Moving America Forward

Civic Crowdfunding: The Future of Paying for Community Projects

June 20, 2014
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Civic Crowdfunding: The Future of Paying for Community Projects
Citizens and government may soon find a new way to work together with crowdfunding. Getty Images
Not only does it provide an infusion of cash, but it's also an opportunity for citizens and governments to work together.

When we think of fundraising, most of us probably think of individuals and a private organization, but what about residents and their local government?

Well, Kickstarter-esque campaigns are getting a little kick themselves with the introduction of civic crowdfunding, a joint venture between citizens and the local government to benefit their town or city. Sites like Citizinvestor, Neighbor.ly and IOBY are providing a platform for governments and citizens to suggest community projects for the town and then raise the money to fund it.

The process is simple. Like ordinary crowdfunding, an idea is posted to one of the sites by either the government or an individual. People can then donate funds to the project online, assisting the government with the cost.

MIT’s Center for Civic Media’s Rodrigo Davies has been studying the growth and trends of civic crowdfunding over the past four years and has recently released his report, which focused on seven geographical areas: four in the U.S. and one each in the U.K., Spain and Brazil. Through his research, Davies discovered trends as well as questions that will need to be resolved as civic crowdfunding continues to evolve.

So far, Davies found that civic crowdfunding has been operating on a small scale, but nonetheless, it has been executed with great success. He reports that between 2010 and March 2014 there were 1,224 civic campaigns with a total of $10.74 million raised averaging about $6,357 per project. The greatest success though is that on Kickstarter, a popular crowdfunding website, 81 percent of projects labeled “civic” were fully funded.

Generally, the most common projects are gardens and parks because, Davies reports, they are usually volunteer-based, fast to build, and uncontroversial. And while civic crowdfunding has been limited to a few big cities such as New York and San Francisco, there’s no reason why they cannot spread to small towns and other cities.

The big question, though, is the role of governments in this endeavor. Davies points out that local leadership has three options: It can use the familiar platforms to promote projects, it can organize and execute its own campaigns, or (and this is Davies’s pick) it can adopt a “facilitator” role, in which it will help with financing but will indirectly be responsible. Ultimately, it’s about the government finding a balance between beings supportive and active all the while not overstepping its boundaries.

The bottom line? Citizens will benefit from these projects, even if it takes some time to figure out exactly how civic crowdfunding works best.

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