IDEAS home Printed from https://ideas.repec.org/a/eee/socmed/v282y2021ics0277953621004378.html
   My bibliography  Save this article

Crowdfunding as a response to COVID-19: Increasing inequities at a time of crisis

Author

Listed:
  • Igra, Mark
  • Kenworthy, Nora
  • Luchsinger, Cadence
  • Jung, Jin-Kyu

Abstract

During the first seven months of the COVID-19 pandemic, more than 175,000 crowdfunding campaigns were established in the US for coronavirus-related needs using the platform GoFundMe. Though charitable crowdfunding has been popular in recent years, the widespread creation of COVID-19 related campaigns points to potential shifts in how the platform is being used, and the volume of needs users have brought to the site during a profound economic, social, and epidemiological crisis. This study offers a systematic examination of the scope and impacts of COVID-19 related crowdfunding in the early months of the pandemic and assesses how existing social and health inequities shaped crowdfunding use and outcomes. Using data collected from all US-based GoFundMe campaigns mentioning COVID or coronavirus, we used descriptive analysis and a series of negative binomial and linear models to assess the contributions of demographic factors and COVID-19 impacts to campaign creation and outcome. We find significant evidence of growing inequalities in outcomes for campaigners. We find that crowdfunding provides substantially higher benefits in wealthier counties with higher levels of education. People from these areas are more likely to initiate campaigns in response to adverse health and economic impacts of COVID-19, and they also receive more funding compared to people living in areas with lower income and education. Modeling also indicates differential outcomes based on the racial and ethnic composition of county population, though without more detail about who is creating and funding campaigns we cannot explain causality. A targeted qualitative analysis of the top earning COVID-19 campaigns offers further evidence of how user privilege and corporate practices contribute to highly unequal outcomes. Taken together, these findings demonstrate how a market-oriented digital technology used to respond to large-scale crisis can exacerbate inequalities and further benefit already privileged groups.

