For love or money? The effect of deadline proximity on completion contributions in online crowdfunding

Purpose: The authors investigate whether the individual “completion contributions” that enable online crowdfunding campaigns to meet or exceed their targets tend to be larger in relative terms when made nearer to the funding deadline. As these contributions are likely to have a disproportionate impact upon campaign outcomes, the authors assess whether the investment patterns they observe are consistent with the theory of impact philanthropy. Design/methodology/approach: The authors use campaign-level data incorporating observations on campaigns from reward (both all-or-nothing, AoN and keep-it-all, KiA), donation and equity-based platforms. To the knowledge of the authors, the coverage of the data is unparalleled elsewhere in the crowdfunding literature. Using these data, the authors analyze whether completion contributions tend to vary contingent upon both the proximity of the deadline and form of crowdfunding. Findings: The authors find that completion contributions tend to vary significantly and positively with proximity to funding deadlines. The authors also find that this relationship tends to be more pronounced among AoN than for KiA campaigns, as well as for donation-based platforms compared with equity-based platforms. Altogether, the patterns of behavior observed are consistent with the theory of impact philanthropy. Originality/value: The authors help develop a better understanding of the behaviors of contributors to online crowdfunding campaigns and whether those behaviors are consistent with altruistic motivations. The findings also have considerable value in understanding the non-financial factors associated with the informal financing of business startups.