The World Government Summit, hosted by the United Arab Emirates, explores how future governments can harness innovation and technology to solve universal human challenges including health, environmental protection, public safety, and citizen engagement. This year Spacehive was honoured to be recognised as one of the top ten government innovators globally for our work on civic crowdfunding alongside the Greater London Authority.
Other innovations in the top ten included detector rats in Mozambique and Tanzania, E-waste recycling in China, Air Purification in Mexico and many more, all of which are included in the ‘Edge of Government’ report that followed the summit. Read the Spacehive case study extracted below or download the full report here.
To build greater public participation in neighbourhood improvement projects, the Greater London Authority has developed a revolutionary way to plan and fund public capital projects. Working in partnership with the crowdfunding website Spacehive, London’s city government created a platform for local organizations to propose ideas for civic projects or new uses for unused space. The Greater London Authority pledges up to £20,000 to support the best proposals. Local organizations raise match funding from the wider community to unlock public funds and realize their projects.
The first round of the programme received 81 proposals, 17 of which were supported, raising 118% match funding from the crowd. In the second round, the Greater London Authority pledged £285,000 to 20 projects, leveraging over £450,000 of additional pledges from more than 2,300 Londoners, a 158% increase in funding. Based on the early success of the program, plans are underway to expand the platform to allow for crowdsourcing and crowdfunding more ambitious and complex projects.
Region and Location: Europe, London, United Kingdom
Entities: Great London Authority (GLA); Spacehive; Future Cities Catapult
Problem Background
Governments everywhere are looking for ways to involve citizens more directly in the process of decision-making. While the formal legislative process has established mechanisms for citizens to voice their views, there are few mechanisms for local communities to be directly involved in generating the ideas for public capital projects, or playing a part in delivering them. Projects tend to be funded based on top-down policy, the efforts of well-funded interest groups, or the slow groundswell of public demand.
These processes can be complex, slow, and unrepresentative of what is really needed in a local place. In addition, projects delivered through traditional processes tend to be funded entirely from government funds, limiting their size and scope to what government is willing and able to spend.
The Greater London Authority (GLA), the city’s top-level administrative body, wanted to give London’s citizens a more direct role in deciding on local regeneration and growth projects. It also wanted to give individuals and organizations outside of government the opportunity to contribute to worthwhile projects. The GLA believed that local residents and organizations were best suited to United Kingdom Glossary Term Collective Intelligence 25 Crowdfunded Civic Projects 26 understand and address the needs of the neighbourhoods in which they lived and worked. To meet these goals the GLA required a more flexible and modern approach to getting citizen input on civic projects.
The Innovation Solution
Within greater London, there is a fantastic diversity of individuals and local organizations with ideas for community improvement. To help people bring their ideas forward for consideration and possible funding, the GLA partnered with the London-based crowdfunding website Spacehive to create a platform for proposing and crowdfunding civic projects. Through Spacehive, local organizations can put forward ideas for civic projects or new uses for unused space. Crowdfunding allows anyone to pledge money to support proposed projects. To help applicants reach their funding targets, up to £20,000 from the Mayor’s High Street Fund is available for each project.
To be eligible to participate, organizations must be a community group, Town Team, resident or trader association, Business Improvement District, Neighbourhood Forum, social enterprise, school, local charity, or local authority. Participating organizations must also:
- Be able to enter into legal contracts, or must partner with an organization that can
- Provide a registered company or charity number
- Demonstrate the capacity and ability to physically deliver the project for which they are advocating
The programme takes an open mind about the type of project to be considered, but projects in Rounds 1 and 2 were expected to:
- Be on, or near, a high street, the centre of neighbourhoods within London
- Mainly be seeking capital funding (rather than operating expenses
- Demonstrate a fit with four criteria:
- Attracting visitors
- Improving the environment,
- Bringing together local groups
- Reusing empty spaces
The decision about whether to pledge to a project is based on these four criteria, as well as:
- The applicants’ ability to physically deliver the project they describe
- The overall value for money of each project
- The potential for wider benefits of each project
A key aim of the programme is building community support for civic projects. The amount a community is willing to invest in a project is an indicator of its commitment. Accordingly, GLA support comes with the expectation of match funding. A limit was set that pubic funds could be no more than 75% of total project costs. This meant that applicants need to do more than merely propose projects.
