CSR Crowdfunding: A qualitative study on the perceived business case value creation effects of CSR crowdfunding

Abstract

Increasingly, established companies are adopting crowdfunding activities that aim at funding not-for-profit activities that advance causes beneficial to society and/or the environment. Since these crowdfunding activities fall within the scope of what is commonly regarded as corporate social responsibility (CSR), a novel combination between CSR and crowdfunding has emerged. As of yet, there is very little research on the effects of CSR crowdfunding on companies, except for the hypothetical synergies between crowdfunding and CSR that were suggested by Spanos (2016). The current research seeks to improve our understanding of CSR crowdfunding by answering to the research recommendation of Spanos (2016), who suggests a business-value and CSR-perspective on CSR crowdfunding.

The four modes of CSR business case value creation (Kurucz et al. 2008) were used to identify the business-value that CSR crowdfunding can have for companies, which can be: (1) cost & risk reduction, (2) reputation & legitimacy, (3) competitive advantage and (4) synergistic value creation. Fifteen semi-structured interviews were conducted with respondents active in organisations that have implemented CSR crowdfunding: companies using CSR crowdfunding, crowdfunding platforms & crowdfunding service providers, and two interviews were conducted with crowdfunding experts. These respondents were identified based on an internet search followed up by snowball-sampling. The respondents’ answers were analysed with respect to the effects of CSR crowdfunding on business case value creation.

This study finds that two dominant types of CSR crowdfunding occur: internal CSR crowdfunding and public CSR crowdfunding. Both types of CSR crowdfunding were found to have particular positive and negative effects on all four modes of business case value creation. These results suggest that CSR crowdfunding can provide the company with opportunities to: (1) increase existing CSR funds by adding crowd or employee donations, (2) improve its reputation and legitimacy amongst the public and its prospective employees, (3) increase its competitive advantage through: gains in reputation, opportunities to market-test innovations and improvements in attraction, CSR engagement, and retention of employees, (4) stimulate its CSR impacts by increasing exposure and funding of CSR initiatives (5) reduce costs of organising CSR and reduce risk of public CSR scepticism. Potential negative effects to a company implementing CSR crowdfunding are related to a possible increased risk to its reputation and legitimacy. Moreover, by corroborating the synergies between crowdfunding and CSR as suggested by Spanos (2016) with qualitative evidence, this study adds to the body of academic literature on crowdfunding and CSR.