research-article

Crowdfunding: Motivations and deterrents for participation

Authors:

Elizabeth M. Gerber,

Julie HuiAuthors Info & Claims

ACM Transactions on Computer-Human Interaction (TOCHI), Volume 20, Issue 6

Article No.: 34, Pages 1 - 32

https://doi.org/10.1145/2530540

Published: 01 December 2013 Publication History

Get Access

Abstract

Crowdfunding is changing how, why, and which ideas are brought into existence. With the increasing number of crowdfunded projects, it is important to understand what drives people to either create or fund these projects. To shed light on this new social phenomenon, we present a grounded theory of motivation informed by the first cross-platform qualitative study of the crowdfunding community. By performing 83 semistructured interviews, we uncover creator motivations, which include the desire to raise funds, expand awareness of work, connect with others, gain approval, maintain control, and learn; and supporter motivations, which include the desire to collect rewards, help others, support causes, and be part of a community. We also explore deterrents to crowdfunding participation, including, among creators, fear of failure, and, for supporters, lack of trust. Based on these findings, we provide three emergent design principles to inform the design of effective crowdfunding platforms and support tools.

References

[1]

J. Aaker and S. Akutsu. 2009. Why do people give&quest; The role of identity in giving. Journal of Consumer Psychology 19, (2009), 267--270.

Crossref

Google Scholar

[2]

Alexa. 2013. Homepage. Retrieved from http://www.alexa.com/.

Google Scholar

[3]

B. P. Bailey and E. Horvitz. 2010. What's your idea&quest;: A case study of a grassroots innovation pipeline within a large software company. In Proceedings of the 28th International Conference on Human Factors in Computing Systems. 2065--2074.

Digital Library

Google Scholar

[4]

A. Bandura. 1997. Self-Efficacy: The Exercise of Control. W. H. Freeman and Company, New York.

Google Scholar

[5]

G. S. Becker. 1974. Theory of social interaction. Journal of Political Economy 86, 2 (1974), 1064--1093.

Google Scholar

[6]

P. Belleflamme, T. Lambert, and A. Schwienbacher. 2010. Crowdfunding: An industrial organization perspective. In Proceedings of the Workshop Digital Business Models: Understanding Strategies. 25--26.

Google Scholar

[7]

P. Belleflamme, T. Lambert, and A. Schwienbacher. 2011. Crowdfunding: Tapping the Right Crowd. Center for Operations Research and Econometrics, Louvain-la-Neuve, Belgium.

Google Scholar

[8]

R. Burt. 1992. Structural Holes: The Social Structure of Competition. Harvard University Press., Cambridge, MA, 1992.

Crossref

Google Scholar

[9]

R. K. Chellappa and P. A. Pavlou. 2002. Perceived information security, financial liability and consumer turst in electronic commerce transactions. Journal of Enterprise Information Management 15, 5/6 (2002), 358.

Google Scholar

[10]

R. Cialdini, D. Baumann, and D. Kenrick. 1981. Insights from sadness: A three-step model of the development of altruism as hedonism. Developmental Review 1, (1981), 207--223.

Crossref

Google Scholar

[11]

W. Cohen and D. Levinthal. 1990. Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly 35, (1990), 128--152.

Crossref

Google Scholar

[12]

E. Deci and R. Ryan 1985. Intrinsic Motivation and Self-Determination in Human Behavior. Plenum Press, New York.

Google Scholar

[13]

E. L. Deci, J. Nezlek, and L. Sheinman. 1981. Characteristics of the rewarder and intrinsic motivation of the rewardee. Journal of Personality and Social Psychology 40, (1981), 1--10.

Crossref

Google Scholar

[14]

M. Dontcheva, E. Gerber, and S. Lewis. 2011. Crowdsourcing and creativity. In Proceedings of the Crowdsourcing Workshop. ACM.

Google Scholar

[15]

C. Esposti. 2012. Crowdfunding Industry Report (Abridged Version): Market Trends, Composition and Crowdfunding Platforms. Retrieved from http://www.crowdsourcing.org/document/crowdfunding-industry-report-abridged-version-market-trends-composition-and-crowdfunding-platforms/14277.

Google Scholar

[16]

D. Gefen. 2000. E-commerce: the role of familiarity and trust. Omega: The International Journal of Management Science 28, 6 (2000).

Google Scholar

[17]

E. Gerber. 2011. Innovation self-efficacy: Fostering beliefs in our ability through and by design. Core 77, 2011.

Google Scholar

[18]

E. M. Gerber, J. S. Hui, and P.-Y. Kuo. 2012. Crowdfunding: Why People Are Motivated to Participate. Retrieved from http://www.segal.northwestern.edu/media/pdf/2012/May/29/segal_report_12--02.pdf.

