Finance Paper 2

ORIGINAL PAPER

Beyond the Opposition Between Altruism and Self-interest: Reciprocal Giving in Reward-Based Crowdfunding

Kévin André1 • Sylvain Bureau2 • Arthur Gautier1 • Olivier Rubel3

Received: 8 February 2016 / Accepted: 26 July 2017 / Published online: 9 August 2017

� Springer Science+Business Media B.V. 2017

Abstract Increasingly, frontiers between business and

philanthropy seem to be blurred. Reward-Based Crowd-

funding platforms contribute to this blurring of lines since

they propose funders to support both for-profit and phi-

lanthropic projects. Our empirical paper explores the case

of Ulule, the leading crowdfunding platform in Europe.

Our results, based on a statistical analysis of more than

3000 projects, show that crowdfunding platforms foster

specific kinds of relationships relying on reciprocal giving,

beyond the usual opposition between altruistic and selfish

motivations. We use the work of Marcel Mauss to account

for this process of reciprocal giving, and we argue that

Maussian theory of gift can be used more generally to

describe funding activities in the context of early stage

entrepreneurship.

Keywords Crowdfunding � Entrepreneurship � Gift � Philanthropy � Reciprocity � Mauss

Introduction

Opposition between self-interest and altruism in human

behavior is a cornerstone of the ethics debate (Nagel 1978;

Shaver 1999), which is also ubiquitous in contemporary

research on business ethics (Hemingway and Maclagan

2004; Kaler 2000). On their side, social scientists have long

tried to understand the extent to which the relationships

between members of a society are driven by selfish or

selfless motives (Batson 2014; Cialdini 1991; Piliavin and

Charng 1990). Arguably the most cited classical author in

this intellectual debate is Scottish moral philosopher and

economist Adam Smith.

In his two main treatises, An Enquiry into the Nature

and Causes of the Wealth of Nations (1776) and The

Theory of Moral Sentiments (1790), Smith developed very

influential arguments that some thought were incompati-

ble (Raphael 2007). In the Wealth of Nations, Smith

emphasized the importance of ‘‘self-love’’ and how its

pursuit by individuals through market exchanges was

much more efficient to produce social welfare than

benevolence or government planning. This famous quote

from the first book, second chapter, sums up his point: ‘‘It

is not from the benevolence of the butcher, the brewer, or

the baker, that we expect our dinner, but from their

regard to their own interest. We address ourselves, not to

their humanity but to their self-love, and never talk to

them of our necessities but of their advantages.’’ (The

Wealth Of Nations, Book I, Chapter II, pp. 26–27, para

12). In contrast, in the first paragraph of his other major

work, Smith wrote: ‘‘How selfish soever man may be

supposed, there are evidently some principles in his

nature, which interest him in the fortune of others, and

render their happiness necessary to him, though he

derives nothing from it, except the pleasure of seeing it.’’

& Kévin André kevin.andre@essec.edu

Sylvain Bureau

sbureau@escpeurope.eu

Arthur Gautier

gautierart@essec.edu

Olivier Rubel

orubel@ucdavis.edu

1 ESSEC Business School, Cergy-Pontoise, France

2 ESCP Europe, Paris, France

3 UC Davis, Davis, CA, USA

123

J Bus Ethics (2017) 146:313–332

https://doi.org/10.1007/s10551-017-3652-x

(The Theory Of Moral Sentiments, Part I, Section I,

Chapter I, p. 9, para.1).

A consequence of this so-called Adam Smith problem is

that many readers of Smith understood that self-interest

was the key principle in the realm of economics and

management (Ferraro et al. 2005; Ghoshal 2005), while

altruism was confined to the family and the nonprofit sector

(Pallotta 2008; Piliavin and Charng 1990). However pow-

erful, such a dichotomy is a caricature of Adam Smith’s

thought, as some business ethics scholars have recently

highlighted (Gray and Clarke 2005; Hühn and Dierksmeier

2016). Smith never was an advocate of rugged self-interest

in market transactions. He condemned selfishness, and his

concept of ‘‘self-love’’ was a form of sympathy for oneself

that could be universalized to others (Hühn and Dierks-

meier 2016). Moreover, previous research has shown that

in a context of bounded rationality as put forward by Simon

(1982), ‘‘sympathy’’ in Smith’s sense can be the positive

construct for lowering transaction costs in market interac-

tions (Szmigin and Rutherford 2013). Meanwhile, econo-

mists found that pure altruism was seldom found in

philanthropy and family relationships (Andreoni 1990;

Becker 1974).

One way to escape the self-interest versus altruism

quagmire (Cialdini 1991) is through the generalized norm

of reciprocity, according to which ‘‘we owe others certain

things because of what they have previously done for us’’

(Gouldner 1960, p. 171). Individuals deviate from self-in-

terested behavior to repay gifts and take revenge, even if

they gain nothing from such reciprocal acts (Fehr and

Gächter 2000). In fact, a majority of people seem to act as

‘‘matchers,’’ relying on the norm of reciprocity, whereas

only a minority are altruistic ‘‘givers’’ and self-interested

‘‘takers’’ (Grant 2013). While research on reciprocity as

outlined by Gouldner is helpful to theorize reactive

behavior based on past interactions, it seems ill-equipped to

understand the first move of the reciprocal chain and why

people engage in a giving relationship in the first place.

Another theoretical perspective on reciprocal giving was

proposed by French sociologist and anthropologist Marcel

Mauss (1872–1950). In a famous essay The Gift, which

remains even today a major foundation of the anthropo-

logical literature (Faldetta 2011; Lévi-Strauss 1983),

Mauss synthesized works of pioneering ethnologists and

outlined a theory of giving as a way to foster social rela-

tionships between members of human societies (Douglas

1990; Mauss 1923). Mauss’ essay focused on ‘‘archaic’’

societies and on specific gift-giving practices such as kula

and potlatch, yet his ambition was to propose an alternative

general theory of exchange systems, which markedly dif-

fered from the utilitarian tradition in economic thought

(Carrier 1991; Schrift 2014). A key takeaway from The Gift

is, in Mauss’ own words, that ‘‘the idea that inspires all the

economic acts […] is neither a purely free and gratuitous provision nor a purely interested, utilitarian notion of

production and exchange, but a sort of hybrid.’’ This is the

type of hybridity that we propose to explore empirically in

this study.

Despite the pervasiveness of the self-interest and altru-

ism dichotomy in our moral and social theories, many

phenomena are not easily classified into either category. In

fact, in recent years, a blurring of boundaries between ‘‘for-

profit’’ and ‘‘nonprofit’’ sectors has intensified (Dees and

Anderson 2003; Mintzberg 2015). For instance, ‘‘hybrid

organizations’’ such as social enterprises in the fields of

microfinance or work integration skillfully combine com-

mercial and social welfare logics (Battilana and Dorado

2010; Pache and Santos 2012). Corporations are ever more

involved in philanthropic or social responsibility activities

in order to create ‘‘shared value’’ (Gautier and Pache 2015;

Porter and Kramer 2011). Meanwhile, philanthropy itself is

increasingly influenced by values and methods drawn from

venture capital, specifically by developing systematic and

‘‘rational’’ processes to solve social problems and by

quantifying the ‘‘social return on investment’’ or ‘‘social

impact’’ of the solutions to these social problems (Letts

et al. 1997; Mair and Hehenberger 2014).

One such growing, hybrid phenomenon is crowdfund-

ing, which allows entrepreneurs and founders of a wide

array of projects to directly raise relatively small contri-

butions from a large number of individuals (the ‘‘crowd’’)

through an open call of a certain duration (the ‘‘campaign’’)

on the Internet (Mollick 2014). Crowdfunding has become

a big business. As a whole, crowdfunding campaigns have

raised over $34 billion as of 2015 by over 400 active

platforms (Hildebrand et al. 2016). Crowdfunding is

mainly used to invest in equity, to loan money or to back

projects in returns of symbolic or material rewards

(Belleflamme et al. 2014; Boudreau et al. 2015). Crowd-

funding platforms are not only a strategy for individuals or

startups to raise money for starting their venture. Platforms

such as Indiegogo for instance also target big companies

and MNCs for using crowdfunding as a way of launching

new products.

In our research, we focus on reward-based crowdfund-

ing platforms. Prominent Internet platforms using the

reward-based model include Kickstarer, Indiegogo, and

Ulule. Most platforms accept both nonprofit and for-profit

projects, leaving ambiguity around the nature of projects

and the underlying intention of their founders. Vocabulary

reflects this ambiguity: users neither ‘‘buy’’ products nor

‘‘give’’ money; they ‘‘back’’ projects and receive ‘‘re-

wards.’’ The nature of rewards can vary considerably,

ranging from a thank-you note to a customized, finished

product (Colombo et al. 2014). Founders can also be

backers of other projects, and backers can end up launching

314 K. André et al.

123

their own campaign. Our hypothesis is that reward-based

crowdfunding platforms induce strong reciprocal relation-

ships among their users, which in turn play a positive role

in the success of campaigns.

