Matched up

In the last few years, crowdfunding has become an established and successful way of raising money for anything from craft beer to the latest smart phone apps.

However, crowdfunding can also be used to support community projects, not only by raising money in the first instance, but also by unlocking other forms of match funding, like local authority and public sector grants.

A new report by Nesta looks at the growing phenomenon of ‘matched crowdfunding’, and highlights a pilot programme where £251,500 in matched funding from the Arts Council England and Heritage Lottery Fund inspired crowdfunding donations of more than £400,000.

During the nine-month trial, the website www.crowdfunder.co.uk provided an online platform for community groups to launch their ideas.

The £251,500 match funding was then distributed to 59 projects around the country, who also benefitted from ongoing support, coaching and workshops all provided by the website.

‘The report makes a strong case for local authorities and other grant funding organisations to work with Crowdfunder,’ said the website’s managing director, Phil Geraghty.

‘We can match the UK’s £5.6bn grant money with crowd-raised funds. Importantly, the report outlines strong evidence for doing so.

‘Crowdfunder is now looking for more funders who have a collaborative approach, deep valuable knowledge of their sectors and a shared mission to tackle societal change by helping make ideas happen,’ he added.

The report found the pilot largely attracted new supporters and finance for arts and heritage organisations, rather than drawing from existing sources.

More than two in three of the fundraisers involved also reported that running the crowdfunding campaign significantly improved their pitching and fundraising skills.

And while crowdfunding can help fundraisers easily attract a global audience, in the majority of these cases backers lived less than 20 miles from the project they supported and the majority stated that they were going to see or experience the project in person.

The report recommends arts and heritage groups should explore using crowdfunding both as a fundraising and an engagement tool.

According to the report, crowdfunding is a good way of testing out demand and interest in ideas.

The report adds that the online nature of crowdfunding can also ‘increase transparency’ around what is getting funded, compared to other traditional forms of fund-raising.

Crowdfund London: The report highlights the partnership between the Greater London Authority and the Spacehive crowdfunding platform, which has given local groups a new way of raising funds and bringing projects to life.

Crowdfund London allows projects to gain the support of the wider community and the mayor of London, who uses the website to pledge funding of up to £50,0000 as ‘one of the crowd’.

The platform has now been running for four years and so far, more than 8,700 Londoners have pledged over £1.6m to 77 different campaigns.

These include the Well Street Community Food Market, the Community Brain Community Kitchen in Surbiton and a community art initiative in north London.

The Peckham Coal Line project raised £75,757 from 928 backers and received an additional £10,000 pledge from City Hall to explore how a disused railway track could be converted into an urban park.

According to the report, the fund found it helped ‘improve community cohesion and democratise the urban re-development process’, as well as opening up local government to the ‘wider and less-active section’ of the population.

Crowdfund Plymouth: In 2015, Plymouth council, in partnership with Crowdfunder, used £60,000 of the neighbourhood proportion of their community infrastructure levy (CIL) to setup the Crowdfund Plymouth match fund.

Now in its third year of operation, the fund has distributed £997,260, including more than £140k from the city in matches to projects in Plymouth.

These range from a campaign by the Plymouth Argyle Ladies Football Club to cover cost of kit and playing matches to Sole Discretion – a social enterprise seeking to protect the marine environment through the creation of a dedicated supply chain for ethically caught fish.

An evaluation of Crowdfund Plymouth found that most of the matched projects have taken in the city’s most disadvantaged areas, but that pledges have come from across the city and nationally.

Through this approach the council has sought to make best use of funds open to the community, reduce time and administration required to give out small grants, increase visibility of the fund and provide support to areas reach a new audience by supporting projects and people that would otherwise not have applied for funding.

‘We check Crowdfunder every week, and we’ve seen a lot of projects that wouldn’t have gone through the usual application route which is what we were aiming for,’ said the council’s neighbourhood planning manager, Hannah Sloggett.

‘They can be quite reactive – someone’s just seen a problem and they have set about fixing it. It creates an environment where local people can be supported to develop their own solutions to improving their communities in a supported way.

‘For people that aren’t used to putting funding applications in it can feel more accessible – they can put in a short film or just explain it as they would to their friends,’ she added

Read the full report here.