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Why London's Mayor is Turning to Crowdfunding to Support Public Projects

Running a crowdfunding campaign involves a lot of stress and anxiety, as well as the occasional rush of banking a big donation. Nick Woodford understands those ups and downs. Part of the team supporting the Peckham Coal Line, a proposed Highline-like park project on an abandoned railway in southeast London, he's been working with his colleagues and collaborators to raise £65,575 ($100,864) for a feasibility study, the first step towards construction. Since being announced late last year, the concept has received great press and attracted hundreds of supporters. But last week, the group's crowdfunding campaign received a sizable boost in the form of a £10,000 pledge from a very public figure: Boris Johnson, London's mayor.

"It gives us credibility that we didn't have before," says Woodford. "We still have a long way to go to hit our crowdfunding goal, but what it does do is show that the mayor has confidence in the projects, so we've seen an upturn in other people bidding."


An interview with the founder of Spacehive, Chris Gourlay.

Johnson's pledge wasn't unexpected, however; The Peckham Coal Line was one of 20 projects across 15 London boroughs that had successfully lobbied for support though an government-supported campaign that's putting London on the cutting-edge of civic crowdfunding. Drawn from the sizable High Street Fund, a £9 million initiative from the Mayor's office meant to stimulate and support community development in the main streets of the British capital, the pledges announced on September 17 were awarded to selected projects, such as the Peckham Coal Line, that were listed on the mayor's page on the Spacehive crowdfunding platform.

According to Woodford, the Spacehive setup offers a progressive model for the Mayor to support public spaces, and demonstrates a recognition that local people can identify and find solutions to their own problems. This partnership has also made London a leader in supporting public infrastructure projects via crowdfunding. Early results, and feedback from the city government, suggest it may not be the last.

"It's a collaborative testing environment," says James Parkinson, a Senior Project Officer for Regeneration at the Greater London Authority. "It's an exciting process for us as a public organization to adapt our process to work with these groups."

This is the second time the Mayor's office has supported campaigns on Spacehive—earlier this year, 17 projects received a total of £315,000 in funding—but it's the first round of pledges that aren't meant to completely fund each campaign. By delivering a percentage of the total funding requested (up to £20,000 per project), the Mayor is attempting to induce community support and stimulate additional funding for community development.

The iterative nature of the city's funding for these projects suggests an attempt to find the right way to tap into the democratic potential of crowdfunding and its promise of more inclusive urban design, without running into the disappointment that can come from crowdfunded projects that are too elaborate to ever be built, or models of support the prioritize the "popular" at the expense of needed projects, especially in poor areas of the city.

"We're not excluding anybody from applying, but we're looking for projects and areas that need public sector investment, that lead economic growth and improve community cohesion," says Parkinson. "We want to focus on areas that need an extra boost, we're not just finding the most popular ideas that attract the least criticism. But, we're still figuring out the process, and how best we can use a tool like this to support the Mayor's regeneration objectives."


Case study about the Peckham Coal Line.

According to Spacehive community manager Fred Tarr, the Mayor's Office saw increased participation and double the submissions when it switched to a crowdfunding model. And even more importantly, the platform itself, specifically oriented towards civic projects, may offer a better chance of success.

Spacehive was founded in 2011 by journalist Chris Gourlay, a Sunday Times staffer who covered architecture and planning. After reporting on local development in London, he wanted to find a way to help support all the cool ideas he'd seen in development and devised the civic project version of Kickstarter. When Spacehive launched, the team wasn't sure how they would be viewed by politicians.

"We were worried councils would see us as enemies, like we're getting the crowd arrayed against them," says Tarr.

But as the platform worked with more and more city councils on different projects, Tarr noticed they appreciated the community insight and creativity crowdfunding brought to the table. Spacehive does a lot of its work offline, says Tarr, collaborating with councils to convince them to "open up spaces to people's creativity." In a sense, the platform also acts as a lobbyist for projects, aiming to get the government on board, as a partner. That spirit of collaborative exchange with local governments has helped the site raise £3.4 million ($5.2 million) for roughly 120 projects since it launched, including a sculpture walk in London and a community center in Wales.
In addition, campaign pages on the site note if a particular project has council support, as well as accurate cost estimates backed by a third-party (all of this information is displayed below the total amount of funds raised). The additional transparency and information ensures potential projects on the platform are more likely to succeed, this increasing the likelihood of support.

"Twenty people around a table in a committee, talking about a project, doesn't really excite a council," says Tarr. "But they get really excited when they see 100 people from the community on the platform, supporting an idea."




That extra level of scrutiny made Spacehive an ideal partner for the Mayor's crowdfunding campaign. According to Tarr and Parkinson, both organizations are looking forward to the next round of projects, and want to simplify and streamline the process for next year. Currently, organizations and projects need to provide additional information to the Mayor's office beyond the information Spacehive requires, such as information on employee liability insurance for potential contractors. While it's too early to point to any finished projects from the first two rounds of funding this year, both organizations say they're both happy with the results.

"This is absolutely the future," says Tarr. "Top-down models can often mean developers and councils have all the control, which ends up producing projects that nobody wants or takes ownership of, which is a waste of council money. Giving people a platform to figure out what they want in their areas empowers them."

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