Research on crowdfunding is a nascent field that has

focused on the motivations of founders and the success

factors of campaigns (Colombo et al. 2014; Cordova et al.

2015). To our knowledge, no prior study has attempted to

characterize the nature of relationships created between

founders and backers on crowdfunding platforms, and to

measure the effect of such relationships on campaigns’

success. The research question that we propose to address

in the present paper is thus: What is the effect of reciprocal

giving relationships on the success of reward-based

crowdfunding campaigns? Our aim is to compare the

success of campaigns relying chiefly on reciprocal giv-

ing—in the sense of Mauss—with those which are more

dependent on either pure altruism (i.e., non-reciprocal

giving, where the donor receives nothing in return) or self-

interest (i.e., market transactions).

To answer this question, we develop three hypotheses

that we empirically test using a unique data set of 3280

projects created in 2015 on Ulule, the leading reward-

based crowdfunding platform in Europe. Our results show

that projects relying on reciprocal giving are more suc-

cessful than the others. We argue that reward-based

crowdfunding platforms foster reciprocity among their

members beyond pure altruism and self-interest and that

reciprocal giving is associated with superior success of

campaigns. Our paper contributes to the growing research

on crowdfunding by bridging business ethics and

entrepreneurship literatures.

In the remaining of the paper, we first introduce the

theoretical background on reciprocal giving as developed

by Marcel Mauss and his successors. Second, we review

the existing literature on crowdfunding in management

journals. Third, we present commonalities between Mauss’

theory and crowdfunding and develop our three hypothe-

ses. We subsequently expose the data and methodology

used before presenting the results of our empirical study.

The final section discusses our contributions and the

implications of this study for practitioners and for future

research.

The Theory of Reciprocal Giving Developed by Mauss

Gift-giving is a phenomenon for which the opposition

between self-interest and altruism has been extensively

discussed. Much research has been conducted in social

sciences on this single question: ‘‘Why do people give?’’

(Andreoni 2001; Bekkers and Wiepking 2011; Vesterlund

2006), trying to understanding the enigmatic nature of this

seemingly ‘‘reward-less’’ behavior. Several empirical and

theoretical studies across disciplines have identified and

categorized multiple motivations for giving. A major

conundrum within the literature on giving concerns the

notion of reciprocity. While some scholars argue that ‘‘gift

exchange is governed by the norm of reciprocity’’

(Schwartz 1967, p. 8), others follow Jacques Derrida

(1992) and see ‘‘the non-reciprocity condition as the acid

test of philanthropic activity’’ (Godfrey 2005, p. 778).

Proponents of the first approach usually refer to the

‘‘norm of reciprocity’’ theorized by Alvin Gouldner (1960).

According to Gouldner, all social systems rely on the fol-

lowing moral rule: ‘‘We owe others certain things because

of what they have previously done for us, because of the

history of previous interaction we have had with them.’’

(1960, p. 171). Hence, following the norm of reciprocity

entail people to help those who have helped them in the

past. Building on Gouldner, Peter Blau (1964) considers

gifts as social exchanges based on reciprocity. People are

motivated to give ‘‘by the returns they are expected to

bring and typically do in fact bring from others’’ (Blau

1964, p. 91). Reciprocity can also be indirect, when the

recipient gives to another member of society instead of a

direct payback to the donor (Nowak and Sigmund 2005;

Stanca 2009). People seem to judge both consequences and

intentions of the benefactors (Falk and Fischbacher 2006).

The norm of reciprocity has developed to transcend ego-

istic motivation and to maintain the order of social systems:

‘‘one who fails to repay debts may benefit individually;

however, such action is likely to cause conflict and a

breakdown of reciprocity, and thus threaten the stability of

the social group.’’ (Deckop et al. 2003; p. 103).

This approach of gift-giving has been criticized in the

sense that if the donor receives recompense or recognition

from his gift, or if s/he expects to receive them, the gift

vanishes and becomes another variation of economic

calculation, and thus does not qualify as a ‘‘genuine gift.’’

An influential source of such criticism was French

philosopher Jacques Derrida and his ‘‘deconstruction’’

approach (Derrida 1976). While Derrida himself avoided

defining deconstruction in a nutshell, one can understand

this approach as a critical examination of the ‘‘meta-

physics of presence’’ in classic Western thought (Caputo

1997). Derrida was chiefly interested in the hierarchies

underlying well-established dualisms, e.g., good/evil,

inside/outside, or man/woman, and the complex imbri-

cation of apparent opposites. Deconstruction opens up

new possibilities of understanding text and writing

beyond simple oppositions, and leads Derrida to introduce

new words or to reappraise older ones. According to

Derrida’s (1992) demanding appreciation of gift, true

giving requires asymmetry, disproportion, and absolute

Beyond the Opposition Between Altruism and Self-interest: Reciprocal Giving in Reward-Based… 315

123

non-reciprocity between the donor and the recipient. For

giving to take place, the intentionality of the gift should

be absolutely forgotten by all parties involved, leaving no

debt behind. As soon as the possibility of a counter-gift

emerges, the gift is annihilated: ‘‘If the other gives me

back or owes me or has to give me back what I give him

or her, there will not have been a gift, whether this

restitution is immediate or whether it is programmed by a

complex calculation of a long-term deferral or differ-

ence’’ (Derrida 1992, p. 12). Derrida’s approach implies

that ‘‘genuine’’ gifts can only be based on non-reciprocal

giving.

Hence, considering gift-giving as a form of reciprocal

relationship makes gift inconsistent with altruistic moti-

vation. Yet, it would be a mistake to classify reciprocity as

purely ‘‘utilitarian’’ (Komter 2007). Indeed, several econ-

omists acknowledge that reciprocity is irreducible to self-

interest or pure altruism: ‘‘In the case of reciprocity, the

actor is responding to friendly or hostile actions even if no

material gains can be expected. Reciprocity is also fun-

damentally different from altruism. Altruism is a form of

unconditional kindness; that is, altruism given does not

emerge as a response to altruism received. Again,

reciprocity is an in-kind response to beneficial or harmful

acts.’’ (Fehr and Gächter 2000, p. 160). Reciprocity seems

to be considered both by economists and by ethicists as

belonging to another category than economic transactions

and genuine gifts.

We argue that reciprocity is stuck in the middle since

Gouldner’s theory fails to explain the first step of the

reciprocal chain. The norm of reciprocity focuses on

obligations toward others on the basis of their past

behaviors. But what about the one who engages in a giving

relationship in the first place? Gouldner’s theory has no

clear answer since he considers that people give because

they have already received before. An alternative take on

reciprocity and gift-giving was outlined by French sociol-

ogist and anthropologist Marcel Mauss (1872–1950) in his

famous essay published in 1923–1924—Essai sur le don.

Forme et raison de l’échange dans les sociétés archaı̈ques,

first translated as The Gift in 1954.

Developing a general theory on giving based on

ethnographic studies, Mauss argued that ‘‘a social system

does not entail only the obligation to give in return; but it

presupposes two equally important obligations: the obli-

gation to give, on the one hand, and the obligation to

receive, on the other hand’’ (1923, p. 89). Explaining why

people give first is crucial since it leads to future social

exchanges. Mauss (1923, p. 89) answer is the following:

‘‘Denying gift (…) is rejecting relationship and commu- nion.’’ In other words, gift-giving is fundamental for

creating and nurturing human relationships in society.

Hence, gift for Mauss has a different meaning that in

common language: ‘‘It is not the present, what is the

given, but the relationship: Gift does not identify either

the object or service itself or the forms and ceremony of

giving and getting. Instead what makes a gift is the

relationship within which the transaction occurs’’ (Car-

rier 1991, p. 122). Mauss offers a theory of ‘‘reciprocal

giving’’ which is an alternative to other theories of

exchange systems, not only to the utilitarian tradition in

economic thought (Godbout and Caillé 2007) but also to

Gouldner’s approach. A key takeaway from The Gift is

that reciprocal giving is a way for members of a society to

develop and maintain relationships, as giving obliges the

recipient to engage in a reciprocal, cyclic relationship,

i.e., giving, receiving, and giving back (Douglas 1990;

Godbout 2007).

This relationship differs from transactions since it

creates a bond between donors and recipients that matters

more than the gift itself. The material object or service

which is given is a mean to create and nurture the

immaterial, spiritual relationship between both parties

(Godbout and Caillé 2007; Mauss 1923), not the other

way around. Reciprocal giving establishes an affective

relationship, whereas an economic exchange typically

creates no emotional connection between the buyer and

the merchant. Derrida (1992) views giving as impossible

and incompatible with the present or the imminence of

the future because it presupposes a break in the circle of

time. In a gift relationship, reciprocity can be delayed

indefinitely, but in a market exchange, payment happens

either immediately or later with an interest (Offer 1997).

