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Crowdfunding to become de-facto funding method for councils

Related themes: Healthy CitiesIntegrated Urban PlanningUrban Mobility

A report released by Future Cities Catapult claims that in the future, crowdfunding will become the de-facto method to assign council resources and budget to local projects.

The UK’s Government-backed centre for urban innovation has been working with Spacehive and the cities of Manchester and Hull to untap their civic funding potential, advising on the ‘Our Manchester’ and ‘Make Hull’ initiatives launched last year (2016).

Hailing numerous economic and social benefits, the report explores how cities could use crowdfunding as a tool to adopt and foster innovation and change, and its potential to revolutionise local democracy.

45 councils across the UK are utilising crowdfunding, but little work has been done to understand what it can offer communities, with 90% of local authorities largely unaware of the domain and how it could apply to them.

Crowdfunding addresses the key city challenge of public authorities operating with structures that have been in place for decades, and their ridged and complex citizen engagement mechanisms. The report encourages cities to share knowledge, build partnerships and ultimately create an ecosystem where government, businesses and citizens can creatively collaborate.

The findings come at a crucial time, as councils search for ways to ease pressure on council budgets, and community and voluntary organisations are finding ways to provide the same services with limited funds.

Scott Cain, Chief Business Officer at Future Cities Catapult said:

“We’re very pleased to be launching our Civic Crowdfunding report, encouraging local authorities to adoption crowdfunding approaches that lead to stronger communities, more attractive neighbourhoods and a more democratic approach to community engagement.

“Crowdfunding is not a new concept, and can be traced back to 1884 when over 120,000 micro-donations were made towards the Statue of Liberty. It’s a great solution to a very real problem and considering it as simply another fund-raising tool is to ignore its huge potential for citizen participation and practical democracy.”

Chris Gourlay, CEO and Founder of Spacehive said:

“What we’re seeing is that civic crowdfunding is beginning to open up an exciting new space where councils can collaborate directly with citizens and businesses to add value to communities.

“More and more councils are seeing the value empowering local people to create places they love: get it right and we can unlock a huge amount of new creativity and funding for the civic environment, boosting people’s quality of life and the local economy.”

John Rossant, Chairman of the NewCities Foundation said:

“It is essential that we rethink the way cities can unlock the energy and creativity of their residents to produce vibrant, successful public spaces.

“We see enormous potential in new tools such as civic crowdfunding that can make a real difference in the city and deliver communities’ needs and aspirations if they are properly understood by city authorities, residents, and and the private sector alike.

“The potential impact of leveraging the crowd in urban development may prove itself the new normal for working with communities to shape public space in cities. ‘Crowd urbanism’ may be an unstoppable force in how we make and re-make our cities.”

Civic crowdfunding is still in the early stages of development and the market is growing rapidly. The Cambridge Centre for Alternative Finance reported that in 2015, the UK online alternative finance market facilitated loans, investments and donations totalling £3.2bn[1]. It facilitates a marketplace-led model, where citizen demands and institutional supply can meet more effectively.

The report is available for download here.


For interview requests or filming opportunities please contact contact Naomi Moore on nmoore@futurecities.catapult.org.uk / 07718 584331.


About Future Cities Catapult                                

Future Cities Catapult exists to advance innovation, to grow UK companies, to make cities better. We bring together businesses, universities and city leaders so that they can work with each other to solve the problems that cities face, now and in the future. This means that we catalyse and apply innovations to grow UK business and promote UK exports.

From our Urban Innovation Centre in London, we provide world-class facilities and expertise to support the development of new products and services, as well as opportunities to collaborate with others, test ideas and develop business models.

We help innovators turn ingenious ideas into working prototypes that can be tested in real urban settings. Then, once they’re proven, we help spread them to cities across the world to improve quality of life, strengthen economies and protect the environment.

Follow us on Twitter @futurecitiescat or sign up for our newsletter to keep up to date with our news.


About Catapult centres

The Catapult centres are a network of world-leading centres designed to transform the UK’s capability for innovation in specific areas and help drive future economic growth. The Catapults network has been established by Innovate UK. For more information visit catapult.org.uk

[1] Zhang, Brian. Pushing boundaries: The 2015 UK Alternative Finance Industry Report. s.l. : Cambridge Centre for Alternative Finance, 2016.


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