When Public Grants Meet Crowdfunding: A New Study on Matchfunding in the Arts

New Research from ESHCC and UFRGS

Carolina Dalla Chiesa, Ellen Loots and Yosha Wijngaarden of Erasmus University Rotterdam (ESHCC), in collaboration with Guilherme Bucco from the Federal University of Rio Grande do Sul (UFRGS, Brazil), have published new findings in the Journal of Alternative Finance. Their research examines how institutional contributions affect the performance of crowdfunding campaigns in the arts.

Key Findings

The study provides robust evidence that matchfunding - the combination of crowdfunding with institutional (public or private) contributions - significantly boosts campaign success. Institutional involvement acts as a credibility signal, particularly when it comes from public bodies, and helps reduce uncertainty for potential backers.

Highlights include:

• Higher success and more funding: Campaigns with matchfunding raised more money and had higher success rates than those without institutional support.
• Public sector boosts credibility: Public-sector partners had a greater positive effect than private partners. Early-stage contributions were particularly effective, generating momentum and enhancing the signalling effect.
• Donation size increases, not donor count: Matchfunding led to larger individual donations, though it did not affect the number of backers - suggesting that donors give more when institutional support is present.
• Core arts vs. commercial sectors: Campaigns in core arts fields (such as visual arts, literature, music and theatre) tended to raise less money overall, but were more likely to meet their funding targets - highlighting their dependence on institutional support where commercial viability is limited.
• Collaborative funding models: The research supports the value of collaborative financing in the cultural sector. Matchfunding offers an alternative to traditional subsidy systems, diversifying funding sources and improving sustainability amid tightening public budgets.

Practical Takeaways for Creators and Fundraisers

• Secure early institutional support to create campaign momentum.
• Prioritise public-sector partnerships to strengthen campaign credibility.
• Use matchfunding strategically to increase average donation size.
• Tailor campaign strategies to the characteristics of different cultural sectors.

Implications for Research

This study introduces new variables into crowdfunding research, such as partner type and timing of support, offering fresh insights into the crowding-in effect. It opens the door for future research on:

• Public vs. private institutional support and their differing impacts
• How matchfunding influences donor behaviour and platform dynamics
• Sector-specific effectiveness of matchfunding in the arts