How crowdfunding can benefit smart cities across the globe
In recent years, many smart cities have been able to engage their citizens in new and exciting forms of collaboration. For municipal governments who are seeking to gain feedback and support for a particular project, civic crowdfunding has become an effective tool in increasing citizen participation while also creating an alternative avenue of financial support. Crowdfunding also benefits your smart city by allowing constituents to feel like they are actively playing their part in new and creative projects that make their community a better place.
What is crowdfunding?
Crowdfunding is the practice of seeking financial backing for a project or venture by raising small amounts of money from a large pool of online donors. The most popular crowdfunding platforms at the moment are Kickstarter, Indiegogo, Patreon, and GoFundMe. These websites have collectively raised billions of dollars for individuals and companies who have benefitted from a community who is eager to invest money in a project or product that means something to them. When a venture is considered to be valuable, timely and necessary, the funding usually follows.
Crowdfunding within the smart city movement
Many municipalities worldwide have started to use crowdfunding to raise money and evolve their operations. This method of financing has quickly become a funding model that is supporting many urban improvement projects. Using incentives like small cash prizes or parking credits, cities can use technology to encourage its population to participate in crowdfunding initiatives that require only a small monetary contribution by each citizen that can quickly add up to thousands of dollars. These revenues can then go towards funding the improvement of city services while at the same time gathering valuable data from its citizens about their sentiments towards certain initiatives. This data can inform the government of trends, preferences, and behaviour patterns within their community, improving the way the city serves its citizens.
Civic crowdfunding reduces budgets while boosting citizen engagement
Balancing a complex budget is a common challenge for governments. Cities naturally feel pressure to manage their limited public funds in ways that can satisfy the expectations of many citizens. Crowdfunding has become an effective method of easing pressure on municipal purse strings, allowing citizens to essentially ‘vote with their dollars’ to bring city projects to life. If funds for projects can be supplemented by the community, this frees up more municipal budget to invest in other improvements to city services.
By encouraging the population to contribute financially to municipal initiatives, citizens also become more personally invested in the goings on within their city. Allowing locals to take an active role in creating a community that they love unlocks a level of civic engagement that can propel a city towards a more transparent decision-making process with its citizens.
Key considerations when crowdfunding for municipal projects
If your municipality is considering crowdfunding for a new city project, it is important to do this in a way which does not marginalize part of the population. Citizens who do not have any wiggle room in their personal budgets might feel that they are alienated by such initiatives. Additionally, there may be some pushback from citizens who feel that certain projects should be funded through the government and not through a platform that can be viewed as taking more money from a population’s pockets. A clear crowdfunding plan that takes into account a variety of stakeholder needs is extremely beneficial to establish before launching a campaign. Setting a realistic financial goal is also an essential step in setting up for crowdfunding success. Remember, these campaigns rely on small donations from the community, so having a lofty monetary goal is best avoided.
Crowdfunding is an excellent opportunity for governments to transform towns and cities around the world. In a day and age where people are much more comfortable with committing online dollars to new initiatives, municipalities are able to crowdfund their way to smarter cities with meaningful projects that have been directly supported by the population.