Americans are struggling to save. New technology and new platforms, including crowdfunding, can provide opportunities for vulnerable consumers to access broader networks and leverage online accounts to help cover the costs of financial emergencies. However, most Americans don't even know these options exist.
A two-part pre-pilot test analyzes an existing model of crowdfunding and consumers’ perceptions of and experiences with existing platforms.
Because a large percentage of consumers are interested in using crowdfunding for emergencies and future goals, but few have actually done so, we believe that closing the gap will require re-framing crowdfunding as a savings tool by either marketing existing platforms as savings tools or by creating new platforms that facilitate crowdfunded savings.
Many of the concerns highlighted by respondents reluctant to use crowdfunding to raise money for emergency or future expenses could be alleviated by a platform that allowed for a higher degree of confidentiality or anonymity for fundraisers.
Further exploration is needed to understand when exchanged funds serve as gifts versus informal loans and how product development around informal loans can yield further innovative solutions for LMI consumers managing financial risk.
Many LMI consumers are already receiving money from others to pay for their expenses, but they normally only receive assistance from the inner circles of their existing networks.
There is a measured gap between the percentage of LMI consumers who are interested in using crowdfunding and the percentage who have actually done so.