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Monetizing Philanthropy

Monetizing philanthropy: Our browser extension, interdisciplinary research findings & plans ahead

Catalina Goanta
The Maastricht Law & Tech Lab is my proudest achievement: populating a law faculty with one computer scientist at a time
・9 min read

The road to the project deliverables

It is with quite some disbelief that I am typing this final report. That is because it feels like we started this project yesterday, since our theme has been the gift that keeps on giving. In other words, when we set out to explore the world of philanthropy by social media content creators, we had solid knowledge of business models relating to social media influencers and a keen interest to explore the future of Internet monetization. And yet what we uncovered with a small-scale project running a bit over 6 months is a multi-faceted research agenda for the following years! I read some other final reports and saw we share this experience with other teams as well.

On a personal note, just like I imagine this was the case for many projetcs, our multidisciplinary team that I wrote about here has been at times challenged throughout these crazy pandemic times. However, team members managed to overcome these challenges mostly because they are incredible individuals and researchers, and I am very grateful that we could work together.

We set out goals on three lanes which I will explore, one by one, below, while also showcasing our specific output.

Monetization/altruistic incentives and models

To better understand the landscape of business models and incentives related to digital giving. In 2020, global health and social justice events revealed at scale a new era of online philanthropy. Content creators around the world started using their online platforms to gather money for families hit by the economic effects of the Covid-19 pandemic, or for social justice causes such as Black Lives Matter. The options to donate for such causes have reflected a mix of traditional payment affordances on websites advertised through social media, as well as new, more creative and elaborate ways to generate revenue. An example of the latter was the farming of views on Youtube for ’fake’ monetized videos (e.g. videos that display the same image/sound for a duration of minutes/hours and that display considerable amounts of ads). Content creators used these videos to maximize the AdSense monetization opportunities, while making public promises that all the monetization revenue would go to charities supporting Black Lives Matter. This context raises three main issues:

  • lack of legal certainty
  • lack of transactional transparency
  • business model volatility

For this deliverable, to tackle these three issues, we ended up with the following output.

Output 1: Literature review

First, we completed the literature review mentioned in our interim report here. Overall, the main finding is that the literature on monetization in general and philanthropy in particular pertains to a lot of siloz (e.g. computer science, law, social sciences) that do not interact. The increasing amount of interest given to the creator economy is currently leading to a lot of micro knowledge that is not building towards a more comprehensive overview relating to what is happening in practice. Thematically, we see there is increasing attention given to online donation behaviours occuring on platforms that allow for gift-giving (e.g. TikTok tokens, Twitch bits, Youtube Super Chat). This is a result of the fact that a lot of social media platforms have already incorporated donation buttons that allow creators to set up campaigns. For instance, TikTok recently integrated a gift affordance in the comments section.
The paper is now available openly here.

Output 2: Crowdfunding incomes on social media and the law

Second, we looked at some of the legal implications of getting an income out of donations. This is only a small part of the overall legal implications of web monetization, applicable in particular to creators who pursue philanthropy on a more systematic basis, to either fully or partially pursue monetary contributions for themselves. Against this background, we can think about philanthropy in two ways:

  • Based on the identity of the donee, philanthropy on social media can target the creator or other parties (e.g. people helped by the creator);
  • Based on the role of philanthropy in the creator's business model, creators can engage in philanthropy ad hoc (e.g. creators who use philanthropy for themselves or someone else sparsely) or systematically (e.g. social justice creators who build their career around philanthropy, or creators who depend on gift-giving). Our analysis considered creators who engage in philanthropy (whether for themselves or others) in a systematic way, to insure an income for themselves via philanthropy.

What is really interesting is that philanthropy in itself is a concept that is currently shifting its meaning, as it is becoming increasingly difficult to define it from a legal perspective. Traditionally, and setting aside jurisdiction-specific requirements, a donation entails a transaction with legal effects whereby a party (the donor) gives something gratuitously to another party (the donee), without the latter having any obligations to give something back. In the markets we explored, while technically it can be claimed that a follower donates bits to a Twitch streamer as a gift, we can also interpret that transaction as a bilateral service (e.g. the streamer provides entertainment and the follower pays for it). From that perspective, philanthropy and service provision may sometimes overlap. Further research is necessary to disentangle the two.

Our paper 'Emerging Business Models and the Crowdfunding Regulation: Income Crowdfunding on Social Media by Content Creators' looks at the practice of content creators asking their followers to support them either by a mix of donations or rewards-based contributions. This contribution tackles the challenges arising out of narrow scope of the new European Union's framework on crowdfunding, which focuses on investment crowdfunding, but which can provide meaningful regulatory inspiration also to practices which define the burgeoning creator economy.

Output 3: Engaging with national law-makers on the topic of the creator economy

We have also taken some of the knowledge we have been generating in the project and:

  • brought together a network of interdisciplinary researchers from around the world working on content creators; and
  • submitted evidence to the UK Parliament on the topic of influencer culture and business models.

