The necessity of a legal framework regulating online donation based crowdfunding in vietnam

VIETNAM NATIONAL UNIVERSITY, HANOI
VIETNAM JAPAN UNIVERSITY

TRAN HONG HANH

THE NECESSITY OF A LEGAL
FRAMEWORK REGULATING ONLINE
DONATION BASED CROWDFUNDING IN
VIETNAM

MASTER'S THESIS


VIETNAM NATIONAL UNIVERSITY, HANOI
VIETNAM JAPAN UNIVERSITY

TRAN HONG HANH

THE NECESSITY OF A LEGAL
FRAMEWORK REGULATING ONLINE
DONATION BASED CROWDFUNDING IN
VIETNAM
MAJOR: PUBLIC POLICY
CODE: 8340402.01

RESEARCH SUPERVISOR:
Dr. NGUYEN THUY ANH
Dr. YANAGIHARA TORU

Hanoi, 2021

ACKNOWLEDGMENT
Foremost, I would like to extend my appreciation and sincere thanks to my
supervisor from the Vietnamese side, Dr. Nguyen Thuy Anh. Her patient and
constructive advice had helped me a lot in the completion of this thesis.
My great gratitude is due to my supervisor from the Japanese side, Dr.
Yanagihara Toru for imparting his valuable guidance and constant supervision during
my preparation time.
Special thanks to the lecturers and staffs in Master’s Program of Public Policy
and researchers for their studies and reports on the topic I have researched, whose
information and findings had been a great support for my thesis.
Finally, I would like to express my love and gratitude towards my family and
my friends. Their encouragement and support have shaped my thesis to this stage.

Hanoi June 20, 2021,
Sincerely,
Tran Hong Hanh


TABLE OF CONTENTS
LIST OF TABLES ................................................................................................................ i
LIST OF FIGURES .............................................................................................................. ii
ABBREVIATIONS .............................................................................................................iii
Chapter 1 INTRODUCTION ............................................................................................... 1
1.1. Research background .............................................................................................. 1
1.2. Problem statement ................................................................................................... 4
1.3. Research purpose .................................................................................................... 5
1.4. Research questions .................................................................................................. 5
1.5. Research scope and time ......................................................................................... 5
1.6. Research significance.............................................................................................. 6

1.7. Structure of research ............................................................................................... 6
Chapter 2 LITERATURE REVIEW AND METHODOLOGY .......................................... 8
2.1. Literature review ....................................................................................................... 8
2.2.1. Overview of crowdfunding ................................................................................. 8
2.2.2. Studies on donation based crowdfunding ......................................................... 10
2.2.3. Research gap .................................................................................................... 17
2.2. Research Design and Methodology ......................................................................... 18
2.2.1 Online survey ..................................................................................................... 18
2.2.2 In-depth interview .............................................................................................. 19
Chapter 3 CURRENT LEGAL STATUS OF DONATION BASED
CROWDFUNDING BY INDIVIDUALS IN VIETNAM ................................................. 21
3.1. Theories behind government’s intervention ........................................................... 21
3.2. Legal documents and framework relating to donation based crowdfunding in
Vietnam .......................................................................................................................... 23
3.3.1 Effective laws ..................................................................................................... 23
3.3.2 Proposed draft ................................................................................................... 25
Chapter 4 FINDINGS ......................................................................................................... 28
4.1. Survey results .......................................................................................................... 28
4.1.1 Popularity of DCF and willingness to participate ............................................ 29
4.1.2. Donor’s motivations and perceived creditability ............................................. 30
4.1.3. Information interest .......................................................................................... 31
4.1.4. Attitude toward the proposed regulation.......................................................... 31
4.2. Interview results ...................................................................................................... 31
4.2.1. From the perspective of fundraisers view ........................................................ 31
4.2.2. Lawyer – Fundraiser for disaster relief ........................................................... 35
4.3. Major findings and discussion ................................................................................. 38
Chapter 5 CONCLUSION AND RECOMMENDATIONS .............................................. 40
5.1. Conclusion ............................................................................................................... 40
5.2 Recommendations .................................................................................................... 40

REFERENCES ................................................................................................................... 44
APPENDIX ........................................................................................................................ 48


LIST OF TABLES
Table 2.1 Classification of crowdfunding model ................................................................. 8
Table 4.1 Sample demographics......................................................................................... 28
Table 4.2 Summary of interviewee’s project ..................................................................... 32

