Crowdfunding platforms give space to private persons and organizations to publish their projects online and ask for financial support. These projects can be either for profit or non-profit.
Although data can, once put online, go viral in no time and become known to many people, there is still much effort needed to create an outstanding project which provides added value to the donor and is thus worth supporting and sharing. By far not every crowdfunding project is successful, and many fundraisers do not yet have the know-how to reach enough funders for their projects. Others even neglect to engage in crowdfunding in the first place, as new possibilities always come along with confusion and insecurity. The central aim of this thesis is therefore to examine how web-based crowdfunding projects must be designed and presented in order to satisfy prospective donors’ needs. The main focus lays on the initiation of the funding process. Prospects shall be convinced to become contributors to a crowdfunding campaign in a sustainable, long-term oriented manner.
In order to come to the right conclusions, it is necessary to analyze both the fundraisers’ and the funders’ point of view. First of all, it needs to be clarified how crowdfunding works and what possibilities there are for German fundraisers to realize their campaigns in the most satisfactory manner. Several donation-based crowdfunding platforms in Germany offer different tools and features for their users, being both fundraisers and funders. Furthermore, it will be defined who must be addressed by crowdfunding campaigns and whether these people differ from regular offline donors. To become more specific, the German donors and their preferences in giving will be investigated, concerning both offline and online fundraising. For a more profound analysis of the donors’ insights, one has to go back to the very roots of charity and philanthropy: What motivates people to donate to charity?
Both the funders’ characteristics and the fundraisers’ possibilities will be brought together when elaborating the incentives to contribute to a crowdfunding campaign. The design and content of the project page as well as the features of the crowdfunding platform should match the basic motives for becoming a donor. Some of the features already being offered by the platforms fulfill this precondition. In addition, there is potential for new tools making a contribution more probable and assuring long-term relationships to donors.
Table of Contents
1. Introduction
2. Crowdfunding for German NGOs
2.1 From Classical Fundraising to Crowdfunding
2.2 Features, Advantages and Limitations
2.3 A Comparison of German Crowdfunding Platforms
2.3.1 Betterplace.org
2.3.2 Helpdirect.org
2.3.4 Ammado.com
3. Classification of Donors
3.1 The Donor Pyramid
3.2 Donor Segmentation
3.3 German Donor Statistics and Developments
4. Motives for Donating to Crowdfunding Projects
4.1 Motivational Theory
4.2 General Motives for Charitable Giving
4.2.1 Socially-oriented Motives
4.2.2 Identity-oriented Motives
4.2.3 Development-oriented Motives
4.2.4 Morally-oriented Motives
4.3 The Motives’ Relevance for Crowdfunding
5. Creating Incentives for Contribution to a Crowdfunding Campaign
5.1 Influencing Donor Behavior
5.1.1 Commitment
5.1.2 Reciprocity
5.1.3 Social Comparison
5.1.4 Tangible Incentives
5.2 Incentives in Applications and Features
5.2.1 The Community of Funders and the Meaning of Social Media
5.2.2 The Fun Factor: Gamification
5.2.3 The Democracy in Crowdfunding
5.3 Incentives in Content
5.3.1 Storytelling
5.3.2 Credibility and Transparency
5.3.3 Updates and Further Contact
6. Conclusion
Research Objectives and Focus
This thesis examines how web-based crowdfunding projects for non-profit organizations must be designed and presented to effectively satisfy prospective donors' needs and encourage sustainable, long-term contributions. The central research objective is to identify motivational factors for donors and translate them into concrete incentives within the crowdfunding context, focusing exclusively on donation-based models.
- Analysis of donation-based crowdfunding as a modern fundraising tool for German NGOs.
- Classification of donors and investigation of specific motivational factors (social, identity, development, and moral).
- Evaluation of psychological principles and communication techniques to influence donor behavior.
- Assessment of digital tools, such as social media, gamification, and content-driven strategies, for campaign success.
Excerpt from the Book
5.2.2 The Fun Factor: Gamification
Every child needs to play in order to learn, and also adults still like to play. This is proved by the existence of a whole industry creating video games with contents exclusively for grown-ups. Recently, the increasing popularity of gaming has captured the attention of human resources and marketing experts. People prefer to fulfill tasks or spend their money when there is some kind of gaming element involved. The transfer of gaming elements to a real-life environment is called gamification. The aim of gamification is to solve problems by “influencing human motivation and behavior” (Zichermann & Cunningham, p.XIV), by making boring, unpleasant or difficult topics more attractive. What counts is not what some game is about, but how its features are implemented and whether it is fun to play.