Output 4: Engaging with creator communities

Our last output under this deliverable section relates to a survey sent out to 300 content creators mapped in our earlier update. This study is still ongoing, and we will update this report once we have a) the final results; and b) the final paper.

Browser extension

The starting point of this project was that current donation solutions/environments have two main problems:

  • they are centralized (e.g. meaning that creators depend on big platforms who can unilaterally cease their financial activity);
  • they are opaque (e.g. who makes how much money out of philanthropy?)

We tried to tackle these two issues by focusing on two outputs.

Output 5: Browser extension for donation campaigns

Our team developed a browser extension that seeks to provide creators with the possibility to ask for donations from their followers for specific causes. One of the most challenging architecture issues we faced was the ability of the donor to control how much money to donate and towards what purpose. From this perspective, we believe the web monetization community might benefit from additional solutions relating to how such control may be offered.

For instance, a creator may have 5 campaigns, but a follower may not resonate with all, meaning that the donor should have the option to not contribute to all the creator's content indiscriminately. Below are a few snaps of how the extension looks like.

User flow snapshot

Donor flow snapshot

Influencer flow snapshot

Here's the browser extension repo (output 5)

Output 6: Donating transparently using the LUCE platform

To track the donation transactions in a privacy-preserving way that can still give users and researchers insights into the donation market for compliance and brand transparency purposes, we relied on LUCE. LUCE is a blockchain platform solution designed to stimulate data sharing and reuse, by facilitating compliance with licensing terms. The platform enables data accountability by recording the use of data and their purpose on a blockchain-supported platform. LUCE allows for individual data to be rectified and erased. In doing so LUCE can ensure subjects' General Data Protection Regulation's (GDPR) rights to access, rectification and erasure.

LUCE diagram

LUCE has also been integrated with Interledger. All the repos resulting from this work can be found below:

Consumer preferences regarding monetization and philanthropy

Output 7: Consumer behavior

To complement the viewpoints raised by literature and contact with content creators, we also set to understand how consumers perceive monetization and how they engage with that on social media. To this end, we are still pursuing an online experiment on Prolific, to determine donation behaviours on social media for a paper which will be published later this year. The report will be updated when we have a) the final results; and b) the final paper.

Output 8: Platform governance - Monetizing controversy

The last viewpoint we explored in this project to offer a holistic view of the issues involved has been the angle of platform governance. While it is true that dependance on big centralized platforms is an issue for content creators, what is equally true is that some form of content moderation needs to exist if we aim to have a safe Internet. From this perspective, any type of illegal content that normally can be taken down by social media platforms as a form of legal compliance, might be more difficult to tackle in decentralized environments. We explored this tension in a paper already published in the journal Morals & Machines on the monetization of controversy, which we covered extensively in an earlier post.

This topic needs further elaboration, especially in connection to the work done by the Coalition of Automated Legal Applications (COALA), which has recently launched a taskforce on decentralized governance legitimacy, and to which our group also participates. COALA brings together renowned researchers and practitioners dealing with decentralization and law, and could be a great resource for this community.

Bonus stuff - Dissemination

Output 9: Project event in September

To disseminate the activities we have been busy with in the past months, we will be hosting an event where we will demo the browser extension and engage in discussions with content creators. The event will either be online or hybrid, and we will announce it in a separate post.

Output 10: Web monetization at the United Nations Internet Governance Forum

The Glossary of Platform Law and Policy Terms was developed as a result of the customary meeting of the Coalition on Platform Responsibility, taking place after the annual session of the 2019 Internet Governance Forum, to provide a common language for academics, regulators and policy-makers when discussing issues of platform responsibility. The Glossary has been developed in the past year, and we have proposed and written an entry on Web Monetization, to enhance the visibility of the protocol and its underlying phylosophy also in policy circles. The Glossary will be published freely soon, but until then the entires can be consulted here.

Output 11: Web Monetization in the Glossary on Decentralization (Internet Policy Review)

The last dissemination activity focusing on the workings and governance of decentralized web monetization will be featured as an entry in the Internet Policy Review's Glossary on Decentralization, which will be published later this year. We believe that an outlet that lies once more at the intersection of science and policy-making will be a good platform for more audiences to engage with the concepts behind Web Monetization. We will update this post when that happens.

Future research

To go back to what I started this post with, the work we have been doing was supposed to have three main pitstops. However, we are happy to report that we were able to have a three-fold productivity for our output due to the fact that we stumbled upon a lot of fascinating implications for philanthropy and social media. So much so, that we uncovered a lot of questions that still need answers, such as:

  • How could we pilot the browser extension with content creators, to make them more aware of the applications relating to COIL/Interledger/Web Monetization?
  • What are the legal frameworks for donations in various countries?
  • What is the legal nature of micro-transactions?
  • What should be the legal definition of philanthropy?
  • How can non-technical knowledge (e.g. social science/law) benefit technical projects?
  • What are the regulatory issues arising out of decentralization?

... and so on and so forth.

We hope to be able to pursue such further research within and also with the amazing community that has been rallying around web monetization!

Greetings from our team <3

Monetizing philanthropy team

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