Vulnerable Populations and Individual Social Responsibility in Prosocial Crowdfunding: Does the Framing Matter for Female and Rural Entrepreneurs?

Prosocial crowdfunding was originally conceived as a financial mechanism to assist vulnerable unbanked populations, typically excluded from formal financial markets. It subsequently grew into a billion-dollar scheme (Kiva 2020a, https://www.kiva.org/blog/1-billion-in-life-changing-loans) in the multi-billion-dollar crowdfunding industry. However, recent evidence claims prosocial crowdfunding may be shifting away from its goal to support the poor and underserved. Drawing on a composite social responsibility and framing theory framework, we examine the role that vulnerability plays in successfully raising funds in a prosocial crowdfunding context. We conduct multilevel logistic regressions on a sample of microloans allocated to 105,727 ventures in 64 countries. Our results indicate that applying for funds through a field partner which caters to vulnerable populations may in fact have a negative effect on the entrepreneur’s request to be fully funded. Notwithstanding, framing the entrepreneur as being female or rural as key characteristics of individual vulnerability increases the project’s likelihood to be fully funded. This conflict offers noteworthy theoretical and practical implications for ethics in prosocial crowdfunding, an understudied field of research.