Selected Readings on Crowdsourcing Funds

Curated on Posted on by Andrew Young

The Living Library’s Selected Readings series seeks to build a knowledge base on innovative approaches for improving the effectiveness and legitimacy of governance. This curated and annotated collection of recommended works on the topic of crowdsourcing was originally published in 2013.

Crowdsourcing funds, or crowdfunding, is an emerging method for raising money that allows a wide pool of people to make small investments, gain access to ideas and projects they feel personally connected to, and spur growth in small businesses and social ventures. Popular crowdfunding platforms like Kickstarter and Indiegogo helped bring the practice into the public consciousness. Now, civic crowdfunding platforms like Citizinvestor and Spacehive are helping to apply this innovative funding model already in use for helping to fund artists, charities and inventors to help address public concerns traditionally considered under government’s purview.

Crowdfunding has also received recent attention from policymakers in the US through the US Securities JOBS Act, which provides an exemption from the registration requirements for offerings of securities by a company made through an SEC registered Crowdfunding Platform.

Selected Reading List (in alphabetical order)

Annotated Selected Reading List (in alphabetical order)

Aitamurto, Tanja. “The Impact of Crowdfunding on Journalism.” Journalism Practice 5, no. 4 (2011): 429–445. http://bit.ly/1bk4wNI.

  • This article analyzes the impact of crowdfunding on journalism, where, “readers’ donations accumulate into judgments about the issues that need to be covered.”
  • Aitamurto’s central findings inspire optimism regarding the potential of crowdfunding for the public good. She finds that, “From the donor’s perspective, donating does not create a strong relationship from donor to journalist or to the story to which they contributed;” rather, “[t]he primary motivation for donating is to contribute to the common good and social change.”

Baeck, Peter and Liam Collins. Working the Crowd: A Short Guide to Crowdfunding and How It Can Work for You. Nesta, May 2013. http://bit.ly/Hkl3rx.

  • This report “aims to give a quick overview of crowdfunding, the different versions of the model and how they work.”
  •  The authors list four technological innovations that have contributed to the growth of modern crowdfunding:
    • An online place for pitches
    • Moving your money with a click
    • The social engine
    • Fueling campaigns with algorithms
  • Baeck and Collins consider public and social projects to be one of the areas where crowdfunding can have a significant impact. They argue that civic crowdfunding “has the potential to disrupt how money for charitable causes is sourced and how public services and spaces are used and paid for.”

Best, Jason, Sherwood Neiss and Davis Jones. “How Crowdfund Investing Helps Solve Three Pressing Socioeconomic Challenges.” Crowdfunding PR, Social Media & Marketing Campaigns. http://bit.ly/1aaTGwQ.

  • This paper outlines the forces driving the widespread use of crowdfund investing, namely social media, the existence of funding systems that marginalize people outside of major urban centers and the ability of people to function remotely from their work spaces.
  • The authors also discuss a number of public-facing benefits of crowdfund investing:
    • Crowdfund Investing Creates Jobs
    • Bringing capital in off the sidelines for use by small businesses
    • Funding entrepreneurs everywhere
    • Capital no longer for the chosen few
    • Crowdfund Investing Grows GDP
    • Reduction in the failure rate of small businesses
    • Crowd monitoring reduces agency costs

De Buysere, Kristof, Oliver Gajda, Ronald Kleverlaan, Dan Marom, and Matthias Klaes. A Framework for European Crowdfunding, 2012. http://bit.ly/1aaTFsE.

  • This paper seeks to provide a “concise overview of the state of crowdfunding in Europe, with the aim of establishing policy and a distinct framework for the European crowdfunding industry,” which the authors believe, “will aid in the economic recovery of Europe.”
  • The authors, in their advocacy for greater crowdfunding opportunities for businesses in Europe, provide a rationale for the practice that also helps demonstrate the potential benefits of greater crowdfunding opportunities within government. They argue that, “Crowdfunding can offer unique support for budding and existing entrepreneurs on multiple levels. No other investment form, be it debt or equity, can provide the benefits of pre-sales, market research, word-of-mouth promotion, and crowd wisdom without additional cost.”

Hollow, Matthew. “Crowdfunding and Civic Society in Europe: A Profitable Partnership?” Open Citizenship 4, no. 1 (May 20, 2013). http://bit.ly/1cgzefL.

