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Civic Crowdfunding for Local Government

by Sherie Sanders on February 1, 2017
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Picture of People in a Circle in an Article About Civic Crowdfunding for Local Government and Alternative FinanceReady for a pop quiz? Name our country's first civic crowdfunded project.* Since most of us think of crowdfunding as a modern phenomena, social media campaigns and online contributions come to mind. We might be surprised to find that the the purchase of the platform under the Statue of Liberty is often considered the first, or at least one of the first, major civic crowdfunding efforts in American history. $100,000 was raised thanks to Joseph Pulitzer and his ability to use his newspaper to rally the public around the cause. What is old is new again as modern technology has the potential to make crowdfunding more convenient than ever, and modern budget constraints have made alternative financing more necessary than ever.

What is Civic Crowdfunding?

Crowdfunding is simply raising contributions from the public to support a project or new business venture. Civic crowdfunding raises money specifically for municipal or community endeavors, giving residents an opportunity to donate to projects that matter most to them. Learn more about the basic concepts in our in-depth Crowdfunding in the Public Sector introductory post.

 

Roles for Local Government in Crowdfunding

Civic technologist Rodrigo Davies is an emerging expert in crowdfunding. In an interview with Government Technology, he categories four ways local government can participate:

  • Curate citizen-initiated projects by choosing which ones to endorse and promote. Davies cites the New York City Council's Kickstarter pages as an example.
  • Start local government-run campaigns for specific new projects.
  • Use an existing platform for small-scale project procurement.
  • Build an in-house crowdfunding platform of their own.

 

A List of Benefits

  • Crowdfunding for the public good can be successful. Davies' original research on Kickstarter found that 81% of civic projects achieved their goals, as opposed to a 44% rate for all projects across the board. The average campaign in the former category sought $26 thousand or less.
  • It promotes civic engagement and a sense of community as people literally become financially invested in projects where they live and work.
  • Ioby's Katie Lorah holds that grassroots campaigns bring attention to problems that may fly under the radar of local government. New community leaders, perspectives and solutions may surface as well.
  • Lorah also contends that small scale pilot projects can serve as dress rehearsals for larger ones as they test the waters and uncover pitfalls to avoid.
  • Crowdfunding is a potential source for the matches many grants require. It can also help attract major funders. A bike share program in Kansas City raised an initial $20 thousand dollars online, then $50 thousand more in private grants as funders saw the campaign's success as evidence of community commitment.

 

Examples of Succesful Funded Projects

  • Young people have a place to go in Gainesville, FL, thanks to Summer Heatwave, a partnership between the Gainesville PD, the Parks, Recreation and Cultural Affairs Department, and the State Attorney’s Office. Contributions go to pool parties, organized sports, a summer teen lounge, and life skills classes.
  • Via Citizinvestor, $81,760 in cash for canines will help build the Holiday Park dog park in Fort Lauderdale, FL.
  • In recovery after Chapter 9 bankruptcy, Central Falls, RI is keeping its centerpiece park clean with the help of The Steel Yard, a nonprofit specializing in functional public sculpture. New public art that doubles as waste receptacles will encourage proper trash disposal and recycling.
  • The Downtown Denver Partnership’s donor outreach campaign brought a new protected bike lane to the heart of Denver.

 

Further Resources

 The Civic Crowdfunding Research Project website is comprehensive resource run by Rodrigo Davies for those interested in exploring crowdfunding further. He offers his latest research, articles on the pros and cons of crowdfunding, how to conduct a successful campaign, case studies, workshops and a newsletter for the most current information.

 

Platforms to Research

When researching which platform is best for you, it is important to note the different requirements and fees for each one. The majority of them have an all-or-nothing component, the goal must be met or the funds are not received. Here are four links to get you started:

  • Citizinvestor -Crowdfunding and civic engagement platform for local governments and their official partners. Projects must reach 100% of goal before deadline, or donors' credit cards will not be charged.
  • Indiegogo - Open to the general public for all types of projects, but has a rare "flexible funding" option that allows you to keep whatever was raised even if goal is not met.
  • IOBY - In Our BackYards, this nonprofit accepts projects that benefit the public good, especially from underserved areas. If goal is not met withing the specified time period, donors receive credits to donate to other projects.
  • Neighborly - Shifted from crowdfunding to democratizing the municipal securities market by allowing small investors to buy bonds that support projects they care about. Currently pioneering the concept with five selected cities.

* Others credit Ben Franklin as the father of crowdfunding for the public good. That industrious Ben Franklin! He may have beaten Lady Liberty to the finish line!

 

Building a Grant Funding Strategy for Cities and Counties

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Topics: Alternative Financing