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Some Cities Hope Crowdfunding Will Help Them Stop Sweating the Small Stuff

BY Sam Roudman | Monday, December 10 2012

As crowdfunding platforms finish their first experiments, some best practices begin to sprout. Photo: Alex Indigo / Flickr

Is it time to give city hall decisions over to the crowd? In an experimental, limited, and closely monitored kind of way: the answer is yes. The success of Kickstarter and other crowdfunding platforms have demonstrated their knack for raising both awareness and funds. Over the past eight months, two companies, Neighbor.ly and Citizinvestor, have redirected the mechanisms of crowdfunding from boutique water filters and role-playing games to civic projects like charter school playgrounds and iPad training for children who are blind. With a number of pilot projects already in progress, there's an emerging picture of what works and what doesn't, and some open questions about the potential for political fallout.

The major lesson so far seems to be this: start small.

The funding platform Neighbor.ly's first campaign was for a long discussed streetcar in the company's hometown of Kansas City. The project's goal was $10 million. It raised $3,775 from 50 backers.

"If you look at it at face value it doesn't look like a very good project," says Sean Connolly, Neighbor.ly's Director of Engagement. "We knew it was really too ambitious but we wanted to do it, because the streetcar talks have been going on for too long."

The streetcar campaign did garner notoriety for Neighbor.ly, but now they're focusing on projects of $15,000 or less, things that are more reasonable or feasible to do, says Connolly. Neighbor.ly's most successful project to date, which paid for neighborhoods to qualify for ultra-high-speed Google fiber connections, raised over $11,000 from 56 backers, more than double its initial goal.

Citizinvestor's first funded campaign is similarly modest. Teaming with the City of Boston and the city affiliated nonprofit TechGoesHome, it raised $6,480 from 47 backers to provide iPads and tech training to low-income, underserved blind students and their families.

"We are very intensely focusing on these micro-projects," says Jordan Raynor, one of Citizinvestor's co-founders and its partnerships director. "We need to start really small," he says, "and slowly build up these communities of these philanthropists who are going to be invest in these projects long-term."

For the time being, Raynor is looking to increase the number of projects Citizinvestor's is working on rather than size of project funding goals.

"At the end of the day it's a platform, any city can go to the site today and start posting projects, so they can post a project for whatever they want," he says.

The prospect of cities placing "whatever they want" at the whim of whomever can pay is a source of concern for all but the most doctrinaire libertarians.

"The problem with that is you end up with services for the very wealthy, but no one else gets the services," says Ethan Zuckerman, from the Harvard Berkman Center, and the Center for Civic media. "There's a real danger that you could see something similar come out of civic crowdfunding."

"Part of the emphasis behind civic crowdsourcing is that the state isn't very good, it isn't very competent, it isn't creative," says Zuckerman, who detailed some of his thoughts in this blog post last August, "and we geeky hackers know the way forward, and we'll find a way to solve the problems of the future — and who really needs the state?"

Zuckerman says this view is very shortsighted. He is concerned that civic crowdfunding could be used to support an "anti-public goods narrative" which has gained traction on the right in recent years. This narrative posits that the market and volunteerism can pick up whatever slack is left after the public sector is sufficiently vivisected. Zuckerman and other critics say this leaves no guarantee that people without as much access to the market and no money of their own to volunteer will also receive service delivery that meets basic standards.

Raynor takes some issue with the potential for civic crowdfunding to favor the rich. He heard from the Democratic mayor of Tampa, where Citizinvestor is based, that even if rich people were to crowdfund their own projects, that would just leave more public money left over for projects in less wealthy neighborhoods.

"I think that's a pretty optimistic view," Raynor admits, but he says it's still too early to draw conclusions. "Nobody knows, we don't know."

So far, there seem to be some blocks in place preventing civic crowdfunding tools from being used in the service of dismantling the public good.

"We're not funding basic amenities," Connolly says, referring to services like waste management or street lights. Neighbor.ly is looking to support smaller-scale projects, he says, like parks, playgrounds, bike paths and dog parks.

Both companies vet their potential projects. Citizinvestor requires their projects come through local government entities, and Neighbor.ly through local governments, as well as public institutions, and public/private entities.

In the end, it's up to cities and organizations to decide where to direct civic crowdfunding campaigns. According to Raynor, San Diego was preparing put "50 capital improvement projects" up on Citizinvestor, before their mayor left office due to term limits.

For cities experimenting with crowdsourcing like Boston and Philadelphia, caution seems to be the rule.

"We need to be careful to ensure that crowdfunding isn't seen as a silver bullet that can solve all of our budget shortfalls," says Story Bellows, who's helping implement civic crowdfunding at the Mayor's Office of New Urban Mechanics in Philadelphia, "and we're taking into consideration issues about equity, fairness, and ability to pay."

Deb Socia, the executive director of TechGoesHome, says the model can deliver.

"It was a good first pilot for us," she says.

One of its benefits was opening up a range of potential donors, she said, whether that's people who live in Boston or who live elsewhere but are interested in supporting projects for people who are blind. Compared with applying for a grant, she said, Citizinvestor was less initial investment and less payoff.

"It's an exciting tool," says Patrick Morgan, who works in Philadelphia Mayor Michael Nutter's administration. "We look at it first and foremost as an engagement tool."

The Philadelphia fall tree planting campaign he worked on raised only $1,694 of its goal of nearly $13,000, but it yielded other results, too.

"As a marketing tool it helped to generate buzz for Tree Philly," he said.

The program generated hundred of likes, retweets, and some press. Morgan believes in the mechanism, but next time, he plans on lowering the goal.

"Hundreds of people under five bucks isn't gonna get you 12 grand," he says.

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