Turning a Dream into a Reality – Crowdfunding for MunicipalitiesLegal Compliance Resource
March 28, 2014 — 1,113 views
Municipalities often face a cash crunch when they have to provide new infrastructure services to citizens. In such a scenario, they either cut down on expenditure or seek to raise funds in a creative manner. Crowdfunding is one of the most sought-after methods to raise finances for a particular project, and municipalities are taking to it like never before.
Advantages of crowdfunding
Filling in budget gaps: One of the effects of the financial recession on the nation was that many American municipalities stared at gaping financial deficits. However, the then NYC Mayor Bloomberg’s ability to create partnerships involving both private parties and the public came in handy. In the past, municipalities sought the support of local banks to fill in budget holes, but after the 2008 financial crisis, local bank funding has also been low for most municipalities. In such a scenario, crowdfunding seems to be a sensible option, as it includes public partnership to raise funds.
Greater transparency, lesser red tape: One of the greatest advantages of crowdfunding is that there is transparency in the sources of funding, creating greater trust. Because a lot of crowdfunding projects are dependent on social networking platforms, the amount of openness is even greater. This means anyone can look up information on the progress of a particular project on a website or social media platform. The other huge benefit for municipalities and urban planners in taking up corwdfunding is that of fewer bureaucratic procedures. There is no need to call for a dozen meetings and consult half a dozen committees. The process of raising funds could take place on an online platform.
Brainstorming and interaction: A big plus when it comes to crowdfunding is that urban planners and policy makers actually get to brainstorm with citizens, creating healthy exchange of ideas and interactions. Communication and accessibility are bound to give municipalities an image makeover.
Accountability and faster turnaround time: The fallout of transparency and common platforms is an enhanced sense of accountability among planners and decision makers. The moment a project is in the public domain, municipalities will be forced to complete it in a fair and professional manner.
Building a sense of community: Crowdfunding enhances a sense of community among people and stakeholders who come together to fund a project. It also invests a greater control and sense of power among people who are most impacted by a certain project or service. In that sense, crowdfunding is not always about finances, it is about generating greater participation among citizens in framing urban policies.