Impact of Project Updates and Their Social Endorsement in Online Medical Crowdfunding

ABSTRACT

Online crowdfunding has become an important fundraising channel for medical care. Yet, individuals in need face numerous challenges in meeting their fundraising goals. To improve fundraising, individuals may use project updates to evoke donors’ sympathy and secure donations. Informed by the sympathy bias literature, this paper conceptualizes two important but distinct aspects of project updates—positive sentiment and negative sentiment—and hypothesizes their individual and relative impacts on the donation amount of a crowdfunding project. In addition, this paper explores moderating effects of social endorsements on the influence of update sentiment. To test our hypotheses, we conducted two studies. Study 1 examined unique project-day panel data from 1,467 projects on a leading medical crowdfunding platform. Results reveal that both positive and negative update sentiment positively affect the donation amount of a crowdfunding project, but negative updates have a greater effect. Further, endorsements by strong ties and weak ties attenuate the positive effects of update sentiment. Study 2 was a controlled, randomized experiment that corroborated findings from Study 1, established the causality of observed effects, and confirmed the mediating effects of sympathy. The findings of this paper underscore the role of sympathy in enhancing online charitable crowdfunding to individual donors and show project updates with positive or negative sentiment to be potent mechanisms to boost donations. Furthermore, the substitution effect of social endorsement on donation amount also adds nuance to our knowledge suggesting that a proper combination of various information can better help improve crowdfunding performance. Platform operators and fundraisers should prioritize project update sentiment to enhance online charitable crowdfunding success.

KEYWORDS:

• online medical crowdfunding
• project updates
• online sentiment
• social endorsement
• sympathy

Acknowledgement

The authors appreciate the constructive comments and suggestions provided by the review team. The authors also wish to acknowledge the National Natural Science Foundation of China (72172103, 72231004, 72172102) for financial support.

Disclosure statement

No potential conflicts of interest are reported by the authors(s).

Supplemental data

Supplemental data for this article can be accessed online at https://doi.org/10.1080/07421222.2023.2301173

Notes

^1. https://www.norc.org/NewsEventsPublications/PressReleases/Pages/millions-of-americans-donate-through-crowdfunding-sites-to-help-others-pay-for-medical-bills.aspx, accessed on Dec 13, 2022.

^2. The exchange rate fluctuated around US$1 = CNY7.11during the writing of this paper.

^3. The detailed description on Alibaba Cloud NLP can be retrieved from: https://www.alibabacloud.com/product/machine-learning?spm=a2796.11222794.6791778070.279.339a27a2tlV42g

^4. https://bigthink.com/health/how-much-does-cancer-cost/, accessed on Dec 13, 2022.

Additional information

Notes on contributors

Yi Wu

Yi Wu ([email protected]) is an associate professor at the Department of Information Management and Management Science, Tianjin University, China. He received his Ph.D. from the National University of Singapore. Dr. Wu’s research interests are in the areas of the online crowdfunding, sharing economy, e-healthcare, and online platforms. His work has been published in the Information Systems Research, Journal of the Association for Information Systems, European Journal of Information Systems, IEEE Transactions on Engineering Management, and Information & Management, among others.

Hua (Jonathan) Ye

Hua (Jonathan) Ye (Corresponding author, [email protected]) is an associate professor in the MIS Division of the Price College of Business at the University of Oklahoma. His research interests include IT-enabled open innovation, user-generated content, crowdsourcing as well as service innovation. Dr. Ye’s research has been published in such journals as, MIS Quarterly, Journal of Management Information Systems, Journal of the Association for Information Systems, Journal of Strategic Information Systems, Information & Management, and many others. And in the proceedings of the premium conferences. He has been serving as the Associate Editor for the European Journal of Information Systems, Information Systems Frontiers, and other journals.

Matthew L. Jensen

Matthew L. Jensen ([email protected]) is the Wood Professor of Management Information Systems and a co-director of the Center for Applied Social Research at the University of Oklahoma. His interests include computer-aided decision making, human-computer interaction, and computer-mediated communication. Dr. Jensen studies how people attribute credibility in mediated interactions and how people filter and evaluate information they find online. His research has been published in the Journal of Management Information Systems, Information Systems Research, MIS Quarterly, and other journals. He has been the primary investigator or co-primary investigator on externally funded research projects totaling more than $9 million.

Linwei Liu

Linwei Liu ([email protected]) is a data scientist at Ant Group. He graduated from Tianjin University with a Master’s degree. His main research fields are online crowdfunding, sharing economy, and e-healthcare. At present, he is responsible for product AB tests in the financial field, experimental data variance reduction, heterogeneity analysis, and other data-based projects.