Google Scholar

[19]

E. M. Gerber and C. K. Martin. 2012. Supporting creativity within web-based self-services. International Journal of Design 6, 1 (2012).

Google Scholar

[20]

B. G. Glaser and A. Strauss. 1967. The Discovery of Grounded Theory: Strategies for Qualitative Research. Aldine, New York.

Google Scholar

[21]

A. Glazer and K. Konrad. 1996. A signaling explanation for charity. American Economic Review 86 (1996), 1019--1028.

Google Scholar

[22]

M. S. Granovetter. 1973. The strength of weak ties. American Journal of Sociology 78, 6 (1973), 1360--1380.

Google Scholar

[23]

M. D. Greenberg, J. S. Hui, and E. M. Gerber. Crowdfunding: A resource exchange perspective. CHI 2013 Extended Abstracts.

Digital Library

Google Scholar

[24]

E. Hargittai. 2005. Survey measures of web-oriented digital literacy. Social Science Computer Review 23, 3, 371--379.

Digital Library

Google Scholar

[25]

J. Howe. 2006. The rise of crowdsourcing. Wired Magazine 14.06.

Google Scholar

[26]

J. S. Hui, M. D. Greenberg, and E. M. Gerber. 2014. Understanding the role of Community in Crowdfunding Work. Retrieved from http://www.juliehui.org/wp-content/uploads/2013/09/Hui_Gerber_UnderstandingtheRoleofCommunity-inCrowdfundingWork_CSCW2014_not_for_distribution.pdf.

Google Scholar

[27]

IndieGoGo. 2013. Homepage. Retrieved from http://www.indiegogo.com/.

Google Scholar

[28]

S. Iyengar and M. R. Lepper. 2000. When choice is demotivating: Can one desire too much of a good thing&quest; Journal of Personality and Social Psychology 79, (2000), 995--1006.

Crossref

Google Scholar

[29]

H. Jenkins. 2009. Confronting the Challenges of Participatory Culture: Media Education for the 21st Century. The John D. and Catherine T. MacArthur Foundation, Chicago, IL.

Google Scholar

[30]

Kickstarter. 2013. Homepage. Retreived from www.Kickstarter.com.

Google Scholar

[31]

M.-J Kim, N. Chung, and C.-K. Lee. 2011. The effect of perceived trust on electronic commerce: Shopping online for tourism products and services in South Korea. Tourism Management 32, (2011), 256--265.

Crossref

Google Scholar

[32]

R. Kraut and P. Resnick. 2011. Encouraging contributions to online communities. In Evidence-Based Social Design: Mining the Social Sciences to Build Successful Online Communities. MIT Press, Cambridge, MA.

Google Scholar

[33]

T. Lambert and A. Schwienbacher. 2010. An Empirical Analysis of Crowdfunding. Retrieved from http://www.crowdsourcing.org/document/an-empirical-analysis-of-crowdfunding-/2458.

Google Scholar

[34]

M. Landler. 2012. Obama Signs Bill to Promote Start-Up Investments. New York Times. Retrieved from http://www.nytimes.com/2012/04/06/us/politics/obama-signs-bill-to-ease-investing-in-start-ups.html&quest;_r=1.

Google Scholar

[35]

M. Lin, N. R. Prabhala, and S. Viswanathan. 2009. Judging borrowers by the company they keep: Friendship networks and information assymmetry in online peer-to-peer lending. In Proceedings of the 2009 Western Finance Association Annual Meeting.

Google Scholar

[36]

T. W. Malone, R. Laubacher, and C. Dellarocas. 2009. Harnessing crowds: Mapping the genome of collective intelligence. MIT Sloan Research.

Google Scholar

[37]

C. R. McClure. 1994. Network literacy: A role for libraries&quest; Information Technology and LIbraries 13, 2 (1994), 115--125.

Google Scholar

[38]

N. L. Mead, R. F. Baumeister, T. F. Stillman, C. D. Rawn, and K. D. Vohs. 2011. Social exclusion causes people to spend and consume strategically in the service of affiliation. Journal of Consumer Research 37, 5 (2011), 902--919.

Crossref

Google Scholar

[39]

H. Mintzberg. 1979. An emerging strategy of “direct” research. Administrative Science Quarterly 24, (1979), 580--589.

Crossref

Google Scholar

[40]

A. D. Miyazaki and A. Fernandez 2001. Consumer perceptions of privacy and security risks for online shopping. Journal of Consumer Affairs 35, 1 (2001).

