Can governments support crowdfunding?

This is a topic quite close to my heart at present, as I'm running a Kickstarter crowdfunding project myself - at www.kickstarter.com/projects/socialmediaplanner/social-media-planner (please check it out!)

It's teaching me a great deal about the challenges involved, and I'll be reporting back on this at the end of the process.

A broader question is whether governments in Australia are able to support crowdfunding, whether simply backing a project they wish to see funded or as an approach for investing money in new projects with community backing.

The first scenario is potentially the hardest for agencies under existing procurement frameworks.

Except in NSW and soon Victoria (which have the notion of unsolicited proposals), governments across Australia have quite a rigid process for buying 'stuff' (goods or services).

First they must identify that they need it. Next they must try to figure out if they can afford it. Then they have to go to market to buy it.

Within these constraints there is a fair bit of flexibility - there's many ways to identify the need, fund the 'stuff' and even to buy it.

As part of this process governments even buy 'stuff' which hasn't yet been developed all the time - such as when they ask someone to design new software, build a custom ship, develop a road or provide a structural review.

Crowdfunding generally works this way - people back a project that hasn't yet been completely developed in order to fund final development.

However governments often struggle to 'buy with friends' - to join in a joint purchase process as just one of the participants. They always want custom assurances and contracts, have specific requirements and otherwise make it difficult for themselves to participate in group processes - such as via crowdfunding.

Despite this, several Australian governments have found a way to participate in crowdfunding exercises, with both WA and Tasmanian governments now actively involved in the process.

Arts Tasmania has teamed up with Pozible, Australia's leading crowdfunding service for the Crowbar funding initiative. The initiative offers approved art projects the opportunity to receive up to $2,000 in funds from Arts Tasmania (capped at 50% of the funds raised) if these projects are successfully funded on Pozible.

On top of simply matching cash, Arts Tasmania is also offering one-on-one campaign development support, additional promotional opportunities from Arts Tasmania and having their projects presented in the Arts Tasmania Collection on Pozible.

It's a great opportunity for artists, who only have to find funding for 50% of their project, and for Arts Tasmania, which gets to support more projects (as the public funds part of them), as well as gets a community view on whether a particular project is worth funding.

The initiative also opens the door to new artists with new ideas that don't necessarily fit into other grant programs.

So far Crowbar has only supported one project, the Cranky Ladies of History. This has exceeded it's Pozible target, which is great to see.

I hope to see more projects funded in the same way - though I appreciate there may also be a learning curve for artists, who are not used to pitching their ideas to the public in this way.

ScreenWest in WA has run a similar program for film makers called 3 to 1.

Also involving Pozible, the program offers three dollars in funding for every dollar contributed by the public to crowdfunded film projects, up to an overall cap of $250,000.

This project has seen almost 30 projects try to raise the funds they need to proceed - with mixed success.  Overall it is achieving the same thing for ScreenWest as Crowbar is for Arts Tasmania - helping them to prioritise projects that have significant community interest while allowing them to stretch their grants funding further.


Besides these approaches in Australia, the UK Government has become a significant supporting of the crowd loan scene. The UK government has partnered with a number of crowd loan services including Funding Circle and Crowdcube through its Start Up Loans initiative to provide up to 20% of the funds from the government.

Essentially organisations looking for a start-up or business development loan can use a crowd site to tell their story and provide their numbers. Individuals then loan money in small amounts, setting the interest rate they want to receive.

Once a loan reaches a certain threshold (80-95%), the government will provide the rest of the funds at the average interest rate.

The loan is then managed as any other and paid back over an agreed term.

The benefit of this system is that it reduces risk for government, by ensuring that the community supports a loan before they put money in. It also is very low cost, even profitable, for government, as they get their money back plus interest and can choose to reinvest it each year.

This is, in my view, a very strong model for businesses, and I can personally testify to its effectiveness as Delib used this last year in the UK for additional product development funds.


We're also beginning to see crowdfunding supported by governments in the US as a way for businesses to raise money beyond the equity or debt models.

Washington State recently passed a very interesting bill (through one house at least) allowing businesses to raise up to a million dollars per year via crowdfunding.

Some other US states are also considering legislation.

Australia is a bit further behind, but the Australian Government is starting to make interesting noises in this area.

As reported in the Saturday Paper, Federal government encouraged to free up crowd funding,

Malcolm Turnbull recently wrote on his blog: “Crowd funding has become an increasingly popular way of promoting financing for innovative projects, allowing start-ups and rapidly growing companies to access diversified sources of capital … however, regulatory arrangements in Australia are not particularly tailored to this type of capital raising. The government is determined to see if we can match the regulatory environment that’s present in the US, here in Australia.”

Of course noise is one thing, changing financial regulations and laws is quite another - and can take some time.

However as the Arts Tasmania and ScreenWest examples show, there's opportunities right now for government agencies to consider crowdfunding, if they're prepared to think outside the square.