Moreover, contrary to market transactions, gifts open a

cycle that potentially never ends: ‘‘you cannot, therefore,

consider the giving back as something that balances the

relationship, which cancels the debt, by putting both

parties in a state of equilibrium; this would be typical of a

contractual exchange where, in the end, each party has

got his due and each party has given what he had to give’’

(Faldetta 2011, p. 70). Through reciprocal giving, people

become permanently and mutually indebted to one

another (Godbout and Caillé 2007).

If reciprocal giving is an alternative kind of relation-

ship to transactions, it also differs from non-reciprocal

giving and should not therefore be confined to the field of

philanthropy. A key insight of contemporary readings of

Mauss is that reciprocal giving is prevalent in all human

organizations, including businesses, since they all rely on

the development of relationships (Bureau 2014; Faldetta

2011; Grant 2013). While Mauss’ theoretical insights

about ‘‘the logic of gift’’ have only recently been used by

organization and business ethics scholars (Baviera et al.

2016), it seems quite effective to explain certain business

phenomena in particular. More specifically, giving rela-

tionships appear to be central in entrepreneurship. Just

316 K. André et al.

123

like project founders on crowdfunding platforms, entre-

preneurs need a variety of resources to develop their

ventures (Venkataraman 1997). Soliciting resources is not

always a transactional process. Entrepreneurship is more

than an economic phenomenon (Rehn and Taalas 2004),

namely it is a social practice (Johannisson 1988),

embedded in a social context, either facilitated or inhib-

ited by people’s positions in social networks (Aldrich and

Zimmer 1986). Therefore, for entrepreneurs to succeed in

their ventures, developing networks and social interac-

tions is an essential prerequisite (Caliendo et al. 2009,

p. 396). Entrepreneurs share their ‘‘entrepreneurial

adventure’’ on a regular basis and seek empathy, feedback

or support from family and friends (Brüderl and Pre-

isendorf 1998). For instance, many entrepreneurs use

bootstrapping techniques to decrease external capital

needs (Harrison et al. 2004). Bootstrapping is mainly

based on social capital (Kim et al. 2006), i.e., entrepre-

neurs largely appeal to their friends and family to obtain

resources through informal support (Parker 2004). Instead

of paying for an office, some young entrepreneurs use a

spare room in their parents’ house, or borrow money to

pay for a new laptop computer. This phenomenon is even

more critical in the case of family businesses (Karra et al.

2006) or community-based enterprises (Peredo and

Chrisman 2006). Besides, entrepreneurs tend to reinforce

their partnerships with suppliers, clients or shareholders,

which are of paramount importance in entrepreneurship

(Sarasvathy 2008), through gift exchanges (Dolfsma et al.

2009). Finally, even in the case of funding by business

angels or venture capitalists, where relationships are much

more formal than with friends and family, gift practices

not only exist but are a key component to succeed (Ferrary

2003).

Today, an increasing numbers of entrepreneurs use

crowdfunding platforms to raise the necessary funds for

their ventures. However, this new opportunity did not

change everything as family and friends remain the first

backers for entrepreneurs on these platforms (Dushnitsky

and Marom 2013). Furthermore, digitalization did not end

interpersonal and physical interactions between backers

and founders as geographical and cultural proximity

remain an essential success factor for campaigns (Burtch

et al. 2014). Of course, there are several differences

between crowdfunding platforms and the aforementioned

practices, such as the number of and the amounts given by

participants (Ahlers et al. 2015; Belleflamme et al. 2014).

Based on these observations, a challenge is therefore to

understand whether (and if so, how) crowdfunding affects

gift practices which already existed prior to the invention

of crowdfunding platforms. In this paper, we argue that

the study of crowdfunding platforms, as modern and

fascinating empirical cases of reciprocal giving, can

contribute to enriching and rejuvenating the field opened

by Mauss almost a century ago.

Crowdfunding and Management Research

The Crowdfunding Boom

Crowdfunding will surpass $300 billion in funding transac-

tions by 2025 (Van Wingerden and Ryan 2011) and is on

track to account for more than venture capital in 2016 (Dakin

2016). Its growth is exponential in the USA as well as in

Europe, Australia, Canada and Japan (Marketwired, March

31, 2015). A common characteristic of crowdfunding is the

existence of a project founder who launches a campaign

involving ‘‘an open call, mostly through the Internet, for

providing financial resources’’ (Belleflamme et al. 2014,

p.7). This practice becomes critical in entrepreneurship to

mobilize resources (Assenova et al. 2016) and to manage

risks (Fleming and Sorenson 2016). Indeed, entrepreneurs

can test whether their solution meets a demand before

investing in their project at a larger scale (ibid 2016).

Crowdfunding involves many different types of online

platforms—almost 200 in the USA (Statista, June 1,

2015)—as each player tries to differentiate itself from

competition. Overall, there are four main categories of

platforms depending on the resources obtained through the

call: donations (Kappel 2009), rewards (Belleflamme et al.

2014; Colombo et al. 2014; Mollick 2014), debts (Zhang

and Liu 2012) and equity (Ahlers et al. 2015). The most

prevalent category is reward-based crowdfunding. On

platforms such as Indigogo in the USA or Ulule in Europe,

founders propose both for-profit and philanthropic projects

to support. Many projects are ambiguous themselves

because words used in the description refer both to the

commercial field (e.g., you will receive rewards in

exchange of your money) and to philanthropy (e.g., you

can help others and make a difference). Moreover, foun-

ders can receive pure donations as well as contributions

against rewards. The rewards are diverse and range from

symbolic recognition to a pre-sale. This ‘‘preselling’’ is

mainly used by crowdfunding projects that ‘‘resemble

entrepreneurial ventures, such as projects producing novel

software, hardware, or consumer products’’ (Mollick 2014,

p.3). Projects with mainly social and environmental goals

find support from donors who do not expect a direct return

for their contribution and who ultimately do not ask for

their reward, or give more than the amount required for the

reward that they claim. While the phenomenon is wide-

spread, research on crowdfunding remains limited

(Colombo et al. 2014). This nascent literature mainly

covered two dimensions: motivations of actors and deter-

minants of success.

Beyond the Opposition Between Altruism and Self-interest: Reciprocal Giving in Reward-Based… 317

123

Motivations of Backers and Founders: What are

the Key Drivers?

On the one hand, some research projects are concerned

with the founders’ motivations. Obviously, the first reason

to launch a campaign is to raise money to develop a project

without generating debt or control from a shareholder.

However, motivations are not limited to funding. These

platforms also enable founders ‘‘to receive validation, to

connect with others, to replicate successful experiences of

others, and to expand awareness of work through social

media’’ (Colombo et al. 2014, p. 117). Reward-based

crowdfunding for example allows participants to get

feedback, including on the potential pricing of the product

for those who use the service as a way to presell their

prototypes (Belleflamme et al. 2014). These options are not

only possible with close friends and relatives, or people

living nearby. It can also be achieved on a global scale as

the availability of online platforms tends to eliminate

geographical constraints (Agrawal et al. 2015).

On the other hand, other scholars are interested in why

backers pledge money to projects. Backers of reward-based

crowdfunding campaigns have two main types of motiva-

tion, extrinsic and intrinsic (Van Wingerden and Ryan

2011). In extrinsic motivation, the main reason lies in the

reward itself. The backer can obtain a solution that nobody

could otherwise access and, most of the time, at a rea-

sonable price. Beyond this pre-order approach, some

rewards enable people to get formal recognition, which can

also be considered as extrinsic motivation in the sense that

people do not contribute for the project itself but more for

the symbolic value that they will receive from it. Backers

who contribute to gain monetary rewards ‘‘generally do not

fund a project for the fun of it, do not feel that helping

someone reach their goal is more important than getting a

reward, nor do they feel that being involved in the process

is a reward in itself’’ (Van Wingerden and Ryan 2011,

p. 50). Here, the motivation of the backers is based on self-

interest.

Conversely, in second type of motivation—intrinsic—

backers enjoy getting involved in the innovation process

for the sake of it. They have the ability to control some of

the characteristics of the solution. But most importantly,

many backers are interested in participating due to the

social interactions that this generates (Gerber et al. 2012).

Indeed, contribution to a campaign tends to create feelings

of ‘‘connectedness’’ to a community with similar interests

and ideals. Moreover, this connection is not only limited to

the campaign but can also be developed over time through

long-term interaction. Here, the motivation of the backers

is mostly based on sympathy toward founders.

If the existing literature has identified the two kinds of

motivation, there is a gap about the way they are related to

each other. Do they coexist for a same platform, a same

project or even for a same backer? We aim in our research

to fill this gap. Our starting point is the way Adam Smith’s

dealt with the opposition between self-interest and sym-

pathy through a ‘‘socially embedded rationality’’ (Hühn

and Dierksmeier 2016: p. 120), or a ‘‘bounded rationality’’

if we use the words of Herbert Simon. Self-interest moti-

vation for rewards is embedded in social relations which

are based on sympathy of the backer for the founder. We

use Maussian approach to propose the notion of reciprocal

giving as a framing of the interrelation between self-in-

terest and sympathy in the context of crowdfunding.

