A report on the current state of crowdfunding in Europe and America

2. by
Alessio Barollo, architect
Daniela Castrataro, twintangibles
The report has been kindly translated by web-translations.com

3. Introduction................................................................................................................................
1. Origins and Principles of Crowd-funding................................................................................
1.1 Origins........................................................................................................................
1.2 Principles....................................................................................................................
2. Civic crowd-funding platforms, how they work and their trends.............................................
2.1 How they work...........................................................................................................
2.2 Civic crowd-funding models.......................................................................................
2.3 Trends........................................................................................................................
2.4 Platforms....................................................................................................................
3. Examples of contemporary crowd-funding.............................................................................
4. Thesis.....................................................................................................................................
4.1 Conditions.................................................................................................................
4.2 How it works..............................................................................................................
4.3 Model........................................................................................................................
5. SWOT Analysis......................................................................................................................
Conclusion.................................................................................................................................
References................................................................................................................................
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04

5. g h i p q r s t i u q h
In this short paper, we aim at presenting both a new type of the wider phenomenon that is
crowd-funding, known as “civic crowd-funding”, and a proposal for feasible active citizenry.
The first aim of this paper is to put forward a feasible use of civic crowd-funding within the national territory [Italy],
rather than offering a fruitless analysis of this phenomenon. However, in order to put forward a proposal with solid and
factual foundations, we included a rather detailed analysis of this phenomenon. We started from the origins and principles
of contemporary civic crowd-funding, and later described the world’s major existing platforms, how they work, the models
they follow and the upcoming trends. We only presented a few platforms, both because this phenomenon is new and
because of the limited scope of this paper. After a brief overview of projects that used civic crowd-funding, we put forward
our proposal, stating the basis and way of operating of a certain model of civic crowd-funding which in our opinion could
be reproduced in our country. This way, a process which both addresses the scarcity of capital in local administrations and
brings citizens closer to institutions would be created, thus increasing people’s respect for public assets and implementing
a model of active citizenry and collective innovation. If this model were put into practice systematically, it could place Italy at
the forefront in this sector as regards the possible future developments of civic crowd-funding, making it a model for other
countries, especially in Europe. We hope to offer a useful and inspirational read for many to put into practice our theories.
Alessio Barollo
Daniela Castrataro
05
Introduction

6. v w v x y €  € ‚ ƒ
During April 1968, the Computer Graphics in Architecture
and Design conference took place at the University of
Yale. Here a group of experts came together in order to
assess the changes the use of computers would bring to
the job of architects. Among the participants were Steven
Coons, Bruce Graham, Carl Steinitz, David Evans, Nicolas
Negroponte from MIT, Charles Moore from the University of
Yale, Louis Kahn, Eric Teicholz from Harvard and Warren
McCulloch. After an initial uncertainty, the majority of the
participants agreed that computers could become a useful
tool for projects. Not many know this, not even among the
experts, but in those days civic crowd-funding relative to
urban planning was being born at Yale, even though it
acquired this name many years and many megabytes later.
Anew urban development model was born from the minutes
of the conference: this model also put the environment
and the people at the heart of a project, rather than just
the designer and the physical system he works with.
Negroponte states that “thanks to new processes, it won’t
be the architect and his personal and cultural experiences
who imposes the project upon the users. Rather, it will
be the users themselves, aided by new technologies and
machines that turn into a collective mind, who lead the
project. This way the project goes definitively from being
a product to being a process. People are no longer seen
only as end users but rather as sources of ideas. The
combination of ideas, innovation and creativity, together
with new technologies, results in a horizontal process.
Both organisations and groups of private citizens have
attempted to involve public administrations in oft-
neglected collective projects, creating an active planning
which is based on the above horizontal structure. We
live in a time in which information technologies and
social networking have been moulding our minds,
„ … † ‡ † ˆ ‰  ˆ ‘ ’ … † ˆ “ † ’ ” • ‰ – — “ † ˜ † “ “ … – ™ ‘ — d ˆ ‘ † ˆ ‡
e f
making us aware of our ability to partake in the betterment
and renewal of society. The potential of web 2.0 is finally
turning into powerful offline collaborations. Applied to urban
planning, this means that citizens can be directly involved
in the formation of processes, services or real public
infrastructures in a coordinated and collaborative way,
whilst being fully aware of having the right tools to do it.
Italy currently has the right infrastructure to be able
to develop such methods. Civic crowd-sourcing could
develop in our national territory into crowd-funding, namely
financial crowd-sourcing, which would address the issue
of scarce public funding. Crowd-funding has existed for
a few years and has been developing greatly, becoming
more and more complex and elaborate. Crowd-funding
is part of a phenomenon which takes online communities
offline, turning them into stronger forms of cooperation
and participation: one of its natural developments
is the phenomenon known as civic crowd-funding.
06
origins

