Crowdfunding is firmly established in the public consciousness as a way of getting great ideas off the ground, especially those that benefit the community. Thousands of businesses, charities, people in need, community groups, sports clubs, political movements and more have benefitted.
As a result, there’s been growing interest in how crowdfunding may shake up the grant sector to make public money more accessible and effective. This has given rise to the concept of matched crowdfunding where funding from institutions, corporates, foundations, local authorities and other bodies can match that pledged by the crowd.
This practice has grown significantly over the last three years, ranging from small community projects to larger capital or regeneration focused ventures. There are now examples of matched crowdfunding being used by a diverse range of funders with a focus on corporate social responsibility, universities and schools. The result is that more than £1m of matched funding was made available for crowdfunded projects in 2016, with that figure looking to rise substantially in 2017.
Despite this rapid growth, until now there has been little known about the impact of matched crowdfunding, its opportunities and its challenges. In turn, this may have kept many established funders from making informed decisions on the efficacy of matched crowdfunding within their current funding programmes.
This is set to change with the publication of Nesta’s report detailing a nine-month pilot project in which £251,500 in matched funding was provided by Arts Council England and Heritage Lottery Fund to 59 arts and heritage related projects on Crowdfunder.co.uk. Projects as diverse as an immersive opera in south London and the restoration of one of the UK’s most important historic ships received matched funding support, coaching and workshops from the Crowdfunder team, alongside the support of a crowd of 4,970 backers.
The pilot suggests that if grant money was distributed via crowdfunding, its impact could be significantly amplified, both in terms of unlocking additional funds and building skills and non-financial support from the community. On average, the public donation to arts projects increased from £63 to £74 when backed by match funding and overall 90% of fundraisers reported a significant improvement in media skills, film creation and image creation.
Importantly, the pilot bought new backers to the arts and heritage sector. This presents a new way for society to collaborate and bring about positive change. Some 86% of project backers had never supported the organisations they backed before and a fifth hadn’t supported this kind of project in the past.
Overall, the report is the evidence funding organisations need to shake up the £5bn grant funding sector forever. The firm recommendation shining through the report is that funding organisations need to give crowdfunding a go.
As a sector, we’ve only just started to scratch the surface of what could be done. In a year’s time just imagine what could have been achieved. Now’s the time to get ready for the grant funding revolution.
Dawn Bebe is managing director of Crowdfunder