Most people would agree that government, whether local, state, or federal, is slow to change.  Many factors play into that, including that government is driven by providing services such as fire, police, sanitation, and water.  But what happens when government budgets are cut, where does the revenue come from?  Welcome to the new economy and the technology of crowdfunding.

Most of us have heard of, or have used, sites such as GoFundMe and Kickstarter.  Uses for these platforms range from raising money for medical bills, to an overseas trip or even a honeymoon.   But what about government?  Could a government use one of these platforms to raise money for a project or to replace money cut from their budget?   In some situations, the answer is yes.  Governments are reaching out in different ways to raise money for projects from dog parks to public defenders. One of the new tools there are utilizing are crowdfunding platforms.

For example, a state representative in Texas partnered with a nonprofit to launch a crowdfunding campaign in his district to replace dollars cut by the governor for criminal justice funding.   The campaign raised more than $150,000 which helped offset some of the dollars that were cut.  In New Orleans, the public defender’s office was having trouble handling caseload because of budget cuts and also turned to crowdfunding.  Their campaign raised $100,000, but most importantly for them, brought media attention to the budget shortfalls in the office.

What are some of the advantages to crowdfunding campaigns?

1. It’s an easier way to collect money
2. It is a great way to spread your message to a wider audience about a budget shortfall
3. Encourages public engagement

Of course, with every good thing or initiative there are words of caution for governments.

1. For the most part crowdfunding can be limiting since the money raised is focused on one project.
2. Could government pull back some services and make them available to only those who pay?

As governments strive to compete financially, using these innovative tools are an interesting way for governments to fund much need services.  Time will tell if this idea spreads into state and/or federal projects, also.

Sources:

The Rise of Public-Sector Crowdfunding

Crowdfunding: Motivations and Deterrents for Participation

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