There are countless campaigns that launch on the crowdfunding site Kickstarter every day. And besides some great early bird specials, many projects offer other incentives and rewards for those who help make the creator's idea reality.
While many people may choose to back a specific campaign for said rewards, it appears as though some projects aren't staying true to their promises.
A new independent analysis on Kickstarter project fulfillment found that some backers have been unfulfilled with the campaigns they support.
A study conducted by professor Ethan Mollick, an expert in entrepreneurship and innovation from the Wharton School of the University of Pennsylvania, found that 9 percent of campaigns fail to deliver on backer's rewards.
Mollick surveyed more than 450,000 backers about project outcomes and sentiments, sampling 65,326 successfully funded projects from April 2009 throughout May 2015 to uncover how many projects fail to deliver backers what they promised.
Kickstater agreed that it would co-publish the study on the Kickstarter community no matter the results.
Focusing largely on backer satisfaction, Mollick's research specifically focused on whether the rewards were delivered or not, no matter if the company's work was actually made or not.
The findings reveal that 8 percent of pledged dollars went to projects that failed (which were identified as projects where backers did not receive a copy of a DVD, for example, after a project was funded, not whether the DVD was made), and 7 percent of backers failed to receive chosen rewards.
However, more than half of the participants surveyed—65 percent, to be exact—agreed or strongly agreed that "the reward was delivered on time."
"Project backers should expect a failure rate of around 1-in-10 projects, and to receive a refund 13 percent of the time. Since failure can happen to anyone, creators need to consider, and plan for, the ways in which they will work with backers in the event a project fails, keeping lines of communication open and explaining how the money was spent," Mollick writes. "Ultimately, there does not seem to be a systematic problem associated with failure (or fraud) on Kickstarter, and the vast majority of projects do seem to deliver."
Even though it appears as though not everyone can bank on getting the rewards they paid for whether the project is fully funded or not, these numbers aren't alarmingly high enough to scare off the community from supporting projects, researchers found.
With some of the many, varied projects the community backed—which include the successful campaigns for Hannibal fan fiction comics, livestreaming paper airplane drones, and a time-lapse pen that uses ink from living algae—it only makes sense that some won't reach their total funding goal.
The fulfillment study also found that projects that raise less than $1,000 fail the most often, which makes sense when thinking about a company needing the capital to get its project off the ground. Approximately 73 percent of backers who supported a project that failed agreed or strongly agreed that they would back another project on Kickstarter. However, only 19 percent would back another project from the same creator who failed previously.
Mollick suggest that project creators should return any remaining funds that are left over if their project fails to those backers who have not received rewards. They also should inform backers just how their money has been used, what has been accomplished, and why the project has failed.
He noted the results of the study apply to Kickstarter projects only, not crowdfunding in general.
Source: Kickstarter
