Report points to crowdfunding future for councils

Future Cities Catapult says digital platforms will play a big role in future allocation of resources and budgets

Local authorities are on their way to making crowdfunding, supported by the use of digital platforms, the de facto method for assigning resources and budgets to local projects, according to a new report.

Drawing of building tops The Future Cities Catapult, the Innovate UK backed group that works with UK cities to promote innovation in services, says in its Civic Crowdfunding guidebook that councils are adopting crowdfunding as it comes with a more proactive approach to getting people involved in local decisions.

Scott Cain, the organisation’s chief business officer, said: “Crowdfunding is not a new concept, and can be traced back to 1884 when over 120,000 micro-donations were made towards the Statue of Liberty.

“It’s a great solution to a very real problem and considering it as simply another fundraising tool is to ignore its huge potential for citizen participation and practical democracy.”

The report says that civic crowdfunding is still in the early stages of development but is growing rapidly. The Cambridge Centre for Alternative Finance has reported that in 2015 the UK online alternative finance market facilitated loans, investments and donations totalling £3.2 billion.

Online presence

It highlights the importance of digital platforms, saying that a council needs to establish at least a low key online presence by the second phase of development – ‘active supporter’ – and that this will enable it to move on to the third phase of ‘catalyser of activity’.

There are different options for the type of digital presence: a managed platform under service subscription from a third party provider; a ‘white label’ platform that can be adapted to the organisation’s profile; and the development of a completely customised website for specific funding and marketing needs, and with full access to all the data generated.

The report warns that just having the online presence is not enough in itself and that councils will have to make efforts in areas such as offering match funding and providing capacity building and support services. But this can help to build an active ecosystem, and take councils to the final stage of ‘confident leader’.

“The phase a local authority reaches, and the speed at which it is achieved, is largely dependent on the authority’s appetite for risk and the level of commitment they can make, both monetarily and in terms of resource effort,” it says. “In return for a heightened risk appetite and increased level of commitment, the resultant impacts are typically larger and are enjoyed more widely across the local area.”

Image: Detail from report cover, Future Cities Catapult