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LIST OF FIGURES
Figure 2.1 Sources, levels and dimensions of donors' motivations to invest in
crowdfunding projects ........................................................................................................ 11
Figure 2.2 Research design................................................................................................. 18
Figure 4.1. The most popular donating channel ................................................................. 29

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ABBREVIATIONS
DCF
CET
ISSEE
ITD
SET
SNS
SDT

TAF
VAPEC
VND
MOF
NGOs

Donation-based crowdfunding model
Cognitive evaluation theory
Institute For Studies Of Society, Economics And Environment
Intention to donate
Social exchange theory
Social network sites
Self-determination theory
The Asia Foundation
The Vietnam Asia Pacific Economic Center
Vietnam dongs
Ministry of Finance
Non-governmental organizations

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Chapter 1 INTRODUCTION
1.1.

Research background

Emerging from the tide of industrial revolution 2.0, crowdfunding models are
becoming an effective micro-financing methods used by both for-profit to social
project founders (Mollick, 2014). Lambert and Schwienbacher (2010) first define

crowdfunding as “an open call, essentially through the Internet, for the provision of
financial resources either in form of donation or in exchange for some form of reward
and/or voting rights in order to support initiatives for specific purposes.”. In the realm
of donation funding, the model is called donation based crowdfunding (DCF).
DCF has been gradually become a popular fundraising method to financially
support charitable projects. According to recent studies, the global value of DCF in
2016 amounts to $0.56 billion (Scataglini & Ventresca, 2019). The Americas (US) led
the race with 290 million and the runner up was the Asia-Pacific with the volume of
USD 53 million (Zhao & Shneor, 2020). The volume is predicted to keep increasing.
DCF is used to fundraise for a wide variety of charitable causes ranging from specific
tasks such as providing free meals to the poor to more ambitious projects like arts
promotion and sustainable goals. Among which, DCF has been proven as an effective
fundraising mechanism for disaster recovery (Behl et al., 2020) and medical aid (Z. Ba
et al., 2021).
Though sharing a great commons with traditional charitable fundraising, DCF
distinguishes itself by the utilization of the internet which makes it superior in term of
eliminating geographical barriers (Choy & Schlagwein, 2016; Zhao & Shneor, 2020).
Often just through a single click anyone can make information on a person in need of
help known to the large crowd. It means that, on the one hand, the information on the
beneficiaries are more diverse and abundant. On the other hand, with the assistance of
social network sites (SNS) the information can reach a wider range of audience.
Besides the fundraiser’s social network, the call can also spread extensively with
sharing function to reach donors who is not known to the fundraiser before. From the

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donors’ side, DCF, thanks to search engines, may tap to donors who is actively
seeking for the right project to support.
Furthermore, DCF increases the likelihood of a charitable project to be funded as