Google Scholar

[41]

M. Muller, T. Soule, S. Daniel, W. Geyer, and L.-T. Cheng. 2013. Crowdfunding inside the enterprise: Employee-initiatives for innovation and collaboration. In Proceedings of the SIGCHI Conference on Human Factors in Computing Systems.

Digital Library

Google Scholar

[42]

B. Obama. 2011. The State of the Union: Winning the Future. The White House, Washington, DC.

Google Scholar

[43]

S. Parnes and R. Noller. 1972. Applied creativity: The creative studies project. Journal of Creative Behavior 6, (1972), 164--186.

Crossref

Google Scholar

[44]

S. Potzsch and R. Bohme. 2010. The role of soft information in trust building: Evidence from online social lending. In Trust and Trustworthy Computing. Springer, Heidelberg, Germany, 381--395.

Digital Library

Google Scholar

[45]

S. Reiss. 2004. Multifaceted nature of intrinsic motivation: The theory of 16 basic desires. Review of General Psychology 8, 3 (2004), 179--193.

Google Scholar

[46]

P. Resnick and R. Kraut. 2011. Evidence-based social design: Introduction. In Evidence-Based Social Design: Mining Social Sciences to Build Online Communities. MIT Press, Cambridge, MA.

Google Scholar

[47]

S. Rick, C. Cryder, and G. Loewenstein. 2007. Tightwads and spendthifts. Journal of Consumer Research 34, (2007), 767--782.

Crossref

Google Scholar

[48]

RocketHub. 2013. Homepage. Retrieved September 17, 2013 from www.rockethub.com.

Google Scholar

[49]

R. Ryan and E. Deci. 2000. Self-determination theory and the facilitation of intrinsic motivation, social development, and well-being. American Psychologist 55, (2000), 68--78.

Crossref

Google Scholar

[50]

B. Schneiderman. 2002. Creativity support tools. Communications of the ACM 45, (2002), 116.

Digital Library

Google Scholar

[51]

D. H. Schunk. 1985. Self-efficacy and classroom learning. Psychology in Schools 22, 2 (1985), 208--223.

Google Scholar

[52]

A. Schwienbacher and B. Larralde. 2010. Crowdfunding of small entrepreneurial ventures. In Handbook of Entrepreneurial Finance. Oxford University Press.

Google Scholar

[53]

D. Sefton 2000. Daily web surfing now the norm. USA Today. Retrieved from http://www.usatoday.com/life/cyber/tech/cth591.htm.

Google Scholar

[54]

D. Siroker. 2010. How We Used Data to Win the Presidential Election. Retrieved December 13, 2013 from http://www.slideshare.net/dsiroker/how-we-used-data-to-win-the-presidential-election-by-dan-siroker.

Google Scholar

[55]

P. Spellman. 2013. Crowd Funding: Arts Patronage by the Masses. Retrieved December 13, 2013 from http://www.berklee.edu/bt/194/crowd_funding.html.

Google Scholar

[56]

J. P. Spradley. 1980. Participant Observation. Rinehart and Winston, New York.

Google Scholar

[57]

M. L. Tushman and R. R. Nelson. 1990. Introduction: Technology, organizations, and innovation. Administrative Science Quarterly 35, (1990), 1--8.

Crossref

Google Scholar

[58]

C. Ward and V. Ramachandran. 2010. Crowdfunding the next hit: Microfunding online experience goods. In Proceedings of Computational Social Science and the Wisdom of Crowds.

Google Scholar

[59]

M. R. Ward and M. J. Lee. 2000. Internet shopping, consumer search and product branding. Journal of Product and Brand Management 9, 1 (2000).

Crossref

Google Scholar

[60]

R. D. Waters. 2007. Nonprofit organizations’ use of the Internet: A content analysis of communication trends on the Internet sits of the philanthropy 400. Nonprofit Management & Leadership 18, 1 (2007).

Google Scholar

[61]

K. E. Weick. 1984. Small wins: Redefining the scale of social problems. American Psychologist 39, 1 (1984), 40--49.

Google Scholar

[62]

Wharton. 2010. Can You Spare a Quarter&quest; Crowdfunding Sites Turn Fans into Patrons of the Arts. Retrieved December 13, 2013 from http://knowledge.wharton.upenn.edu/article.cfm&quest;articleid=2647.

Google Scholar

[63]

Kickstarter. 2012. Ouya: A New Kind of Video Game Console. Retrieved December 13, 2013 from http://www.kickstarter.com/projects/ouya/ouya-a-new-kind-of-video-game-console&quest;ref=live.

