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Non-profit differentials in crowd-based financing: Evidence from 50,000 campaigns

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  • Pitschner, Stefan
  • Pitschner-Finn, Sebastian

Abstract

We use data from approximately 50,000 crowdfunding projects to assess the relative funding performance of for-profit and non-profit campaigns. We find that non-profit projects are significantly more likely to reach their minimum funding goals and that they receive more money from the average funding provider. At the same time, however, they have fewer funding providers and obtain lower total funding amounts. Our analysis shows that these results are driven by a small number of very successful for-profit projects. We argue that the findings are consistent with a simple selection mechanism in which entrepreneurs make the non-profit/for-profit decision based on expected project payoffs.

Suggested Citation

  • Pitschner, Stefan & Pitschner-Finn, Sebastian, 2014. "Non-profit differentials in crowd-based financing: Evidence from 50,000 campaigns," Economics Letters, Elsevier, vol. 123(3), pages 391-394.
    • Handle: RePEc:eee:ecolet:v:123:y:2014:i:3:p:391-394
    DOI: 10.1016/j.econlet.2014.03.022
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    References listed on IDEAS

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    4. Ajay K. Agrawal & Christian Catalini & Avi Goldfarb, 2011. "The Geography of Crowdfunding," NBER Working Papers 16820, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    Crowdfunding; Non-profit; Entrepreneur; Startup;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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