Determinants of Success for Crowdfunding Projects

The other stream of research focuses on the determinants of

success. A project is coded as a success if it raises its pre-

defined goal (Crosetto and Regnier 2014; Mollick 2014;

Venkat and Bayus 2013). This measure is very convenient

to determine success and failure empirically, but it involves

several limitations: time is not taken into account, nor the

number of backers, or the number of qualitative feedback

written by backers (feedback which could help the founder

to improve the project). In this paper, we adopt the measure

used in the literature (e.g. the capacity to reach the target

amount), but it may be relevant to develop a more complex

scale to measure success in future research projects.

Different predictors have been identified. We can list

three types of variables: those related to the project, to the

process of the campaign and to the characteristics of the

founders. First, results tend to show that nonprofit and

charities tend to have a higher success rate than for-profit

ventures (Pitschner and Pitschner-Finn 2014). Moreover,

projects in the creative domains are more successful in

locations where the creative industries are well-developed

(Mollick 2014). Results related to the second type of

variables tend to show that it is better to create a video, to

regularly take into account feedback received from the

crowd by updating the online page or to choose a campaign

duration that is not too long (Colombo et al. 2014; Mollick

2014). But many research projects underline that the most

important drivers for success are related to the founder

himself (Crosetto and Regnier 2014; Giancarlo et al. 2013).

One key predictor identified in the literature is the level of

social capital. Indeed, money does not flow to a project

without a preexisting social network around the proponent.

At the beginning of the project, there is no specific reason

ex-ante why someone would pledge money without

knowing the person who behind the campaign. The main

reason for this lies in the high degree of uncertainty. As the

project is an emergent solution that nobody can manage

without facing various challenges and contingencies, its

quality and its chance of success are too hard to predict. In

318 K. André et al.

123

other words, ‘‘potential backers are usually unsure of

proponents’ abilities and do not know whether proponents

are trustable’’ (Cordova et al. 2015, p. 78). As explained

before, one of the main roles of a crowdfunding campaign

is to test a project to receive feedback from a community

(Gerber et al. 2012). The great challenge at the early stage

of the campaign is then to develop confidence around the

potentiality of the project, especially when one knows that

on average on the leading platform Kickstarter, ‘‘over 75%

deliver products later than expected, with the degree of

delay predicted by the level and amount of funding a

project receives’’ (Mollick 2014, p.1). Eventually, some

industry experts question the business model of crowd-

funding due to information asymmetries between entre-

preneurs and funders and the ensuing risk of moral hazard

(Belleflamme et al. 2014), e.g., fraudsters have taken

advantage of these asymmetries to extract money from

credulous funders to finance bogus projects (Cornell and

Luzar 2014; Mollick 2014).

In this context, the only way to convince backers is to

ask support from people who already know and trust the

founder. The key dimension is, beside the project and the

process of the campaign, the social capital of the project

leader, defined as ‘‘the sum of the actual and potential

resources embedded within, available through, and derived

from the social structure that facilitates exchange and

social interactions’’ (Dolfsma et al. 2009, p. 316). Prior

studies underlined two main pieces of evidence. First,

Mollick (2014) found that the number of Facebook friends

is positively associated with the amount of money raised

during a crowdfunding campaign. Second, geography

remains central for the early contributions as people who

are physically close to the founder and with whom they can

develop real-life interactions happen to be the ones who

bring the first contributions (Agrawal et al. 2015; Colombo

et al. 2014). But if ‘‘social network size predicts success’’

(Mollick 2014, p. 8), it is critical to differentiate between

internal and external social capital. External social capital

refers to people within the founder’s network who are not

part of the crowdfunding community. They can definitively

help, especially to support the founder at the early stage of

the campaign but they do not provide as a critical support

as the internal social capital. This second form of capital

relates to social contacts developed from within the

crowdfunding platform. Based on the analysis of 669

projects started during the fall of 2012 which they follow

from inception to closure on Kickstarter, Colombo et al.

(2014) measured the role of this capital and found that

‘‘internal social capital is positively associated with both

the amount of early capital and the number of early

backers, and that the positive relation between internal

social capital and the probability of project success is fully

mediated by these two variables’’ (p. 77). These results

confirm the central idea that crowdfunding is very much

associated with ‘‘community-based experiences that gen-

erate ‘‘community benefits’’ for participants’’ (Belleflamme

et al. 2014, p. 587).

Reward-Based Crowdfunding and Reciprocal Giving

Commonalities Between Crowdfunding

and Reciprocal giving

At the outset, it is important to clarify that Mauss’ theory of

reciprocal giving is far-reaching and not confined to the

analysis of gifts of material objects or money. Scholars

have used the conceptual framework proposed by Mauss to

analyze diverse phenomena such as organ donations

(Vernale and Packard 1990), giving blood (Titmuss 1970),

globalization (Sørensen 2002), knowledge exchange (Chen

and Choi 2005), social entrepreneurship (Dees 2012)

workplace relations (Caillé and Grésy 2014), gifts made by

consumers (de Peyrelongue et al. 2016). Also, while giving

typically involves bilateral relations, the Maussian gift is a

web of social relations that is not reducible to only two

individuals (Godbout and Caillé 2007). As a matter of fact,

we argue that the approach outlined by Mauss encompasses

complex acts of generosity with at least two parties, and

often more. Such a theoretical perspective seems promising

to understand a nascent social phenomenon like crowd-

funding, in which several stakeholders engage in a wide

range of relations.

The two previous sections of our paper allow us to

pinpoint several commonalities between crowdfunding and

Mauss’ reciprocal giving. First, research on the motivations

of founders and backers showed that both are stimulated by

a mix of material and immaterial expectations, which do

not merely consist of monetary donations (Colombo et al.

2014; Gerber et al. 2012). Crowdfunding platforms allow

people to create strong and complex relationships and host

projects that are hard to categorize as either commercial or

philanthropic. Rewards in particular have an ambiguous

status. They can be conditional pre-orders of products and

services (provided the campaign is successful), and the

backer is thus an early customer, but also often immaterial

counter-gifts infused with honor, status, representing the

bond between the backer and the entrepreneur, whose value

is not equivalent (or near) the gift amount. Hence, as for

reciprocal giving, crowdfunding platforms seem to rely on

hybridity, neither purely free nor purely interested.

Second, research on success factors of crowdfunding

campaigns also point toward a key feature of reciprocal

giving: the ability for founders to mobilize ‘‘social capital’’

early in a campaign (Mollick 2014; Dolfsma et al. 2009).

Beyond the Opposition Between Altruism and Self-interest: Reciprocal Giving in Reward-Based… 319

123

Even if close friends and family members are not sufficient

to guarantee a successful campaign (Davidson and Poor

2016), they remain critical to initiate a virtuous circle of

contributions as they offer a positive signal to the com-

munity (Agrawal et al. 2015). The idea of social capital

reminds us that for crowdfunding projects to be success-

ful—and thus financial capital to be raised—bonds

between community members matter. These relations are

richer and more ambiguous than mere monetary transac-

tions. As Mauss (1923) argued, gifts are ‘‘total social facts’’

because they bring together all types of social relations

between members of a group, e.g., commerce, friendship,

honor, love. (Webley et al. 1983). Crowdfunding also

blends different kinds of relationships: personal acquain-

tances, social network connections, and transactional

interactions.

The importance of uncertainty is a third commonality of

crowdfunding platforms and reciprocal giving. Indeed,

when a backer supports the project of a founder, there is no

certainty whether s/he will get anything back, i.e., if the

campaign does not meet its target, or if the entrepreneurial

project fails for whatever reason, the only thing the backer

gets back is his monetary gift. The debt is paid off and the

cycle of giving is terminated (Godbout and Caillé 2007).

Moreover, there is also uncertainty about when the founder

will give back to the backer (Faldetta 2011). Even when a

campaign has a set deadline, there are often delays, in

particular when the reward consists of a new product or

technology. The backer usually does not expect to receive

his counter-gift at a specific date. Finally, as mentioned

above, the cycle of giving is not bilateral and can take

many paths within the community formed by platforms

users (Colombo et al. 2014). Founders of a given project

may have been backers of other projects before, and ‘‘star’’

backers within the community can benefit from counter-

gifts from community members when they launch their

own projects as founders.

