Here’s why city governments should do more to support crowdfunding

Plymouth, unlikely centre of the UK crowdfunding scene. Image: Mark Murphy/Wikimedia Commons.

Say “investment crowdfunding” or “buying shares”, and most people will think you are talking about taking a punt on a startup with the aim of making a good financial return if they become a success. However, investment crowdfunding, which involves a large number of individuals each making a relatively small debt or equity investment in a project, can also be about communities coming together to save a much-loved local pub from closure, or creating a new community arts space. In these situations investors are driven by motivations that are more about making their local area a better place to live, work and play, than making a financial return.

Over the last 9 months at Nesta, we have been working to understand how investment-based crowdfunding models – such as community shares and bonds – can be used to create projects which are owned and run by the communities they serve, and the benefits and challenges that come along with this. 

It’s easy to find inspiring examples of community-initiatives all over the country that have crowdfunded investment in this way. These include, but are not limited to, those running pubs, shops football clubs, workspaces, renewable energy projects and even broadband services.

From these examples we have learnt that investment crowdfunding helps to fund socially-beneficial projects that would otherwise struggle to find the money they need through grants or bank loans. Fundraising in this way can also lead to greater use of these assets, alongside increased offers of volunteering and other forms of support by the community they serve. In addition, by bringing communities together to improve their local area, these crowdfunding models can strengthen social cohesion and empower individuals with increased self-determination over the future of their local area.

However, raising money in this way is not all plain sailing, and community organisations often face difficulties in gaining access to assets or transitioning from grassroots fundraising to running a community business with a large number of investors to keep happy. Further to this, there are potential challenges around ensuring the diversity of those investing in and governing these assets are representative of the communities in which they belong.

City authorities have a crucial role to play in creating an environment in which strong community projects are able to thrive, and there are clear social benefits in them doing so. Cities can support local groups in overcoming some of the challenges, for example, by providing small grants to cover legal and advisor fees or by helping them access unused space, whether through the transfer of public sector assets or by acting as a matchmaker between private owners of unused spaces and community groups.

Plymouth City Council is one authority that understands the potential of crowdfunded community investment to improve how community development and regeneration is done. Plymouth residents’ interest in a new type of economy combined with the need for urban regeneration and the council’s desire to do things differently with shrinking local authority budgets provided the drive for Plymouth to brand itself the UK’s first “Social Enterprise City”.

Contributing to this has been the council’s commitment to provide match funding to over 200 crowdfunded projects up to £20,000 each, from Community Infrastructure Levy funds and the designated £2.5m Social Enterprise Investment Fund, which offers a combination of grant and loan funding to get projects up and running. The Clipper Inn, a project to bring a dilapidated pub back to life as a community market and work space, is one project which has benefited from this fund, which has enabled the purchase of their building.

While cities are starting to see the power of investment crowdfunding to help community-led projects transform local areas socially, economically and environmentally, there remains potential for authorities to make supporting groups to use these tools a larger part of their regeneration and development strategies.

Jonathan Bone is a senior researcher in new technology at innovation charity NESTA.

You can read more about this work in our new report, Taking ownership: Community empowerment through crowdfunded investment. This research was conducted with funding from funded by the Greater London Authority through the London Economic Action Partnership (LEAP).


Five ways the UK can prepare for its next heatwave

Brighton, 2014. Image: Getty.

The 2018 summer heatwave in the UK broke records – and it won’t be the last spell of such severe heat. In fact, climate change means that hot summers which would once occur twice a century may soon occur twice a decade. As the population grows and ages, this will lead to more premature heat-related deaths and place extra strain on physical and mental health services.

Previous research on resilience to heatwaves, such as last year’s report by parliament’s Environmental Audit Committee, a cross-party group of MPs, has focused predominantly on policy, regulation and infrastructure. Such research barely addresses behavioural or social responses that occur during hot weather events and how these can contribute to building resilience.

This is what my own work looks at. In a new book I explore these ideas and assessed how to improve resilience to climate change through communication, collaboration and co-production. So what can the UK do to be better prepared for heatwaves in future?

1. Remember that heatwaves are a serious threat

People must be trained to think more carefully about their vulnerabilities and responses to hot weather. Everyone’s experience of hot weather varies, and this is often associated with positive memories of past summers where they’d enjoy the heat, venture outside and make the most of a potentially short-lived summer.

But this often leads to people being more exposed to the effects of the sun, which affects their health and productivity and puts extra strain on hospitals. Hot temperatures also cause roads to melt and train track to buckle, resulting in delays. As hot weather becomes more common, people need to bear these things in mind.

2. Factor in behavioural change

While appropriate regulation and policies are important, they must represent how people respond to heatwaves and how their experiences affect their behaviour. This can be incorporated into broader thinking around other topics.

Buildings, for instance, can be insulated to stay warm in the winter yet cool in the summer, but we need to better understand how people behave in buildings during those periods to ensure appropriate use.

And working practices can be adjusted so people can work outside periods of intense heat. People rarely want to stay at home all day, so more water fountains should be provided in public places.

3. Get better at talking about hot weather

British people famously love talking about the weather. But they still need to get better at talking about heatwaves specifically, and how they can become more resilient to them. That means things like sharing whether they’re feeling the load of the hot weather or sharing ways to stay cool.

Better communication will also help people understand who’s doing what during a hot weather event (for example, emergency services under extra strain, or bus and train drivers working in tough conditions).

4. Learn from the neighbours

Learn from other others. Mediterranean countries, for instance, are used to the hot weather and people there have adopted simple practices to help them cope with the stress: closing shutters during the hot weather, avoiding being outside or on the beach during peak heat temperatures, painting buildings white, staying hydrated and avoiding strenuous activities during hot weather. Countries in northern Europe that are just getting used to severe heatwaves could adopt these practices.

5. Invest in resilience and communication

Investment should be pro-active, rather than reactive. That means working closely with scientists to anticipate the risks from heatwaves, getting a better understanding of our vulnerabilities and the potential measures we can take. Ensure buildings (especially hospitals and care homes) and infrastructure are better prepared to withstand hot weather events and that regulation is updated to better reflect this, without which the number of heatwave-related deaths would increase.

The Conversation

Candice Howarth, Senior Lecturer in Sustainability and Climate Change Communication, University of Surrey.

This article is republished from The Conversation under a Creative Commons license. Read the original article.