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Legitimacy and Reciprocal Altruism in Donation-Based Crowdfunding: Evidence from India

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  • Indu Khurana

    (Department of Economics and Business, Hampden–Sydney College, 172 Via Sacra, Hampden-Sydney, VA 23943, USA)

Abstract

The donation-based crowdfunding platforms witness a mix of different entities seeking funding for numerous campaigns, adding complexities in understanding the donor behavior and factors that motivate donation. This study builds upon the economic theory of charitable giving and examines the ethical dilemma that donors face during the selection process. Using the data from Ketto.org, the biggest crowdfunding platform in India, this paper investigates the rank-order preference of donors while making a selection across heterogeneous entities and campaigns. The results show that campaigns run by non-profit organizations registered with causes that qualify for a tax-deduction receive a higher level of funding. Donors then fund unregistered non-profit organizations, followed by campaigns run by individuals. Demonstrating legitimacy by using subtle cues, like tagging “with tax-benefit,” motivates the donors to provide a higher amount of funding.

Suggested Citation

  • Indu Khurana, 2021. "Legitimacy and Reciprocal Altruism in Donation-Based Crowdfunding: Evidence from India," JRFM, MDPI, vol. 14(5), pages 1-16, April.
    • Handle: RePEc:gam:jjrfmx:v:14:y:2021:i:5:p:194-:d:543345
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    References listed on IDEAS

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    Cited by:

    1. Noelia Salido-Andres & Marta Rey-Garcia & Luis Ignacio Alvarez-Gonzalez & Rodolfo Vazquez-Casielles, 2022. "When the winner takes it all: online campaign factors influencing the success of donation-based crowdfunding for charitable causes," International Review on Public and Nonprofit Marketing, Springer;International Association of Public and Non-Profit Marketing, vol. 19(4), pages 763-780, December.
    2. Agnieszka Szewczyk & Zbigniew Stempnakowski, 2021. "Social Energy as the Driving Force behind Crowdfunding—Analysis and Classification of Selected Attributes," Energies, MDPI, vol. 14(19), pages 1-32, September.
    3. Han-Chiang Ho & Candy Lim Chiu & Somkiat Mansumitrchai & Zhengqing Yuan & Nan Zhao & Jiajie Zou, 2021. "The Influence of Signals on Donation Crowdfunding Campaign Success during COVID-19 Crisis," IJERPH, MDPI, vol. 18(14), pages 1-25, July.
    4. Betty Purwandari & Latifatul Khairiyah & Mardiana Purwaningsih & Achmad Nizar Hidayanto & Nur Fitriah Ayuning Budi & Kongkiti Phusavat, 2023. "Why do people donate online? A perspective from dual credibility transfer," International Review on Public and Nonprofit Marketing, Springer;International Association of Public and Non-Profit Marketing, vol. 20(2), pages 393-425, June.

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