coordination and transaction costs associated with donation collections are reduced in
a significant way. With the aid of the internet, each step to fundraise for charitable
purposes has been simplified and integrated into one standardized process (Zhao &
Shneor, 2020). The campaign initiator can not only easily broadcast the call, but also
provide real-time interaction in form of updates, comments and live streams to
emotionally appeal the donor. The availability and popularity of wire transfer and ebanking enables the donor to make donation from anywhere at any time. DCF, thus, is
open to anyone who wishes to raise funds or make a donation by lowering the
threshold for participant and activism.
In recent year, Vietnam witness the trend of DCF in form of individual calling for
voluntary contribution for charitable cause on the internet. In October 2010, Hoang
Phan Anh – a famous MC, through a Facebook post, raised 24 billion Vietnam dongs
to support people suffering from flood in the central provinces of Vietnam. November
2020, for the same cause and with the same means, Thuy Tien – a pop singer collected
roughly 178 billion Vietnam dongs. Furthermore, DCF model is not only used by
celebrity but also regular persons. Hoang Hoa Trung, a normal man of his thirties,
thanks to online platform like social network and mobile application has connected to
12,000 donors and galvanized enough financial resource for 77 voluntary construction
works, providing lunch for a year for 20.000 children in mountainous area with the
value of 1.450.000/per school year in year 2020. Besides Phan Anh, Thuy Tien, Hoang
Hoa Trung, many persons are utilizing online networks to initiate both ad-hoc and long
term charitable projects.
The emerging of DCF by individuals also comes with concerns. First, asymmetric
information between the donators and the beneficiaries exists, especially in the context
that information used in online platform is mostly unverified and unapprised. Recently,
in the national television news reported an individual illegally gain 07 billion Vietnam
dongs by posting calls for charity donations through SNS. Unofficial reports on the
fraud in form of DCF are also popular.
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Second, in cases where the fund raised is large, the question of effective
distribution comes to hand. Both Phan Anh and Thuy Tien faced problem of
distributing the mobilized voluntary contribution. In the case of Phan Anh, among 24
billion VND, emergency assistance including financial assistance, food and supplies
amounts roughly to half of the total donations. The remaining was used for providing
breeding cows and calves to 04 poor communes of 02 provinces of Ha Tinh - Quang
Binh, namely: Phuong My, Phuong Dien, Mai Hoa, Thach Hoa; building 1 clean water
station to serve 500 households in Minh Cam parish, Tan Hoa village, Quang Binh
province; sponsoring heart surgery for 90 cases of children in the Central with
congenital heart disease through the Heart Understanding Fund; supporting project to
build 31 flood-proof houses for people in Phuong My commune, Phuong Dien, Huong
Khe district, Ha Tinh province. Though being transparent in the way of distributing the
donations, Phan Anh was under criticism for not using the money for the purpose as
stated in his fundraising status. Similarly, the post of Thuy Tien asking for using part
of the donations to assist Vietnamese labor in Japan during Covid-19 was opposed by
many supporters. Later, she announced to have been assigned all the contribution to
local province to distribute to 61.532 households affected by the flood. Some expert
claimed that the distribution of a large amount, if not being in line with the
government support scheme, may cause overlap. Some households may receive too
much while others cannot access to necessary assistance.
In Vietnam, the mobilization, receipt, distribution and use of sources of voluntary
donations is regulated by Decree 64/2008/ND-CP. Accordingly, organizations allowed
to perform mobilization, receipt, distribution and use of sources of voluntary donations
are limited to Vietnam Fatherland Front and Red Cross Society (at all administrative
levels), social and charity funds registered under Government's Decree No.
148/2007/ND-CP of September 25, 2007, and central and local mass media agencies
(in case of donations for terminally ill patients only). The emerge of DCF practice has
revealed the gap in the current legal framework. In October 23rd 2020, Government
Office issued Official Correspondence No. 8876/VPCP-QHĐP to assign the Ministry
of Finance to urgently draft a Decree replacing Decree No. 64/2008/ND-CP.

According to Correspondence No. 8876/VPCP-QHĐP, the purpose of the amendment
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is to ensure the efficiency and timeliness of the mobilization, reception, distribution
and use of voluntary contributions to support people in overcoming difficulties caused
by natural disasters, epidemics and incidents; patients suffering from dangerous
diseases; and to encourage, honor and create favorable conditions for organizations
and individuals to promote the spirit of solidarity, mutual love and support in order to
stabilize life, restore and develop production and daily life of the people.
According to the latest proposal from Ministry of Finance on December 25 2020,
regarding the regulations on individuals participating in the mobilization, receipt,
distribution and use of voluntary contributions, two options are being proposed. The
first one is that mobilization, receipt, distribution and use of voluntary contributions
by individuals shall be regulated through reporting regime. The second option is that
the Government provides just the legislative backing for individual to do DCF,
leaving open all the requirements.
. Since 2010 when Vietnam achieved low, middle income country status, foreign
donors have been considering the plan to assist countries at lower status. In the trend
of gradual decrease in foreign development assistance the mobilization of voluntary
contributions within the nation is essential to help address existing and new
development challenges. Meanwhile, a regulation can be a double-edged sword. If it
imposes too much burden on the subject, initiatives to do good can be discouraged.
Therefore, it is essential to have a research to explore the DCF carried out by
individuals in Vietnam and evaluate the necessity of a legal framework regulating
such activities. From the analysis, suitable recommendations can be proposed so that
new laws and regulations can provide a favorable condition for individuals
mobilizing resources for charitable cause and yet ensure the effectiveness of
distribution process.
1.2.

Problem statement

In the era of Web 2.0, individuals are assisted to changing from solely donors to
the fundraiser using DCF model. The DCF model by individual now has not been
regulated by any official regulatory documents. Meanwhile, frauds and ineffective
distribution are potential to happen, causing lost to the society. In line with the aim of
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mobilizing resources from society for charitable cause of the Government, it is
necessary to explore the practice of DCF by individuals and evaluate the necessity of
issuing new legal regulations regarding the matter.
1.3.

