The glossary entries are the result of a collaborative process among OpenHeritage consortium partners and have undergone an internal review. However, they only express the perspective of the authors listed under each term, not of all partners. You can find information on the glossary production process and the full glossary here.
Nadia Nadesan
Platoniq, Fundacíon Goteo, Barcelona, Spain; nadia@platoniq.net
Olivier Schulbaum
Platoniq, Fundacíon Goteo, Barcelona, Spain; olivierschulbaum@platoniq.net
Short definition
Crowdfunding is an instrument among the alternative finance landscape. It combines the terms ‚crowd‘ and ‚funding‘ in the sense that an interested or general public redistributes capital to a group of people through an online platform in order to realize a certain project.
Key discussions around the term
“Crowdfunding“ was coined by combining “crowd” and “funding”, indicating that many of the individuals provide their own contributions to create a fund (Schwienbacher and Larralde, 2010). Thus, crowdfunding works as an infrastructure, which enables projects to collect cooperation, attention, and trust from an amount of the general public. In very recent years, the position of crowdfunding in the alternative finance landscape has progressively shifted from being just a possible option to becoming a well-established and mature funding mechanism. Starting from a restricted pool of innovators, crowdfunding has steadily expanded its outreach.
In addition to entering the core alternative finance options, crowdfunding has also earned a primary role as a means of “democratisation of finance” (Passeri 2018). The term refers to asking for funding and providing it to a large crowd of individuals, but also to the processes of co-decision, co-creation, engagement, and ownership that it produces in all parties involved. A further evolution of mechanisms like this mechanism is represented by the so-called “civic crowdfunding” a term coined by Alessio Barollo and Daniela Castrataro during the “Torino Crowdfunding” convention (Olivia 2018). It defines a subcategory of crowdfunding through which citizens, often in collaboration with governments, propose, fund, and deliver projects that aim to provide a community service or deliver public value through local improvement projects. The peculiarity of civic crowdfunding is that, by leveraging the close ties that crowdfunding platforms enjoy with local communities, it can promote a sense of engagement and belonging among citizens by enabling them to contribute to specific projects that will generate common good in their local areas.
Both financial and non-financial benefits have increasingly attracted the attention of a wide range of public and private stakeholders, such as local and regional authorities, development agencies and banks, and private foundations. These entities are partnering with crowdfunding platforms all over Europe and setting up match-funding schemes through which resources collected by crowdfunding campaigns in specific areas are topped up with an additional share of their own resources. Goteo.org the platform partnering with the Open Heritage project is a pioneer in both Civic and Match funding, and the creator of an open funding standard for the creation, preservation, and sustainability of the commons.
Reference list
Morell, M. F., Hidalgo, E. S., & Rodríguez, E. (2020). Goteo. org civic crowdfunding and match-funding data connecting Sustainable Development Goals. Scientific Data, 7(1), 1-10.
Passeri, F. (2018). “Lessons Learned from Civic Crowdfunding and Match-Funding Schemes in Europe.” In CrowdAsset Crowdfunding for Policymakers. Edited by Gajda, Oliver, Marom, Dan and Wright, Tim, 211-55. World Scientific Publishing Company.
Oliva, Nadia. 2018. “Crowdfunding and Civic Crowdfunding: Theoretical Features and Future Prospects.” Public Management and Administration, April. https://doi.org/10.5772/intechopen.74739.
Schwienbacher, A., and Larralde, B. “Crowdfunding of small entrepreneurial ventures.” In Handbook of entrepreneurial finance, Oxford University Press, Forthcoming (2010).