7. of the pedestal which was to support the statue itself.
The situation stalled until the media tycoon Joseph Pulitzer
raised the public’s awareness through his newspaper: he
encouraged the citizens to donate in order for the public
work to be carried out. A hundred thousand dollars was
raised in 5 months, collated from 120,000 micro-donations,
thus allowing for the statue to be placed in New York Bay.
There was also another result, which is as important:
the local community started to feel particularly
attached to this symbol because they had actively
contributed to its realisation, actively cooperating with
the public administration which was managing its use.
In line with civic crowd-sourcing, civic crowd-funding
is defined as the collective financing of public works
and projects, which is not included in the budget of the
relevant governmental bodies or local administrations.
It is carried out by citizens, organisations and private
businesses, which sometimes co-fund the works together
with the local authorities themselves. This new model of
distributed microcredit is not really a new practice. Let’s
go back to the USA, this time to New York: in 1884 the
French were about to send the Statue of Liberty to the
United States, however the American Committee had
not allocated all the necessary funds to the construction
07

8. g h i j k l m n l o p q r
Wecanascribetheoriginsofmodernciviccrowd-funding(not
contemporary,asitnaturallydidnotmakeuseoftheweb2.0)
tothisshortanecdote,asitpresentssomeofitscoreaspects:
s t u v w x y u z
{
a scarcity of public funds;
s t u | u w } y ~  } € u } s  ‚ u y z
{
an emotional bond
with the territory, the local community and the public
good, which comes from projects of a civic nature;
s t u ƒ u y x „ s z
{
astrengtheningofbondsinthecommunity
and a higher sense of belonging towards public places
on the citizens’ part, with a consequent heightened
sense of respect and willingness to preserve them.
Nowadays, we can find all these elements together with
an ever increasing distrust and loss of connection on the
citizens’ part towards local administrations. The example
of active citizenry found in the case of the Statue of
Liberty has evolved into civic crowd-funding. This is in all
respects a form of active government, through which the
citizens decide where and how to invest money to improve
communities and neighbourhoods. This happens through
project proposals, voting and petition mechanisms, and
naturally relies on the funding itself. Furthermore, thanks to
the web 2.0 and to the social nature of contemporary civic
crowd-funding, we also have another essential element:
transparency. People have (or at least could have, and
certainly demand) access to all the information on how the
money is utilised. Moreover, the way crowd-funding works
allows citizens to have a tangible return for the offer they
made to help carry out the public work thanks to reward
systems (or interest, in the case of civic social lending, as
we will see later). These rewards are naturally on top of
the reward of a better community, which is intangible and
less immediate but factual nonetheless. The internet tends
to make us forget about the importance of our location. We
can communicate, interact and work online with anyone,
but this does not mean that we have a real relationship.
Local communities can encourage collaborations and
innovation, bringing online communities offline. If a small
business or a local project is looking for funds, it is unlikely
they will find them in the global market. Why should
someone from Buenos Aires finance a bakery near Rome?
This is even more obvious if we talk about civic crowd-
funding: there are a lot more opportunities and it is more
sensible to collect funds for a footbridge in the Rotterdam
city centre within the local community rather than calling on
the online global community. We are talking about relational
rather than social capital, and small but strong relations that
form tightly bound communities rather than large networks.
Online communities gain a new life going offline: online
cooperation allows for the creation and development of
strong relations that can go up a level if they transfer to an
offlineenvironment.Thesedynamicsareonlypossiblewithin
limited geographical boundaries. As previously mentioned,
local communities seem to be a suitable environment
in which civic crowd-funding can flourish, as this aims at
financing local works and projects. It is important to keep this
in mind for civic crowd-funding initiatives to be successful:
thekeypointseemstobebothtofacilitatedigitalcooperation
and to build offline relationships. According to Chance
Burnett of Crowdfunder (see references) the real power
of the crowd does not lie with people randomly connecting
on the web. The future of this technology seems to be
pointing towards local online environments that promote
strong interactions both online and offline. This is the future
of crowd-funding, and civic crowd-funding is the future.
08
principles

