Asking for help: restaurant crowdfunding during COVID-19

Abstract

ABSTRACT The purpose of this study is to explore business crowdfunding donation campaigns in which there is no reward or incentive provided to the donor. Specifically, crowdfunding campaigns benefiting restaurants and their employees are examined in two large U.S. cities during the COVID-19 pandemic to determine whether the level of social embeddedness and the amount of social capital available to restaurants affected the amount donated. This study’s findings indicate that the social embeddedness for COVID-19 restaurant donation campaigns is not related to the amount donated. There is a significant difference in donation amounts for campaigns started by the restaurant owner or an individual connected to the restaurant compared to campaigns started by GoFundMe. There is also a significant difference in the amounts of funds donated and the number of shares made for campaigns in large population cities compared to those not in large cities. Examinations of donation campaigns for the benefit of businesses provide new insight into the use of this emerging financial platform, particularly in relation to social embeddedness and social resource theory.