How crowd­fund­ing is help­ing fundraise for com­mu­ni­ty projects 

If you most­ly asso­ciate crowd­fund­ing with start­up busi­ness­es, this arti­cle will shed light on how it can be used to ben­e­fit com­mu­ni­ties and beneficiaries.

Written by
Sarah Daren
July 11, 2018

The Internet has changed almost everything we do, including fundraising. Crowdfunding, which involves individuals donating small amounts of money to a cause or project, has been one of the biggest changes in how we raise money. 

Although crowdfunding is relatively new, it grew 167 per cent from 2016 to 2017, raising $16.2 billion worldwide. The rapid growth of crowdfunding is no surprise: it has a dual benefit of raising money and creating an initial customer base who can serve as word-of-mouth promoters. It also allows founders to retain more control over their product, company, or project than other forms of funding, such as venture capital. Venture capital still makes up tens of billions of dollars in funding every year, but crowdfunding’s growth means that it’s no longer the only viable option for entrepreneurs. 

Crowdfunding for diverse projects

It may be most popular among people starting businesses, but crowdfunding works well for projects of all kinds: entrepreneurs who have a product idea but no startup capital, charitable organisations raising money for a specific cause, and even communities with civic projects that need funding.

Civic crowdfunding is a growing sector of the industry, and for good reason. Let’s take a look at the benefits of crowdfunding for community projects, as well as some tips for creating a successful crowdfunding campaign. 

Benefits of civic crowdfunding

If you’re wondering why civic crowdfunding might be necessary, think about it: tax dollars only go so far, and some projects simply never get funded. Those projects might be important to the community, but local governments may not feel that they are a priority when compared to other items that need to go into the budget.

Civic crowdfunding gives members of the community a voice. They speak with their dollars, and exchange ideas on what is really best for the community. Maybe that project is a new public park, bicycle lanes, or new street lights. Crowdfunding can speed up the fundraising process for these projects by years, depending on the other projects that are necessary in the community. 

Crowdfunding for community projects also encourages public engagement. By voicing their opinion on the kinds of projects and amenities they want, they are engaging with their neighbours and building a stronger community.  There is more transparency and more accountability for the projects to be completed in a timely manner, which can help bring the community together. 

The civic crowdfunding process doesn’t just help the community, it can help individuals as well. In addition to the benefit of the civic project being completed, contributions to some crowdfunding campaigns can be tax deductible, especially when the project is initiated through a local nonprofit. Since tax deductions can lead to huge savings, this can be a great way to get people interested in contributing. 

Examples of successful civic crowdfunding

Using tools like the civic crowdfunding site Patronicity, cities all over the United States have taken on projects to improve their communities in the last several years. Most of these projects are short-term, and are often initiated to beautify cities or increase sustainability.

Royal Oak, Michigan, for instance, raised just over $100,000 to create a new downtown park, while Denver successfully raised money to put in enhanced bike lanes in the downtown area to increase safety and reduce congestion. One of the most impressive civic crowdfunding efforts was the $1.2 million raised to light the Willie L. Brown Jr. Bridge in San Francisco until 2026. Crowdfunding can make a wide range of projects reality.

Tips for creating successful crowdfunding projects

If you’re considering civic crowdfunding in your community, what can you do to ensure the community steps up and makes a project reality? Here are a few tips:

  • Create a video promoting the project. Videos help campaigns raise 105% more funds.
  • Have a team dedicated to the project’s success. Enthusiastic community members are key to reaching the project goals.
  • Create a marketing plan well before launch. People won’t contribute if they don’t know the campaign exists.
  • Above all, have enthusiasm and share the campaign with everyone! 

About the author: Sarah Daren

Sarah Daren has been a consultant for startups in the nonprofit sector, fintech and health & wellness. When she's not watching the New York Yankees play, Sarah enjoys practicing yoga and reading a good book on the beach. 

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