Google Scholar

[64]

Kickstarter. 2012. Sprout: A Pencil with a Seed. Retrieved December 13, 2013 from http://www.kickstarter.com/projects/democratech/sprout-a-pencil-with-a-seed&quest;ref=live.

Google Scholar

[65]

Kickstarter. 2011. (en)Visioning Hyde Park. Retrieved December 13, 2013 from http://www.kickstarter.com/projects/raimist/envisioning-hyde-park&quest;ref=live.

Google Scholar

[66]

Kickstarter. 2011. Coffee Joulies -- Your Coffee, Just Right. Retrieved December 13, 2013 from http://www.kickstarter.com/projects/705847536/coffee-joulies-your-coffee-just-right&quest;ref=live.

Google Scholar

[67]

Kickstarter. 2011. Happy Birthday Kickstarter&excl; Kickstarter Blog. Retrieved September 28, 2011 from http://www.kickstarter.com/blog/happy-birthday-kickstarter.

Google Scholar

[68]

Kickstarter. 2013. Kickstarter Stats. Retrieved September 17, 2012 from http://www.kickstarter.com/help/stats.

Google Scholar

Cited By

View all

Rykkja ABonet L(2025)From Intent to Inaction: Factors Conditioning Cultural Institutions From Embracing Crowdfunding as a Fundraising ToolJournal of Alternative Finance10.1177/27533743241313462Online publication date: 12-Jan-2025
https://doi.org/10.1177/27533743241313462
Ratilla MPlata Lerma DRosíková MAjaz Khan K(2025)Crowdfunding agricultural ventures: psychological predictors of funding intentions and the role of climate change beliefsCogent Social Sciences10.1080/23311886.2024.244303411:1Online publication date: 6-Jan-2025
https://doi.org/10.1080/23311886.2024.2443034
Efrat KGilboa SWald A(2025)Loyal to the concept or to the platform? The complexity of the dual loyalty of crowdfunding backersTechnological Forecasting and Social Change10.1016/j.techfore.2024.123854210(123854)Online publication date: Jan-2025
https://doi.org/10.1016/j.techfore.2024.123854
Show More Cited By

Index Terms

Crowdfunding: Motivations and deterrents for participation
1. Human-centered computing
2. Social and professional topics
  1. Professional topics
    1. Computing and business

Recommendations

Older adults' perceptions of usefulness of personal health records

Electronic personal health records (PHRs) have the potential to both make health information more accessible to patients and function as a decision-support system for patients managing chronic conditions. Age-related changes in cognition may make ...
People who create knowledge sharing communities
JSAI'06: Proceedings of the 20th annual conference on New frontiers in artificial intelligence

Web-based knowledge sharing communities, which are supported by countless voluntary Internet users, are in widespread use in our lives. In one of these communities, Yahoo! Chiebukuro, one of the most famous web-based knowledge sharing communities in ...
Motivational design cards: a practical approach for game-based motivational design at the workplace
AcademicMindTrek '15: Proceedings of the 19th International Academic Mindtrek Conference

Game based approaches and especially gamification are an emerging topic within the field of motivational design at the workplace. The motivational potential of games was suggested to be based in motivational psychology. So far this is an active field of ...

Reviews

Reviewer: Barrett Hazeltine

This in-depth study of why people create or fund projects online is based on 83 semi-structured interviews with creators, supporters, and people who had decided not to use crowdfunding. Some principal findings follow. Besides raising funds, creators want to expand awareness of their work, connect with others, and gain approval. Creators also want long-term interaction and feedback from supporters. A benefit of crowdfunding for creators is maintaining control, without the constraints imposed by traditional financial institutions. Supporters (funders) participate to expand their social network, to feel they are part of a special community. They also want to support causes and people, be recognized, and collect rewards. Participants appear to be strongly motivated by wanting to learn and to connect with others, beyond the value of the financial transaction. Creators, especially, and supporters want to carry out the project themselves. Supporters value the opportunity to choose projects to fund, to be in control. Three design principles for crowdsourcing are presented: promote interaction between supporters and creators throughout the process; build a community of creators and supporters; and provide transparency about intellectual property restrictions and supporters' preferences and amounts given. The paper is readable and insightful, and will be a useful guide to someone considering a crowdfunding campaign. Online Computing Reviews Service

Access critical reviews of Computing literature here

Become a reviewer for Computing Reviews.

Comments

Please enable JavaScript to view thecomments powered by Disqus.

