Project NCN Sonata 17

SOCIO-PSYCHOLOGICAL MOTIVATIONS FOR SUPPORTING SOCIAL AND COMMERCIAL CROWDFUNDING CAMPAIGNS

NCN Sonata 17 Project

Project Leader: Dr. Joanna Adamska
Researcher: Dr. Urszula Mrzygłód

Project funded by the National Science Centre (NCN) under the SONATA 17 competition

Project Number: UMO-2021/43/D/HS4/00781
Project Duration: 2022-2025

Project Description

Raising capital is one of the most significant challenges for new ventures. Entrepreneurs seeking funding for business, commercial, social, or cultural projects face numerous obstacles. Traditional financing methods, such as conventional banking, are often inadequate due to the entrepreneur's lack of experience and, consequently, lack of creditworthiness. Meanwhile, venture capital and business angels—forms of financing dedicated to startups—are primarily focused on innovative projects with high growth potential.

One financing mechanism that has gained particular popularity in recent years, especially for social projects and small local initiatives, is crowdfunding. Crowdfunding can be defined as a form of capital acquisition through an "open call," usually conducted via online platforms. This process typically involves a large number of supporters (contributors) who provide relatively small amounts of money. In most crowdfunding models (except for the charitable model), backers receive something in return for their contributions, such as interest, securities, voting rights, or rewards. The latter is a defining feature of reward-based crowdfunding, which allows campaign organizers to offer incentives in exchange for support.

The reward-based model is particularly interesting due to its low level of institutionalization and the diversity of projects it accommodates. It is especially popular for both commercial projects, which introduce new products or services often through pre-sales, and social projects, which aim to provide social goods and generate societal, humanitarian, or environmental benefits. However, a major issue is that the majority of crowdfunding campaigns fail to reach their financial goals and, therefore, do not succeed in financial terms.

It is widely recognized that the success of a crowdfunding project depends on both the characteristics of the campaign (as presented on the project's webpage) and the motivation of backers. Given the fundamental distinction between social and commercial crowdfunding campaigns, we hypothesize that success factors—such as project attributes and supporter motivations—differ significantly between these two categories. This difference arises because they attract individuals with different personalities, meaning different factors may drive them to support a campaign.

The main objective of this project is to identify the personality traits and project characteristics that influence people's willingness to support commercial and social crowdfunding projects. By doing so, the study aims to reveal the differences between the key factors affecting financial support for social vs. commercial crowdfunding initiatives.

This project stands out from other crowdfunding studies in several ways:

Segmentation of Crowdfunding Projects: Most significant studies on crowdfunding success focus on campaign analysis without distinguishing between social and commercial projects. We believe that this distinction fundamentally changes the key determinants of success.

Examining Intentions to Participate in Crowdfunding: While most studies analyze existing, completed crowdfunding projects, this research aims to determine the willingness of potential backers to participate before they engage in crowdfunding.

Experimental Approach: Unlike traditional studies that rely on post-hoc analysis of crowdfunding campaigns, this project will employ an experimental methodology, making it distinct from existing research.

Integrating Project Characteristics and Supporter Motivations: Most studies focus either on project attributes or supporter motivations separately. This study seeks to integrate both perspectives to provide a more comprehensive understanding of crowdfunding success factors.

Scientific Publications

"Social vs. Commercial Crowdfunding: A Theory of Planned Behavior and Financial Well-being Perspective" – submitted to the Journal of Banking and Financial Economics (under review).

Dissemination of Project Results

Scientific Conferences:

• Global Finance Conference, organized by the University of Cagliari (June 18-20, 2024)
• Conference of Finance Departments 2024, Katowice (September 16-17, 2024)
• The 2024 International Conference on Sustainability, Environment, and Social Transition in Economics and Finance (SESTEF 2024), Paris (December 11-13, 2024)

Scientific Seminars:

Crowdfunding Research Seminar, organized at the University of Agder, Kristiansand (August 30, 2024)