Donor coordination in project funding: Evidence from a threshold public goods experiment

• On crowdfunding sites or in charitable giving, multiple projects vie for limited funding.
• We experimentally study how the presence of multiple options affects contributions.
• The presence of multiple projects decreases coordination and total contributions.
• Coordination is not a problem when one project stands out on its merits.
• Important for crowdfunding sites to highlight the best projects

We present results from an experiment with multiple public goods, where each good produces benefits only if total contributions to it reach a minimum threshold. The presence of multiple public goods makes coordination among participants more difficult, discouraging donor participation and decreasing the likelihood of any public good being effectively funded. Applied to the case of fundraising, the results show how overall donations and the number of effectively funded projects may both decrease as the total number of projects vying for funding increases. The analysis considers whether making one of the contribution options salient, either through its merits or by arbitrarily choosing one to feature during the experiment, helps overcome the increased coordination problem. The results have implications for the growing popularity of crowdfunding websites, and suggest benefits to these sites from helping donors compare and identify the most promising projects.