Information & Contributors

Information

Published In

cover image ACM Transactions on Computer-Human Interaction

ACM Transactions on Computer-Human Interaction Volume 20, Issue 6

December 2013

155 pages

ISSN:1073-0516

EISSN:1557-7325

DOI:10.1145/2562181

Issue’s Table of Contents

Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected]

Publisher

Association for Computing Machinery

New York, NY, United States

Publication History

Published: 01 December 2013

Accepted: 01 August 2013

Revised: 01 May 2013

Received: 01 May 2012

Published in TOCHI Volume 20, Issue 6

Permissions

Request permissions for this article.

Request Permissions

Check for updates

Author Tags

Qualifiers

Research-article
Research
Refereed

Contributors

Other Metrics

View Article Metrics

Bibliometrics & Citations

Bibliometrics

Article Metrics

512
Total Citations
View Citations
11,529
Total Downloads

Downloads (Last 12 months)471
Downloads (Last 6 weeks)73

Reflects downloads up to 15 Jan 2025

Other Metrics

View Author Metrics

Citations

Cited By

View all

Rykkja ABonet L(2025)From Intent to Inaction: Factors Conditioning Cultural Institutions From Embracing Crowdfunding as a Fundraising ToolJournal of Alternative Finance10.1177/27533743241313462Online publication date: 12-Jan-2025
https://doi.org/10.1177/27533743241313462
Ratilla MPlata Lerma DRosíková MAjaz Khan K(2025)Crowdfunding agricultural ventures: psychological predictors of funding intentions and the role of climate change beliefsCogent Social Sciences10.1080/23311886.2024.244303411:1Online publication date: 6-Jan-2025
https://doi.org/10.1080/23311886.2024.2443034
Efrat KGilboa SWald A(2025)Loyal to the concept or to the platform? The complexity of the dual loyalty of crowdfunding backersTechnological Forecasting and Social Change10.1016/j.techfore.2024.123854210(123854)Online publication date: Jan-2025
https://doi.org/10.1016/j.techfore.2024.123854
Hu JSun HYou W(2025)Emphasizing rewards: An empirical analysis of backer motivations in charitable crowdfundingInformation & Management10.1016/j.im.2024.10407862:1(104078)Online publication date: Jan-2025
https://doi.org/10.1016/j.im.2024.104078
Khuc ANguyen PNguyen MLe H(2025)Perceived risks of financial misconduct and fintech in crowdfunding of Vietnamese individual investorsEmerging Markets Review10.1016/j.ememar.2024.10122964(101229)Online publication date: Jan-2025
https://doi.org/10.1016/j.ememar.2024.101229
Esperança JPaz FCurto JFerreira F(2025)Determinants of prosocial crowdlending successAnnals of Operations Research10.1007/s10479-024-06463-xOnline publication date: 4-Jan-2025
https://doi.org/10.1007/s10479-024-06463-x
Li WDong YXie ZYao QTian Y(2024)Does consciousness of social face matter? Understanding sharing behavior towards online charitable crowdfunding informationCyberpsychology: Journal of Psychosocial Research on Cyberspace10.5817/CP2024-5-618:5Online publication date: 29-Nov-2024
https://doi.org/10.5817/CP2024-5-6
Dukul A(2024)Dijital Medyada Kültürel İçerik Üreticiliğinin Ekonomik Sermayeye Dönüşümünde Patreon Modeli İncelemesiDüşünce ve Toplum Sosyal Bilimler Dergisi10.55796/dusuncevetoplum.13953366:1(1-29)Online publication date: 30-Jun-2024
https://doi.org/10.55796/dusuncevetoplum.1395336
He VTröbinger MMurray A(2024)The Crowd Beyond Funders: An Integrative Review of and Research Agenda for CrowdfundingAcademy of Management Annals10.5465/annals.2022.006418:1(348-394)Online publication date: Jan-2024
https://doi.org/10.5465/annals.2022.0064
Prasobpiboon SChandrachai ATriukose SRatanabanchuen R(2024)Innovative Reward-Based Crowdfunding Decision ModelInternational Journal of E-Entrepreneurship and Innovation10.4018/IJEEI.34998314:1(1-26)Online publication date: 17-Sep-2024
https://dl.acm.org/doi/10.4018/IJEEI.349983
Show More Cited By

View Options

Login options

Check if you have access through your login credentials or your institution to get full access on this article.

Cited By

Index Terms

Recommendations

Older adults' perceptions of usefulness of personal health records

People who create knowledge sharing communities

Motivational design cards: a practical approach for game-based motivational design at the workplace

Reviews

Access critical reviews of Computing literature here