Ten people each contribute $100 a month into a pool. They meet once a month and discuss possible projects to support. Each month, they give a grant of $1000 to a project that meets a simple criterion: it’s awesome.
That’s the logic behind the Awesome Foundation, founded by Tim Hwang and friends, brilliantly built and managed by Christia Xu. Awesome Foundation now has 50 chapters in 10 countries and has given 252 grants, sponsoring awesome projects like Float, which attaches air pollution sensors to kites to report on air quality, and Free the Billboards, which invites people to visualize alternatives to unsightly billboards by photobombing them. (Full disclosure – I’m on the board of Institute for Higher Awesome Studies, the shadowy organization that acts as an umbrella organization for the individual Awesome chapters.)
This July, Christina and the Awesome Foundation convened a gathering at the MIT Media Lab to discuss new approaches to philanthropy. (Center for Civic Media blogged the conference, in case you want to catch up on all the cleverness you missed.) Featured at the table were well-known efforts like Kickstarter, and less visible efforts like SmallKnot, which helps local businesses raise investment capital from their customers, rewarding investments with premium products that are far cooler than tote bags or coffee mugs.
What these new approaches – commonly called “crowdfunding” – have in common is that they seek to democratize philanthropy. Why should George Soros and Bill Gates have all the fun, deciding where charitable money goes? Roughly 80% of American give time or money to charities, but very few are involved with deciding how those funds get allocated. That’s changing with efforts like Donors Choose and Global Giving, which allow donors to pick the projects they want to help. Awesome goes a step further – all the management of the giving process comes from the donors.
I’m an enthusiastic supporter of crowdfunding, whether it’s designed to support charitable efforts, invest in art projects or fund businesses. But, as I sat at the Awesome Summit, blogging talks about inspiring new efforts, I found myself starting to think about the unanticipated downsides of this form of organizing.
Here’s a project that’s unlikely to succeed, but exemplifies some of my worries. Kansas City was denied funds from the US Department of Transportation to build a new streetcar line. Jase Wilson is now trying to raise $10 million towards the streetcar on his site, neighbor.ly, designed to enable investment in “civic projects.” (So far, only $3600 has been pledged towards the goal. Ethan Mollick’s research on Kickstarter suggests that Wilson’s project is following a pretty common pattern of failing big… the majority of projects success by small margins, and those that fail often fall far short.)
Writing on TechPresident, Miranda Neubauer points to two other civic crowdfunding sites: Citizinvestor and Patronhood, which hasn’t yet launched. In the UK, Spacehive allows similar crowdfunding projects and can boast an enormous success, with nearly 800,000£ raised for a community center in Glyncoch, Wales. (It’s worth noting that most of the funds for the center came from government, with roughly 2000£ coming from community donations.) Brickstarter is pursuing a similar model in Helsinki.
Alexandra Lange calls these type of projects “Kickstarter Urbanism”, and she warns that they are far from guaranteed to succeed. She points to funding for The LowLine – a proposed underground park in an abandoned trolley terminal – as a widely discussed project in this space. The $155,000 raised by the LowLine isn’t building the park, but allowing the park designers to build a demonstration installation, proving their fiberoptic lighting technique works. Actually building the park, Lange warns, is much more complicated – it’s going to require massive bureaucratic wrangling to get the space permitted and supported as a public park.
Lange suggests that Kickstarter works best as a way to sell goods. The projects that have raised massively more funds than they sought, like the Pebble watch, are most frequently ones where your pledge purchases a product. Kickstarter allows a designer to aggregate sufficient demand to make creating a product feasible. I recently backed a (failed) project that sought to build a toy action figure of Rama – the project sought $125,000 to cut custom molds for the toy. Had it succeeded, a $35 pledge would have bought me a very cool action figure for my son. Other successful projects function as pre-sales systems for audio recordings or documentaries.
But parks aren’t products – they are public goods. And that’s where my concerns about civic crowdsourcing begin.
The right in the US, led by anti-tax crusader Grover Norquist, has been fighting a war against government spending that is, in effect, war on public goods and services. Norquist’s conviction that private sector enterprise is inevitably more efficient and less corrupt than the government has led to the privatization of services once provided by the government, like prisons and defense, and elimination of other key services once tax revenues no longer support their provision. A recent episode of This American Life – featuring an interview with Norquist – makes clear that the elimination of public goods is no accident. Demanding that Republican politicians sign a pledge not to increase taxes is about forcing a crisis that will lead to elimination of programs and shrinking of government.
Sometimes, this shrinkage means that public services we rely on no longer work very well. This American Life interviews government officials in Trenton, New Jersey, where massive cuts to the police department have led to dramatic increases in crime. At other times, it means services are only available if we pay for them. Colorado Springs turned off streetlights, stopped maintaining public parks and cut public transit when voters didn’t pass a tax increase. Affected citizens could pay to “adopt” a streetlight turned off by the government, paying $75 for a service that had previously been provided by the city. (The city council has abandoned this program, in part due to adverse publicity, and “all residential streetlights are in the process of being reactivated”.)
