Donor Retention in Online Crowdfunding Communities: A Case Study of DonorsChoose.org.

Abstract

Online crowdfunding platforms like DonorsChoose.org and Kick-starter allow specific projects to get funded by targeted contributions from a large number of people. Critical for the success of crowdfunding communities is recruitment and continued engagement of donors. With donor attrition rates above 70%, a significant challenge for online crowdfunding platforms as well as traditional offline non-profit organizations is the problem of donor retention. We present a large-scale study of millions of donors and donations on DonorsChoose.org, a crowdfunding platform for education projects. Studying an online crowdfunding platform allows for an unprecedented detailed view of how people direct their donations. We explore various factors impacting donor retention which allows us to identify different groups of donors and quantify their propensity to return for subsequent donations. We find that donors are more likely to return if they had a positive interaction with the receiver of the donation. We also show that this includes appropriate and timely recognition of their support as well as detailed communication of their impact. Finally, we discuss how our findings could inform steps to improve donor retention in crowdfunding communities and non-profit organizations.