  • In this paper, Hollow explores the rise of crowdfunding platforms (CFPs), particularly related to civil society. He notes that, “[f]or civil society activists and others concerned with local welfare issues, the emergence of these new CFPs has been hugely significant: It has opened up a new source of funding when governments and businesses around the world are cutting back on their spending.”
  • Hollow argues that, “aside from their evident financial and economic benefits, CFPs also have the capacity to help foster and strengthen non-parliamentary democratic structures and practices. As such, they should be supported and encouraged as part of a framework of further European democratization and civic integration.”

Mollick, Ethan R. “The Dynamics of Crowdfunding: An Exploratory Study.” Journal of Business Venturing (June 26, 2013). http://bit.ly/1aaTJIV.

  • This paper “offers a description of the underlying dynamics of success and failure among crowdfunded ventures,” focusing on how personal networks and the project quality and viability have an impact on the success of crowdfunding efforts.
  • Mollick also highlights how other factors, like the geography of the project, design choices made by crowdfunding sites and developments in technology in this space all have an influence on the relationship between backers and project founders.
  • The paper finally demonstrates that projects that succeed do so by a small margin and those that fail seemingly by a large margin suggesting the influence of social bias and crowd influence.

Stemler, Abbey R. “The JOBS Act and Crowdfunding: Harnessing the Power—and Money—of the Masses.” Business Horizons 56, no. 3 (May 2013): 271–275. http://bit.ly/1ih9lts.

  • This paper discusses the Jumpstart Our Business Startups (JOBS) Act signed into law by President Obama in 2012, with a specific focus on the CROWDFUND Act, which enables entrepreneurs and small business owners to sell limited equity in their companies to a “crowd” of investors.
  • The objective of the Act is to exempt crowdfunding from registration requirement costs, allowing the potential of equity-based funding to be realized, by creating a pathway for underfunded entrepreneurs to access otherwise inaccessible streams of funding.
  • Stemler argues that the Act helps to legitimize crowdfunding as a community-building and fundraising tool for the business community, and also helps build better relationships between small business owners and government.

Citizen participation in municipal budgeting: Origins, practices, impact

Curated on Posted on by Stefaan Verhulst
Leighton Walter Kille: “Citizen participation in governance is generally limited to the ballot box in the United States: If you don’t like what the last year’s crop of politicians is up to, throw them out of office next year. Residents almost never have a say on budget decisions beyond holding protests at press conferences or picketing city hall. Appointed community boards are found in New York and other municipalities, but their roles are strictly advisory. Still, more participation can lead to greater perceptions of procedural fairness and support for government, some research has shown.

For residents of other countries, more options exist. A practice known as “participatory budgeting” (PB) allows citizens to determine how some government funds are used. As detailed in a 2010 study by political scientist Yves Sintomer of the University of Paris and others, “Learning from the South: Participatory Budgeting Worldwide,” it was first developed in Porto Alegre, Brazil, in the late 1980s. Residents took part in local and citywide assemblies to help establish spending priorities for a select portion of the city’s spending budget. Larger issues such as taxation, debt service and pensions were specifically excluded. (A 2003 study from the Inter-American Development Bank and Harvard University goes deep into the specifics of the Brazilian experience.)
Since this beginning, participatory budgeting has spread to hundreds of other cities around the world, Sintomer and his team state: “There are between 511 and 920 participatory budgets in Latin America: more than the half of the participatory budgets in the world, where we can count between 795 and 1,469 experiences.” The range of numbers is an indication of how widely definition of participatory budgeting varies. Interest in the United States has been growing, with a number of New York council districts using the technique, as well as Chicago and Vallejo, California.
A 2013 paper in the International Journal of Urban and Regional Research, “The Struggle for a Voice: Tensions between Associations and Citizens in Participatory Budgeting,” notes that “the heterogeneous nature of the existing experiments calls into question even the possibility of defining [participatory budgeting].” Similarly, in a 2012 issue of the Journal of Public Deliberation dedicated to the issue, the authors note that “there is no standardized set of ‘best practices’ that governments are adopting, but there are a broader set of principles that are adapted by local governments to meet local circumstances.” Writing in the issue, Brian Wampler of Boise State University, states that there are four main principles: active citizen participation; increased citizen authority; improved governmental transparency; and reallocation of resources to improve social justice.
A 2013 study in the American Review of Public Administration, “Citizen Input in the Budget Process: When Does It Matter Most?” examines the impact of public participation on organizational effectiveness. The researchers, Hai (David) Guo and Milena I. Neshkova of Florida International University, used survey data from state departments of transportation to examine the effectiveness of citizen input at four different stages of the budgeting process: information sharing, budget discussion, budget decision and program assessment.
The findings of the study include:

