Can crowdfunding for public projects be awesome? Yes it can.
I've spent the summer working with Spacehive, the UK's first crowfunding platform for public space projects, and it's been a great window into what is rapidly becoming one of the most exciting corners of the increasingly excitable civic technology space.
A crop of civic crowdfunding websites has sprung up in the past year - several of whom have contacted Spacehive to thank the team for inspiring their efforts. We're hoping to help bring a few of these groups together at SXSW 2013 to debate the relationship between crowdfunding and local government (and we'd appreciate your support for our bid for a SXSW panel). The question being posed, "Can crowdfunding save local government budgets?" is a provocative one, and it's meant to be.
That's because crowdfunding public projects is not a straightforward money in, good out equation. Several people we've worked with in the third sector and local government - people who've been working with public spaces for decades - had their reservations. And they were right to. I was glad to see Ethan Zuckerman, who I'll be joining at the Center for Civic Media in a couple of weeks, pointing out some of the potential pitfalls of the model.
So what are the main risks?
That crowdfunding is seen as a replacement for government spending cutbacks or a way of subverting government processes.
That crowdfunding successes will be concentrated in better-off areas of a city or country (due to the large number of individuals or businesses who are able to pledge) and entrench existing socio-economic divisions.
That successful crowdfunding projects will lead governments to pull back from funding projects in the future, in the hope that the crowd will become self-funding.
That crowdfunding will shift the emphasis towards projects that have a visible short-term impact but create very little lasting social capital.
It's fair to assume (as Zuckerman does) that most of the people starting crowdfunding platforms don't want to shrink government beyond recognition or to produce publicity-heavy white elephants. That doesn't mean that the 4 risks above aren't worth considering. So how do we address them?
NB: while the suggestions below are informed by some of my work with Spacehive, they reflect my own views and not those of the organization.
Have an open dialogue with local government and be community led. Crowdfunding platforms need to be clear that they're not attempting to supplant government or plug budget holes. They're also not best placed to build key infrastructure, but they can help realize projects that enrich communities, allowing local government to focus on infrastructure and core services. The rhetoric crowdfunding platforms use need to reflect this. Instead of asking governments to identify projects that they think require extra funding, crowdfunders should start with the government projects that communities are passionate about and want to see executed. Government is a critical partner in the process, but not the gatekeeper.
Spread the net wide. While most crowdfunding platforms are open and allow any individual to post a project (and that's an essential element of the model), it's critical for platforms to identify individuals who aren't even aware of crowdfunding. That means publicising the platform to communities that are not already full of digitally literate would-be funders. Spacehive's first project, was in Glyncoch, a deprived community in South Wales that the Deputy Mayor said "is used to being let down." Crowdfunding won't grow as a universal model for civic projects unless the constituency it reaches is expanded. Using digital platforms to deliver government consultations suffers from the same issue: these exercises won't become any more inclusive or reach a wider audience unless the teams running them promote them correctly, and in some cases, make interventions to try and bridge the digital divide. For instance, A crowdfunding campaign could create a popup donation bank of computers in a community to enable those who don't have regular access to the internet to find out more about a project and make their pledge.
Help communities push governments to do more, not less. Instead of causing a roll-back in government investment, crowdfunding can prompt governments to attempt more ambitious projects. Communities, empowered by the knowledge that they have the potential to raise funds themselves, need to push governments to think in terms of larger budgets that take into account some of the investment that crowdfunding can bring. Government should be emboldened by the opportunity to secure the active support of the community and business at the earliest stage of a project. It should welcome more active citizen participation in planning and the mandate for action such engagement brings with it.
Use experts in the field to build projects that have a lasting impact. A passionate individual with a creative mind may have a great vision for a new community garden and the ability to rally their local community, government and business to support it. Often they will have already thought through the legacy of what they're proposing, and if not, a crowdfunding platform can help them think this through. But what about third sector organisations that specialise in a particular area and have decades of experience? In this example, there could be a great opportunity for a green spaces charity to partner with a crowdfunding platform and bring together similar local projects as part of a national or regional initiative. The initiative could set out long-term goals and best practices, and the partner charity would encourage individuals to propose their own local campaigns using the same crowdfunding platform. The charity could choose to attach the best campaigns to its initiative, providing technical expertise and some of the funding. Crowdfunding therefore acts as a two-way source of support: helping national bodies to identify great local projects, and giving local projects the backing of large organisations.
Awesome civic crowdfunding involves everyone. It's not a replacement for government action, and neither should it try to be. It should try to give local communities a stake and a say in the future direction of their neighbourhoods. It should persuade SMEs and corporations to invest in campaigns with measurable goals that benefit the communities in which they operate.
Civic crowdfunding is at a very early stage, and these are brief observations on a complex topic, so I'd be glad to hear comments and contrary arguments.