Research purpose

The research aims at giving an exploratory of the current situation and analysis of
the draft regulation on mobilization, receipt, distribution and use of sources of
voluntary donations by individuals using DCF model, especially for the cause of
helping people to overcome difficulties caused by natural disasters, fires or serious
incidents and for terminally ill patients. From the analysis, the paper will then propose
suitable policy implications to create favorable conditions for individuals participating
in fundraising activities and to ensure the efficiency of the mobilization, reception,
distribution and use of voluntary contributions.
1.4.

Research questions

The main research question is “Is a legal framework regulating online donation

based crowdfunding necessary in Vietnam?”. To clarify this matter, the paper focuses
on answering the following sub-questions:
 What is the current legal status of DCF in Vietnam?
 Does the government need to issue new regulation to regulate DCF in
Vietnam?
 Is there any alternative to mandatory regulation of the State?
1.5.

Research scope and time

Basing on the nature of the research, a desk review was conducted regarding
regulation theories, DCF and the current effective legal system of Vietnam.
Information regarding online fundraising campaign dated from 2015 to 2020 which is
available in the circle of the author is gathered to provide a glimpse of the potential of
DCF in Vietnam.
The Vietnamese residents and overseas are surveyed through an online
questionnaire open in May 2021 in finding an overview of DCF practice in Vietnam
and exploring the potential impact the proposed regulations may have on donor’s
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behavior as they are the subject of the regulations. The population is selected
randomly by providing a survey link accessible to everyone.
The in-depth interviews are carried out with three fundraisers and one lawyer in
Hanoi via telecommunication channel and in person.
1.6.

Research significance

Regarding academic significance, the research hopes to contribute as an

exploratory to the under researched practice of DCF by individual in Vietnam. From
the results of survey and in-depth interviews, insights from different stakeholders are
identified and compared with theoretical foundations from international researches.
The research is expected to pave the way for further studies in the sense that
similarities and difference between practice of DCF in Vietnam and international are
reviewed with reference to theories behind.
For practical significance, being carried out in line with the timeframe of the
Government in reviewing legal documents on mobilization, receipt, distribution and
use of sources of voluntary donations, the research aims at presenting diverse
viewpoints of subjects affected by the proposed regulation to the Government. By
analyzing donor-fundraiser’s perspective with theoretical framework, implications
are expected to contribute to create favorable conditions for individual to participate
in mobilization, receipt, distribution and use of sources of voluntary donations.
Moreover, it could promote the process of mobilizing the resource from the society
for pro-social mission in the context of decrease in foreign development aid.
1.7.

Structure of research

The thesis will contain five chapters with the contents as follow:
Chapter 1: Introduction. This chapter will illustrate the research background and
clarify the research problem. The research questions, research scope and time, and
significance of the research are also presented in this part.
Chapter 2: Literature review and methodology. The content of this chapter
focuses on reviewing available literature history of research on DCF in the world and
Vietnam. The second part will clarify the methodology applied in the research.
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Chapter 3: Current legal status of donation based crowdfunding by

individuals in Vietnam. Chapter 3 will first present theoretical foundation for the
intervention of the Government. Then, a glimpse of current legal status of DCF and
analysis of available laws and regulations that can applied to manage DCF in
Vietnam as well as the proposed draft regulating DCF by individuals are provided.
Chapter 4: Findings. This chapter shows the findings resulting from online
survey and in-depth interviews. These finding will then be analyzed and discussed in
this part.
Chapter 5: Conclusion and recommendations. This is the final chapter of this
research which summaries all the main findings and discussions from the analysis in
the above chapters. Then, the author will provide suitable recommendations to the
draft of new regulations relating to the mobilization, receipt, distribution and use of
sources of voluntary donations by individuals in Vietnam.

