Crowdfunding in the era of the pandemic is more common and successful in affluent communities

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June 16, 2021

In the first months of the pandemic – when communities locked down, jobs were lost, PPE was scarce, and store shelves were cleaned up – thousands turned to online crowdfunding to respond to their needs.

But a new analysis from the University of Washington of requests and donations to crowdfunding site GoFundMe, as well as census data, shows glaring inequalities in where the money goes and the amount of donations.

A study published on June 15 in Social Science & Medicine found more than 175,000 GoFundMe campaigns related to COVID-19 in the United States, raising more than $ 416 million, from January to July 2020. Researchers found that affluent communities and educated people created more fundraising campaigns, and received more in return, than other communities with fewer resources.

In addition, the researchers found that the campaign’s success, on the whole, was difficult to achieve. Some 43% of campaigns received no donation. Over 90% of campaigns did not reach their goals.

The researchers say the study reveals the challenges inherent in online crowdfunding, as well as its ability to strengthen existing socio-economic divisions.

“Our study shows that while COVID-19 had an impact across the country, the places that benefited the most from crowdfunding were the places that already had the most resources available,” said the lead author of the ‘study, Marc Igra, a graduate student in sociology at UW.

While some of the findings are unsurprising from an economic perspective – people in wealthier communities likely have more money to donate to charity – the researchers say the findings highlight other contributing factors. to the success of the campaign. For example, residents of more educated communities are probably better able to tap into existing social networks to raise funds – while in communities with lower education needs may be greater, but residents may have fewer links with wealthy donors and fewer campaigns are reaching their goals.

Other recent research has explored online crowdfunding specific to medical needs, noting that campaigns are common, but often unsuccessful, in communities where health care resources and insurance coverage are lacking. This study is considered the first to examine online crowdfunding as a broader response to the crisis and its impacts on inequalities.

By examining COVID-19-related fundraising campaigns that mentioned a need associated with the pandemic, such as a lost job and a need for food or money for rent, the researchers eliminated those that were part of the ‘a GoFundMe program providing matching funds to businesses, leaving around 164,000 campaigns to sort through. Since demographics on crowdfunding users are difficult to come by, the researchers analyzed county-level campaign data and compared it to other county-level socioeconomic characteristics using data from the county level. US census. Among their discoveries:

  • The campaign’s median goal was $ 5,000, with a median of two donations and only $ 65 raised.
  • The top 1% of campaigns received almost a quarter of all funds raised.
  • As COVID-19 cases and unemployment increased in various communities, more fundraising campaigns were created in communities with higher levels of education and income.
  • Counties where 35% of residents have a college degree can expect about 50% more countryside than counties where only 12% are graduates.
  • Counties with a median household income of at least $ 130,000 raised nearly $ 150 million, almost three times as much as counties with a median income of $ 19,000 to $ 47,000, even though populations of these counties are pretty much the same.
  • Keyword research of GoFundMe campaign requests found that those identifying business and medical needs generated more donations than campaigns mentioning personal financial needs.

GoFundMe’s approach of highlighting and promoting certain campaigns, whether they are related to a prominent person or those that grab attention and grow at a faster pace, means success breeds success. , the researchers said.

High income counties create more fundraising campaigns and raise more money than low income counties.

These bar charts show the differences in building crowdfunding campaigns, among other differences, by median county household income.Igra et al., 2021, Social sciences and medicine

Co-author Nora Kenworthy, an associate professor of nursing and health studies at UW Bothell, said the study shows who is able to leverage resources in a crisis and that the nature of online crowdfunding as a platform -Social media form exacerbates the dynamics of a crisis.

“During the pandemic, there was a lot of talk about communities supporting communities, but we have to ask ourselves where this is happening, for whom and who is being left out?” Kenworthy said. “The more we rely on social media platforms to shape this community response, the more we don’t know where help isn’t coming and who isn’t getting help. “

That’s not to say that crowdfunding doesn’t serve a valuable purpose, the authors point out. It’s more a sign “that we shouldn’t shy away from more structural solutions,” Kenworthy said, such as government-run programs that might cast a wider net than crowdfunding can cover.

“People’s basic health and wellness needs should not depend on such an unpredictable source of funding. It’s really a question of what is our shared commitment to the things people should have, whether or not they can be successful in crowdfunding, ”Igra said. “It’s a good thing that people are helping, but the people who are not being helped are not visible.”

The study was funded by the National Science Foundation, the Center for Studies in Demography & Ecology at UW, and the School of Nursing and Health Studies at UW Bothell. Additional co-authors were Cadence Luchsinger from the Department of Health Services at UW and Jin-Kyu Jung from the School of Interdisciplinary Arts and Sciences at UW Bothell.

For more information, contact Igra at [email protected] or Kenworthy at [email protected]

Tag (s): College of Arts and Sciences • COVID-19 • Department of Sociology • Mark Igra • Nora Kenworthy • UW Bothell School of Nursing and Health Studies

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