Role of Social Media In Crowdfunding

Published by Irfan Bashir on

Breswana is a remote Himalayan village in the Doda district of Jammu and Kashmir in India. Located at 7,500 feet above sea level, Breswana can be accessed only after trekking for one-and-a-half hours (7 km) from the last motorable point at the wooden bridge over the Chenab river in Premnagar. The bridge is the nearest road link with the village, lying at a distance of over 15 km from Doda town, where people usually go to get access to decent healthcare and buy basic amenities.

By all means, the Breswana village is cut off from the world below. The villagers face many difficulties, especially during the harsh winter months, when the snowstorms can make the village inaccessible to the rest of the world. Yet, despite geographical constraints, the children of Breswana have been exposed to high-quality education, and their stories have even reached JK Rowling.

The remote Himalayan village is home to the Haji Public School (HPS), which was started in 2009 in the ancestral home of its founding members— the Haji family. The school is run by Sabbah Haji, who has served as the director of HPS since its inception in 2009. The idea of the school emerged in the aftermath of the Amarnath riots. In 2008, Breswana, a village no one had heard of, was suddenly featured in the national news because of a mob violence incident.

Before the riots, the Haji family had been running a trust in the Doda town, providing charity on a small scale to widows, orphans, and poor people looking for financial help. However, the riots made the family realize that to bring about any real change, they needed to work towards providing education for the children in their ancestral village. The Amarnath riots acted as a wake-up call for Sabbah, who decided to leave her job in Bangalore city and return permanently to her native village in Breswana to start the Haji Public School, with the help of her family.

The school started with two classes, lower and upper kindergarten, two teachers and thirty-five students studying in the rooms of the Haji Cottage. A decade later, Haji Public School has over five hundred students on its rolls, a permanent local staff of more than twenty teachers, and teaching volunteers from various parts of India, Canada, South Africa, Singapore, and Paris.

Sabbah uses her social media platforms to raise funds and invite volunteers to teach at her school. She represents the school outside her village, on social media, and at various conferences. Through platforms like Facebook, Twitter, and Instagram, she constantly posts updates and stories about the progress of students enrolled in her school. Currently, her Instagram has over 12,000 followers, and her Twitter has over 35,000 followers. The school’s official Facebook page also has over 5,000 followers. Thus, with the help of a strong social media network, Sabbah has run successful volunteer programs and fundraisers for the school.

Inspired by Sabbah’s efforts in her village, Srini Swaminathan, a runner and a freelance

consultant for nonprofit organizations, participated in six full marathons and two half marathons to raise funds for the Haji Public School in 2016. His crowdfunding campaign raised Rs 2.49 lakh (242,909) and was shared 307 times on social media. In the same year, Dushyant Arora, a lawyer practicing in Delhi and a Columnist with Mumbai Mirror, raised Rs 6.12 lakh (612,000) from 123 supporters to cover the tuition costs of over 100 students enrolled in Haji Public School. Perhaps, the most impressive campaign was run by an ex-volunteer at Haji Public School, Nagakarthik, whose crowdfunding campaign raised Rs 9.31 lakh (931,000) from 217 supporters in an effort to install a solar-powered grid at the school and set up smart screens with educational content to improve the quality of education at HPS. Due to Nagakarthik’s fundraising efforts, the Haji Public School now runs on solar power, and its students have access to smart classrooms. A short film made on Nagakarthink’s initiative ‘The Breswana Project’ was awarded the people’s choice award at the IMF Mountain Film Festival.

One of the many factors behind the success story of Haji Public School is the social networking prowess of its volunteers and management. By tapping into the power of social media, Haji Public School has become an ideal education model for social changemakers aiming to transform remote and inaccessible regions. Through a brilliant social networking strategy, the Haji family has been able to bring teachers from across the world to a small Himalayan village in Jammu and Kashmir. Together, they have helped educate hundreds of first-generation learners— an impact that cannot be quantified.
“Nobody would have known about the school if it hadn’t been for the internet. Twitter has been great. I almost need to keep spamming the world about the things we are doing. These updates have given us visibility,” Sabbah Haji said in a 2015 Ted Talk, highlighting the role played by the internet, especially Twitter, in giving visibility to the school and its activities.