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Civic crowd-funding platforms work according to
the same basic dynamics as traditional platforms.
However, some models are favoured over others.
We will analyse briefly a few innovative solutions
characteristic of crowd-funding in the following paragraph.
All the platforms that were analysed in the scope of this
paper adopt the “all or nothing” model: the project must
receive all the necessary funds for its completion, or else
the investors’ pledged donations will not be collected.
We can also further classify the platforms into two sub-
models, according to who can initiate the campaigns:
The project can only be put forward by local•
governments and public bodies, and at times by
private businesses, non-profit organisations and
public sector building contractors. Citizens can put
forward petitions in some cases. This is the case
for the two major civic crowd-funding platforms
in North America, Neighbor.ly and Citizinvestor.
The project, despite being in the public interest,•
can be put forward even by a single private citizen.
An example is the British platform Spacehive.
Like in traditional crowd-funding platforms, the projects
are selected by the platform and published online. This
way the fundraising process, which can vary in duration, is
initiated. Let us take a look at its models and how they differ.
Ÿ Ÿ « ¬ £ ­ § ® ¯
The main civic crowd-funding models followed by the
platforms examined in this short overview follow traditional
crowd-funding models: “reward based”, “donation based”
and “crowd-lending”. We haven’t found any equity based
platforms intended solely for projects of a civic nature.
° › œ ± Ž Œ ’ – — ˆ Œ ’ ² – ™ œ Ž ³ ˜ Œ Ž œ •
This model is based on emotional attachment and
ideas, as no tangible reward is given in exchange for
donations. Therefore, the success of the crowd-funding
campaign is based almost exclusively on the community’s
or individual’s emotional attachment to the project.
Whether the project’s supporters see the campaign for
the first time during the fund-raising phase or took part in
conceiving the project itself, they have to have or establish
a bond with the idea behind the project. Spacehive
follows this model. Other examples of donation based
campaigns are political or charity fundraising campaigns.
° › œ ± ‹ œ  – ‹ Ž ² – ™ œ Ž ³ ˜ Œ Ž œ •
This model takes its name from the rewards given in
exchange of a donation. This is a way of enlarging the
community related to the project by giving a further reason
to donate. However, offering a reward does not preclude
aiming at gaining people’s emotional attachment, which
should remain the essential element of the campaign.
Examples of reward based platforms are the American
Neighbor.ly and Citizinvestor. Some “do-it-yourself” (DIY)
crowd-funding campaigns belong to this group as well:
these projects do not resort to any particular platform,
rather they set up the campaign on ad-hoc websites.
09
models

