Crowdfunding is about getting friends and contacts to chip-in and pay for a bright idea. Using web-based platforms, Crowdfunding massively extends your reach to like-minded individuals and makes collecting the cash much easier.
Crowdfunding Examples
Crowdfunding within communities is great for events and activities that capture the imagination and provide benefits for a wide range of people. Examples of community and civic projects supported through Crowdfunding include:
- Bristol Park and Slide which raised £6,500 to temporarily turn a city centre street in to a giant water slide.
- A St Albans Playground that was restored when the Friends of Victoria Playing Fields raised £68,000.
- Bethesda’s ‘Pay as You Feel’ Café which is on target to rise £12,000 towards the set-up and running costs for a community cafe and cookery school.
If you are seeking funds through Crowdfunding you will need to set up a project profile on a website run by a suitable Crowdfunding company. You can then use social media, alongside traditional networks of friends, family and work acquaintances, to raise money.
Types of Crowdfunding
There are three different types of Crowdfunding: donation, debt and equity.
Donation/Reward Crowdfunding: People invest simply because they believe in the cause. Rewards can be offered (often called reward crowdfunding), such as tickets to an event, regular news updates, free gifts etc. this is the type of Crowd Funding most often used by community groups.
Debt Crowdfunding: Investors receive their money back with interest. Also called peer-to-peer (p2p) lending, it allows for the lending of money while bypassing traditional banks. Returns are financial, but investors also have the benefit of having contributed to the success of an idea they believe in.
Equity Crowdfunding: People invest in an opportunity in exchange for equity. Money is exchanged for a shares, or a small stake in the business, project or venture. As with other types of shares, apart from Community Shares, if it is successful the value goes up. If not, the value goes down.
Historical Footnote
Oddly I have just realised that a friend of mine was part of the fledgling Crowdfunding movement in the 1990’s when fans of rock band Marillion used the then fledgling internet to raise cash so they could tour. Having accompanied him to a couple of concerts, I would suggest that Marillion’s Crowdfunding legacy is more significant than their musical one!
Further Information and Contacts
For more information about Crowdfunding in the UK and the work of its members contacts the UK Crowdfunding Association
Spacehive provides a Crowdfunding Platform targeted at helping people “bring their civic environment to life”.
Buzzbank is a social enterprise providing a Crowdfunding plaftform suitable for community projects.
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