We live in an age where the internet has dramatically reduced the limitations posed by geographical distances. Social media has enabled us to transcend communication barriers and connect with people irrespective of their geographical or socio-economic location. If a story of a 12-year-old girl from a small Himalayan school can reach a renowned writer across the world within a few hours, it begs the question: How connected are we? Poets, philosophers, researchers have all pondered about this question, and some even found an answer.

Fig 1- JK Rowling’s reply to a 12-year-old girl from Haji Public School.

In 1967, a Yale social psychologist Stanley Milgram conducted an experiment famously known as the ‘small world experiment’ which tracked chains of acquaintances in the United States. Milgram asked 160 random people living in Nebraska and Kansas to send a letter to a stranger (a stockbroker from Boston, Massachusetts) using only friends (whom they knew by their name) as intermediaries. In turn, the friends were allowed to pass the letter to their friends, and so the chain would continue. On average, it took five friends — a separation of six degrees — for the letters to reach their destination.

A ‘degree of separation’ is a measure of social distance between people; you are one degree away from everyone you know, two degrees away from everyone they know, and so on. The

earliest historical reference to the theory of six degrees of separation can be traced back to the Hungarian author Frigyes Karinthy who, in 1929, published a collection of short stories titled, ‘Everything is Different’. In one of the stories, titled ‘Chain-Links’, two characters believe that any two people could be connected through a chain of at most five acquaintances, so they create a game out of their conjecture. One of the characters notes, “A fascinating game grew out of this discussion. One of us suggested performing the following experiment to prove that the population of the Earth is closer together now than they have ever been before. We should select any person from the 1.5 billion inhabitants of the Earth — anyone, anywhere at all. He bet us that, using no more than five individuals, one of whom is a personal acquaintance, he could contact the selected individual using nothing except the network of personal acquaintances.”

In 2001, Columbia University professor Duncan Watts made an effort to recreate Milgram’s experiment via the internet, using an email message with 48,000 senders and 19 recipients (across 157 countries). Watts found that the average number of intermediaries it took for the message to be delivered was around six. In 2007, Researchers Jure Leskovec and Eric Horvitz studied records of 30 billion electronic conversations among 240 million people in various countries on Microsoft Messenger. They found that the average path length among Messenger users was 6.6, hence further corroborating the theory of six degrees of separation.

The concept of ‘Six Degrees of Separation’ has been enshrined in various movies, literature, and even a game involving actor Kevin Bacon. There was also a play that premiered in 1990, which was named Six Degrees of Separation.

I read somewhere that everybody on this planet is separated by only six other people. Six degrees of separation. Between us and everybody else on this planet. The president of the United States. A gondolier in Venice. Fill in the names. . . . How every person is a new door, opening up into other worlds. Six degrees of separation between me and everyone else on this planet. But to find the right six people . . .”– John Guare, Six Degrees of Separation.

Unsurprisingly, the degrees of separation have decreased with the advent of social media. On February 4, 2016, Facebook released a report on its blog claiming that the collective “degrees of separation” had shrunk over the past five years. As per their estimates, ‘each person in the world’ is connected to ‘every other person’ by an average of three and a half other people (3.57). The company relied on statistical algorithms to calculate their social network’s centrality, finding the approximate number of people within 1, 2, 3 (and so on) hops away from a source. In 2011, Facebook, in collaboration with researchers from Cornell University and the University of Milan, had found the average degrees of separation to be 3.74 on its platform. The one major drawback to facebook’s study is that the sample size is its users who all share one point of common interest: Facebook. 