10. ´ µ ¶ · ¸ ¹ º » ¸ ¼ » ½
In this model, the citizens lend money to local government,
which plan to carry out a specific project through a crowd-
lending platform. The loan can vary in duration and citizens
can opt for reducing or not earning any interest at all, in
order to support the community further. An example
of this is the German platform LeihDeinerStadtGeld.
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Data from civic crowd-funding platforms and projects are still
too scarce to be able to report significant trends. However,
we analysed the Spacehive platform,
which is the most substantial and active
platform to date as regards the
numberofprojects.Eightprojects
were completed successfully on this
platform1
, totalling nearly £900,000.
First of all we have to consider the
type of investors and the distribution of
donations. There seems to be a strong
prevalence of big investors, such as
institutions, organisations or private
businesses, rather than individuals. As shown in the below
pie chart, over 60% of donations come from institutions or
organisations. However, only 21 out of 315 investors for 8
projects are organisations or private businesses. This can
be explained with the amount of the average investment:
according to the data analysed, an investor donates on
average £2,842, a rather high sum for a private individual
to invest. This is of particular interest as currently a form
of match-funding seems to prevail on civic crowd-funding
platforms: the institution or organisation allocates part of
the budget for the project, whilst private
investors contribute in order to complete
the fundraising. Four out of eight projects
were put forward by private citizens, as this
British platform allows for this arrangement.
However, excluding a few isolated cases
of projects led by a private citizen and
financed by private individuals2
(these
projects did not reach the total of £1,500),
Spacehive projects are mostly supported
by local organisations and/or institutions.
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Individui
Ente/Organizzazione
Individuals
Istitutions/Organisations
10
trends

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ò ó ô õ ö ÷ ø ù ú û ü ý þ þ þ ú ÿ ó ô õ ö ÷ ø ù ú û ü
Neybor.ly is a civic crowd-funding platform based in Kansas
City, USA. It only accepts projects from local administrations
and public bodies. At the moment citizens are unable to put
forward projects directly, however a system that receives
citizens’ projects is scheduled for the near future. This is
a reward based platform: citizens donate in exchange for
a reward. However, they can opt for not being rewarded,
thus contributing further to the campaign. In some cases,
projects hold funds before the campaign starts. Because
Neighbor.ly’s mission is also to show the full picture about
a project’s finances, campaigns sometimes show the total
value of a project, not only the amount necessary to reach it.
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ô ¢ ô £ ô ÿ ¤ ó ¥ ¢ ø ù ý þ þ þ ú ¦ ô ¢ ô £ ô ÿ ¤ ó ¥ ¢ ø ù ú ¦ ø §
Citizinvestor is an American platform for public projects
which allows citizens to finance projects that have been
published by local government. These projects will already
have been assessed and approved, and they only need
financing. Projects range from the building of a new park
to the setting up of first aid kits for cyclists on cycle lanes.
Normally these projects have been sitting on the waiting lists
of local governments’ budget plans. Citizinvestor also offers
citizens the chance to put forward a petition for projects they
would like to see implemented and which are not included
in budget plans. Also in this case, projects are carried
out only if they received 100% of the necessary funding.
According to its website, offers made on the Citizinvestor
platform are tax-deductible, as they have a strictly
public purpose, and as such are classified as donations.
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ThisisaBritishplatformwhichdefinesitselfas“theworld’sfirst
funding platform for neighbourhood improvement projects”,
suchasbuildinganewplaygroundinone’sownneighbourhood.
Anyone can put forward a project: citizens, professionals,
publicbodies,privatebusinesses.Projectsmayvaryinnature,
as long as they hold planning permission. Projects go ahead
only if they receive 100% of the target funds. This platform
is donation-based: no reward is given out for donations.
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This German platform is one of the very first civic crowd-
lending platforms. Its mission is to support local authorities
in directly financing local projects through public loans.
Through this platform, citizens are able to lend their
savings to their local administration or public body in
order to finance a specific project. The loan can vary in
duration and citizens can opt for reducing or not being paid
any interest, in order to support the community further.
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ù ø þ
ÿ
ô ÿ õ
Some civic crowd-funding projects do not resort
to any platforms, rather they rely on what is
known as do-it-yourself (DIY) crowd-funding.
11
platforms