Reciprocity in Reward-Based Crowdfunding

Platforms

According to a recent study, one of the prevailing forms of

relationship that crowdfunding platforms trigger is re-

ciprocity (Colombo et al. 2014, p. 80). Someone who has

backed several projects (usually, this information is made

visible on the platform) will receive more support from the

community to show recognition for his/her previous

engagement, i.e., the ‘‘feelings of mutual identification and

unwritten social norms of (specific and generalized)

reciprocity build social capital relations among platform

members, leading them to show support to other members’’

(Cordova et al. 2015, p. 76). Evidence about reciprocity

shows that crowdfunding is close to what Mauss and

successors labeled the cycle of giving and receiving

(Godbout 2007; Douglas 1990; Mauss 1923).

We argue that reciprocity is not only based on rela-

tionships between users throughout different campaigns but

also within each project. Reciprocity on crowdfunding

platforms implies that each campaign is also based on an

internal process of giving and receiving. Reciprocal giving

means that backers give a pledge to founders and backers

receive a reward from founders. Using Mauss’ vocabulary,

the pledge may be considered as a gift and the reward as a

counter-gift. If we can assume that reciprocal giving is

induced by the three commonalities previously stated—

hybridity, bonds and uncertainty—it can be actually

directly observed on the platforms. Indeed, backers have

three options when they decide to pledge. First, they can

pledge for an amount which equals the amount of the

reward. The second option is to pledge more than the

amount of the reward. The last option is to choose to

receive no reward. For instance, Kickstarter uses the fol-

lowing sentence to describe this option: ‘‘No thanks, I just

want to help the project.’’ Interestingly, we note that these

three options correspond to the typology we presented

earlier in the presentation of Mauss theory, i.e., transac-

tions, reciprocal giving, and non-reciprocal giving. Trans-

actions correspond to pledges that are equal to the reward

amount. Reciprocal giving occurs in the case of a pledge

that is higher than the amount of the reward. Non-recip-

rocal giving is when backers choose not to receive any

reward. We assume that since the three options exist and if

they are frequently used on the platform, the three kinds of

relationships do coexist on crowdfunding platforms.

Reciprocal Giving and Success of Crowdfunding

Campaigns

If the three logics coexist, we may question the effect of

each one on the success of campaigns. A campaign is

successful if the amount raised is equal or superior to the

amount determined by the founder when the campaign is

launched. Concerning the transactional logic, we assume

that transactions are necessary to the development of

crowdfunding campaigns, but they are not sufficient. We

do not argue that transactions—when the pledge equals the

reward—hinder the success of the campaign. Our hypoth-

esis is that that the target amount cannot be reached if the

campaign is based only on transactions. Thus, we formulate

Hypothesis 1:

Hypothesis 1 Projects that rely on transactions alone fail

more often. Hence, projects where the total sum of pledges

is equal to the sum of rewards are less successful.

What about reciprocal giving? Does reciprocal giving

have positive outcomes? Are human activities stronger and

320 K. André et al.

123

more successful if they rely on cycles of giving and

receiving? This hypothesis appears in recent works by

sociologists using Mauss’ outlook to analyze human

interactions in various business and professional settings

(Alter 2010; Faldetta 2011). Some scholars contend that the

more ‘‘disinterested’’ (or altruistic) the exchange relation-

ship is, the more it will produce potentially beneficial

exchanges. In other words, ‘‘the merchant must be sincere

in giving his/her gift if s/he wants it to bear fruits’’ (God-

bout and Caillé 2007, p. 104). As Faldetta (2011, p. 74)

observed, ‘‘most modern tools of marketing make abundant

use of the language of gift, trying to show an apparently

disinterested logic of business,’’ yet many of these prac-

tices can be analyzed as hypocritical when actions are not

consistent with discourses (Brunsson 1989; La Cour and

Kromann 2011). While we assume that the crowdfunding

model is not merely about disguised transactions, we

nevertheless contend that reciprocity fosters success.

Therefore, we formulate Hypothesis 2:

Hypothesis 2 The more pledges there are based on

reciprocal giving, the more successful the project is. Hence,

the proportion of pledges that are higher than the reward

has a positive effect on success of crowdfunding

campaigns.

If reciprocity is at the heart of crowdfunding, non-re-

ciprocal giving should hinder the success of projects.

Campaigns based only on backers’ altruism toward foun-

ders, where rewards are not considered valuable, are

assumed to fail more often. Here is our Hypothesis 3:

Hypothesis 3 The more pledges there are based on non-

reciprocal giving, the less successful the project is. Hence,

the proportion of pledges made without reward has a

negative effect on success of crowdfunding campaigns

(Fig. 1).

Data and Method

Crowdfunding on Ulule

Our empirical study explores the case of Ulule, a French

crowdfunding platform operating mainly in Europe in

seven languages. From its inception in October 2010 until

March 2017, almost 17,000 projects have been funded on

Ulule with about €75 million collected. Thus, our study differs from the extant research on crowdfunding platforms

that focuses mainly on US-based platforms such as Kick-

starter or GoFundMe. Contrary to Kickstarter, which is

only dedicated to non-charity projects, Ulule hosts

crowdfunding campaigns in a large number of categories

such as photography, sports, education and technology as

well as charities and citizenship. This is particularly rele-

vant in our endeavor study practices beyond the opposition

of commercial versus philanthropic projects. However, just

like Kickstarter, most projects are in the field of arts and

culture (comics, photography, movies, performing arts),

which is reminiscent of crowdfunding’s origins in creative

industries.

Ulule is a reward-based crowdfunding platform offering

an all-or-nothing model. In this model, the founder

receives the money from the backers only if the money

pledged to his/her project by the end of the campaign is

equal or greater than the target declared on the platform.

Success is thus defined as the capacity for a project to reach

or go beyond the amount of money initially targeted by the

entrepreneur for its campaign. If this is not the case, the

founder receives no money at all. As stated earlier, backers

have three main options: They can pledge money and ask

for a reward, they can pledge money without asking for a

reward, or they can pledge money of an amount that is

higher than the reward selected.

Sample and Variables

We obtained data on all projects completed between

December 31, 2014 and June 18, 2015. We chose to keep

only the 2015 projects in order to control the evolution of

the success rate of the projects on Ulule. Indeed, the

average success rate of projects has steadily risen since the

inception of the platform, from 43% in 2011 to 67% in

2015. Our final sample comprises 3280 projects.

We first coded three explanatory variables. The two vari-

ables PledgeMoreReward% and PledgeNoReward% give

information about proportion of pledges within each project

which are not equal to rewards. PledgeMoreReward% indi-

cates the proportion of pledges in the project where the

amount pledged is higher than the amount of the reward. For

each project, the calculation is the following: number of

pledges where the amount of the pledge is higher to the

amount of the reward pledge/number of pledges. It corre-

sponds in our analysis to pledges based on reciprocal giving.

The variable PledgeNoReward% indicates the proportion of

pledges in the project where the backers asked for no reward.

For each project, the calculation is the following: number of

pledgeswhere norewardhasbeenasked/numberofpledges.It

corresponds to the share of pledges based on non-reciprocal

giving. PledgesEqualRewards is a binary variable indicating

whether the project has received only transactions. If this

variable is coded ‘‘1’’ for a project, it means thatthe sum of the

pledges is equal to the sum of the rewards. If this variable is

coded ‘‘0,’’ it means that some pledges were higher than the

rewards and/orthatsomepledgesweremadewithout rewards.

In other words, PledgesEqualRewards equals 1 if both vari-

ables PledgeMoreReward% and PledgeNoReward% equal 0.

Beyond the Opposition Between Altruism and Self-interest: Reciprocal Giving in Reward-Based… 321

123

Concerning the dependent variables, the first one is the

binary variable Success which indicates whether or not the

project has reached the target amount. The other dependent

variable is Funded%, which is the percentage of funding of

the goal. For instance, when the project has failed, Success

equals 0 and Funded% is less than 100. When the project is

successful, Success equals 1 and Funded% is equal to or

greater than 100 (since backers can continue to pledge even

if the target amount has been reached).

Concerning the control variables, they are consistent

with prior research on Kickstarter (Mollick 2014), i.e., Goal

(the amount founders of the project seek to raise), Duration

(the number of days during which the project accepts

funding), Backers (the number of users funding the pro-

jects), Pledge/backer (the mean pledge per backer), News

(updates posted by founders on their project), Comments

(the number of comments posted by backers). Finally, the

categorization of projects is also available and is based on

the main tags assigned by Ulule to each project when it is

created. Fifteen tags were available: ‘‘Art/Photography,’’

‘‘Comics,’’ ‘‘Charities/Citizen,’’ ‘‘Childhood/Education,’’

‘‘Craft/Food,’’ ‘‘Fashion/Design,’’ ‘‘Games,’’ ‘‘Heritage,’’

‘‘Movies,’’ ‘‘Music,’’ ‘‘Performing Arts,’’ ‘‘Publishing,’’

‘‘Journalism,’’ ‘‘Sport,’’ ‘‘Technology,’’ and ‘‘Other.’’

Descriptive Statistics

The overall summary statistics are provided in Table 1.

