Periodic Reporting for period 2 - SIM Crowd (Social Innovation Matched Crowdfunding (SIM Crowd))
Reporting period: 2021-03-02 to 2022-01-01
FFG runs a novel funding program that supports non-technical innovation projects of SMEs, called “Impact Innovation”. The projects that are funded are required to define a timely relevant and unsolved problem. Using an innovation management methodology through iteration loops and co-creation with users and experts, new solutions are being proposed at the early phase of project design, before the initial project submission. Approximately 30% of project proposals address problems or solutions that were classified as “social innovation”, which aim to meet social needs. A recurring pattern in these proposals was failure to secure sufficient funding to cover the total cost of the project (FFG funds up to 50% of total project cost). Moreover, FFG received feedback from the community of social innovators that a significant number of ideas were not even submitted to Impact Innovation because the potential applicants could not generate or demonstrate the necessary funds to completely fund the project (100%). FFG therefore wants to test whether and how providing information on available public funding for social innovation projects will increase (or decrease) the chances to attract funding for the remaining 50% of project cost. This project has important implications for society as it is investigating ways to make public funding available for social innovatiosn which are inherently geared towards solving social problems.
The main objective of the proposed project is to conduct an experimental pilot and test the effects of information on additional funding provided by a public funding organisation (FFG) on the funding decision of the audience on crowdfunding platforms, specifically for early phase social innovation projects. A randomised controlled trial (RCT) will be conducted within a particular division of the existing funding scheme “Impact Innovation” called Social Crowdfunding.
The main objective of the proposed project is to conduct an experimental pilot and test the effects of information on additional funding provided by a public funding organisation (FFG) on the funding decision of the audience on crowdfunding platforms, specifically for early phase social innovation projects. A randomised controlled trial (RCT) will be conducted within a particular division of the existing funding scheme “Impact Innovation” called Social Crowdfunding.
The work performed in the first reporting period encompasses the finalisation and implementation of the first RCT. The Action began with an intensive design finalisation phase with scientific partners at the University of Minnesota Carlson School of Management and RCT consultants from Innovation Growth Lab by Nesta. in which the research design was finalised and translated into an actionable plan. In short, the final research design is a randomized, three-arm messaging trial testing whether the presence of public funding for a social innovation project has an effect on an individual’s likelihood to contribute to a crowdfunding campaign for that project. The RCT takes place within a large email sendout introducing rewards-based crowdfunding campaigns from social innovation projects funded in the Social Crowdfunding strand of Impact Innovation. The sample comprised approximately 22.000 email recipients.The intervention was one of two small additional texts - seed funding and challenge match funding - in the email detailing the nature of the FFG funding for the social innovation project in addition to information about the crowdfunding campaigns. The control group received no information regarding FFG funding of the projects. The final outcome variables measured are click-rates of links in the email and conversation rates.
Once the design was finalised, we transitioned into the actual implementation of the first RCT. First results indicate that there is no significant difference in an individual’s interest in social innovation crowdfunding campaigns when FFG funding is mentioned or not. Generally, there was overall high interest in the campaigns. No robust results could be derived from the first RCT due to issues with data collection, however, thus a second RCT will be conducted in the 2nd reporting period to determine causal links. The main results from the second RCT show that, overall, financial support from the FFG – in particular seed funding - has positive effects for the CF Campaigns of social innovation projects, however the positive effects are differentiated by gender. When it came to measuring the demonstrated interest, females in seed funding demonstrated significantly more interest than females in the other two groups, whereas there was no statistically significant difference among men in different treatment groups. Furthermore, there is evidence that indicating financial support from the FFG positively affected an individual’s perception of campaign success and project success, although the gender component also played a role here. Specifically, females in the seed group perceived the social innovation projects to be much more likely to succeed in meeting their project goals compared to females in the other two treatment groups and males in the seed group. On the other hand, males in the challenge match funding group perceived the CF campaigns to be more likely to succeed in meeting their campaign targets.
Communication and dissemination activities were targeted at different stakeholders, namely innovation agencies, innovation policy makers, evaluators and researchers, cross-sector activites, and the crowdfunding community. Innovation agencies were generally adressed by having presentations in the FFG and in the TAFTIE Task Force Experiment! as well as creating a new internal process in the FFG for experimentation and RCTs. In addition, innovation policy makers were informed by conducting a workshop and presentation, reaching out to program managers at the FFG and the advisory committee of the General Programmes. Evaluators and researchers could be reached by attending conferences (CODE@MIT, WISE 2021) and a submitted paper to Management Science by our scientific partners UMN as well as a cooperation with the Vienna University of Economics and Business for a master thesis. Furthermore, cross-sector activities encompassed a panel session at the EU industry weeks 2021 and the presentation at the Social Entrepreneurship Network Austria. Finally, we informed the crowdfunding community by giving a presentation to Startnext, our partnering crowdfunding platform, and the FFG submitted a case study to Eurocrowd.
Once the design was finalised, we transitioned into the actual implementation of the first RCT. First results indicate that there is no significant difference in an individual’s interest in social innovation crowdfunding campaigns when FFG funding is mentioned or not. Generally, there was overall high interest in the campaigns. No robust results could be derived from the first RCT due to issues with data collection, however, thus a second RCT will be conducted in the 2nd reporting period to determine causal links. The main results from the second RCT show that, overall, financial support from the FFG – in particular seed funding - has positive effects for the CF Campaigns of social innovation projects, however the positive effects are differentiated by gender. When it came to measuring the demonstrated interest, females in seed funding demonstrated significantly more interest than females in the other two groups, whereas there was no statistically significant difference among men in different treatment groups. Furthermore, there is evidence that indicating financial support from the FFG positively affected an individual’s perception of campaign success and project success, although the gender component also played a role here. Specifically, females in the seed group perceived the social innovation projects to be much more likely to succeed in meeting their project goals compared to females in the other two treatment groups and males in the seed group. On the other hand, males in the challenge match funding group perceived the CF campaigns to be more likely to succeed in meeting their campaign targets.
Communication and dissemination activities were targeted at different stakeholders, namely innovation agencies, innovation policy makers, evaluators and researchers, cross-sector activites, and the crowdfunding community. Innovation agencies were generally adressed by having presentations in the FFG and in the TAFTIE Task Force Experiment! as well as creating a new internal process in the FFG for experimentation and RCTs. In addition, innovation policy makers were informed by conducting a workshop and presentation, reaching out to program managers at the FFG and the advisory committee of the General Programmes. Evaluators and researchers could be reached by attending conferences (CODE@MIT, WISE 2021) and a submitted paper to Management Science by our scientific partners UMN as well as a cooperation with the Vienna University of Economics and Business for a master thesis. Furthermore, cross-sector activities encompassed a panel session at the EU industry weeks 2021 and the presentation at the Social Entrepreneurship Network Austria. Finally, we informed the crowdfunding community by giving a presentation to Startnext, our partnering crowdfunding platform, and the FFG submitted a case study to Eurocrowd.
There is little evidence investigating the success of crowdfunding campaigns for social innovation projects when conducted in the realm of a grant from a public institution. With the RCT in SIM CROWD, we are gaining robust evidence on the efficacy of combining crowdfunding campaigns and financial support from public institutions to successfully finance early-stage social innovation projects. These evidence-based results can be used to inform innovation policy and potential policy instruments on an organizational, national, and international level - which means both promoting a new policy based on positive results and not rolling out a policy based on negative results. Either way, it ensures that the future support measures offered from public innovation agencies are both a good use of public money as well as only positively impact SMEs.