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F G H I G P Q R S T U V W X Y W
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Q R H a b P c d e f g h P b i T a p S T q S r
In order to encourage the citizens to donate, every citizen
who donates is offered the opportunity to write a message,
a quote or their name and signature on the wooden boards.
Having one’s name written on a plate (€25), on a section of
the bridge (€125) or on the bridge structure itself (€1,250)
is one of the rewards. The project proceeds by stages:
when a certain amount is reached, a section of the bridge
is built. Further parts of the bridge are completed with each
subsequent crowd-funding stage. If donations carry on at
the current rate, the footbridge will be completed in 2014.
.
This project is part of a plan which aims at linking two parts
of this city which are currently separated by a congested
main road. The footbridge links the two parts of the town,
which have been reappropriated by its citizens, who are
now able to move more freely and with little environmental
impact. This is a perfect example of reward based
crowd-funding for a project which benefits the whole
community. So it is not surprising that a strong community
aspect featured in the media campaign, whose slogan
went “the more you donate, the longer the bridge”. The
minimum donation is €25 and the maximum is €1,250.
12
examples

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„ … † ‡ ˆ ‰  
‘ ’ “ ” • – — ˜ ™ d “ e – –
campaign was put forward on the platform Razoo (www.
razoo.com). It is possible to donate between $10 and
$2500. It is possible to help purchase tops for children in
summer camps, or pay for rangers to patrol, or even hire
local bands to provide evening entertainment in the park.
Franklin Park is one of the green lungs of Boston. The
non-profit organisation FPC decided in 2011 to involve the
citizens in the management of public green areas, ranging
from tidiness and safety through to outdoors activities. In
order for these activities to exist, a reward-based fundraising
13

14. f g h i f g j k l i m n o p q r s p t k u p t v
w x y z { | z
} ~  €  ‚ ƒ „ … † }  ‡ ˆ ‰ Š ‹ ˆ
interesting for the number and variety of its supporters.
This project received only 10% of its funding through small
investors, the rest was contributed by big organisations
which were not necessarily linked to local government.
This is another interesting project, which was hosted
on Spacehive. In this case, almost £37,000 was raised
in order to finance the creation of a wi-fi hotspot in the
centre of Mansfield (UK). This project is especially
14

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› œ  ž Ÿ ¡ ¢ £ ¤
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ž  œ ¦ § ¨ © ª « › ¬ ­ ¨ § ® ¯ ¦ ° ± ¯ ² ± ³
The Madama Palace museum in Turin (Italy) put forward an
interesting cultural project in the first few months of 2013:
they intended to bring back to Turin the china that once
belonged to the Taparelli d’Azeglio family. The whole 43-
piece set was found recently after a long and careful search,
and it was on sale for £66,000, which needed to be raised
by 31st March 2013. Because of the scarcity of funds, the
museum chose to raise the money through crowd-funding,
involving the community in this cultural project. Rewards
were offered in exchange for donations: they ranged from a
mention on the website (with a €2 donation) to free access
to the museum for a year (with a €100 donation). The
sum was reached (and exceeded) a few days before the
deadline and the china set will shortly return to the museum.
12312315

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The town of Oestrich-Winkel decided to resort to loans from
citizensinordertofinanceinvestmentinthetown’sFreiwillige
Feuerwehr (lit. “Volunteer Fire Brigade”), which had been
included in the town’s budget plan. These investments
will allow replacement of analog radio frequencies (which
are used in case of emergencies) with a wireless network,
within the scope of a nation-wide project. The project
was successfully financed by €83,200. An overview of
the conditions on offer is reported below as an example.
Annual Interest Rate up to 0,76%
Duration 6 years
Type of loan Instalment loans
Available from 26/09/12
Financed on 17/10/12
Commencement of loan repayments 17/12/12
Maturity date 17/12/18
Commencement of interest payments 16/12/13
Payment of interest Every year, in arrears
Minimum investment €100, it increases in multiples of 50
Maximum investment Equal to the amount of loan remaining
16

