Abstract
Charitable crowdfunding provides a new channel for people and families suffering from unforeseen events, such as accidents, severe illness, and so on, to seek help from the public. Thus, finding the key determinants which drive the fundraising process of crowdfunding campaigns is of great importance, especially for those suffering. With a unique data set containing 210,907 crowdfunding projects covering a period from October 2015 to June 2020, from a famous charitable crowdfunding platform, specifically Qingsong Chou, we will reveal how many online donations are due to endogeneity, referring to the positive feedback process of attracting more people to donate through broadcasting campaigns in social networks by donors. For this aim, we calibrate three different Hawkes processes to the event data of online donations for each crowdfunding campaign on each day, which allows us to estimate the branching ratio, a measure of endogeneity. It is found that the online fundraising process works in a sub-critical state and nearly 70–90% of the online donations are endogenous. Furthermore, even though the fundraising amount, number of donations, and number of donors decrease rapidly after the crowdfunding project is created, the measure of endogeneity remains stable during the entire lifetime of crowdfunding projects. Our results not only deepen our understanding of online fundraising dynamics but also provide a quantitative framework to disentangle the endogenous and exogenous dynamics in complex systems.
Highlights
Fundraising is a process of seeking and gathering money by engaging individuals, businesses, charitable foundations, or governmental agencies
We aimed to quantify the fraction of online donations deriving from the endogeneity in crowdfunding campaigns, corresponding to endogenous feedback processes in which the donating and sharing actions of donors attract more people to donate
By fitting three different Hawkes processes, including the Hawkes processes with an exponential memory kernel, the Hawkes processes with a power-law memory kernel, and the renewal Hawkes process, to the crowdfunding projects spanning over a period from October 2015 to June 2020, we found that more than 90% of the fits pass both Lagrange multiplier (LM) and KS tests at the significant level of 5%
Summary
Fundraising is a process of seeking and gathering money by engaging individuals, businesses, charitable foundations, or governmental agencies (https://en.wikipedia. org/wiki/Fundraising, accessed on 19 November 2021). Fundraising is a process of seeking and gathering money by engaging individuals, businesses, charitable foundations, or governmental agencies As a new form of fundraising, crowdfunding takes advantage of the internet to collect funds through small contributions from a large number of contributors for commercial and charitable purposes. As a promising form of charity, charitable crowdfunding has received considerable contributors and donations. In 2018, a survey on crowdfunding in America (https://nonprofitssource.com/online-giving-statistics/, accessed on 19 November 2021) revealed that almost 41% of respondents had made donations. In China, 20 charitable crowdfunding platforms registered in the Chinese Ministry of Civil Affairs had raised more than CNY 3.17 billion, which increased about by 30% in comparison to the donations in 2017 (http://www.charityalliance.org.cn/givingchina/12781.jhtml, accessed on 19 November 2021). Charitable crowdfunding has attracted a great deal of attention in industry, the dynamics of the fundraising process still experience a lack of investigation
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