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Chapter 2 LITERATURE REVIEW AND METHODOLOGY
2.1. Literature review
2.2.1. Overview of crowdfunding
Emerging from the concept of “crowdsourcing” in micro-finance (Mollick, 2014),
crowdfunding is an unofficial channel of raising fund to finance a venture or project
from the general public, rather than an intermediation such as banks or venture
capitalists. Crowdfunding is often used to refer to an open call by individuals or a
group of individuals over a fixed time, often through the medium of web-enabled
information systems for making financial contribution to support a project
(Belleflamme et al., 2012). Basing on the backer’s return type, (Massolution, 2012)
categorized crowdfunding into four different models namely: donation-based model,
lending-based model, reward-based model, and equity-based model, which has
reached consensus among literatures in the field (detailing as in Table 2.1).
Donation-based

crowdfunding

Table 2.1 Classification of crowdfunding model
Crowdfunding model where funders donate to causes that
they want to support, with no expected compensation (i.e,
philanthropic or sponsorship based incentive”)

Equity-based

Crowdfunding

model

in

which

funders

receive

crowdfunding

compensation in the form of fundraiser’s equity-based or
revenue or profit-share arrangements

Lending-based

Crowdfunding model in which funders receive fixed

crowdfunding

periodic income and expect repayment of the original

Reward-based

Crowdfunding model in which funders’ primary objective

crowdfunding

for funding is to gain a non-financial reward such as a token
or in the case of a manufactured product, a first edition
release.
Source: (Massolution, 2012)

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A typical crowdfunding model consists of three participating stakeholders: the
project initiators who seek funding for a project, the backers who are willing to
contribute, and the crowdfunding platforms acting as intermediaries to match project
initiators with donors and facilitates the exchange (Belleflamme et al., 2014; Tanaka &
Voida, 2016). The project initiators determine the pledge amounts and publish it on
crowdfunding platforms to draw supports from the backers. The platforms are often
run by established institution with it owns operation rules and requirements such as
minimum pledge amounts, all-or-nothing-/keep-it-all-principle fundraising principle,
compulsory information and the like. By it matching mechanism, the platforms help to
bring the projects to the potential backers depending on their preferences. In return, the
platforms may receive commission basing on the percentage of the pledge. (Gierczak
et al., 2016). A few crowdfunding platforms to be named are Crowdfunder, Kickstarter,

Indiegogo, Patreon, GoFundMe, GoGetFunding, Fundable, Suning, CircleUp,
Jingdong, AngelList, Alibaba, RocketHub, DemoHour, DonorsChoose, Modian,
CrowdPlus, FundRazr, Crowdo, Companisto, Milaap, Crowdcube, and Campfire
….(Ziegler et al., 2020). Besides crowdfunding platform, the initiators can also
broadcast their call on social networks (SNS) and other available online channels. In
mainland China, two largest social network sites Weibo and WeChat run its specific
features for charity fundraising called “weigongyi” and “qingsongchou” respectively.
Even in Facebook, Instagram it is not difficult to come across fundraising posts.
From 2013 to 2017, total global market volume of crowdfunding had grown 40
times from $11.06 billion in 2013 to $418.52 billion in 2017, in which DCF amounted
to $0.47. However, this number was based only on data collected from formal online,
peer-to-peer or crowd-led marketplaces. Statistics on “individual crowdfunding’
initiatives which are individual- or organization-specific fundraising campaigns carried
outside the control and oversight by a formal crowdfunding platform has not been
produced by any report yet (Ziegler et al., 2020).

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2.2.2. Studies on donation based crowdfunding
International studies
Within the field of DCF, scholars attached great importance to the exploration of
the motivations behind the funder’s behavior (Bagheri et al., 2019). Prominent theories
used to examine the psychological and social motivations of donors' choice and real
behavior are self-determination theory (SDT) and social exchange theory (SET).
Self-determination theory (SDT)
SDT is a psychological theory which has long been used to explain donor’s
behavior in conventional charity (Zhao & Shneor, 2020). Under SDT, motivation can
be classified into intrinsic and extrinsic. While intrinsic motivation refers to doing
something because of inherent enjoyment and satisfaction, extrinsic motivation uses