17. Þ ß à á â ã ä ã
After our analysis of civic crowd-funding and its various
forms and applications, we will now consider whether
the necessary conditions for the growth of crowd-funding
exist in Italy, and if so, which conditions are necessary
to make it grow. Finally we will put forward a model of
civic crowd-funding that is well suited to our territory
on the basis on the analysis we carried out so far.
å æ ç è é ê ë ì í ì é ê î
Civic crowd-funding seems to be a solution to the lack of
funds in local governments, much like crowd-funding in
a wider sense presents itself as a solution to the lack of
capital on the market. Financial problems in the budget
of towns, provinces and regions are widespread and
rooted in many places, both small and large. This situation
results in the citizens feeling increasingly distant from
their administrations, more distrustful and less respectful
of public assets: this comes mainly from the feeling of
distance towards assets that are not identified as one’s
own, but rather owned by the state. On the contrary, citizens
are often socially bound to their own community: even in
the smallest of villages, organisations for the promotion
of the local area, local clubs, local football teams, local
government meetings, bars and schools are shared places
in which the community comes together to try and improve
the environment they live in. This precondition is related
to the strong bond between citizens and their birthplace,
and it offers the initial foundations for the development of
crowd-funding. However there are many problems which
are linked to crowd-funding in a wider sense and which
hinder the development of collective funding of a civic
nature. These obstacles include scarcity of information,
lack of IT literacy and lack of structures that would facilitate
a suitable and thorough spread of the web. Moreover, the
web has enabled us to carry out many things we were not
aware of being able to do before, by allowing ideas and
talent to circulate freely, and more recently by unlocking
capital through crowd-funding. However, all of this does not
happen across the board. There is still a strong feeling of
lack of empowerment and trust in our ability to improve the
community we live in. This problem should be addressed
with more digitisation, a better availability of infrastructures
and a more extensive use of the web, which could be
applied in different aspects of everyday life. Paradoxically,
the web presents itself as the new and strongest means of
association. What once used to be a meeting in a town hall
room or a walk in the neighbourhood has now become an
online forum. It looks as though it is necessary to go via the
web to be able to share, cooperate and feel empowered,
transferring these activities offline later. If communities
are educated on the web and how to use it, crowd-funding
will find fertile ground from which to start off and develop.
12312317
thesis

18. ï ð ñ ò ó ô ò õ ó ö ò ð
÷ ï ó ø ù ú ð õ û ó ù ò
and that these people might want to finance a project.
However, for bigger projects the “extended” community
might not be able to contribute the whole amount by itself.
Towns with many well rooted associations which involve
citizens on public matters (for example
the towns that follow the Agenda 213
plan) could be a fertile ground
for shared funding projects. This is
due to certain conditions found in these
environments, such as the development
of a strong bond between citizens and
their territory, the citizens’ active involvement in discussing
and giving their feedback, their willingness to cooperate
directly or indirectly with the local administration on choices
aimed at the local community. Based on our previous
observations, we can now put forward a model of civic
crowd-funding that we deem suitable to our national territory.
Another precondition for the development of civic crowd-
fundingseemstobetheparticipationofpublicadministration
or other institutions in the role of promoters, validators and
co-investors of projects. We saw in the models above how
institutions are often the ones who put forward the projects.
Moreover, the construction of public works requires the
approval of local government in any case,
which needs to assess the projects’
feasibility. It is important that local
organisations and private businesses are
also involved. Civic crowd-funding often
requires a very high budget, which means
that often match-funding is necessary.
Crowd-funding in a general sense is based on a potentially
global audience, however local crowd-funding looks for
funds in a geographically small area, which implies a
small community in terms of numbers. On one hand it is
true that the web could put people who live far away, but
who are still bound to their original community, in touch,
Money
Passion and interest in the topic
Being happy to enter
and partecipate
Asking for opinions or
specific knowledge
Trustworthy project
Altruism
Indicators of reputation,
progress, tax levels, score
Usefulmess of project for
the contributors
Having a good time
Immediate feedback
Recommendation of other users
belonging to the same social class
18

19. ü ý þ ÿ ¡ ¢ £ ¡ ¤ ¥ ¦
§ ¨ © © ¨ ¨ © !
¨ © # $ %
On the basis of our analysis and observations, we think
that the best model for crowd-funding to be implemented in
Italy is through a platform which integrates crowd-sourcing,
crowd-validation and crowd-funding. The tool we propose
is important for the social and economic development
of the community. Through this tool, it would be possible
to integrate the decisions made by the administrators
with the suggestions made by all the interested parties.
It would also become possible to increase the feedback
within local communities and give credit to their creativity.
Public administrations would be able to communicate
directly with the citizens, inform them on common choices
in a clear and transparent way, reaching a large section of
the population thanks to the internet and social networks.
Local associations could use online platforms as a place
to make themselves known, grow, interact with citizens
and put forward projects for the community’s sustainable
development. Citizens could use these platforms to give
feedback directly to the local administrators, and also to
put forward ideas and proposals for shared projects and
to find interested parties that pursue their same objectives.
12312319
how it works

