I’ve never been a fan of crowdfunding but this latest headline on Pymnts.com (above) put me over the edge.

• Not a day goes by that I’m not deluged with requests for money to pay for other people’s doctor bills, equipment to start their businesses (latest: massage table for a wellness spa), or funding for animal relief in the wake of yet another natural disaster.
• This is so far removed from my first experiences with crowdfunding when it was primarily artists and musicians who had kickstarter campaigns to make movies or pay for their band to go on tour. At that time, if the entire amount was not raised, the artist was out of luck and your contribution would be returned to you.  I contributed a few times but rarely saw anything come of it.
• Nowadays, many of the sites are set up to give the fund creator all the money that was raised even if the goal isn’t met. Am I the only one who sees this as a scam in the making?

Cynic that I am, I see crowdfunding basically as electronic panhandling (and begging has never been easier). It’s gotten so out of hand, there’s even a subreddit, DontFundMe, focusing on “those born without shame-glands, dedicated to showcasing particularly egregious GoFundMe projects.” One that stood out for me is set up to raise $100,000 so the fund creator “can live, not just survive.”

In doing a small amount of research, I also came across some fascinating articles teaching people the best psychological tricks to manipulate friends, family and strangers into coughing up maximum $$$. Many “how-to” sites are also bemoaning how competitive crowdfunding has become.

Read on below for two of the most successful tactics being utilized to part you from your hard-earned cash. If you’re a crowdfund-devotee this will not deter you from giving, but at least you’ll be aware of how you’re being played.

 

Two top strategies that get the most funding.

 

Amplify Feelings of Guilt

• Good deeds are often motivated by feelings of guilt.
• If potential donors feel guilty, they’ll experience a stronger urge to perform a pro-social action (e.g. donating to your campaign).

 

Reference an Inexpensive Hedonic Product

• It sounds strange, but there’s a scientific reason behind this tactic.
• Savary, Goldsmith, and Dhar (2015) were collecting donations in a field experiment. Depending on the group, they compared the price of a donation to a specific product:

• Utilitarian Comparison: “Please donate $2 to Doctors without Borders. For reference, this is about the price of a bar of soap.”
• Hedonic Comparison: “Please donate $2 to Doctors without Borders. For reference, this is about the price of a [popular local] cookie.”
• Surprisingly, hedonic comparisons influence more people to donate. Since those products are associated with self-indulgence, people feel more selfish if they would rather purchase that hedonic product than donate to the cause. This feeling prompts people to donate so they won’t feel as selfish.

Bottom Line.

It is tempting to see crowdfunding as a new brand of philanthropy, filling holes left by the shortcomings of, for example, profit-driven healthcare.

But it is not that simple. Crowdfunding is not the antithesis of the market. It is competitive in its own right — a sympathy market where sickness (or any other issue) is on sale.