Fig 2- Estimated average degrees of separation between all people on Facebook.
Therefore, the results cannot be applied to the rest of the 7.8 billion people on the planet, many of whom don’t even have internet access. However, one thing is certain: social media has vastly reduced the communication barriers between people. Today, we are just a few connections away from most people in the world. 

Social media plays an integral part in the success of most crowdfunding campaigns. A campaign’s success depends mostly on the campaigner’s networking skills, a process that involves tapping into one’s social network and persuading people to donate. For a crowdfunding campaign to be successful, the creator needs to promote it across multiple social media platforms. Numerous studies have found that a person’s social network connections, fan base, early promotional activities on social media, and the number of Facebook ‘likes’ on a campaign page are all positively correlated with fundraising success.

On a larger scale, even a crowdfunding platform’s success can be tied to its social media following. As the social media following of a platform grows, it can attract more donors and project creators. The degrees of separation between the platform and other social media users (who don’t follow the platform’s social media handle) is also reduced as the platform gets more followers. By retweeting or commenting on a crowdfunding campaign on Twitter or by liking a campaign shared on Facebook or Instagram, notifications or updates can appear on the timelines of other users who are not in the primary network of the campaigner. Since social media platforms amplify herding behavior, more people are likely to donate to a campaign or follow a platform’s social media handle when they see their friends involved in it.

Fig 3- Correlation between Facebook likes and funds raised on Kickstarter between 2014-19.

Fig 4- Correlation between Facebook likes and funds raised on Kiva between 2014-19.

Fig 5- Correlation between Facebook lives and funds raised on GoFundMe between 2014-19.

Comparing the increase in the Facebook following (Variable A) of Kickstarter, GoFundMe, and Kiva with the increase in funds raised by each of these platforms (Variable B) over a period of 5 years, we observe a strong positive correlation between the two variables. For Kickstarter, there is a 0.87 correlation between the increase in funds raised on the platform and the increase in social media following. For Kiva, the correlation is 0.91, and for GoFundMe, it is 0.87. While correlation doesn’t imply causation, we can infer from both platform and campaign data that social media is essential to crowdfunding success in more ways than one, especially when it comes to reaching a new audience. A strong social media presence is also a prerequisite for emerging crowdfunding platforms and campaigners to improve their success rate, brand recognition, and trust ratings. Most crowdfunding platforms worldwide, either directly or indirectly, benefit from social media platforms like Whatsapp, Facebook, Instagram, Youtube, Twitter, WeChat, Weibo, Snapchat, and Reddit to fund their campaigns.

Take Milaap’s example; upon realizing that approximately 85% of their traffic came from mobile devices, the platform decided to focus its efforts on mobile messaging apps. Since 95% of their mobile audience already used WhatsApp, Milaap chose to use the WhatsApp Business API as a communications channel. WhatsApp’s conversational approach helped the platform connect with more people in rural India and guide them to start fundraisers for personal emergencies or creative projects. Due to WhatsApp’s popularity and broad reach, people in remote areas could share campaigns with their social network via the platform, thereby allowing them to raise funds quickly. After introducing the WhatsApp Business API for its campaign in October 2018, Milaap witnessed a 2X higher gross donation volume via WhatsApp compared to traditional channels. By 2019, Milaap had served 240,000 customers through WhatsApp.  

Social media is a space for like-minded people to converge and rally behind a common cause that they feel strongly about. Animal lovers, sci-fi enthusiasts, human rights advocates, nature lovers, and people from all walks of life can easily find relevant social media groups. This makes it easier for project creators to pitch their crowdfunding campaigns to their target audiences. A few minutes on social media can expose a person to thousands of groups where they can find like-minded people. 

Take the case of Rakesh Shukla, a dog lover who sold his house and cars to build a sanctuary for abandoned and stray dogs on the outskirts of Bangalore. His crowdfunding campaign was shared over 1,100 times on social media, allowing him to raise Rs 1.7 crore (17 million) with the help of 10,000+ supporters. 