20. Let us take a look at how this tool works:
Citizens or organisations put forward their proposals1.
for projects to be carried out in their community. Local
government can put forward projects as well: in this
case the platform is used to finance the project and
to understand the citizens’ priorities, thus involving the
citizens and implementing a form of active citizenry.
Projects are checked by public administrations to2.
ascertain they are feasible. This is very important as
there is the risk that projects which are not needed
urgently or which go against natural, historical or
artistic elements in the community are put forward
and approved, in the event of total freedom for
the citizens4
. A scientific and cultural structure
which assesses the proposals made by citizens and
organisations must necessarily exist. This structure
has to actively communicate with the parties involved
according to the principles of “crowd” methods.
After the projects are first sifted through, there will be3.
a stage in which online methods are brought offline (at
least until ITliteracy has reached a suitable level among
the community). Projects are published on the platform
where they remain available for a certain period of time
in order to be voted on by citizens. At the same time,
the relevant organisations and groups will contribute
to inform the population through traditional means.
Projects with the most votes go through to the4.
financing stage: this is the crowd-funding stage.
If projects reach the target budget, they5.
will be initiated by the administration.
These are often large scale projects both on a physical
and a financial level. For this reason, it could be useful to
divide the projects in stages, so that the project is carried
out in three or four phases, like in the case of the Rotterdam
footbridge mentioned above. This would both decrease the
size of the initial investment, and involve later on citizens
who were not involved in the initial campaign, which would
have an important social aspect. A first stage which is
both efficient and not too costly can demonstrate that the
method is clear and
transparent, that the
invested money is being
employed according to
the project plan and that
the rewards are being
given out. All of this
should help the project
to progress as planned,
thankstothefactthatthe
project’s ideas are being
practicallyimplemented.
' ( ) 0 1 2 3 4 5 6 7 8 9 @ A B @ C D 2 E @ 8 E 2 4 F 5 9 2 G 5 9 E
H 5 B 2 E I P 9 8 G E B 8 P C 5 4 4 2 Q E C Q R 3 4 5 6 7 8 9 @
A reward based crowd-funding model is the one that
suits best the dynamics of civic crowd-funding. The
administrations’ lack of the necessary funds to carry out
some projects would not allow for any financial rewards to
be offered to citizens (therefore equity based crowd-funding
is to be excluded). On the other hand, the building of a
public structure would allow for a variety of rewards linked
to the structure itself to be offered. These rewards would
range from seeing one’s name on a wooden board on a
bridge, to obtaining an annual subscription to a museum or
theatre. The model known as “pre-selling model” could be
suitable for the chronic lack of funding mentioned earlier,
which is one of the major obstacles for urban crowd-
funding. This could also help dissipate initial scepticism
and lack of understanding around the ideology of crowd-
funding: the individual makes a donation not merely for
an individual benefit, but rather to share the benefit with
others for the collective well-being. However, considering
rewards for individual supporters could be of help in a
period of transition like the one we are living at the moment.
20