separable outcome as the impetus to action (Ryan & Deci, 2000b). A sub-theory
within SDT called cognitive evaluation theory (CET) suggests that intrinsic motivation
can be enhanced or deteriorated by social and environmental factors (Ryan & Deci,
2000a). Some recent works in crowdfunding also argued that extrinsic motives can
foster and intensify the effects of intrinsic motives of the backers by generating the
feelings of competence and relatedness (Allison et al., 2015; Choy & Schlagwein,
2016; Deci et al., 2017).
In the field of DCF, the motivation of backers are often impure altruism (Zhao &
Shneor, 2020). Impure altruism is the combination of pure altruism and warm glow.
Pure altruism is "a motivational state with the goal of increasing another's welfare". In
other word, the donor donates because he/she believes that his/her donation can
alleviate the suffer of the beneficiary. The donor, upon the act of donating, may enjoy
pleasure and satisfaction, which is often been referred to as warm glow effect. The
warm glow reflects the empathy process between donor and receiver, which on one
hand motivate donation by positive feeling of helping others. On the other hand, it
amplifies the guilt when the individual turns away. While intrinsic motivations can be
understood as individual’s inherent joy in doing good led by impure altruism, extrinsic
ones could be the impulse to comply with group expectations, the sense of social
belonging, and the desire to gain peer recognition or have better image or influence.
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(Bagheri et al., 2019) in exploring donors’ motivations in DCF in Iran carried out a
semi-constructed interview with 13 donors who had donated through Hamijoo – a
DCF platform in Iran. The interview transcripts were analyzed with additional
information of the project available on Hamijoo. The finding confirmed that the
impetus behind individual donors is a combination of both intrinsic and extrinsic and
at both individual and social level. Summary of indicators under each category is in
Figure 2.1.

Figure 2.1 Sources, levels and dimensions of donors' motivations to invest in
crowdfunding projects
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Source: (Bagheri et al., 2019)
Basing on SDT, Wang et al (2019) examined the donor’s intention in DCF in
China using a framework incorporating intrinsic and extrinsic motivations with
conceptual factors. Intrinsic variable is defined by the author as the degree of inherent
joy and personal value that donor believe as outcome of donation, referred to as sense
of self-worth. Extrinsic ones are presented by face concern, perceived donor
effectiveness (the perception that donation may contribute to solve the problem) and
moral obligation. Conceptual factors include social interaction and referent network
size which respectively indicate the communication between donors and fundraisers in
crowdfunding communities and perceived donor size of the crowdfunding platform.
To collect the empirical evidence, the author built a five-point Likert scale survey to
measure aforementioned variables and, then published the hyperlink on online survey
website and random online forums which has DCF activities identified via search
engines. The survey was open from June 23, 2019 to July 12, 2019 and was answered
by 632 respondents in China nationwide. 588 answers were valid and used to run
correlation test. The finding showed that self-identity and social identity significantly
influenced the intent to donate. All variables were proved to be positively associated
with either or both self and social identity.
(Jiao et al., 2021) also conducted a Likert scale survey targeting WeChat users
to find the answer for why Chinese supported online charities crowdfunding. Eight
independent variables including Reputation, Reciprocity, Sense of belonging, Joy of
giving, Altruism Financial constraints, Social influence and Social tie with the initiator
were put in OLS regression model to test the effect on intention to donate (ITD). The
analysis of 617 valid responses indicated that except for Reputation and Social
influence, six other variables had significant effects on ITD.

Social exchange theory (SET)
Looking at the “online” feature of DCF, the act of donation in DCF bear
resemblance with an online transaction. Under social exchange theory (SET), the
preliminaries to participate in a transaction is that the perceived benefits being higher
than the perceived costs of interaction (Sidel, 1997). In the DCF, the cost is often
12


associated with risk of fraud due to information asymmetry. While trust plays vital role
in easing the perception of risk associated with highly uncertain online transaction
(like crowdfunding) (S. Ba & Pavlou, 2002; Jarvenpaa et al., 1999), several studies
have confirmed the magnitude of trust and perceived creditability to intention of
backers in crowdfunding (Fakultät, n.d.; Gerber et al., 2014; Kang et al., 2016;
Rodriguez-Ricardo et al., 2019; Zhao & Vinig, 2019).
Especially to the DCF model, Liu et al (2018) explored the effect of both empathy
form SDT and perceived creditability of SET to the ITD using stimulus-organismresponse (S-O-R) framework. The

model consolidated various factors of

Technological Characteristics (Website quality, Transaction Convenience) and Project
Characteristics (Initiator Reputation, Project Popularity, Project Content Quality) to
Empathy and Perceived Credibility with control variables namely altruism, income,
past donation experience, social ties with project initiators. The data was collected
from the users of WeChat and Weibo and SNSs in Mainland by a seven-point Likert
scales ranging from 1 (strongly disagree) to 7 (strongly agree) survey from May 12 to
May 26 2016. 205 valid responses were collected and tested. The findings showed that
empathy and perceived credibility were statistically proved to have strong positive
effects on ITD. Technical characteristics, project content qualities were all positively
associated with empathy and perceived creditability. Altruism and past donation
experience asserted significant effect on ITD. Notably, initiator reputation was

