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  • 08.13.14

Are Cities Ready To Host Their Own Crowdfunding Platforms?

It’s a tricky balance for local governments. There’s potential to open up new sources of funding and get citizens involved in civic life. But some projects are better financed by regular tax dollars.

Are Cities Ready To Host Their Own Crowdfunding Platforms?

Civic crowdfunding is a small star in the wider crowdfunding universe. Most of the money raised on Kickstarter-type sites so far has been for private entrepreneurial ideas, like solar roads and smart eye-masks. But that’s not to say there isn’t potential. Sites like Neighbor.ly and Citizinvestor have shown they can raise funds for parks, libraries, and other important urban features–albeit in relatively small amounts.

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The question is whether civic crowdfunding can grow to something more than a niche, and what role governments might play. It’s tricky territory. On the one hand, there’s potential to open up new sources of capital and get citizens more engaged in civic life. On the other, officials can be accused of double dipping: funding things that properly should be paid from taxes.


Should cities let citizens and outside organizations start their own campaigns and get involved only when all the funding’s in place? Should they propose their own projects on third party sites? Or, should they set up their own platforms and encourage the process from the start?

More than 170 cities have signed up to use Citizinvestor.com. But many cities now want a more active role, co-founder Jordan Rayner says. That’s why he’s launching a new white label service called Citizinvestor Connect, which allows cities to set up their own platforms.

“I think a lot of cities want to own their own civic engagement platform,” he says. “They’d love to do all this functionality in one spot and that’s what we’re trying to provide them with.”

The platform lets cities set up a web site–say InvestInSiouxFalls.com–but with Citizinvestor technology. It goes like this: The city asks for ideas. Citizens suggest them. The city takes one on. Citizens crowdfund through the platform. Then, the city agrees to an implementation timeline.

Rayner says the new product was inspired by the story of Central Falls, Rhode Island, which went bankrupt during the recession but successfully crowdfunded a parks project last year. The new mayor asked for ideas through Citizinvestor.com. Some young people said they wanted new bins. The mayor said he didn’t have the money but would get behind a campaign. Then, together, the mayor and kids raised more than $10,000.

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Flickr user David Berkowitz

Parks and other green-spaces have attracted most civic crowdfunding dollars to date. But Rayner sees other categories, including libraries and schools, developing strongly in the future.

“One of the challenges is that most projects are really small. They’re four or five figures,” he adds. “We remain confident it can scale to bigger projects, but it’s going to take time to build a community around this idea.”

“It’s going to take a handful of cities doing a significant number of projects [before it really takes off]. If you only have two or three projects per city, it’s hard for it to grow quickly in that geography. It’s going to take a city doing 25 or 30 projects in one year, so you can give citizens more choice.”

About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.

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