How do you do it? What does it actually mean?
While crowdfunding provides social and financial support for projects, it is not a panacea for the infrastructure funding gap or neglected community engagement. Crowdfunding is a fickle tool that requires capable and resourced project sponsors and partners for its strategic implementation. Not all projects are good candidates for crowdfunding. And, not all crowdfunding models are created equal.
Donation crowdfunding models are best suited for public infrastructure projects, like community centers and protected bike lanes. This crowdfunding model leverages previous community engagement to ensure projects are well-aligned with neighborhood needs. Donation crowdfunding campaigns are often initiated by civic organizations. These organizations become ideal project sponsors who use the social and financial support from a crowdfunding campaign to attract political will for a project.
Now, this is different for regulation crowdfunding which is commonly used for projects that have a revenue stream, like a toll road or utility. Regulation crowdfunding occurs after projects are prioritized or selected. At this phase, crowdfunding isn’t shifting development patterns, but rather reactively letting the community approve and become partial owners in the project. In this case, the project can attract local investors by fulfilling a community need and attract outside investors with a strong business case reinforced by community support.
Crowdfunding is not chosen purely as an engagement tool and neither as a purely financial tool. It is the interplay between these two purposes that allow it to be successful and also contentious. Regardless of the discourse surrounding crowdfunding, it draws attention to infrastructure projects, often neglected and unnoticed. It allows the community to see the project in new ways and begin to challenge authorities earlier in the process, providing enough time to address those concerns and improve the project. And that discourse might be the most powerful part of crowdfunding.
Learn How you can do it!
To better explain this, I worked with a very talented Stanford undergrad to develop an interactive tool to be used by practitioners, citizens, and YOU. This tool is meant to help local leaders, who are facing extreme challenges in delivering public services, better understand the implementation and consequences of using new tools like crowdfunding. The tool includes (1) description of three different crowdfunding mechanisms, (2) stories of past crowdfunded projects, and (4) resources for moving forward with crowdfunding infrastructure projects in your community. Interested in learning more- Check it out for yourself!