In recent years, crowdfunding has been rising as a relevant solution to finance innovation and entrepreneurial initiatives (e.g., Belleflamme et al., 2014; Mollick, 2014). Projects currently financed through crowdfunding aim at producing different outputs e.g. innovative electrical appliances, movies, videogames, and music shows. Along with these typically commercial projects, which have been broadly investigated in extant literature, crowdfunding is more and more adopted to finance projects with a clear social impact. In particular, public entities have been increasingly relying on crowdfunding to finance their social project (Brent and Lorah, 2019). These crowdfunding initiatives are commonly labeled as civic crowdfunding in the popular press. However, despite the recent growth of this phenomenon and its high potential impact, the literature on this form of crowdfunding is still in its early development phase (Brent and Lorah, 2019).
This project aims at increasing our understanding of this phenomenon. In particular, we plan to develop a database of European Civic Crowdfunding campaigns. The database developed will be used to study the diffusion of civic crowdfunding in Europe, provide a taxonomy of civic crowdfunding campaigns, assess whether the propensity to use civic crowdfunding by public entities varies in different institutional settings, and determine the funding dynamics of civic crowdfunding campaigns.
Belleflamme, P., Lambert, T. and Schwienbacher, A. (2014), Crowdfunding: Tapping the right crowd, Journal of Business Venturing, Vol. 29, No. 5, pp. 585-609.
Brent, D.A. and Lorah, K. (2019), The economic geography of civic crowdfunding, Cities, Vol. 90, July, pp. 122-130.
Mollick, E. (2014), The dynamics of crowdfunding: an exploratory study, Journal of Business Venturing, Vol. 29, No. 1, pp. 1¿16.
Contribution to the literature
We believe we can contribute to the current academic debate on crowdfunding which has hitherto understudied the motivations and performances of public entities using this funding method (Stiver et al., 2014; Brent and Lorah, 2019), as well as how institutional setting shapes the crowdfunding phenomenon (Burtch et al., 2014; Vasileiadou et al., 2016).
Prior literature has provided evidence that crowdfunding allows projects¿ proponents to collect financial resources from distant contributors, who are typically interested in receiving products (Gleasure and Feller, 2016; Kang et al., 2017). Civic crowdfunding challenges this perspective, as projects proposed by public entities have a local outreach, and accordingly should not be appealing for distant potential contributors. Understanding what explains civic crowdfunding success and what are the motivations for public entities to use this funding may contribute to get a finer-grained picture of the crowdfunding phenomenon.
Moreover, studying the propensity to use crowdfunding by public entities and its effectiveness in different institutional contexts may provide an additional instance of how institutional arrangements influence the way private financing of public projects works.
This project aims also at inspiring a scholarly debate and further developing the theoretical foundation of the crowdfunding literature. This may also prompt practitioners to take note of the emerging opportunities and concerns of the crowdfunding phenomenon.
Brent, D.A. and Lorah, K. (2019), The economic geography of civic crowdfunding, Cities, Vol. 90, July, pp. 122-130.
Burtch, G., Ghose, A. and Wattal, S. (2014), Cultural differences and geography as determinants of online prosocial lending, MIS Quarterly, Vol. 38, No. 3, pp. 773-794.
Gleasure, R. and Feller, J. (2016), Emerging technologies and the democratisation of financial services: A metatriangulation of crowdfunding research, Information and Organization, Vol. 26, No. 4, pp. 101-115.
Kang, L., Jiang, Q. and Tan, C.-H. (2017), Remarkable advocates: An investigation of geographic distance and social capital for crowdfunding, Information and Management, Vol. 54, No. 3, pp. 336-348.
Stiver, A., Barroca, L., Minocha, S., Richards, M. and Roberts, D. (2014), Civic crowdfunding research: Challenges, opportunities, and future agenda, New Media & Society, Vol. 17, No. 2, pp. 249-271.
Vasileiadou, E., Huijben, J.C.C.M. and Raven, R.P.J.M. (2016), Three is a crowd? Exploring the potential of crowdfunding for renewable energy in the Netherlands, Journal of Cleaner Production, Vol. 128, pp. 142-155.
Potential applications, scientific and/or socio-economic impact
The expected outputs of the project include a database of European civic crowdfunding campaigns, which comprises information related to the crowdfunding campaign, the proponent and backers of the civic crowdfunding campaign, and the related financial performances. This dataset will be used in scientific contributions aimed at assessing the propensity by public entities to use civic crowdfunding in different institutional settings, and determining the funding dynamics of civic crowdfunding campaigns. Moreover, the project will result in a booklet for practitioners, which synthesizes best practices and guidelines for public entities, platform managers, and backers interested in civic crowdfunding.
The project results may entail a number of practical implications for policy makers, platforms managers, backers, and citizens. First, assessing the diffusion of civic crowdfunding in Europe will support public entities interested in utilizing this funding mean. An increasing number of policy initiatives have centred on crowdfunding (see e.g. the project launched by the Municipality of Milan for the social innovation through crowdfunding), although robust empirical evidence in support of this view has been missing. The result of this project can support policymakers in the decision of launching a civic crowdfunding campaign and can highlight best practices to favour backer participation. Second, a better understanding of the civic crowdfunding phenomenon will also allow platform managers to develop better suited business models to facilitate the participation of backers in these campaigns, and in turn maximize own profits. Finally, a better awareness of civic crowdfunding will likely encourage backers to finance these campaigns, which will ultimately create positive externalities for citizens.