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Learning how to crowd fund - and launch of Social Media Planner Kickstarter

This morning at BarCamp Canberra I gave the presentation below on how to setup a crowdfunding campaign, based on my personal experience setting up a Kickstarter for Social Media Planner.

For people interested in crowdfunding I've embedded my presentation below.

If you're interested in learning more about Social Media Planner, and potentially backing it, see: kickstarter.com/projects/socialmediaplanner/social-media-planner

Crowdfunding: How to set up a campaign (from my personal experience) from Craig Thomler

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Crowdfunding gaining strength as an FOI tool - but will governments seek a seat at the table?

As reported by Peter Timmins in his Open & Shut blog, and as I have commented on Twitter, crowdfunding is beginning to become an interesting tool for fundraising the cash requested by government agencies for fulfilling FOI responses.

Where governments are still using charging for FOI searches as a cost-recovery tool (and potentially occasionally as a barrier to releasing information), crowdfunding offers the advantage of spreading the cost across a range of people and organisations in a structured way.

Peter points to an article in FreedomInfo, Crowdfunding FOI Requests Gains in Use, Seems to Work, which highlights how this tactic is being used in four jurisdictions.

Where these crowdfunding approaches are public, which is the usual case, they also draw greater attention to these FOI requests, potentially marshalling a range of interested parties around the release request.

While it is still very early days for this approach, it does raise the prospect of a new wave of organising around areas where government is perceived to be secretive or evasive - where interested individuals, activists and even business interests can raise public and even media attention for a range of topics that otherwise would remain under the radar.

There's a few permutations of this approach likely to emerge involving 'crowd' but without always being about 'funding'. For example we've already seen crowdsourcing of insights from FOI responses (including by The Guardian in the UK and Fairfax in Australia) and have also seen FOI requests around a given topic being coordinated by grassroots groups seeking a full understanding of complex situations.

There's also the potential to establish collaborative funding models - where there's X dollars placed in a pool to fully or partially fund different FOI requests each month or year, and contributors to the fund can vote on which FOI requests these funds are applied to.

I also expect to see crowdfunding mechanisms built into more FOI platforms, such as Right to Know in Australia, and increasing use of 'crowd' approaches to FOI across by individuals, activists and media outlets.


The most interesting question is whether governments will seek to have some influence in these processes by implementing their own central platforms for crowdfunding FOI requests, or will continue to pursue a 'hands-off' fragmented process to FOI as the majority do today.

Given the success of the US and UK governments' ePetition platforms, and the steps into collaborative law making in Scandinavian countries, I would tip these jurisdictions as the most likely to take a step into providing an FOI request and crowdfunding platform.

This would also allow governments to realise cost benefits through standardising and streamlining FOI request and review processes within and across agencies as well as aggregating similar FOI requests and providing centralised access to already released information, thereby saving agency time and money in attempting to discover this or telling people manually that information is already in the public domain.

Establishing their own FOI management and crowdfunding system may also allow the governments concerned to allocate a monthly budget offsetting legitimate FOI costs, which could be accessed by individual FOI requests through approaches such as collaborative budgeting or an 80/20 approach (if 80% is funded, the government contributes the other 20%), as has been used in the UK successfully for other crowdfunding.

If governments decide not to enter this space, larger civic groups will, leading to a situation over time where governments will increasingly find increased public scrutiny over what is released, to whom and for how much - as well as what is refused release or where charges appear high.

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A good community engagement professional understands their tools - and picks the right ones to meet their goals

I had an interesting conversation via Twitter with @hughstephens of Dialogue Consulting on Friday regarding how and when different consultation and engagement tools should be used by government.

His view was that online surveys should not be the default consultation method for government,

Possibly going to be controversial by saying that online surveys should NOT be governments' default consultation method #gov2au
— Hugh Stephens (@hughstephens) February 21, 2014

I found this a rather unusual thing to say - though I did agree with his follow-up tweet that,

@vivmcw exactly! Just a pity that many take "innovative"/"online" to mean 'SurveyMonkey'
— Hugh Stephens (@hughstephens) February 21, 2014

There was an interesting discussion between Hugh and myself after this point, which you can follow via my Storify or directly on Twitter.

However I can boil my position down to one point: focus first on the goals of your consultation or engagement, then select the tools based on which will best suit your needs.

This approach works whatever your goals and whether you're consulting online, offline or both.

It causes me no end of concern when senior management, communication or community engagement professionals start from a position of which tool they prefer to use and then justify it within the goals they seek to achieve.

This can lead to distortion of the goals, poor outcomes and, potentially, significant pain for agencies, councils and governments or councillors when there's substantial pushback on the decisions arrived at via this process.

I'm also concerned when I hear engagement professionals state personal biases for or against specific types of tools. This can also bias an engagement process.

Someone who doesn't like, is unfamiliar with, or out-of-date on the capabilities of certain types of consultation and engagement tools may not be able to provide the best advice as to which tools and approaches will best meet an organisation's engagement goals.

