Crowdfunding and the future of municipal projects
Ten years ago, there were reports that Mayor Michael Bloomberg may have stepped in to fund key municipal and community projects in New York City. These were projects critical to NYC, but unfortunately they were falling off the city budget. Even worse – NYC’s budget woes were being experienced in other cities from Tucson, Ariz., to St. Louis to Atlanta.
Fast forward to the height of the recession when many of America’s 19,000 municipalities faced devastating fiscal deficits – highlighted by a handful of high profile bankruptcies in California. Police forces were slashed, teachers were furloughed and fire companies were closed. Again, Mayor Bloomberg’s Fund to Advance NYC was able to forge public-private partnerships to prop up local programs when citizens needed it most.
Mayor Bloomberg’s model has revolutionized the way city managers think about funding public projects, but without the deep pockets and notoriety of a figurehead like Bloomberg, this model has been hard to replicate in other municipalities – until now.
Crowdfunding technology is bringing together community members, nonprofits, socially-minded businesses and private foundations to finance critical projects that municipalities struggle to fund. This model is changing the game for four primary reasons:
1. Virtual Public-Private Partnerships – Because crowdfunding platforms bring businesses, foundations and citizens together, they’re essentially virtual public-private partnerships. What used to require hours of phone calls, town hall meetings and networking, now takes place in a matter of days on a single website.
2. Transparency – Citizens continually desire deeper transparency and openness in government, particularly during tough economic times. Crowdfunding lets the sunshine in by detailing individual donations, business sponsorships and foundation contributions. Many of these platforms are integrating social media, taking transparency from a buzzword to a friendly and engaging public standard.
3. Funding Power – Crowdfunding is Internet based, mobile accessible and socially shareable, allowing populations to participate in real-time with friends, neighbors and colleagues. We’ve seen the power this type of online interaction can have in recent international revolutions and natural disaster relief efforts. I’m not suggesting that crowdfunding will cause a citizen protest in your town, but it will harness the passions and pocketbooks of thousands of community members in a very viral way.
4. Idea Exchange – At their core, crowdfunding platforms are highly searchable. Concerned citizens can locate new projects that warrant their attention, businesses can find programs worthy of their support and foundations can identify projects that complement their mission. Crowdfunding lets municipal leaders see how other cities are innovating their communities and how your own neighborhoods are tackling hyperlocal issues. Essentially, crowdfunding platforms become communities in and of themselves where ideas flourish.
Crowdfunding will increasingly support local governments as our nation recovers from the recession and revitalize our locales into the future. Perhaps it’s coincidence that as Mr. Bloomberg prepares to retire from the NYC mayor’s office, crowdfunding platforms are picking up steam and strengthening communities across our nation.
A former investment and real estate executive, Mark Feinberg is co-founder and CEO of Uruut, a collaborative community crowdfunding platform. Through Uruut, Mark is able to blend his business, technology, investment and entrepreneurial background with his passion for strengthening community. Mark holds both a Bachelor and Master of Business Administration from Emory University and is a founding member of the Dunwoody Chamber of Commerce. Find Mark on Twitter @MarkLFeinberg and @Uruut.