confirmed to attribute to perceived creditability but not empathy while project
popularity was significant to empathy but insignificant to perceived creditability.
Taking the qualitative approach, by analyzing comments expressing doubt of
creditability of medical crowdfunding campaign available in Reddit and data from
semi-structured interviews with 20 DCF participants, (Kim et al., 2016) suggests ten
indicators for creditability including two indicators regarding legitimacy of the
beneficiaries (Details of External Financial Support, Beneficiary Merit), three about
project quality (Off-Site Verification Details, Realistic Funding Goals, Redundancy in
Campaign Description, Multimedia, & External Resources), Fundraiser and
Beneficiary Identity Verification, Communication between Donors & Fundraisers,
Presence of Personal Comments, Appropriate Level of Emotion and Others such as
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crowdfunding site’s reputation, grammar mistakes and/or lack of professionalism.
Among which, presence of variety of external sources such as links to articles, news
and SNS were rated as highest important. Communication between Donors &
Fundraisers through updates was the runner up. The author, thus, emphasized the role
of collective endorsements, i.e “collection of personal messages from people
appearing to be close friends on the public campaign page (whose identities are linked
to a social media site) and the online community discussion threads describing that
campaign” as leverage to perceived creditability.
(Bukhari et al., 2019)’s research confirmed the suggestion of (Kim et al., 2016) in
the market of Iran. Accordingly, testing on 223 donation-based projects from
LaunchGood - a large and fast-growing Muslim crowdfunding platform during
Ramada month using multiple linear regressions and logistic regressions, the author
confirmed that creators’ credibility and backers’ endorsements are decisive factors to
success. In which, creators’ credibility was measured by the ratio of previous
successful project(s) to unsuccessful projects in the platform. Backers’ endorsement
indicates the number of shares on SNS or through emails or number of followers.

The perceived creditability of donors in DCF reflects what donors evaluate the
trustworthiness of not only the project itself, the project initiator but also the
institutional environment (Choy & Schlagwein, 2016; Jiao et al., 2021; Kim et al.,
2016; Strohmaier et al., 2019). When it comes to institutional factors, most of
researches drew the attention to the effect of quality of website service (Lacan &
Desmet, 2017; Sura et al., 2017; Zhang et al., 2020) or perceived platform rules
(Strohmaier et al., 2019).
Studies in Vietnam
Ever since 1997, the voluntary sector and philanthropy of Vietnam has attracted the
attention of the academic. (Sidel, 1997) basing on his own desk research, interviews
and policy discussions with Vietnamese and foreign experts, provided an exploratory
of the development of the non-profit sector and philanthropy in Vietnam as well as a
review of the legal environment in 1997. The research defines the voluntary sector in
Vietnam as a comprise of nine varieties of organizations and philanthropy is referred
14


to individual/private giving. While the voluntary sector was robustly emerged, the
organized private giving was lagged behind in term of values and still under umbrella
of an organization such as local peasant associations and collectives, ethnic and clan
groups, private schools and universities, companies, charitable fund. Looking into the
regulatory context, Sidel (1997) found out that the legal framework for voluntary
sector was primarily built on three sets of laws and regulations namely 1957
regulations governing the establishment and operation of associations and similar
groups, 1989 - 1990 policy documents promulgated on mass organizations and
associations and 1992 legal documents issued which allow the formation of
organizations to promote scientific research and technological innovation and
exchange.

These

instruments

were

overlapping,

confusing

and

sometimes

contradictory, out of dated, which nevertheless was the advantage for non-profit sector
to claim at least quasi-legal status in the absence of explicit approval of the
Government. The regulations regarding philanthropy is out of scope of Sidel’s
research.
During 2009 - 2010, The Asia Foundation (TAF) and The Vietnam Asia Pacific
Economic Center (VAPEC) carried out a research on both individual and corporate
giving in Vietnam, with the goal of providing a sketch of current state of philanthropic
giving, along with the motivations for and challenges of such activities. 16 large
corporations and 100 small enterprises in Hanoi and Ho Chi Minh City, 100
households in Hanoi and Ho Chi Minh City and 100 households Thai Binh and Long
An provinces were surveyed using semi-structural questionnaires and in-depth
interviewed. The findings derived from the survey among household suggests that a
majority of both urban and rural households were willing to participate in charitable
activities. Motivations for the charitable act were the desire to share the difficulties of
others and the satisfaction received, especially when being inspired by the practice of
giving by individuals. The two most popular cause for donation is for disaster rescue
and assistance to the poor with the ranking differed between rural and urban household