I've been talking about this issue for around eight years now within and with government, exposing public sector professionals to a range of online approaches now available to them for engagement purposes to deepen and broaden their toolkit.

Only by understanding the capabilities, strengths and weaknesses of a good cross-section of the tools available today can communication and engagement professionals provide good advice to their senior management and elected officials regarding how to achieve their goals.

So for everyone involved in community engagement from the public sector - don't focus on the tools you like or dislike, focus on your goals.

Use your breadth of experience with different engagement and consultation approaches, together with evidence of past successes and failures, to select the right tools to meet your goals, whatever they happen to be!

PS: I'll shortly be crowdfunding a product designed to help community engagement and communications professionals to understand and select the right online tools for their goals. It is based on the training tool I developed and have been using successfully around the world for the last eight years.

Keep an eye out for more information in my blog and at socialmediaplanner.com.au

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First the internet, then social media and now crowdfunding is disrupting government

Government has proven no more immune to disruption by digital than any other industry.

The internet changed the model for governments in delivering information and dealing with pressure groups. It has been a largely positive disruption, facilitated billions in savings as government moved services online in egovernment initiatives. At the same time it has seen governments able to provide the same, or more, services to citizens without growing staff numbers at the same rate as population growth.

In Australia the Australian Public Service employs roughly the same number of staff as in 1990, despite a 30% increase in our population. While not all attributable to egovernment, I think it is fair to say that considering the range of services and activities of the Australian Government today, compared to 40 years ago, digitalisation has had a substantial impact in respect of job numbers.

Social media has been a more uncomfortable disruption for government, thus far providing for a mixed experience. Governments in Australia have rapidly adopted the use of social media - as I track through the proxy of Twitter accounts (over 920 today compared to none in early 2007) - using social platforms for activities from communication to engagement, customer service, codesign and policy development.

At the same time social media has challenged government by giving millions a more public voice and way to organise groups - from simple petitions for bank notes usable by blind people through to connecting people and facilitating the organisation of mass rallies during the Arab Spring.

Governments have found it more difficult to ignore self-organising groups than single isolated individuals, and have begun to face continual critiquing of every decision as soon as it is announced - an unprecedented environment of scrutiny and noise.

However the clamour of critics on social networks can be ignored - we've already seen several elected politicians cancel social media accounts and put much greater constraints around how their staff use these networks.

The next disruption, crowdfunding, is already showing some signs of having a material impact beyond that of raised voices and organised protests.

Historically when governments stopped funding activities or services, or changed what they delivered - as a result of electoral and policy changes - the media would comment, the public would talk about it for a few weeks, maybe even protest, and then generally governments could get on with delivering their new mix without significant disruption.

Governments were in control - they chose where their budget was spent and things that were cut remained cut.

Of course some form of charity or other provider might choose to find alternative funding to continue delivering a service on a small scale, however this could be safely ignored, or even declared a win by government as it was clear that government didn't need to fund that service anyway.

This line was actually used very recently by the current Australian government after it defunded the Climate Change Commission (a government-funded body for providing expert advice on climate change to the public) and the commissioners went out to find alternative funding.

However something was different on this occasion.

Rather than having a few organisations or wealthy and concerned individuals provide funds to keep the Climate Change Commission alive under a new name, the Climate Council, the Commissioners used a crowdfunding route.

The first donation to keep the Climate Council live was $15. Over the first 12 hours it raised $160,000 - literally overnight.

At the end of the first week the Climate Council had raised one million dollars, and the donations continued to arrive.

For awhile it was unclear whether this was a once-off event. The Climate Commission dealt with an emotive topic - climate change - and was led by prominent and well-respected Australian, Professor Tim Flannery. It was an existing body with an existing purpose, so already had structure and goals.

This was a useful combination for crowdfunding, providing a leg-up for marshalling the right crowd to provide the donations required to continue operations.

However we're now seeing crowd funding used to underpin the completion of another defunded Australian Government project, the Blueprint for an Ageing Australia.

While it is unclear whether this project will meet its goal, it is beginning to suggest that crowdfunding may become a regular tactic used to counter government decisions.


Effectively communities could use crowdfunding, in certain casesm as an alternative to government funding. The approach allows them to self-organise and finance public initiatives that they feel are important but governments, for funding or ideological reasons, do not.

The impact of this crowdfunding may be benign - communities simply getting the services they wish, regardless of the government's priorities - or may be considered highly political.

If a government defunds something and then supporters find the funds in the crowd to keep it alive, what does that say about the community's view of the government's priorities and decisions? Will governments be forced to back down or change their approach? Will it affect elections?

This is still very early days, however it is worth governments beginning to build their awareness of crowdfunding and how it is beginning to be used - as well as how it can be used for the benefit of government, such as by seeking some public crowdfunding for an initiative before agreeing to put public money into the mix.

At the end of the day an individual putting down their personal cash to back a crowdfunding project is a significantly greater commitment of belief and value than a signature on a petition, a social media backlash or even a march on the street. Governments need to appreciate and understand this and treat it accordingly.

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