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Crowdfunding, a new tool for local sustainable development policies

Issue Briefs N°03/2017. Iddri, 2017. 4 p.

This Issue Brief explores uses of crowdfunding by local authorities and analyses how it may be useful to territorial sustainable development policies. Whether as a tool for territorial action or to finance projects delivered by the authorities, crowdfunding is more than just a financing tool: it is also a tool for territorial communication and citizen participation. By demonstrating its importance for sustainable development policies, this brief also suggests avenues for increasing its potential.

KEY MESSAGES:

  • Local authorities use crowdfunding to support projects developed by other actors (funded predominantly through donations), but also to finance their own projects (through donations, but also loans or investments).
     
  • In both cases, crowdfunding is more than just a financing tool: it is also used to promote and communicate on the territory (use 1) and for mobilising local actors and citizens around emblematic projects delivered by the authority (use 2).
     
  • The values embodied in sustainable development contribute to the success of fundraising, which in return helps to inform and engage citizens. Thus, the first loanbased crowdfunding initiatives for projects organised by local authorities concern the ecological transition.
     
  • However, crowdfunding is not a magic bullet. The real contribution citizens make to the ecological transition and the knock-on effects crowdfunding will have on their everyday practices depends, for example, on their involvement in the governance of projects.
     
  • In the context of a policy approach seeking to strengthen local democracy and inclusion with a view to the ecological transition, crowdfunding could be combined with other digital citizen participation tools, such as crowdsourcing or participatory budgeting.