Minuscule but Impactful: The Effects of Educational Crowdfunding on Student Performance

Georgia Tech Scheller College of Business Research Paper No. 18-26, Forthcoming

Georgia Tech Scheller College of Business Research Paper No. 19-10

52 Pages Posted: 29 May 2019

See all articles by Qiang Gao

Qiang Gao

Zicklin School of Business, City University of New York

Mingfeng Lin

Scheller College of Business, Georgia Institute of Technology

D. J. Wu

Georgia Institute of Technology - Ernest Scheller Jr. College of Business

Date Written: April 30, 2019

Abstract

We present the first empirical evidence of improvement in students’ academic performance after their teacher seeks and receives funding from the online donation crowdfunding platform DonorsChoose, even though such donations are small compared with the operational costs of schools. Using data on public schools in California, we report that the proportion of students in a class whose score on the California Standard Tests qualified them as at least “proficient” increased by 4.49 percentage points if their teacher benefited from donations via this site. This finding survives a large number of robustness tests. More importantly, the monetary value afforded by these donations alone does not fully explain such improvements. Two non-monetary mechanisms also play a role: (1) the act of organizing the fundraising campaign “forces” teachers to think and plan educational activities systematically and carefully to appeal to donors; and (2) the motivational effect of receiving funds from strangers. We conducted a series of additional tests to show that these factors contribute to the gain in academic performance by students. Our study contributes not only to the literature on crowdfunding and the offline impact of online platforms but also, more broadly, to discussions on financing public education.

Keywords: donation crowdfunding, donations, education, offline impact, student performance

Suggested Citation

Gao, Qiang and Lin, Mingfeng and Wu, D. J., Minuscule but Impactful: The Effects of Educational Crowdfunding on Student Performance (April 30, 2019). Georgia Tech Scheller College of Business Research Paper No. 18-26, Forthcoming; Georgia Tech Scheller College of Business Research Paper No. 19-10. Available at SSRN: https://ssrn.com/abstract=3383879 or http://dx.doi.org/10.2139/ssrn.3383879

Qiang Gao (Contact Author)

Zicklin School of Business, City University of New York ( email )

17 Lexington Avenue
New York, NY 10010
United States
6463123192 (Phone)
6463123192 (Fax)

Mingfeng Lin

Scheller College of Business, Georgia Institute of Technology ( email )

United States

D. J. Wu

Georgia Institute of Technology - Ernest Scheller Jr. College of Business ( email )

800 West Peachtree Street, NW
Atlanta, GA 30308
United States
404-894-4364 (Phone)
404-894-6030 (Fax)

HOME PAGE: http://mgt.gatech.edu/wu

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