They also have to raise funding from ‘the crowd’ through the Spacehive platform, which allows for a diverse set of funders to fund a diverse set of relatively small ideas.
Of course, match funding alone is not a true representation of local support – as support depends on the wealth of the neighbourhood. By contributing financially to projects, the GLA was able to democratize the crowdfunding process by taking into account non-financial measures of community support, such as volunteer support or Facebook likes.
Government backing for projects significantly increased their credibility, profile, and the ability to raise funding. Before receiving GLA support, projects received an average of £60 worth of pledges per day. Following GLA support, the average was £200 per day – an increase of 233%.
To ensure viability and success, projects only get approved once they meet pre-established funding targets, within a fixed timescale. Project risk management, contract frameworks, and due diligence are all built into the Spacehive platform, and no project advances without full funding and the necessary planning and regulatory permissions. To support local organizations to come forward with ideas and deliver them, Spacehive and the GLA run a capacity-building programme including workshops for interested applicants and bespoke advice on running crowdfunding campaigns.
The GLA dedicated £600,000 in direct funding from its High Street Fund for the first two rounds of the programme. In the first round, the GLA received 81 proposals, representing a pipeline of locally led projects worth around £2.5 million that could be delivered very quickly. The GLA funded 17 of these projects based on the High Street Fund criteria. These projects represent £315,000 of GLA investment, bringing in £370,000 of match funding, equalling 118% local match. In the second round the GLA pledged £285,000 to 20 projects, leveraging over £450,000 of additional pledges from more than 2,300 Londoners (2,100 individuals, 120 businesses, and 6 councils), a 158% increase in funding.
A sample of projects funded include:
- The re-use of an empty shop unit as a local community centre, hosting a programme of events and workshops that have allowed more than 350 local people to co-produce the Queen’s Park
Neighbourhood Plan, a locally-led strategic vision to inform the local government’s future thinking about the area. - Preparatory work for a new community urban park in Peckham using a disused railway viaduct, which will link neighbourhoods on either side with shops, services, and public transport.
- Bringing an empty shop in Catford back into use as a community grocery store, selling affordable, locally grown vegetables as well as providing workshops, training, and advice on healthy eating.
- Transforming a disused alley in Whitechapel into a free public library with a book exchange, seating, and planters.
- A new not-for-profit restaurant in Tottenham offering young people an affordable, healthier alternative to fast food, at the same time as creating job opportunities for local people.
The GLA have committed an additional £700,000 to a further two rounds of the initial pilot programme. This is being run as an iterative design process with each round learning from the last, and testing of new ideas, which allows the programme to evolve quickly to meet the needs of users. Other than the GLA and Spacehive, supporters of the programme have included organizations such as Vicarage Field Shopping centre – Barking, Arts Council England, Sustrans, Southwark Council, and Tesco.
In the future, the GLA plan to extend the programme to create a central civic crowdfunding hub for London, bringing together all community-led civic projects in one place to leverage investment from citizens, public bodies, and the private sector. Calls for projects will be made on specific themes (e.g. Zero Carbon or Smart Cities) or to align with key government funding priorities.
The hub will also allow projects to be presented in phases with various elements ‘unlocked’ and secured once certain funding targets have been met. In addition, crowdfunding campaigns could be run for both a ‘standard’ and ‘enhanced’ project. This, of course, would change the current ‘all or nothing’ model for funding, but could make funding go further where there is extra support. The GLA and Spacehive also plan to develop their package of support to encourage groups with limited skills or resources to propose ideas and engage in delivery, building local capacity and ensuring diversity and fairness in public funding.
Replicable Success Factors
• Local community members with good ideas for smaller scale public capital projects.
• Presence of large number of potential crowdfunders, either individuals or organizations.
• Available crowdfunding platform to bring together good ideas and many small contributors.
What next?
The third round of the Mayor’s Crowdfunding Programme has now launched. To find out how you can be involved in this globally recognised initiative, visit his hive here.