The document discusses crowdfunding as a method of financing community projects through public donations, noting examples such as the Statue of Liberty and a health center in Gosforth, Newcastle. It explores whether crowdfunding is an established practice or a passing trend, outlining the growth of crowdfunding platforms and types including rewards-based, equity, and donation models. Risks and benefits of crowdfunding are examined as well as some successful crowdfunding campaigns.

1. Crowdfunding
Established behaviour or
flash in the pan…?
Alice.Casey@nesta.org.uk

2. Many local Did you know
community the Statue of
projects have been Liberty and the
funded by plinth it stands
communities upon were
(acting off-line) “crowd-
Church-spires, funded” by the
incubators, citizens of USA
religious and France?
buildings…

3. Gosforth Memorial Health Centre
The people of Gosforth,
Newcastle funded their
health centre through
public subscription in
1925. It was built by public
subscription, which means
that it was paid for entirely
by the people of Gosforth.
“The building cost approximately £4500 when it was built in 1925,
which in today’s money is about £600,000. This gives an idea of just
how huge an undertaking this was and it’s something the people of
Gosforth should be really proud of.” Cllr John Shipley

4. Annual growth in the number of crowdfunding
platforms worldwide
In 2011 453 platforms raised €1.5 billion
in project and business financing
Source: Crowdsourcing.org

5. Types of crowdfunding…
Combination of
Revenue Repayment of intrinsic motivation,
Sharing Loan/ Investment percentage of profit social and financial
motivation
Equity
Financial return on
Crowdfunding Investment Combination of
investment in time if
intrinsic, social and
the business does well.
financial motivation.
Rewards also offered
Sometimes, plus
Intangible benefits.

6. Rewards-based crowd funding :
The basics
• A set target amount for a specific outcome
• “All or nothing” within a specified time limit
• Benefits in return – engaging benefits, goods
or products, events, tributes, etc.
• In some cases, ability to raise loans or equity

7. Flash in the pan or Here to stay?
• Helps people do what they’ve always done –
faster, cheaper… differently?
• Digital tech uptake + spread
• Less of the old sources of finance available
• Innovative ideas need backers with belief
• Lots of ‘market’ space remains
• Long term upsurge in grass roots action
• Direct relationship between funder and
funded is fresh

8. Using a crowdfunding platform.. Step by step.
• Projects submit funding plans/targets and
Apply rewards
• Some vetting of projects takes place
Pitch • Publicising fundraising (often a film/video)
goes live • Tapping into networks beyond known people
• Interactions on website with backers
• If target not reached, funds are returned to
Funding
backers
ends
• If target is reached, funds are awarded
• Thank you and interaction on site
Post • Awards/rewards begin to take place – some
funding are social
• Promotion to networks of backers

9. Innovation In Giving…
Nesta and Cabinet office back 3 crowdfunding platforms

10. Features of the site
include:
• Offering something in
return
• Multiple levels and
types of participation
• Embedded video &
social media sharing
• Gift certificates to
share with friends and
family
• A clear outcome for
what the funds will be
used for with
milestones along the
way

11. Example platforms

12. Staged rewards – how do they work?
Amount Rewards No.
£20 Custom t-shirt, badge, thank you letter 69
£50 As above, plus handcrafted bag and postcards 28
£150 As above plus handmade mini bike frame 10
£300 As above plus choice of 1 day course or full size 15
handmade bike frame
£500 As above plus 4 day bike making course 56
£2000 As above plus a bike and photo yearbook 0
Non Need : Accountant and Electrician ?
financial

13. Some possible risks
• What if good, effective projects
can’t tell their story well?
• If supporters come from existing
networks, how will those in poorer
areas manage?
• Wilful misuse (no case known>yet)
• Is it replacing or expanding giving?

14. Some possible benefits
• More than money : time, assets?
• Crowds of support – network effect
• Innovative ideas backed
• New types of audience reached
• Match funds

15. Some impressive
over-achievers
from the USA…!
What happens
with the excess?

16. Questions?

17. Some events coming up
• London Funders : 15th October
• NCVO sustainable funding : 29th November
Alice.casey@nesta.org.uk
Twitter : @cased
With thanks to…Theresa Burton, CEO Buzzbnk; Nick Underhill, Keo Digital & Peoplefund; Liam Collins, Nesta;
creative commons image of statue of liberty: wwarby.