Individual Versus Institutional Philanthropy: Crowdfunding During Crises

Abstract

Crises are accompanied by resource shortages, operational challenges, and shifts in demand for resources. During crises, nonprofit organizations have historically played a crucial role in mitigating these challenges, with crowdfunding platforms emerging as a new solution for resource mobilization. In this study, we examine how individual and institutional donors respond to the sudden shifts in demand that accompany a global crisis. We analyze rich, granular data from multiple sources, including donation data from a leading education crowdfunding platform, before and after the onset of the COVID-19 pandemic, and find notable contrasts between individual and institutional responses. While there was a significant increase in institutional donations during the pandemic, individual donations remained relatively stable overall. Adopting a motivation-opportunity-ability (MOA) framework, we center donor heterogeneity in our approach, deriving nuanced insights. Donations from individuals in economically disadvantaged communities, which were the worst impacted by the crisis, decreased; however, these communities prioritized immediate and time-sensitive needs. Small and local institutions played a pivotal role in supporting high-need schools during the crisis. These findings make meaningful contributions to the operations literature on crowdfunding and have practical implications for platform designers. By distinguishing between individual and institutional donors and identifying the factors that drive their behavior, our study offers important implications for platform designers to improve crisis-time resource mobilization through more targeted engagement strategies.