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Crowdfunding as a response to COVID-19: Increasing inequities at a time of crisis

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  • Igra, Mark
  • Kenworthy, Nora
  • Luchsinger, Cadence
  • Jung, Jin-Kyu

Abstract

During the first seven months of the COVID-19 pandemic, more than 175,000 crowdfunding campaigns were established in the US for coronavirus-related needs using the platform GoFundMe. Though charitable crowdfunding has been popular in recent years, the widespread creation of COVID-19 related campaigns points to potential shifts in how the platform is being used, and the volume of needs users have brought to the site during a profound economic, social, and epidemiological crisis. This study offers a systematic examination of the scope and impacts of COVID-19 related crowdfunding in the early months of the pandemic and assesses how existing social and health inequities shaped crowdfunding use and outcomes. Using data collected from all US-based GoFundMe campaigns mentioning COVID or coronavirus, we used descriptive analysis and a series of negative binomial and linear models to assess the contributions of demographic factors and COVID-19 impacts to campaign creation and outcome. We find significant evidence of growing inequalities in outcomes for campaigners. We find that crowdfunding provides substantially higher benefits in wealthier counties with higher levels of education. People from these areas are more likely to initiate campaigns in response to adverse health and economic impacts of COVID-19, and they also receive more funding compared to people living in areas with lower income and education. Modeling also indicates differential outcomes based on the racial and ethnic composition of county population, though without more detail about who is creating and funding campaigns we cannot explain causality. A targeted qualitative analysis of the top earning COVID-19 campaigns offers further evidence of how user privilege and corporate practices contribute to highly unequal outcomes. Taken together, these findings demonstrate how a market-oriented digital technology used to respond to large-scale crisis can exacerbate inequalities and further benefit already privileged groups.

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  • Igra, Mark & Kenworthy, Nora & Luchsinger, Cadence & Jung, Jin-Kyu, 2021. "Crowdfunding as a response to COVID-19: Increasing inequities at a time of crisis," Social Science & Medicine, Elsevier, vol. 282(C).
    • Handle: RePEc:eee:socmed:v:282:y:2021:i:c:s0277953621004378
    DOI: 10.1016/j.socscimed.2021.114105
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    References listed on IDEAS

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    Cited by:

    1. Teng Ye & Jingnan Zheng & Junhui Jin & Jingyi Qiu & Wei Ai & Qiaozhu Mei, 2024. "Using Artificial Intelligence to Unlock Crowdfunding Success for Small Businesses," Papers 2407.09480, arXiv.org.
    2. Ahmad Harith Ashrofie Hanafi & Mohd Shahid Azim Mohd Saufi & Muhammad Zarunnaim Haji Wahab & Suheil Che Sobry & Mohd Hilal Muhammad, 2024. "Crowdfunding as a Social Phenomenon: A Bibliometric Exploration of Research Trends and Societal Implications," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(9), pages 909-927, September.
    3. Nikolaos Daskalakis, 2023. "COVID-19 Effects on Reward-based Crowdfunding Campaigns," Business & Entrepreneurship Journal, SCIENPRESS Ltd, vol. 12(2), pages 1-6.
    4. Moysidou, Krystallia & Cohen Chen, Smadar, 2023. "Inducing collective action intentions for healthcare reform through medical crowdfunding framing," Social Science & Medicine, Elsevier, vol. 333(C).
    5. Borello, Giuliana & Muri, Roberta, 2024. "The effect of covid policy restrictions on donations during the sustainable and entrepreneurial context," Journal of Business Research, Elsevier, vol. 177(C).
    6. Lenny Phulong Mamaro & Athenia Bongani Sibindi, 2022. "Entrepreneurial Financing in Africa during the COVID-19 Pandemic," JRFM, MDPI, vol. 15(11), pages 1-17, November.
    7. Elrashidy, Zeinab & Haniffa, Roszaini & Sherif, Mohamed & Baroudi, Sarra, 2024. "Determinants of reward crowdfunding success: Evidence from Covid-19 pandemic," Technovation, Elsevier, vol. 132(C).
    8. Lenny Phulong Mamaro & Athenia Bongani Sibindi, 2022. "Financial Sustainability of African Small-to-Medium Enterprises during the COVID-19 Pandemic: Determinants of Crowdfunding Success," Sustainability, MDPI, vol. 14(23), pages 1-14, November.
    9. Davis, Aaron Renee & Elbers, Shauna K. & Kenworthy, Nora, 2023. "Racial and gender disparities among highly successful medical crowdfunding campaigns," Social Science & Medicine, Elsevier, vol. 324(C).
    10. Janina Sundermeier & Tyge-F. Kummer, 2022. "Does personality still matter in e-commerce? How perceived hubris influences the assessment of founders’ trustworthiness using the example of reward-based crowdfunding," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(3), pages 1127-1144, September.
    11. Evangelos Katsamakas & J. Manuel Sanchez-Cartas, 2024. "A computational model of the effects of borrower default on the stability of P2P lending platforms," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 14(3), pages 597-618, September.

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