CrowdClan | Tessa MacDouga | April 22, 2014

Tessa MacDougall of Fundrazr discusses the rapid number of cites using crowdfunding for community projects.

Crowdfunding has become an extremely effective way of raising money for startups, but now even cities and communities are using it to fill a current funding gap. Budget cuts and slow decision making can often leave important programs and initiatives unfunded. With crowdfunding, the community can decide what projects are priorities and they can raise funds quickly.

Marty Gunderson is a Board member at the National Crowdfunding Association of Canada. He commented at the recent 2014 Alberta Economic Developers Conference, “Crowdfunding is just in its infancy, but has already significantly impacted conventional financing. The idea of democratizing fundraising by reaching out to the grassroots has proven a game changer in the industry. Cities can access a new source of funds from local communities that will vote with their dollars to make projects happen.”

Homes For Good

This type of fundraising can also be used for a city to support its own local initiatives. Recently, Coquitlam residents and the organization Homes For Good rallied around a campaign by Coquitlam Mayor Greg Moore to raise money to get one homeless person off the street for good. People contributed small amounts but collectively raised enough to support paying rent, not welfare housing, for one homeless citizen for 18 months. The group noted this could be the first time that social media was used to get a homeless person off the street.

Bret Conkin from Canadian crowdfunding platform FundRazr states, “City crowdfunding is growing, and every city and community project should be considering it as one of their funding options. Finding a proven platform is really important. Not all platforms have the technology to help campaigns become successful plus you want to be able to study the approach of other funded projects.” Conkin continues, “An interesting trend that we foresee is local small business and brands jumping on board to offer perks to backers of city projects.”

Even small initiatives can have a global reach. For example, disaster relief initiatives are common in raising money for families and communities that need help immediately after a disaster. Government relief takes time and often many individual projects get overlooked. Crowdfunding presents the opportunity to leverage the power of the global crowd to help people in times of need.

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Invest YYC raised $268k for Calgary Flood Relief with matching donations of $50k from Suncor and Alberta Foundation for the Arts. The Colorado floods last fall also saw the community rising up to help local citizens – like the campaign for the T&L Quarter Horses Relief Fund. On the East Coast, The Island Park Disaster Relief Fund was one of many cases where a community in need during Hurricane Sandy raised the funds they desperately needed. As a platform, FundRazr was able to collectively raise over $700K for Hurricane Sandy relief efforts.

There are many local examples of cities turning to crowdfunding, but international cities are turning to the solution as well. Last year, a famous campaign called I Make Rotterdam raised the funds to build a bridge connecting and rejuvenating two areas of the city, otherwise separated by many lanes of heavy traffic. Donors could purchase planks with their names on them, all together gathering 17,000 planks to construct the promenade. Local residents successfully rallied to build something that would unite their city.

A popular UK platform for civic projects, Spacehive, currently hosts a variety of campaigns for cities to effect change in their local communities. Fly Over Liverpool, a recent campaign, raised over £40K to create a park in a concrete flyover that would have otherwise been demolished.

Using an established crowdfunding solution improves security, but also ensures the social sharing of your story is optimized. FundRazr, for example, hosts a variety of city crowdfunding initiatives and provides campaigns with a customized widget that you can embed in your own website. Cities and organizations can host community funding projects on their own website, without spending any money developing the technology using a solution like FundRazr Business.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry.  NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place.   Join our growing network of industry stakeholders, fundraisers and investors.  Increase your organization’s profile and gain access to a dynamic group of industry front runners.  Learn more About Usor contact us at casano@ncfacanada.org.