Guestblog by Carolina Ospina Botero, a student from Colombia. She wrote her Master Thesis at Tilburg University.
Did you know that 1%Club has been one of the first non-profit organizations that employed the concept of Crowdfunding in a new way? Originally, this concept refers to collecting money in small amounts from a large audience to create an investment. However, 1%Club aims to collect donations for charity rather than seek investments. These donations are collected from the members of their online community. Moreover, the members can use social interaction tools, which are used to communicate and to establish a social network. But let’s get back to the social interaction concept. Online members can log in to 1%Club platform, look for the projects they like, make friends, post comments, write testimonials, rate projects and so on. However, one interesting question is: does this social interaction among community members help 1%Club to achieve more donations? This has been the main research question of my marketing master thesis. In fact, this is a very interesting question to answer for 1%Club, in order to have the knowledge to positively encourage, maintain and increase the community and the donations.
How does social interaction among community members help 1%Club to achieve more donations? After analyzing the results, some interesting conclusions were revealed leaving this final summary of influences:
• People’s positive attitude towards charitable giving, change over their life time despite external factors, such as participating or not in the online community.
• Females and males do not behave differently when it comes to participating in the online community. This means that counter to expectations, females do not post more comments or testimonials, do not rate more projects, send or receive more invitations and do not link 1%Club to their facebook more than males. Moreover, there are also not differences in donors when it comes to gender. However, one unexpected result shows that people, who do not provide their gender, participate more in the online community and therefore donate more. This can be due to these members want to provide their gender information in order to signal their participation to other members, but in reality they do not participate nor donate as much as the other group. This can imply that they might be seeking reputation by being identifiable and a feeling of being collaborative. Glazer and Konrad (1996), argue that when individuals receive a warm glow from being part of charity, this generates intrinsic utility like luxury goods do. However, this can have another statistical explanation. The variable gender, contains 51,75% of missing values and that is very likely to cause statistical significance.
• With respect to country, this study found out that non-Dutch members will interact less in social networking than Dutch members and therefore, will contribute less to total donation and vice versa. This could be due to the fact that non-Dutch members are just interested in certain projects destined to their own country or origin and are predetermined to donate to them. Therefore, they might not have enough motivation to develop social relationships with the members (Rheingold, 1993). However, non-Dutch members and Dutch members do not behave differently when it comes to participating in online communication.
• In addition, it has been proven that the longer the members are subscribed in 1%Club website, the higher their participation in social interaction and as a result, the more they donate. The reason behind this could be that members that have been longer registered in 1%Club and participate in the online communication will be more committed than new members, and as such, are more likely to continue participating in the future (Moreland and Levine, 1982). Furthermore, theories of reciprocity suggest that posters with a history of contribution are more likely to receive responses, because others feel obligated to return the favor (Gouldner, 1960). Therefore, the feelings of friendship and social entity might be stronger. Consequently, they will also donate more.
• Regarding project owners, they will participate more in online communication. The reason for this could be that if project owners are more active in online communication, they will be recognized by the online community members and therefore be trusted. As a result they can request support for their projects’ basket of money collection, because of the theory of reciprocity (Gouldner, 1960). Furthermore, project owners will also be more active in social networking. If project owners are active in online communication, their names are likely to be well-known within the members of 1%Club. Consequently, they might be opinion leaders, who according to Li and Du (2011) normally have more acquaintances and higher eduation, status and social standing. Therefore, they can influence other members easier through their social network. However, it is important to mention that even if project owners participate more in social interaction; this does not mean that they will contribute more to total donation. This can be due to project owners have a more crowdsourcing (Belleflamme, Lambert and Schwiebacher, 2011) than a crowdfunding approach. If project owners are active in the online community, they have the feeling they might have contributed and helped enough with their knowledge to the online community and as a result, the do not feel obligated to donate anymore.
• Finally, when members provide more information in their 1%Club profile, they will participate more in socialinteraction, and as a result they will donate more. This should occur because members’ willingness to participate in social interaction is demonstrated by the amount of information they want to provide about their identity (Lampe, Ellison and Steinfield, 2007).
Finally, after all these interesting findings, some recommendations were done to 1%Club:
• Regarding age,
-1%Club should focus on older members when it comes to encouraging donations. This means that the communication mix should be designed in such a way that it directly encourages them to donate, instead of encouraging them to participate in social interaction activities.
-Investigate which are the year-intervals of the members of 1%Club to make more accurate communication plans.
-Make age information and obligatory field.
• With respect to gender,
-Should make gender information an obligatory field.
-After this information is complete investigate again the differences between males and females. If there is still no difference in their behavior; 1%Club should focus on unisex communication campaigns that appeal to both genders.
• Concerning country,
-1%Club can, like facebook, create a “common-friends” suggestion option for Dutch members. They are more willing to donate after they create a social network in 1%Club.
-For non-Dutch members, 1%Club could inform them of which projects are taking place in their country of origin and who is participating. As a result, non-Dutch members can make friends, and therefore donate more.
• In the case of membership duration,
-To achieve more donations, 1%Club should encourage members to participate in social interaction since the first beginning. How? 1%Club can incentivize the first participation by bonuses that members can use to support some projects. These bonuses could be obtained by points that members receive for collaborating in social interaction.
-Ask long-term members for advices, ratings and so on.
• Furthermore, it is important to be know that project owners are,
-Of relevant importance for 1%Club to influence members and encourage them to participate in social interaction. This might be the key for 1%Club members to become more active and therefore, donate more.
• Finally, 1%Club should keep in mind that for profile completion,
-members who provide more information in their profile will be more willing to interact, hence donate.
-Therefore, campaigns should treat these members more personally and try to give them motivations to interact and feel important in the community.
I am Carolina Ospina Botero and I come from Colombia, but I have been living the last 10 years of my life in Spain. Recently, I graduated from the Master in Marketing Management in Tilburg University. I had the opportunity to write my master thesis together with my supervisor Johanna Slot for 1%Club. The research purpose was to uncover how social online interaction will influence donation behavior depending on member characteristics. The findings were very interesting and could give more inside into the topic of crowdfunding for non-profit organizations