  • Citizen participation is positively correlated with higher organizational performance. “In general if a state DOT adopts more citizen input strategies in the budget process, it achieves better outcomes. In other words, other things held equal, more citizen participation in the budget process is associated with fewer poor-quality roads and less fatalities on state highways.”
  • In terms of road condition, citizen participation makes a difference at all but the budget discussion stage.
  • Overall, citizen input matters most at the information-sharing and program-assessment stages. Consequently, “public managers should seek public input at these stages not only because it is normatively desirable but also for the very practical reasons of achieving better performance. When conveyed at the information-sharing stage, citizens’ preferences can be taken into account by decision makers and incorporated into the budget priorities.”

Mexico City Open Database Improves Transit Efficiency, Helps Commuters

Curated on Posted on by Stefaan Verhulst

The World Bank: “Mexico City residents make 32 million vehicle trips a day, of which over 20 million are via public transport. These use 12 subway lines, four rapid transit lines, eight trolleybus and light rail lines, a suburban rail line, a hundred formal bus routes and over 1,400 “colectivo” minibus routes, along 260 public bike stations. Since the 1970s, five separate agencies have supervised this network, grouped under SETRAVI, Mexico City’s public transit authority. And although each agency has made attempts to collect and store data on passenger counts, route licenses, travel times, and stop locations, these data have never been assembled in one place….

In November 2012, the Bank’s Latin America and Caribbean Transport Unit—with support from the Energy Sector Management Assistance Program (ESMAP)—began providing SETRAVI with technical assistance to develop a new digital platform to collect and manage urban transport data.  This new system is built to the General Transit Feed Specification (GTFS), the de facto standard for cities in recording transit data.
GTFS, created in 2005 by Google and the US city of Portland, Oregon., is an open standard that can be shared and used by anyone. It enables the collection, storage, publication and updating of information on transit routes, times, stops and other important public transport data.
Representatives from each transit agency were enrolled by SETRAVI to crisscross the capital, using TransitWand, an open-source app on their mobile phones, to collect real-time data such as routes, speed, location of bus stops and frequency of train departures.  The data collected were then fed into a data management portal and converted into GTFS.
Despite its simplicity and ease of use, there was one major hurdle to adapting GTFS for Mexico City. The standard was too rigid to incorporate data related to non-scheduled services such as the thousands of colectivo minibuses traversing the city.  As such, another objective of the World Bank scheme was to pilot a “GTFS-Lite” specification that could measure forms of transport that operated with flexible routes and stopping points.
With “GTFS-lite”, Mexico City’s urban planners have access to comparable data on minibuses. This helps them visualize route configurations to determine where best to add or eliminate services, how to plan for integration with more structured transit services, regulate and improve service, and plan for the longer-term future.
Mexico City’s GTFS data have been made public, so that third party software developers can use them to innovate and create applications—such as trip planners and timetable publishers—that can be used on smartphones and other devices.
The GTFS feed for Mexico City will also help the city’s transit agencies develop practical open tools. For example, a real-time tracking tool that informs users of disruptions in the system and provides route change options has already been developed with World Bank assistance…”

The GovLab Academy: A Community and Platform for Learning and Teaching Governance Innovations

Curated on Posted on by Stefaan Verhulst

Press Release: “Today the Governance Lab (The GovLab) launches The GovLab Academy at the Open Government Partnership Annual Meeting in London.
Available at www.thegovlabacademy.org, the Academy is a free online community for those wanting to teach and learn how to solve public problems and improve lives using innovations in governance. A partnership between The GovLab  at New York University and MIT Media Lab’s Online Learning Initiative, the site launching today offers curated videos, podcasts, readings and activities designed to enable the purpose driven learner to deepen his or her practical knowledge at her own pace.
The GovLab Academy is funded by a grant from the John S. and James L. Knight Foundation. “The GovLab Academy addresses a growing need among policy makers at all levels – city, federal and global – to leverage advances in technology to govern differently,” says Carol Coletta, Vice President of Community and National Initiatives at the Knight Foundation.  “By connecting the latest technological innovations to a community of willing mentors, the Academy has the potential to catalyze more experimentation in a sector that badly needs it.”
Initial topics include using data to improve policymaking and cover the role of big data, urban analytics, smart disclosure and open data in governance. A second track focuses on online engagement and includes practical strategies for using crowdsourcing to solicit ideas, organize distributed work and gather data.  The site features both curated content drawn from a variety of sources and original interviews with innovators from government, civil society, the tech industry, the arts and academia talking about their work around the world implementing innovations in practice, what worked and what didn’t, to improve real people’s lives.
Beth Noveck, Founder and Director of The GovLab, describes its mission: “The Academy is an experiment in peer production where every teacher is a learner and every learner a teacher. Consistent with The GovLab’s commitment to measuring what works, we want to measure our success by the people contributing as well as consuming content. We invite everyone with ideas, stories, insights and practical wisdom to contribute to what we hope will be a thriving and diverse community for social change”.”

