By now probably most of us are familiar with the concept of ‘crowdfunding’. As defined in Wikipedia, it “is the practice of funding a project or venture by raising monetary contributions from a large number of people”. It’s a source of alternative financing; in 2015, “it was estimated that worldwide over US$34 billion was raised this way”.
An article in a recent issue of Psychology Today explores the motivation for people to subscribe to this method of giving.
In a featured illustration, a man leaving a grocery store in Memphis, Tenn., was approached by a teenager who offered to carry his groceries to the car in exchange for a box of doughnuts. Impacted by the latter’s appearance, a mixture of shame and hunger but with an ‘endearing personality’, the man took him back into the store and paid for a cart of groceries, drove him home with them, and was saddened to see the plight of the young man who, with his grandmother, had sleeping bags for beds, two lamps, and an empty refrigerator. When the man posted this episode on Facebook, it went viral; he attached it to a crowdfunding website, with a goal of raising $250 – two months later, more than 14,000 people had contributed almost $345,000.
While this is obviously a higher profile example, the practice of asking for money by crowdfunding is becoming more popular. There are estimated to be about 2,000 such websites, for causes from charitable to entrepreneurial, appealing out to relations, friends, and strangers.
Thanks to the ever-growing impact of social media, this avenue is “enabling huge pools of potential donors to be reached with greater ease than traditional forms of fundraising”. Moreover, it has additional elements of human appeal: the non-tangible reward of recognition, along with an altruistic sense of knowing one has helped a certain identifiable family or group. This can evoke a warm feeling.
There is also the potential motivation of reinforcing relationships, albeit in a more circumspect context. Since relationships are ‘one of the pillars of happiness’, such activity can strengthen the pillar.
As well, it is easier to ‘gather’ potential donors on-line than in person.
An interesting by-product of being a potential on-line donor is that one’s extent of altruism may be based on signalling to connections on social media, without actually contributing oneself.
Another reason for giving is an extension of the relationship angle: it appeals to people’s craving to be part of a larger group. This contrasts with much focus otherwise on individualism in our society.
Those who run crowdfunding venues fortify interconnectedness by providing updates on campaigns, so donors feel reinforced in their commitment. Then there is the opportunity to connect directly to others in the community, thanks to the openness of social media.
For all of their accent on immediacy, and rightful concerns about privacy, it seems websites and social media have been helping many to help others while enjoying a healthy dose of reciprocal ‘warm feeling’. Our interconnected world could use more.