Concerning the dependent variables, almost 70% of the

projects in our sample were successful. This is much higher

than for the Kickstarter samples which are about 40%

(Mollick 2014; Colombo et al. 2014). The average level of

funding is 92% of the goal. Almost 85% of the successful

projects outperformed their target amount. Concerning the

explanatory variables, we observe that only 8% of the

projects were based purely on transactions. Moreover, 16%

of the pledges were based on reciprocal giving and 17% on

a non-reciprocal gift. Hence, while transactions represent

the majority of pledges, they are not sufficient to complete

campaigns. Reciprocal giving as well as non-reciprocal

giving does significantly coexist with transactions on the

Ulule platform. As far as control variables are concerned,

the goal amount is around €3000 even if there is consid- erable variance between projects. While several projects

target only several dozen euros, some projects set goals of

up to €200,000. The average number of backers is around 50, less that of Kickstarter which is almost 70 according to

Mollick’s data (2014). Interestingly, the campaign process

appears similar between Ulule and Kickstarter with 40-day

duration, four updates and around nine comments.

When we look at the descriptive statistics for each

project category as presented in Table 2, we observe that

success varies according to the categories. The ‘‘Technol-

ogy’’ category has the lowest success rate (only 36%),

while ‘‘Comics’’ has the highest (81%). Interestingly, the

‘‘Technology’’ category also has the highest rate of projects

where pledges equal rewards, whereas ‘‘Comics’’ has one

of the lowest. ‘‘Charities/Citizen’’ has an average rate of

Transactions ReciprocalGiving Non-reciprocal

Giving

Pledges equal rewards

Pledges more than reward

Pledges with no reward

Success

H2 (+) H3 (-) H1 (-) if only

transactions

Logic of relationships

Options on reward-based crowdfunding platforms

Output of the campaign

Fig. 1 Conceptual background and hypotheses development

322 K. André et al.

123

success but a lower target amount. The proportion of

pledges greater than rewards for ‘‘Charities/Citizen’’ is

lower than many other categories such as ‘‘Games’’ for

instance. The proportion of pledges with no reward in

‘‘Charities/Citizen’’ is among the highest but is, for

instance, lower than ‘‘Performing Arts.’’

A comparison of Ulule and Kickstarter shows a major

difference between models since Ulule hosts a significant

number of ‘‘Charities/Citizen’’ projects, whereas Kick-

starter forbids the funding of charities as stated very clearly

in the ‘‘Rules’’ of the platform: ‘‘Projects can’t promise to

donate funds raised to a charity or cause.’’ US-based

Kickstarter and European-based Ulule share the same

process but with some differences in the project categories.

This might be one of the explanations for the difference in

the average rate of success between the two platforms since

charities tend to have a higher success rate than others

(Pitschner and Pitschner-Finn 2014).

Findings

The correlation matrix presented in Table 3 shows strong

positive relationships between dependent variables and the

other control variables. There is a negative correlation

between duration and goal. The more ambitious and pro-

longed campaigns are, the less successful they are. Foun-

ders have to deal with a trade-off between building

momentum in the campaign, which is easier over a short

period of time, and targeting the highest funding, which is

more difficult over a short period of time. The advice

offered by Ulule is to set a goal that founders consider to be

achievable. Once the goal is achieved, founders are

encouraged to set new targets and surpass a 100% level of

funding. This may explain why 85% of the successful

projects outperform the target amount. The number of

backers, the average amount pledged, and the number of

news are positively correlated. These results are consistent

with past research (e.g., Mollick 2014). Moreover, the

correlations observed between dependent variables and

explanatory variables are consistent with our assumptions.

PledgesEqualRewards and PledgeNoReward are nega-

tively associated with Success and Funded%, whereas

PledgeMoreReward is positively correlated.

We designed four different models to test our three

assumptions for each dependent variable. Model 1 includes

control variables and PledgesEqualRewards as the

explanatory variable. Model 2 is similar to Model 1 but

includes PledgeMoreReward and PledgeNoReward as the

explanatory variables instead of PledgesEqualRewards.

Model 3 added project categories to Model 1. Model 4

added project categories to Model 2. We used a linear

regression for Funded% that is a continuous variable.

Results of the four linear models concerning Funded% are

presented in Table 5. Concerning Success, since it is a

binary variable, we used a Logit regression. Results of the

four Logit models concerning Success are presented in

Table 4.

Our findings show that projects that rely on transactions

alone are significantly less successful than those that do

not. The PledgesEqualRewards variable has a negative

impact both on Success and on Funded% both in Model 1

and in Model 3. Moreover, the data strongly support

Hypothesis 1, i.e., crowdfunding is not based solely on a

transactional logic. Concerning reciprocal giving,

PledgeMoreReward has a positive effect on the continuous

variable Funded% both in Model 2 and Model 4 and on the

binary variable Success in Model 2. Concerning our last

assumption about non-reciprocal giving, Model 2 and

Model 4 show that PledgeNoReward has a negative effect

both on Success and on Funded%. Hence, our three

hypotheses are validated by the results (Table 5).

Concerning the projects categories, Model 3 and Model

4 confirm that ‘‘Technology’’ projects achieve significantly

lower levels of funding than others. On the contrary,

‘‘Charities/Citizen’’ projects are more successful. It is

Table 1 Summary statistics Variables Average Standard Deviance Minimum Maximum N

Success 0.69 0.46 0 1.00 3280

Goal 3.038 6.029 10.0 200.000 3280

Funded% 92.3 94.0 0 4.029 3280

Backers 47.7 102 0 3.756 3280

Pledge/Backer 42.9 43.0 0 1.504 3280

News 3.84 5.65 0 112 3280

Comments 9.74 342 0 19.562 3280

Duration 40.2 15.4 0 99.0 3279

PledgesEqualRewards 0.08 0.28 0 1.00 3238

PledgeMoreReward% 0.16 0.17 0 1.00 3238

PledgeNoReward% 0.17 0.19 0 1.00 3238

Beyond the Opposition Between Altruism and Self-interest: Reciprocal Giving in Reward-Based… 323

123

interesting to observe that ‘‘Charities/Citizen’’ projects

perform better even in controlling the variables concerning

reciprocal and non-reciprocal giving. A possible interpre-

tation of this finding is that the altruistic nature of a project

supported on a reward-based crowdfunding platform is

more prone to foster reciprocal giving, beyond the option

of pledging more than the reward. Other categories are

positively associated with Success: ‘‘Childhood/Educa-

tion,’’ ‘‘Sport,’’ and ‘‘Movies.’’ Comparison of categories is

interesting to build a continuum of crowdfunding projects

regarding altruism and self-interest. We used the propor-

tion of ‘‘PledgeEqualRewards’’ as the way to rank self-

interest and the proportion of ‘‘PledgeNoReward’’ as the

way to rank altruism (see Fig. 2). We find that ‘‘Technol-

ogy’’ projects are more likely to involve self-interest,

whereas unsurprisingly, ‘‘Childhood Education’’ projects

are more likely to be based on altruism. Interestingly, the

lowest categories of projects in terms of altruism are not

the highest in terms of self-interest. For instance,

‘‘Comics’’ projects rank low for altruism but do not rank

higher than ‘‘Childhood Education’’ projects in terms of

self-interest. These results suggest that the ‘‘either/or’’

logic of the altruism versus self-interest debate is not

applicable as far as reward-based crowdfunding platforms

such as Ulule are concerned.

Discussion and Conclusion

Our findings show that even if the majority of pledges

made on crowdfunding platforms can be considered as

transactions, i.e., pledge equal to reward, there is a sig-

nificant number of backers who are engaged either in

reciprocal giving (i.e. pledge superior to reward) or non-

reciprocal giving (i.e. pledge without reward). Giving

seems essential to the success of crowdfunding platforms

since projects relying only on a transactional logic perform

less than projects relying also on non-reciprocal giving.

Thus, crowdfunding can be considered as more than a pure

economic phenomenon (Belleflamme et al. 2014; Colombo

et al. 2014) and involves hybridity of transactions and gifts

with a plurality of logics.

As expected, reciprocal giving fosters project success,

whereas non-reciprocal giving is negatively associated

with the achievement of the goal. Crowdfunding involves

complex and holistic relationships that can be understood

neither with self-interest perspectives nor with altruistic

approaches. Our research shows that reward-based

crowdfunding platforms rely on reciprocal giving and

trigger a modern and digitalized form of what Mauss wrote

about traditional societies in the early twentieth century.

