Civic crowdfunding is not about the money

Last summer 200 of my neighbours were on holiday in their own city: they were camping for a weekend in a nearby city park. Of course funding was needed for practical things like showers, and part of the funds were raised through crowdfunding. But interestingly, it was not the funding that defined the success of this neighbourhood camp site. The campers made it their camping by organizing activities and volunteering at the reception or as security guard.That’s what it made it a success. And that’s what the main value of their crowdfunding campaign was all about.

Civic crowdfunding is not about the money. That’s what I have learned from pioneering in the civic crowdfunding field in The Netherlands. Almost 3 years ago, in january 2013, we launched Voor je Buurt (literally ‘For your Neighbourhood’). A crowdfunding and crowdsourcing platform for civic projects in The Netherlands. Think of projects like local festivals, community centers and temporary use of public space. We are the first organisation in The Netherlands, and one of the first worldwide, to prove crowdfunding for local civic projects to be successful. Since the start 207 projects started a crowdfunding campaign, 11.000 supporters backed a project and €700.000 euro was raised. During this talk I will explain more about the background and the impact of civic crowdfunding and the role of the government.

What is civic crowdfunding?
Civic crowdfunding is about raising funds for initiatives in the public domain, like a neighbourhood garden or a community art project, or with a common social goal, like activities for the elderly in a community centre. Often civic crowdfunding campaigns are initiated by citizens, local communities, social entrepreneurs or social organisations.

Developments fuelling the growth of civic crowdfunding
Civic crowdfunding is not something new. It might actually be the oldest kind of crowdfunding; a lot of churches have been built with crowdfunding, schools and sport clubs are traditionally good fundraisers and also the base of the Statue of Liberty has been realised with a kind of crowdfunding that closely resembles ‘modern’ digital crowdfunding campaigns. Nowadays technology, like a platform and social media, makes crowdfunding easier and changes the way communities are raising funds.

There are two other trends, apart from technological developments, that accelerate the growth of civic crowdfunding. First, there is a trend of government withdrawal, cutbacks and a demand of citizens to participate and take responsibility for their environment.

Second, citizens increasingly initiate projects to improve their town, city or neighbourhood. They have the mentality to get things done and are tired of waiting for the government to get permission and funding.

Civic crowdfunding campaigns are relatively small if you compare them to investment crowdfunding for businesses. On average, a civic crowdfunding campaign raises €4.500 and the crowdfunding targets vary from, let’s say, €300 to €40.000. With civic crowdfunding you can realize a painting in a playground for €400 or a marathon for €20.000 but you cannot build a whole city with crowdfunding.

Civic crowdfunding is campaign instrument instead of a funding instrument
So, the big impact of civic crowdfunding is not in the money that is raised. First and foremost, civic crowdfunding is a powerful campaign instrument. It is about building communities, promoting your project and can even be a political instrument to put pressure on local authorities and other key players. That is the reason we are talking about a crowdfunding campaign and not just about crowdfunding. Civic crowdfunding has impact in at least three ways. It can be used as a:

1. Community building instrument

Civic crowdfunding is a very effective way to build active and involved communities around a project. For most civic projects a strong community is equally important for the success as the funding that is needed. Take for example this project in Gouda. This mid-sized city is known worldwide for it’s cheese, but is also has a large online community of people initiating social and creative projects for the city. Two years ago they decided to realize an offline place where they can meet each other and work together. For the success of a community place like this, not only nice furniture is needed. More important are people who feel ownership, use the building and feel responsible for it.

We also researched the impact of crowdfunding on community building. We asked 550 backers of civic crowdfunding campaigns about the effect the crowdfunding campaign had on their relationship with the project.As a result of the crowdfunding campaign 82% of the backers felt more involved with the project, 55% felt (increased) ownership of the project and 66% actively wants to help make the project successful.

2. Marketing instrument.

Second, crowdfunding is a strong instrument to promote a project and to increase the reach of a project. A good example of that is the ‘Deelkelder’ (‘Sharing Basement’), a shared storage space in the neighbourhood where you can store and borrow items like tools, sport equipment or a backpack. The crowdfunding is also a marketing campaign to find the first users and increase the knowledge about the concept.

Our survey shows that crowdfunding is a successful marketing instrument. 45% Of the backers heard from the project for the first time during the crowdfunding campaign. Also, crowdfunding triggers word of mouth marketing: 72% of the backers tell other people about the project. Also we see that campaigns reach a multitude of people who hear about the project without contributing financially. A project with 100 backers often has over 2,000 unique page views.

3. Political instrument

Finally, crowdfunding is more and more used as a political instrument. As we speak, upset villagers of a Dutch town with less than 2,500 inhabitants, that disagrees with an infrastructural plan of the province are crowdfunding  €19.000 to finance a feasibility study for an alternative plan. Within a week from the start of the campaign they had raised €11.000. Another successful example is the Molentuin, a community garden in Deventer. The housing organisation owned the land of this garden and citizens were allowed to use it temporally. When the housing organisation decided to sell the land, the neighbourhood stood up and decided to raise funds to buy the land to keep the garden. They started a crowdfunding campaign to make visible how many people wanted to preserve the garden. They used the campaign as a lobby towards the municipality to change the zoning plan from a building area to a green area to make the land less expensive. In the end the housing organisation felt sympathetic for the joint action of the neighbourhood, and the citizens were able to buy the land for half the original price.

The role of the government
Because most civic crowdfunding projects involve public space or public services, local governments do have a role. Traditionally the municipality functions as a gatekeeper towards civic projects. It decides who gets permission and funding and thus can realise a project. Civic crowdfunding is radically changing this relationship between local governments and civic initiatives. Citizens just walk past the gate and take matters into their own hands, raise funding and organize visible support.

Often we see municipality’s who are being reluctant, not knowing how to respond properly to this new movement. As a result they enter a kind of ‘freeze mode’ and stick to regular rules and procedures. But their role can be more active and stimulating by anticipating on civic projects. For example by contributing to crowdfunding campaigns as an alternative way to distribute subsidies for social projects. This is called ‘match funding’ and is a way municipalities can strategically change their funding instruments to stimulate civic projects to use crowdfunding. That way they can be sure a project has support in the neighbourhood and an actively involved community. In The Netherlands private funds are the forerunners in matching crowdfunding in a structural way. A good example is the way the VSBfonds, one of the biggest private funds for social projects in The Netherlands, is contributing to projects on our platform. They add a minimum of criteria. There is no application form, but they make their decision whether or not to contribute on the crowdfunding page and two additional questions. Also they make their decision within days, instead of months.

But more than funding is needed to make civic projects happen. They need expertise, support with procedures and local contacts. Municipalities can actively support civic projects with their crowdfunding campaign by being responsive, by offering expertise and by speeding up bureaucratic procedures. To do that successfully municipalities need better understanding of the dynamics of civic projects and crowdfunding. That way municipalities can become a more equal partner.

Conclusion
So, Civic crowdfunding is not about the money. At least not just about the money. It’s a powerful campaign instrument to build community’s and create a movement. It’s enforcing a new role of local governments towards civic projects and this is only the start. As civic crowdfunding platform and expertise center Voor je Buurt is on top of all new developments. Want to discuss civic crowdfunding? Get in touch through Aster@voorjebuurt.nl or take a look at www.voorjebuurt.nl/about.