In another instance, Dr. Uday Modi, who wanted to raise funds to build an old-age home for over 200 abandoned elderly in Mumbai, raised 1.9 crore (19 million) for his project after 6,800 people on social media shared his campaign. Over 40 campaigns were started on the crowdfunding platform Milaap for Dr. Modi’s project by people with whom the project’s cause resonated. Since social media creates echo chambers where people with common interests connect, it allows campaigners and supporters to invite like-minded people to support a crowdfunding cause that appeals to the ingroup. Ingroup members can then share the relevant campaign with their networks to amplify the campaign’s reach. 

For most crowdfunding platforms, social media is one of the primary drivers of web traffic. Different platforms evolve to prefer certain social media channels to reach out to potential donors. Let’s look at the preferences of India’s top three crowdfunding platforms: Milaap, Ketto, and ImpactGuru. In August 2020, Milaap received 30.81% of its web traffic from social media platforms, with Facebook driving a massive share of the traffic to the website at 52.7%.

Fig 6- Percentage of traffic sent to Milaap by different social media platforms.

On the other hand, Ketto’s share of traffic from social media was primarily driven by Youtube. In August 2020, the platform received 31.12% of its web traffic from social media, out of which 56.84% was from Youtube. The number reflects Ketto’s video-centric strategy to appeal to potential donors. With curated donation appeals ranging between 30 seconds to 4 minutes, Ketto has successfully leveraged Youtube as a platform to engage with potential donors. While the written content allows for nuance and elaboration, video content drives the greatest engagement and sales, given its tendency to appeal to people’s short attention spans.

Fig 7- Percentage of traffic sent to Ketto by different social media platforms.

Fig 8- Percentage of traffic sent to ImpactGuru by different social media platforms.

Compared to Ketto and Milaap, ImpactGuru’s dependence on social media is relatively lower, with the platform driving 24.27% of its traffic from social media in August 2020. Interestingly, ImpactGuru also gets a fair share of web traffic (13.4%) from Reddit forums. This implies the platform has been able to stir enough discussions regarding its campaigns on the social news aggregation platform, a slightly different strategy from the rest of its competing firms.  

All in all, different crowdfunding platforms have devised various strategies to target potential donors across multiple social media websites. In almost all cases, Facebook occupies the first or second place. The amount of traffic that crowdfunding platforms receive from social media is not always directly through their own handles. Most of the time, the traffic comes from third-party handles (campaigners, influencers, celebrities, donors). Influencers, especially cause-driven influencers play a significant role in the success of a crowdfunding campaign.

If a crowdfunding campaign is initiated or supported by a social media influencer, the chances of success become much higher. Influencers become a central point of convergence for crowdfunding campaigns, mobilizing supporters by tapping into their vast social media networks. Thus, allowing them to make a crowdfunding campaign go viral in a matter of minutes or hours. For example, if a tech influencer backs a Kickstarter tech project and asks his followers to do the same, his followers will follow suit because of his authority or knowledge in the domain.

One crowdfunding platform that has cracked the code of collaborating with micro-influencers and creating thriving communities is LaunchGood, a crowdfunding platform that mostly crowdfunds for Muslims and humanitarian causes. The platform has successfully raised over $160 million for 18,000+ crowdfunding campaigns since its inception in 2013. With an average pledge amount of $110 and its campaigns raising $10,000 on average, LaunchGood’s performance is better than most existing identity-based crowdfunding platforms. Despite a small social media following of just over 80,000 people, the platform raises millions of dollars every year by allowing NGOs to create communities on its website. With a community-driven approach, the platform has created a donor network of over 940,000 people spread across 144 countries.

One of the most successful collaborations of LaunchGood has been with International Human Care and Relief Organization (IHCRO), a nonprofit organization with a presence in 9 countries. IHCRO has launched 63 campaigns on LaunchGood, raising over $18.3 million with an average campaign success rate of 104%. The primary driver of IHCRO’s success is a man named Abdullateef Khaled. Khaled is a humanitarian worker with an Instagram following of 93,000 people. Compared to other prominent influencers and social media celebrities, Khaled’s following is not enormous. But his ability to engage with his followers sets him apart from the rest. 

