Redistributing Funds across Charitable Crowdfunding Campaigns
This addresses the problem of inefficient funding allocation for crowdfunding platforms and donors, offering incremental improvements through policy-based redistribution.
The paper tackles the low success rate of charitable crowdfunding campaigns by exploring redistribution of donations, finding that aggressive redistribution can boost success rates from 37% to 79%, while choice-preserving schemes achieve 48%.
On Kickstarter only 36% of crowdfunding campaigns successfully raise sufficient funds for their projects. In this paper, we explore the possibility of redistribution of crowdfunding donations to increase the chances of success. We define several intuitive redistribution policies and, using data from a real crowdfunding platform, LaunchGood, we assess the potential improvement in campaign fundraising success rates. We find that an aggressive redistribution scheme can boost campaign success rates from 37% to 79%, but such choice-agnostic redistribution schemes come at the cost of disregarding donor preferences. Taking inspiration from offline giving societies and donor clubs, we build a case for choice preserving redistribution schemes that strike a balance between increasing the number of successful campaigns and respecting giving preference. We find that choice-preserving redistribution can easily achieve campaign success rates of 48%. Finally, we discuss the implications of these different redistribution schemes for the various stakeholders in the crowdfunding ecosystem.