group. Although the survey finds that the likelihood to increase the donation amount
and re-donate was high, up to 20% of people in urban areas expressed the
dissatisfaction with the giving method pointing to the ineffectiveness and lack of
15


transparency and trust in the process. In addition, the respondents also doubted that the
donation could reach the person of greatest need. The research also reveals that the
primary channels to access the information on charitable activities were differed
between rural and urban area. While the information was often delivered to rural
household by grassroots organizations, urban households rely more on mass media to
get informed. There was a consistence tendency among both rural and urban
households to donate through unofficial channels (community, pagoda, church and
donations) rather than official ones like (corporate organizations, established funds,
etc.). Besides providing initial picture of philanthropy activities in Vietnam, the
research also pointed out that the Decree 64/2008/ND-CP – the primary legal
document in the field was not compatible with the practice of philanthropy.
Taking the approach of topic-based study and inductive analysis, in 2015, Institute
For Studies Of Society, Economics And Environment (ISSEE) carried out a research
into the public awareness of charitable activities in general and their current status of
charitable donations. Focusing on the non-governmental charitable organizations
(NGOs) only, ISSEE surveyed 1,197 people living in four different cities and
provinces nationwide (Nam Dinh, Dak Lak, Ho Chi Minh City and Dong Thap) during
the period of 2012-2013 to explore their understanding of NGOs and willingness to
donate to such organization. Sample size was pre-determined using Fleiss and
associates’ formula. The respondents were chosen randomly as long as they were
willing to participate. The finding confirmed the previous studies on the willingness of
individuals in participating in charitable activities, main motivations and primary
information channels. Contrary to findings of TAF, the research furthers showed that
dominated channels of donations were those relating to local authorities (53,5%) and

funds for the poor. The survey in ISSEE’s research also recognized the practice of
individuals organizing charitable events. However, it was assessed as less effective
and transparent than state agencies and only 1.8% respondents donating through
individuals. Interestingly, the research asserted that the dominance of state
mobilization channels does not reflect the trust of the citizen on the effectiveness of
state organized charity campaign but rather a practice of administering these activities.

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In term of publications specialized in DCF, though several researches have been
published exploring the crowdfunding in Vietnam almost all the researches examines
crowdfunding as a new form of informal financing for business (T. Nguyen, 2017;
Thanh Tu et al., 2018) or in the reward based model (Dat Trinh & Hoai Phuc Nguyen,
2020; Linh, 2019; T. Nguyen, 2017). All the aforementioned literatures focus on the
determinants or the success factor of a crowdfunding project using quantitative method,
basing on data collected from some famous crowdfunding websites in Vietnam such as
fundstart.vn, comicola.com, betado.com, firststep.vn, funding.vn. The findings are of
consistent that quality and quantity of project information (number of videos,
description of the product, product demo, website, spelling mistakes), founder
information

(personal

information,

contact

information,

personal

website/page/introduction available, number of social network friends) and project
goal significantly determined the likelihood of success of a project. While the first two
were positively correlated to the success of the project, high amount of money raised
might indicate lower chance of target hit.
There has been only one work that mentioned DCF. However, it is not the main
subject of the research. (Bui & Hoang Bui, 2017) in exploring how to facilitate
crowdfunding in Vietnam examined the impact of regulatory factors to crowdfunding
through interviewing three co-founders of three crowdfunding platforms (one DBF and
two from reward-based crowdfunding). The interviewees all agreed that regulatory
factors will affect the crowdfunding. However, no further discussion was provided.
2.2.3. Research gap
These studies mentioned above are abundant sources for exploring DCF in the
perspective of Antecedents, Actors, Enablers and Effects of DCF for Charitable
Causes. However, almost all the researches were based on the data collected from
mature/well-known DCF platforms rather than general internet medium like SNSs or
webpage, which is more related to DCF practice in Vietnam. In addition, little took the
regulatory approach or examined thoroughly on the policy of the state regarding DCF
(Salido-Andres et al., 2020). Particularly in Vietnam, researches on crowdfunding are
limited and DCF seems to be an untapped area as compared to other form of
crowdfunding. Especially in the context where there is currently no DCF platforms
17