Boosting Innovation by Rethinking Government Procurement

Curated on Posted on by Stefaan Verhulst

Sarah Rich in Government Technology: “Earlier this month, Philadelphia announced a new 12-week accelerator program called FastFWD that will soon select 10 entrepreneurs to develop innovative projects around public safety challenges. One end goal is that the city will award contracts to several of the projects developed during the program.
FastFWD comes on the heels of a newly launched innovation center by North Carolina that will let the state test technologies before purchasing them. Both initiatives are attempts to ease frustration with government procurement processes that tend to discourage innovation and limit flexibility.
The traditional government RFP process — with its long timelines, complex rules and tight guidelines around liability — tends to scare off some of the IT industry’s most innovative companies, said Dugan Petty, former Oregon CIO and procurement director…In addition, traditional RFPs can rob both vendors and customers of the ability to adjust projects as new needs are discovered. Jurisdictions may not fully understand their business requirements when an RFP is drawn up, Petty said, but contractors often can’t deviate from the scope of the RFP once the contract is awarded….
To help rethink some of these restrictions and find better ways to procure technology, North Carolina plans to test products before purchasing them in the state’s new innovation center… Philadelphia’s bid to improve procurement involves incubating startups through the city’s new accelerator program. Entrepreneurs and the city will work together upfront to identify community problems and then develop innovative solutions, according to Story Bellows, co-director of Mayor Michael Nutter’s Office of New Urban Mechanics…
Petty, who now serves as a senior fellow for e.Republic’s Center for Digital Government, says both North Carolina and Philadelphia are developing more effective procurement practices. “The key thing here is this is now a new approach that is helping to evolve procurement technology in a way that keeps up with what’s out there on the industry side,” Petty said. “I think a lot of people should be evaluating these incubator move-to-contract scenarios because they minimize the risk of the project.”

Smart Citizens

Curated on Posted on by Stefaan Verhulst

FutureEverything: “This publication aims to shift the debate on the future of cities towards the central place of citizens, and of decentralised, open urban infrastructures. It provides a global perspective on how cities can create the policies, structures and tools to engender a more innovative and participatory society. The publication contains a series of 23 short essays representing some of the key voices developing an emerging discourse around Smart Citizens.  Contributors include:

  • Dan Hill, Smart Citizens pioneer and CEO of communications research centre and transdisciplinary studio Fabrica on why Smart Citizens Make Smart Cities.
  • Anthony Townsend, urban planner, forecaster and author of Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia on the tensions between place-making and city-making on the role of mobile technologies in changing the way that people interact with their surroundings.
  • Paul Maltby, Director of the Government Innovation Group and of the Open Data and Transparency in the UK Cabinet Office on how government can support a smarter society.
  • Aditya Dev Sood, Founder and CEO of the Center for Knowledge Societies, presents polarised hypothetical futures for India in 2025 that argues for the use of technology to bridge gaps in social inequality.
  • Adam Greenfield, New York City-based writer and urbanist, on Recuperating the Smart City.

Editors: Drew Hemment, Anthony Townsend
Download Here.“

Residents remix their neighborhood’s streets through platform

Curated on Posted on by Stefaan Verhulst

Springwise: “City residents may not have degrees in urban planning, but their everyday use of high streets, parks and main roads means they have some valuable input into what’s best for their local environment. A new website called Streetmix is helping to empower citizens, enabling them to become architects with an easy-to-use street-building platform.
Developed by Code for America, the site greets users with a colorful cartoon representation of a typical street, split into segments of varying widths. Designers can then swap and change each piece into road, cycle paths, pedestrian areas, bus stops, bike racks and other amenities, as well as alter their dimensions. Users can create their own perfect high street or use the exact measurements of their own neighborhood to come up with new propositions for planned construction work. Indeed, Streetmix has already found use among residents and organizations to demonstrate how to better use the local space available. Kansas City’s Bike Walk KC has utilized the platform to show how new bike lanes could figure in an upcoming study of traffic flow in the region, while New Zealand’s Transport Blog has presented several alternatives to current street layouts in Auckland.
Streetmix is an easy-to-use visualization tool that can help amateurs present their ideas to local authorities in a more coherent way, potentially increasing the chances of politicians hearing calls for change. Are there other ways to help laymen express complex ideas more eloquently?”
Spotted by Murtaza Patel, written by Springwise