Khaled is actively engaged with his Instagram community and posts relevant content that his audience wants to see, helping him raise funds for various humanitarian projects. He has fundraised to build eight villages comprising 150+ houses with a capacity to house more than 1200 people. The villages are communities where orphans, refugees, and underprivileged people can restart their lives. Besides raising funds for the villages, Khaled has also fundraised to set up over 1000 wells in remote villages facing dire water shortages across countries like Niger, Benin, India, Bangladesh, Syria, Indonesia, and Yemen. Furthermore, he has raised funds for the medical treatment of refugee children, distributing relief packages in war zones, and providing cash relief to needy families. 

Khaled’s social media strategy is simple: he makes a donation appeal and follows it up with updates on the project’s development in the form of short videos, testimonials, pictures, and written posts. His followers trust him because they see a project that they have backed evolve with the help of these regular updates, prompting them to make recurring donations to his campaigns. 

Much like how social media influencers sell fitness merchandise and tech products, the emergence of online crowdfunding has prompted many people to become social media influencers who sell crowdfunding campaigns to their followers. This is especially true for reward-based crowdfunding, where influencers can significantly influence a project’s success. 

Today, crowdfunding is no longer limited to just dedicated crowdfunding platforms. Some social media platforms like Facebook and Weibo allow users to start a crowdfunding campaign on their website to raise money for personal causes or nonprofit organizations.
Facebook allows its users to fundraise or donate money to over 1 million nonprofits. People have raised over $3 billion for personal fundraisers and nonprofit causes on Facebook with the help of a donor network comprising over 45 million people. 

Facebook has raised over $1 billion from Birthday Fundraisers alone. Usually, two weeks before their birthday, people will see a message from Facebook in their News Feeds giving them the option of creating a fundraiser for a nonprofit organization on their birthday. By dedicating their special day to a nonprofit organization, people rally their friends and family to support the causes that they care about most. Some nonprofits have raised millions of dollars through Facebook Fundraisers, most notable being the St. Jude Children’s Research Hospital which has successfully crowdfunded over $100 million on Facebook. 

Fig 9- Facebook’s Birthday Fundraiser notification. 

On GivingTuesday 2019 (the Tuesday after the Thanksgiving holiday in the US), over $120 million was raised on Facebook for more than 97,000 charitable organizations. An additional $20 million was raised in GivingTuesday-related fundraisers in the week leading up to December 3, 2019. Currently, Facebook allows users from over 40 countries to donate to its fundraisers, while users from 20 countries are allowed to start their own fundraisers. In April 2020, during the COVID-19 pandemic, Facebook even expanded its Fundraiser initiative to India, allowing around 70 Indian charities to raise funds on its platform. 

Social media has the potential to increase a post’s visibility, encourage user interaction, and allow a larger audience to engage with it. If a cause resonates with enough people, it can trigger herd behavior in the users, who tend to follow their acquaintances, friends, and family’s footsteps. Take the example of the ALS Ice Bucket Challenge that saw 1.2 million ice bucket challenge videos uploaded to Facebook to raise awareness and funds for ALS, a neurodegenerative disease known as Lou Gehrig’s Disease.

The challenge required participants to pour ice water over their bodies within 24 hours of being “nominated” or else donate $100 to the ALS Association. Around $115 million were raised for the cause across multiple platforms. More than 15 million joined in on the conversation about the ice bucket challenge on Facebook, including posting, commenting, or liking a challenge post.

At the core of social media, movements are shared interests that motivate people to form communities to get behind a common cause. Some causes are inherent to people’s identities and therefore drive their altruistic behavior. For example, a dog lover is more likely to start a fundraiser for dogs or support one. Our patterns of giving are driven— either consciously or subconsciously— by our identities.