Profitable Nonprofits? Reward-Based Crowdfunding in the Czech Republic

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Abstract

This paper deals with crowdfunding as a new and alternative mechanism of nonprofit funding which has thus far attracted little scholarly attention in the Czech context. It focuses on the factors that affect a campaign’s overfunding rate and determines whether these factors are consistent among different forms of project creators. A comprehensive analysis of reward-based crowdfunding in the Czech Republic was conducted based on the data from 617 projects using the Czech crowdfunding platform Hithit that were categorized according to the status of the project creator. Using binary logistic regression, a statistic estimation on an overall sample and on a sample of purely nonprofit projects was executed in order to observe if the outcomes diff er. Th e key empirical finding is that NGOs tend to raise fewer additional funds than other forms of project creators. Except for certain specific factors, the effects of the examined factors were consistent across all samples. Th is new and innovative approach to resource insufficiency by using alternative funding sources presents an important and unexplored research gap in the (post-) transitive context of nonprofit sector studies, enabling a view of policy implications for Czech NGOs.

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