There are at least four main dimensions of the Maussian

theory which remain valid. First, many users developT a b le

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4 1 .7

3 8 .5

4 8 .7

7 4 .9

4 3 .1

N e w s

4 .0 6

9 .8 0

2 .8 2

3 .3 5

4 .1 0

5 .1 0

9 .2 5

5 .6 1

3 .8 5

4 .1 9

3 .2 5

6 .6 7

1 .6 2

3 .3 0

3 .5 8

C o m m e n ts

3 .7 5

1 4 .0

2 .1 8

2 .0 5

3 .6 9

6 .8 3

4 1 8

2 .4 6

2 .1 7

2 .8 0

1 .3 9

7 .8 8

1 .4 2

3 .3 4

2 .7 6

D u ra ti o n

3 7 .0

4 7 .9

3 8 .8

4 0 .9

4 0 .7

4 1 .4

3 8 .0

4 8 .9

3 6 .9

4 4 .4

4 1 .8

4 0 .3

3 9 .1

4 1 .0

4 2 .1

P le d g e sE q u a lR e w a rd s

0 .1 2

0 .0 6

0 .0 8

0 .0 7

0 .1 1

0 .0 9

0 .1 3

0 .0 6

0 .0 6

0 .0 5

0 .0 5

0 .0 8

0 .1 5

0 .2 2

0 .1 0

P le d g e M o re R e w a rd %

0 .1 6

0 .1 5

0 .1 6

0 .1 6

0 .1 4

0 .1 7

0 .2 3

0 .1 8

0 .1 5

0 .1 7

0 .1 5

0 .1 6

0 .2 0

0 .1 4

0 .1 7

P le d g e N o R e w a rd %

0 .1 5

0 .0 5

0 .2 0

0 .2 4

0 .2 0

0 .1 7

0 .0 7

0 .1 4

0 .1 7

0 .1 2

0 .2 1

0 .0 9

0 .1 8

0 .1 3

0 .1 8

324 K. André et al.

123

hybrid logics (neither purely free nor purely interested);

second, founders mobilize their ‘‘social capital,’’ third

uncertainty remains a key characteristics of the exchange;

and fourth the cycle of giving is not bilateral as it can take

many paths within the community. Obviously, there are

also differences with the Maussian context: The practices

do not require physical interactions, the number of people

involved can be very high, and last but not least, it is

possible to reach territories which are thousands of miles

away.

Contributions of the Research to Entrepreneurship

and Crowdfunding Literature

We contribute to crowdfunding and entrepreneurship

literatures in several ways. First, crowdfunding literature

often states a clear distinction between reward-based

platforms and platforms intended for pure donations

(Meyskens and Bird 2015). As explained earlier, Kick-

starter, for instance, forbids funding of charities on the

platform. Yet, recent research tends to show that even on

this American platform the success of a campaign cannot

rely on pure utilitarian motives (Thürridl and Kamleitner

2016). Rewards must be based on multiple logics

including the capacity to generate connections and

interactions between backers and the entrepreneurs (op.

cit., 2016). More importantly, crowdfunding, far from

being in the realm of anonymity, can only works if it

relies on the personal networks of the entrepreneur

(Mollick 2014). In this sense, far from being anonymous

and impersonal, crowdfunding tends to support reciprocal

relationships, at least for a significant proportion of the

backers. These observations are also true for Ulule

where people tend to give to a person and not an

organization because projects remain emergent with very

small structure supporting it or even without a formal-

ized company or association. Moreover, we obtained the

percentage of backers who decide to be anonymous on

Ulule and this figure is only of 2% which supports the

idea that interpersonal dimension is core for crowd-

funding dynamics.

In this paper, we complement these results by showing

that gift-giving is central even for the reward-based plat-

forms. Second, we offer new insights regarding the

empirical analysis of crowdfunding in Europe, which has

not been very well documented so far. European and US

platforms seem to share the same fundamentals but do not

address the same kind of projects. Ulule blends philan-

thropic and creative projects. It seems to be a successful

approach since the average success rate is higher than on

Kickstarter. An assumption to be tested in further com-

parative research between platforms is that the high success

rate on Ulule is related to the high percentage of charities.

A possible implication for practitioners is that projects

should include a social and/or environmental dimension to

foster reciprocal giving and avoid being categorized as

purely commercial projects.

Concerning the entrepreneurship literature, venturing

has been acknowledged as being not only based on

utilitarian logics (Sarasvathy 2008; Steyaert and Hjorth

2007; Rehn and Taalas 2004). It involves complex and

holistic relationships that cannot be understood solely

through self-interest perspectives. Our research builds on

this approach to empirically document the key role of

reciprocal giving. The role of gift-giving remains largely

unexplored today in the entrepreneurship literature which

is quite surprising considering the importance that

scholars give to social capital in this field (Chetty and

Agndal 2007; Peredo and Chrisman 2006) either through

crowdfunding practices (Colombo et al. 2014), kinship

Table 3 Correlations

1 2 3 4 5 6 7 8 9 10

1 Success

2 Goal -.10***

3 Funded% .54*** -.05***

4 Backers .23*** .27*** .69***

5 Pledge/backer .19*** .15*** .12*** .06***

6 News .25*** .22*** .37*** .48*** .10***

7 Comments .02 .03 .74*** .66*** .03 .27***

8 Duration -.09*** .27*** -.10*** .10*** .15*** .19*** .00

9 PledgesEqualRewards -.35*** -.04** -.21*** -.12*** -.09*** -.15*** -.01 -.02

10 PledgeMoreReward% .08*** -.02 .09*** .01 .08*** .01 .04** .05*** .30***

11 PledgeNoReward% -.04* -.06* -.07*** -.09*** .02 -.12*** -.02 -.17*** .27*** .18***

* p \ 0.10; ** p \ 0.05; *** p \ 0.01

Beyond the Opposition Between Altruism and Self-interest: Reciprocal Giving in Reward-Based… 325

123

(Karra et al. 2006; Stewart 2003) or informal activities

(Bureau and Fendt 2011; Williams 2007). Our results

could help us look ahead in that direction and raise

questions regarding the way entrepreneurs use this logic

and how it impacts the venture’s performance.

Table 4 Predictors of level of funding (Funded%)

Model 1 Model 2 Model 3 Model 4

Goal -.000*** -.000*** -.000*** -.000***

(.000) (.000) (.000) (.000)

Backers .003*** .004*** .003*** .004***

(.000) (.000) (.000) (.000)

Pledge/backer .002*** .002*** .003*** .003***

(.000) (.000) (.000) (.000)

News .016*** .018*** .017*** .019***

(.002) (.002) (.002) (.002)

Comments .001*** .001*** .001*** .001***

(.000) (.000) (.000) (.000)

Duration -.007*** -.008*** -.007*** -.008***

(.001) (.001) (.001) (.001)

PledgesEqualRewards .501*** -.486***

(.033) (.033)

PledgeMoreReward% .268*** .257***

(.057) (.056)

PledgeNoReward% -.223*** -.249***

(.050) (.051)

Charities/citizen .050 .093**

(.037) (.038)

Childhood/educ .002 .060

(.048) (.050)

Craft/food -.105* .080

(.056) (.058)

Fashion/design -.091 -.074

(.059) (.061)

Games -.010 -.068

(.078) (.080)

Heritage -.042 -.010

(.077) (.079)

Movies -.002 .038

(.039) (.040)

Music .067* .096**

(.041) (.042)

Other -.100* -.074

(.050) (.051)

Performing arts -.076* -.015

(.046) (.047)

Publishing journalism -.090* -.097

(.052) (.053)

Sport .011 .008

(.046) (.047)

Technology -.267*** -.317***

(.079) (.081)

SE in parentheses: * p \ 0.10; ** p \ 0.05; *** p \ 0.01

326 K. André et al.

123

Table 5 Predictors of project success (Success)

Model 1 Model 2 Model 3 Model 4

Goal -.001*** -.001*** -.001** -.001***

(.000) (.000) (.000) (.000)

Backers .130*** .141*** .132*** .142***

(.007) (.007) (.007) .00663

Pledge/backer .041*** .042*** .042*** .044***

(.003) (.003) (.003) (.003)

News .047** .038* .060** .052**

(.022) (.022) (.023) (.023)

Comments -.018 -.027 -.017 -.0267***

(.024) (.003) (.023) (.004)

Duration -.017*** -.022*** -.019*** -.024***

(.005) (.005) (.005) (.005)

PledgesEqualRewards .754*** .739**

(.226) (.228)

PledgeMoreReward% .65* .537

(.365) (.370)

PledgeNoReward% -1.76*** -1.97***

(.345) (.355)

Charities/citizen .995*** 1.08***

(.263) (.264)

Childhood/educ .918** 1.11***

(.336) (.342)

Craft/food .142 .341

(.422) (.434)

Fashion/design .543 .572

(.445) (.458)

Games .313 .137

(.640) (.650)

Heritage 1.21* 1.12*

(.649) (.680)

Movies .983*** 1.01***

(.294) (-.294)

Music .617* .595*

(.321) (.322)

Other .524 .571

(.364) (.365)

Performing arts .325 .407

(.332) (.335)

Publishing journalism .281 .161

(.394) (.397)

Sport 1.15*** 1.14***

(.311) (.320)

Technology -.273 -.403

(.622) (.617)

SE in parentheses: * p \ 0.10; ** p \ 0.05; *** p \ 0.01

Beyond the Opposition Between Altruism and Self-interest: Reciprocal Giving in Reward-Based… 327

123

Contributions of the Research to the Field

of Business Ethics

Our research offers important contributions to the business

ethics literature. Indeed, if Gouldner’s theory of reciprocity

(1960) has been often used in the field of business ethics, it

has failed to bridge the gap opposing gift-giving and

reciprocity since it does not provide an explanation for the

initial gift. For instance, Deckop et al. (2003) use Gould-

ner’s theory to explain prosocial behaviors of employees as

a result of past organizational citizen behaviors they have

received. But how to explain past organizational citizenship

behaviors? Indirect reciprocity has been considered as a way

to overcome this difficulty and has been used for instance to

better integrate the concept of future generations in the field

of business ethics (Arenas and Rodrigo 2016). This

approach seems problematic since it transforms reciprocity

in an abstract principle no longer rooted in concrete inter-

personal relationships.