21. Another solution for the scarcity of public funding could
be to apply a crowd-lending system. A loan from citizens
to public administrations is facilitated on the model on
the German platform LeihDeinerStadtGeld. This way,
public administrations would ask for loans directly from
citizens rather than from banks, and citizens would be
encouraged to invest in the future of the place where they
live. The advantages are obvious: local government would
receive a closed-end loan at a low interest rate. Citizens
are rewarded with a better community and with a small
interest rate, which is still better than what many banks
offer on traditional bank accounts. Moreover, trusting
that citizens understand that the primary benefit they will
receive is a better community and public services modelled
on the community’s real needs, the option of not offering
interest on loans could be considered. This process must
be based on the utmost transparency in order to work:
citizens should have access to projects’ proposals and
to the reasons why a local government deems a project
infeasible; they should have forums on the platforms, thus
improving the feedback from all the interested parties.
This proposal should be regulated by the relevant authorities
in order to be implemented, as it is already the case with
equity-based crowd-funding. The cases analysed earlier
are on the town or neighbourhood scale, however this
model could be scaled up in the context of Italy. Projects on
different scales could be put forward, involving increasingly
large communities. This factor is not to be underestimated,
as the idea behind the project and the relevant community
constitute the strength of this method. On the basis of
this, we propose to employ a national platform which is
divided into sub-levels for regions, provinces and towns.
The platform model so far described would lead to a
global gathering and sharing of ideas, with a subsequent
push to publicly debate choices relevant for citizens,
who would become more informed about the public
administration’s choices and would find it easier to form
project’s groups. Finally, this platform could become the first
element of a larger sharing network, and hopefully a real
network of towns, provinces and regions can be created.
12312321

22. S T U V W X Y ` Y a b c d c
User-friendly structure•
Internationally recognised method•
High involvement of social players•
Repeatability of projects•
High rate of process democratization•
Creation of businesses•
More dialogue between P.A. and citizens•
Decrease in digital divide•
Increase in speed in broadband services•
“Digitisation” of processes•
Opportunity for economic development•
Initation of high speed dialogue with international•
communities due to new infrastructures
Increases inclusion•
Encourages citizens’ IT literacy•
Aimed at public administrations, wich must have a•
leadership role
Suitable for pubblic administrations that want to•
invest in development and innovation
Difficulty in raising funds•
Entails a good level of IT literacy among the•
citizens involved
Weak leadership of pubblic adminastrations•
Possible lack of interest among citizens•
Absence of sufficient network services•
Public administration’s difficulty in dealing with•
complex and innovative organisations
22
SWOT analysis

23. e f g h i p q r f g
Development is generated through innovative processes
which derive from the interaction of four core strengths:
ideas, institutions, population and human capital (expressed
through education and research). As demonstrated in
this short paper, civic crowd-funding is able to create
an interaction among these four components and to
point them towards common objectives, by facilitating
processes and adding two essential elements created
by the web 2.0: relationships of trust and transparency.
We have analysed this proposal in order to put across
that it is already possible to put it into practice, with
current means: there is nothing we have to wait for but
support from the responsible parties. It is an opportunity
to take part directly and actively to the betterment of the
society we live in, going beyond delegating, which takes
us away from what should concern us the most: our local
community. Now more than ever, there is harm in not trying.
CIVIC
CROWD
EDUCA
TION
OPEN
SOURCE
COOPE
RATION
HUMAN
CAPITAL
POPULA
TION
IDEAS
INSTITU
TIONS
12312323
conclusion

24. s t u t v t w x t y
http://www.forbes.com/sites/chancebarnett/2013/03/20/crowdfundings-future-local-online-ecosystems/
http://rodrigodavies.com/blog/2013/02/19/civic-crowdfunding-from-the-statue-of-liberty-to-now/ x
http://www.aia.org/press/releases/AIAB097681
http://www.aia.org/aiaucmp/groups/aia/documents/pdf/aiab097668.pdf
http://www.launcht.com/blog/2012/11/27/state-of-crowdfunding-in-the-government
http://blog.civiccommons.org/2011/11/crowdsourcing-civic-infrastructure
http://www.archdaily.com/233194/can-you-crowdsource-a-city
http://archrecord.construction.com/news/2012/10/121024-Crowdfunding.asp
http://vodblogsite.org
http://spacehive.com
http://citizinvestor.com
http://neighbor.ly
http://www.luckyant.com
https://www.leihdeinerstadtgeld.de
http://www.citysourced.com/about (http://www.citysourced.com/zenfunder)
http://giveaminute.info
http://changeby.us
http://www.newurbanmechanics.org
24