Suggested Citation

  • Igra, Mark & Kenworthy, Nora & Luchsinger, Cadence & Jung, Jin-Kyu, 2021. "Crowdfunding as a response to COVID-19: Increasing inequities at a time of crisis," Social Science & Medicine, Elsevier, vol. 282(C).
    • Handle: RePEc:eee:socmed:v:282:y:2021:i:c:s0277953621004378
    DOI: 10.1016/j.socscimed.2021.114105
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0277953621004378
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.socscimed.2021.114105?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Berliner, Lauren S. & Kenworthy, Nora J., 2017. "Producing a worthy illness: Personal crowdfunding amidst financial crisis," Social Science & Medicine, Elsevier, vol. 187(C), pages 233-242.
    2. Giancarlo Giudici & Massimiliano Guerini & Cristina Rossi-Lamastra, 2018. "Reward-based crowdfunding of entrepreneurial projects: the effect of local altruism and localized social capital on proponents’ success," Small Business Economics, Springer, vol. 50(2), pages 307-324, February.
    3. Michael Bailey & Ruiqing (Rachel) Cao & Theresa Kuchler & Johannes Stroebel & Arlene Wong, 2017. "Measuring Social Connectedness," NBER Working Papers 23608, National Bureau of Economic Research, Inc.
    4. Nora Kenworthy & Zhihang Dong & Anne Montgomery & Emily Fuller & Lauren Berliner, 2020. "A cross-sectional study of social inequities in medical crowdfunding campaigns in the United States," PLOS ONE, Public Library of Science, vol. 15(3), pages 1-23, March.
    5. Snyder, Jeremy & Mathers, Annalise & Crooks, Valorie A., 2016. "Fund my treatment!: A call for ethics-focused social science research into the use of crowdfunding for medical care," Social Science & Medicine, Elsevier, vol. 169(C), pages 27-30.
    6. Kshetri, Nir, 2015. "Success of Crowd-based Online Technology in Fundraising: An Institutional Perspective," Journal of International Management, Elsevier, vol. 21(2), pages 100-116.
    7. Lee, Sumin & Lehdonvirta, Vili, 2020. "New digital safety net or just more ‘friendfunding’? Institutional analysis of medical crowdfunding in the United States," OSF Preprints 9kecq, Center for Open Science.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nikolaos Daskalakis, 2023. "COVID-19 Effects on Reward-based Crowdfunding Campaigns," Business & Entrepreneurship Journal, SCIENPRESS Ltd, vol. 12(2), pages 1-6.
    2. Moysidou, Krystallia & Cohen Chen, Smadar, 2023. "Inducing collective action intentions for healthcare reform through medical crowdfunding framing," Social Science & Medicine, Elsevier, vol. 333(C).
    3. Lenny Phulong Mamaro & Athenia Bongani Sibindi, 2022. "Entrepreneurial Financing in Africa during the COVID-19 Pandemic," JRFM, MDPI, vol. 15(11), pages 1-17, November.
    4. Lenny Phulong Mamaro & Athenia Bongani Sibindi, 2022. "Financial Sustainability of African Small-to-Medium Enterprises during the COVID-19 Pandemic: Determinants of Crowdfunding Success," Sustainability, MDPI, vol. 14(23), pages 1-14, November.
    5. Davis, Aaron Renee & Elbers, Shauna K. & Kenworthy, Nora, 2023. "Racial and gender disparities among highly successful medical crowdfunding campaigns," Social Science & Medicine, Elsevier, vol. 324(C).
    6. Janina Sundermeier & Tyge-F. Kummer, 2022. "Does personality still matter in e-commerce? How perceived hubris influences the assessment of founders’ trustworthiness using the example of reward-based crowdfunding," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(3), pages 1127-1144, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Moysidou, Krystallia & Cohen Chen, Smadar, 2023. "Inducing collective action intentions for healthcare reform through medical crowdfunding framing," Social Science & Medicine, Elsevier, vol. 333(C).
    2. Laura Grassi & Simone Fantaccini, 2022. "An overview of Fintech applications to solve the puzzle of health care funding: state-of-the-art in medical crowdfunding," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-27, December.
    3. Sarah J Pol & Jeremy Snyder & Samantha J Anthony, 2019. ""Tremendous financial burden": Crowdfunding for organ transplantation costs in Canada," PLOS ONE, Public Library of Science, vol. 14(12), pages 1-11, December.
    4. Hossain Mokter & Oparaocha Gospel Onyema, 2017. "Crowdfunding: Motives, Definitions, Typology and Ethical Challenges," Entrepreneurship Research Journal, De Gruyter, vol. 7(2), pages 1-14, April.
    5. Juliane Proelss & Denis Schweizer & Tingyu Zhou, 2021. "Economics of philanthropy—evidence from health crowdfunding," Small Business Economics, Springer, vol. 57(2), pages 999-1026, August.
    6. Renwick, Matthew J. & Mossialos, Elias, 2017. "Crowdfunding our health: Economic risks and benefits," Social Science & Medicine, Elsevier, vol. 191(C), pages 48-56.
    7. Aurélien Petit & Peter Wirtz, 2022. "Experts in the crowd and their influence on herding in reward-based crowdfunding of cultural projects," Small Business Economics, Springer, vol. 58(1), pages 419-449, January.
    8. Cai, Wanxiang & Polzin, Friedemann & Stam, Erik, 2021. "Crowdfunding and social capital: A systematic review using a dynamic perspective," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    9. Davis, Aaron Renee & Elbers, Shauna K. & Kenworthy, Nora, 2023. "Racial and gender disparities among highly successful medical crowdfunding campaigns," Social Science & Medicine, Elsevier, vol. 324(C).
    10. Luis Alfonso Dau & Aya S. Chacar & Marjorie A. Lyles & Jiatao Li, 2022. "Informal institutions and international business: Toward an integrative research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(6), pages 985-1010, August.
    11. Helen Bollaert & Gaël Leboeuf & Armin Schwienbacher, 2020. "The narcissism of crowdfunding entrepreneurs," Small Business Economics, Springer, vol. 55(1), pages 57-76, June.
    12. Adhami, Saman & Giudici, Giancarlo & Martinazzi, Stefano, 2018. "Why do businesses go crypto? An empirical analysis of initial coin offerings," Journal of Economics and Business, Elsevier, vol. 100(C), pages 64-75.
    13. Fang, Xing, 2022. "Why we hide good deeds? The selfless and anonymous donation behavior in crowdfunding," Technology in Society, Elsevier, vol. 71(C).
    14. Nathalie Duran, 2016. "Le crowdlending : une opportunité de mission originale pour l'expert-comptable ?," Post-Print hal-01900572, HAL.
    15. Massimiliano Barbi & Valentina Febo & Giancarlo Giudici, 2023. "Community-level social capital and investment decisions in equity crowdfunding," Small Business Economics, Springer, vol. 61(3), pages 1075-1110, October.
    16. Konrad B Burchardi & Thomas Chaney & Tarek A Hassan, 2019. "Migrants, Ancestors, and Foreign Investments," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(4), pages 1448-1486.
    17. Estrin, Saul & Gozman, Daniel & Khavul, Susanna, 2017. "Equity crowdfunding and early stage entrepreneurial finance: damaging or disruptive?," LSE Research Online Documents on Economics 86590, London School of Economics and Political Science, LSE Library.
    18. Edgar Cambaza, 2023. "The Role of FinTech in Sustainable Healthcare Development in Sub-Saharan Africa: A Narrative Review," FinTech, MDPI, vol. 2(3), pages 1-17, July.
    19. Nathan Deutscher & Bhashkar Mazumder, 2023. "Measuring Intergenerational Income Mobility: A Synthesis of Approaches," Journal of Economic Literature, American Economic Association, vol. 61(3), pages 988-1036, September.
    20. Stan Oana Mara & Fanea-Ivanovici Mina, 2019. "Time to act: discourse on time in crowdfunding for social entrepreneurship project," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 13(1), pages 1162-1172, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:socmed:v:282:y:2021:i:c:s0277953621004378. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/315/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.