When an underfunded police department can’t prevent crime, it sends a message: the government isn’t doing a competent job, so perhaps we should look for alternatives, like private security forces for neighborhoods who can afford to hire them. When community efforts to maintain a park, despite cuts in government funding, succeed, they send the message that we don’t need the government to provide a public service, as volunteers will take care of it. (This was the genius of George H.W. Bush’s “thousand points of light” – Americans love the ideas of volunteerism and community organizations, and if those organizations can serve the public, why should government provide the services they can provide?) Whatever the outcome, positive or negative, Norquist’s experiments “prove” that we need less government and fewer goods and services provided by the government.
The impact of cuts to public services is not evenly distributed. Cuts to public transport don’t dramatically affect people who own cars and use them to commute to work. Closure of public parks matters less to people who can afford country club memberships or the dues at a gym or YMCA. This uneven impact on the poor turns these cuts into a social wedge – the tax savings disproportionately benefit the rich and service reductions harm the poor, sparking debate on whether wealthy people should be required to subsidize services to the less privileged.
When Colorado Springs turned off the streetlights in 2010, they launched a secure website that allowed residents to log on and pay to turn their lights back on. It’s not hard to imagine a cash-strapped municipality taking a list of parks they can’t build or maintain posting projects to Kickstarter or Neighbor.ly, seeking crowdfunding for their support.
I think that would probably be a bad thing. Unless done very carefully, crowdfunding a city’s projects is likely to favor wealthy neighborhoods over poor ones. People in poorer neighborhoods have less to spend on crowdfunding projects, and are less likely to have internet access. If Lange’s observation that people tend to Kickstart projects they benefit from holds true, we’d expect to see a wealth of parks funded in Brooklyn and few in the Bronx.
But unfairness isn’t the only problem. If crowdfunding parks succeeds, it supports the case that governments don’t need to build parks because they’ll get built anyway through the magic of civic crowdfunding. That, in turn, supports the Norquistian argument for a government small enough to drown in a bathtub, with services provided by the free market and by crowdfunding a thousand points of light.
Is Jase Wilson, the guy who’s trying to fund the Kansas City streetcar line on Neighbor.ly a secret agent of the radical right? Of course not – he’s a well-intentioned guy who’s turning to a successful online model to support a project he cares about. The nature of unintended consequences is that they’re the downside of an otherwise worthwhile activity. Bringing neighbors together to make their neighborhood better is a good thing. Figuring out how to do it while minimizing unwanted political impacts is even better.
Civic crowdfunding is inevitable because it’s so consonant with other forms of internet-based organization. There’s widespread acceptance of the idea that software developers can build high-quality software, motivated not purely by financial gain (though there’s certainly a role for commercial enterprises within the open source ecosystem.) Wikipedia demonstrates that volunteers can produce a high quality reference work. The campaigns against SOPA/PIPA and the Susan G. Komen Foundation show that activists, loosely linked through the internet, can achieve social change. Civic crowdfunding leverages many of the same mechanisms: rapid and lightweight group formation, coordination of efforts, enlightened self interest.
Here are some thoughts on how we could embrace civic crowdfunding and avoid the downsides:
Avoid rhetoric that posits crowdfunding as a remedy for government inaction and failure. There’s a proud tradition on the left of building social services for communities ignored or shortchanged by the government. I think of the Black Panthers’ “Survival Programs“, providing child nutrition, education and medical testing to the African American community in Oakland, and more recently, efforts by the Occupy movement to provide food to local homeless communities. It’s possible to provide these services and argue – as the Panthers did – that these services are an alternative to unfair government services. It’s also possible to argue, as Occupy has sometimes done, that these services are an example of what we want governments to provide and a way of pressuring government to do the right thing. This second argument is a healthier one, in light of a sustained rightwing push against public goods and services.
Crowdfund projects that leverage existing government opportunities. ioby is a civic crowdfunding site that seeks environmental change close to home – “in our back yards”. One of their featured projects is helping Latino communities in San Francisco engage with a city planning process to convert unused lots into public parks. The crowdfunding ask – $5,185 – isn’t sufficient to build a park, but it’s enough to ensure that the Latino community in southern San Francisco can participate in hearings and lobby city officials for their rights.
Use crowdfunding to brainstorm and innovate, and let governments implement. Crowdfunding has been a powerful tool to bring innovative new design solutions to market. In the case of civic innovation, the folks behind the LowLine may have the right idea – crowdfunding can help bring attention to a civic project and enable an innovative prototype design, but actual implementation will surely involve the city of New York. Finding ways to cooperate with governments to sustain new public spaces, works of art, etc. is surely going to be a key part of civic crowdfunding projects going forward, and ensuring that projects have built appropriate government ties should be a criterion for evaluating viable projects.
Look for projects that create community capital through volunteering. One of the promises of civic crowdfunding is that it builds stronger neighborhoods and communities. We know that participating in volunteer activities, like Kaboom!’s efforts to build playgrounds, helps build local civic capital. Let’s encourage projects that want our time and input, as well as our dollars – civic crowdsourcing as well as crowdfunding.
Don’t let governments dump unfunded projects into civic crowdsourcing. Instead, let’s look for ways that people excited about civic crowdfunding can lobby and ensure that city, state and federal funding for transportation, public spaces and the arts isn’t cut any further. Civic crowdfunding should be about making public goods and services more awesome, not shifting responsibility onto the backs of internet-connected donors.