The limitation in Gouldner’s theory may explain why

reciprocity has little moral value in Western context and

why philosophers such as Derrida consider true generosity

to be without any form of reciprocity. As opposed to the

context of Chinese sociocultural system, ‘‘the moral quality

of reciprocity, and its part in an ethical system, is down-

played in the Western context’’ (Westwood et al. 2004,

p. 367). This limitation is rooted in Adam Smith’ con-

ception of morality which was already embedded in a norm

of reciprocity based on past behaviors: ‘‘Kindness is the

parent of kindness; and if to be beloved by our brethren be

the great object of our ambition, the surest way of

obtaining it is, by our conduct to show that we really love

them.’’ (The Theory of Moral Sentiments, Book VI, Sec-

tion II, Chapter I, par. 22). This approach of reciprocity led

business ethics scholars to bring back reciprocity to self-

interest, appealing as a consequence for ‘‘an ethics in

organizations that moves beyond self-interest and

reciprocity toward generosity’’ (Rhodes and Westwood

2016, p. 237).

We argue that Maussian theory has the potential to

restore the ethical value of reciprocity and detaches it

from a strict utilitarian perspective. The field of business

ethics could benefit from a more thorough exploration of

reciprocal giving in the tradition of Marcel Mauss. If few

recent studies used this perspective (Faldetta 2011; Fré-

meaux and Michelson 2011; Spiller et al. 2011), to our

knowledge, the present article is the first empirically

grounded contribution to the field based on Maussian

theory. Further research is needed to investigate the other

potential developments of the use of Mauss in the field of

business ethics. Further empirical enquiries of reciprocal

giving, such as the present study on reward-based

crowdfunding platforms, could contribute to enriching the

debate on the plurality of motivations in business decision

making (Norcia and Larkins 2000). Reciprocal giving

allows scholars to leave aside pitfalls of the self-interest

versus altruism debate, thus avoiding the ‘‘separation

fallacy’’ between business decisions and ethical decisions

that Edward Freeman insightfully reported (Abela and

Shea 2014; Freeman 1994). Our study shows that reward-

0%

5%

10%

15%

20%

25%

30%

Self-Interest (Proportion of

‘PledgesEqualReward’)

Altruism (Proportion of

‘PledgesWithoutReward)’)

Fig. 2 Altruism versus self-interest for crowdfunding project categories

328 K. André et al.

123

based crowdfunding platforms such as Ulule do not

explicitly differentiate between self-interested transac-

tions and altruistic giving, leaving both founders and

backers decide the type of relations they want to

establish.

Limitations and Further Research

Our research is not without limitations concerning our

method and the conceptual background we used. We grasp

reciprocal giving only through an option provided to the

backers by the platforms to give more than the reward. Yet

reciprocal giving can be assumed to exist in the two other

options available. First, concerning pledges made without

rewards, one could argue that counter-gift could be made

outside the platform, especially if founders and backers

know each other ‘‘in real life.’’ Second, pledges that equal

rewards may be categorized as gift-giving since some

rewards actually have no market value. Rewards of €10 or less mostly ‘‘only’’ provide gratitude in return. Some of

them could be more symbolic and equivalent to ‘‘non-re-

ward’’ in the sense that they are equivalent to a ‘‘thank

you’’ or a way to connect (for instance some rewards

equate to a drink/meal with the founders) more than a

reward per se. After identifying rewards without market

value, they could be included in the logic of reciprocal

giving. Further research needs to set up coding of the

rewards to analyze their very nature. More generally, we

need to investigate on a possible correlation between the

size of the pledge and the characterization of the pledge

(transaction vs. gift). A second methodological limitation is

that we did not control the effect of social capital. What is

the correlation between personal relationships and recip-

rocal giving? Are the relatives the only ones to engage in

gift-giving? Do they engage more in reciprocal or non-

reciprocal giving? Further research is needed to check this

point as well.

As far as theoretical limitations are concerned, one

could argue that Mauss’ conceptualization of reciprocal

giving in archaic societies of the nineteenth and twentieth

centuries markedly differ from the context of twenty-first

century crowdfunding practices. First, the formalization

(e.g., platforms require to detail formally the project,

rewards, contributions, names…) is much more developed in the case of crowdfunding compared with the situation

observed by the anthropologists reviewed by Mauss in The

Gift. Indeed, in the tribes analyzed, the oral culture is

quasi-exclusive as well as the absence of money (Boas

1888; Malinowski 1922). It was not accepted to formally

explicit the counter-gift. The notion of reward would not

have been meaningful in this context. The second differ-

ence between reciprocal giving in crowdfunding and

Mauss’ work is the level of uncertainty. Indeed, the for-

malization, far from securing the process, creates some

instability in the sense that it does not fully protect the

exchange (e.g. it is not a contract) and offers a wide variety

of possible rewards (whereas it was limited to shell bra-

celets or necklaces in the case of the Kula). Moreover, the

community and potential stakeholders in the exchange can

expand far beyond a clan than in the original gift as anyone

can join in. Even if they do not physically live nearby or

have close connections with the founders, anyone can be

part of the exchanges, generating potential free rider

behavior. As a consequence, the possibility of counting and

measuring is counterbalanced by this uncertainty which

makes economic rationality almost impossible. The last

difference lies in the effect expected by the persons

involved in the exchanges. Whereas reciprocal giving

practices in so-called archaic societies were essentially

used to maintain an existing social order, crowdfunding is

designed to help people transform our world. When the

Maussian gift was used to sustain the system, gift practices

on the crowdfunding platforms are there to disrupt existing

rules. While the reciprocal giving theory was fully relevant

for understanding social stability and reproduction of the

social order in archaic societies, we believe that it is also

useful to understand social change and innovation practices

in modern societies, yet this theoretical contribution is yet

to be articulated (Silber 1998).

Other theoretical lenses could be very appropriate to

analyze the social relationships between reward-based

crowdfunding participants such as stakeholder theory

(Freeman 1984; Freeman et al. 2010). Recently, stake-

holder theorists have shown interest for reciprocity and

how reciprocal relations between firms and their stake-

holders affect performance and legitimacy issues (Elms

and Phillips 2009; Fassin 2012). A ‘‘stakeholder reciproc-

ity’’ outlook could be fruitful to interpret the results of our

empirical study, namely that reciprocal giving is more

successful for crowdfunding projects than non-reciprocal

giving and market transactions. In response to friendly or

fair actions such as offering a symbolic or personalized

reward, crowdfunding platforms may incite people to

respond positively to a request to give money. Self-inter-

ested calculations would thus be ‘‘bounded’’ by the social

norm of reciprocity (Bosse et al. 2009; Fehr and Gächter

2000).

Further research is needed to understand more pre-

cisely to what extent present reciprocal giving is different

from ancient forms of gift relationships described in

Mauss’ work. More generally, we may ask to what extent

the so-called collaborative economy is based on reciprocal

giving rather than a newer form of market exchange. Is the

collaborative economy a new form of the ancient logic of

gift? What is similar or different between the two

Beyond the Opposition Between Altruism and Self-interest: Reciprocal Giving in Reward-Based… 329

123

frameworks? What are the conditions for a collaborative

platform to foster reciprocal giving? Ambiguity seems to

be one of the characteristics of the collaborative economy.

How could the concept of reciprocal giving be used to

better apprehend these emergent practices which blur the

lines between consumers and producers, between owner-

ship and usage, between self-interest and altruism (Rifkin

2014)? Answering these questions may contribute to build

an economy which goes beyond the opposition between

altruism and self-interest.

Acknowledgments We wish to thank Tobias Goessling and the editors of the thematic symposium on ‘‘Business Ethics, Peace &

Environmentas’’ as well as two anonymous reviewers for their helpful

guidance and feedback. We are also very grateful to Arnaud Burgot,

COO of Ulule and his team for allowing us to collect and analyze

such interesting data.

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