An early and simple example for gamification in marketing is the Payback-system. The consumers collect points with every purchase made in partner shops. When having enough points, they can swap them against rewards which come in form of goods, vouchers or cash. As soon as the “players” can compete with each other and earn badges for fulfilling tasks, like for instance the members of WeightWatchers®, the gaming character of a commercial environment cannot be overlooked.
This is what connects gamification with the social media approach for crowdfunding explained in the previous paragraph. The idea of a donor community could be complemented with a rewarding system. Donors get different titles or badges for having donated certain amounts. For example, someone who donates 5 Euros is a friend, a 500 Euro donation makes the donor an angel et cetera. The names could be adapted to fit the respective project. They have to be visible to others to unfold their whole power, which is to be a status symbol for the bearer and to attract others to “play”. All types of crowdfunding could benefit from gamification as they have the characteristics of big multiplayer games. Crowdfunding is highly dependent on the motivation of people to participate. The more fun and exciting the tools are, the more likely becomes the participation and thereby the success of a project.
Summary of Chapters
1. Introduction: This chapter highlights the impact of internet development on fundraising, defines the scope of donation-based crowdfunding, and outlines the research objective of analyzing donor needs and incentives.
2. Crowdfunding for German NGOs: This section explores the transition from classical to online fundraising, discusses the advantages and limitations of crowdfunding, and compares relevant German platforms.
3. Classification of Donors: This chapter investigates how donors are categorized using models like the donor pyramid and segmentation, while also reviewing German donor statistics and demographic trends.
4. Motives for Donating to Crowdfunding Projects: This part analyzes motivational theories and specific types of charitable giving motives, such as social, identity, development, and morally-oriented factors, and their relevance to crowdfunding.
5. Creating Incentives for Contribution to a Crowdfunding Campaign: This chapter provides an in-depth look at how to influence donor behavior through psychological techniques, social media integration, gamification, and strategic content design.
6. Conclusion: The concluding chapter summarizes the key findings, reiterating the potential of crowdfunding as an additional funding source and the importance of adapting strategies to meet modern donor demands.
Keywords
Crowdfunding, NGO, Fundraising, Donor Motivation, Donation-based Crowdfunding, Donor Segmentation, Online Fundraising, Social Media, Gamification, Altruism, Donor Behavior, Charity, Digital Natives, Relationship Fundraising, Transparency
Frequently Asked Questions
What is the core subject of this thesis?
The thesis explores the application of crowdfunding as a financing tool for NGOs in Germany, specifically focusing on how to analyze and leverage motivational factors to acquire and retain donors.
What are the primary themes discussed?
Key themes include the shift from traditional to online fundraising, the psychology of donor motivation, donor classification and segmentation, and the design of digital incentives for crowdfunding campaigns.
What is the main research goal?
The goal is to provide fundraisers with actionable insights on how to design and present crowdfunding projects to satisfy donor needs and foster long-term relationships.
Which scientific methods are employed?
The work utilizes a descriptive analytical approach based on existing motivational theories, donor statistics, industry studies, and behavioral psychology principles to interpret the effectiveness of crowdfunding features.
What does the main body cover?
It covers the framework of German crowdfunding, donor classification, the psychological motives for donating, and a comprehensive analysis of incentives—ranging from social networking and gamification to storytelling and transparency—that fundraisers can implement.
How would you describe the key terminology?
The work is characterized by terms such as donation-based crowdfunding, donor pyramid, motivational theory, gamification, and relationship fundraising, all within the context of the digital transformation of charitable giving.
How does the "Donor Pyramid" model apply to online crowdfunding?
The author argues that while the traditional donor pyramid remains a conceptual reference, the internet revolution has changed the linearity of donor engagement, allowing for more fluid and unpredictable shifts between levels of support.
Why is "Gamification" considered an incentive for crowdfunding?
Gamification is proposed as a way to make the donation process more engaging and fun, using elements like badges, titles, and competition to tap into the "playful" nature of adults and encourage higher levels of participation.
How does "Storytelling" enhance campaign effectiveness?
Storytelling uses available media (texts, photos, videos) to present beneficiary stories, which activates empathy and makes abstract needs more tangible, thereby increasing the likelihood that a prospect will donate.
- Quote paper
- Katharina Hauck (Author), 2015, Crowdfunding as a Financing Tool for NGO Projects. An Analysis of Motivational Factors for Contribution, Munich, GRIN Verlag, https://www.grin.com/document/336774