7 Tactics for 21st-Century Cities

Curated on Posted on by Stefaan Verhulst

Abhi Nemani, co-director of Code for America: “Be it the burden placed on them by shrinking federal support, or the opportunity presented by modern technology, 21st-century cities are finding new ways to do things. For four years, Code for America has worked with dozens of cities, each finding creative ways to solve neighborhood problems, build local capacity and steward a national network. These aren’t one-offs. Cities are championing fundamental, institutional reforms to commit to an ongoing innovation agenda.
Here are a few of the ways how:

  1. …Create an office of new urban mechanics or appoint a chief innovation officer…
  2. …Appoint a chief data officer or create an office of performance management/enhancement…
  3. …Adopt the Gov.UK Design Principles, and require plain, human language on every interface….
  4. …Share open source technology with a sister city or change procurement rules to make it easier to redeploy civic tech….
  5. …Work with the local civic tech community and engage citizens for their feedback on city policy through events, tech and existing forums…
  6. …Create an open data policy and adopt open data specifications…
  7. …Attract tech talent into city leadership, and create training opportunities citywide to level up the tech literacy for city staff…”

Building a Smarter City

Curated on Posted on by Stefaan Verhulst

PSFK: “As cities around the world grow in size, one of the major challenges will be how to make city services and infrastructure more adaptive and responsive in order to keep existing systems running efficiently, while expanding to accommodate greater need. In our Future Of Cities report, PSFK Labs investigated the key trends and pressing issues that will play a role in shaping the evolution of urban environments over the next decade.

A major theme identified in the report is Sensible Cities, which is bringing intelligence to the city and its citizens through the free flow of information and data, helping improve both immediate and long term decision making. This theme consists of six key trends: Citizen Sensor Networks, Hyperlocal Reporting, Just-In-Time Alerts, Proximity Services, Data Transparency, and Intelligent Transport.

The Citizen Sensor Networks trend described in the Future Of Cities report highlights how sensor-laden personal electronics are enabling everyday people to passive collect environmental data and other information about their communities. When fed back into centralized, public databases for analysis, this accessible pool of knowledge enables any  interested party to make more informed choices about their surroundings. These feedback systems require little infrastructure, and transform people into sensor nodes with little effort on their part. An example of this type of network in action is Street Bump, which  is a crowdsourcing project that helps residents improve their neighborhood streets by collecting data around real-time road conditions while they drive. Using the mobile application’s motion- detecting accelerometer, Street Bump is able to sense when a bump is hit, while the phone’s GPS records and transmits the location.

retio-app

The next trend of Hyperlocal Reporting describes how crowdsourced information platforms are changing the top-down nature of how news is gathered and disseminated by placing reporting tools in the hands of citizens, allowing any individual to instantly broadcast about what is important to them. Often using mobile phone technology, these information monitoring systems not only provide real-time, location specific data, but also boost civic engagement by establishing direct channels of communication between an individual and their community. A good example of this is Retio, which is a mobile application that allows Mexican citizens to report on organized crime and corruption using social media. Each issue is plotted on a map, allowing users and authorities to get an overall idea of what has been reported or narrow results down to specific incidents.

…

.openspending

Data Transparency is a trend that examines how city administrators, institutions, and companies are publicly sharing data generated within their systems to add new levels of openness and accountability. Availability of this information not only strengthens civic engagement, but also establishes a collaborative agenda at all levels of government that empowers citizens through greater access and agency. For example, OpenSpending is a mobile and web-based application that allows citizens in participating cities to examine where their taxes are being spent through interactive visualizations. Citizens can review their personal share of public works, examine local impacts of public spending, rate and vote on proposed plans for spending and monitor the progress of projects that are or are not underway…”

Smart Machines: IBM's Watson and the Era of Cognitive Computing

Curated on Posted on by Stefaan Verhulst
New book from Columbia Business School Publishing: “We are crossing a new frontier in the evolution of computing and entering the era of cognitive systems. The victory of IBM’s Watson on the television quiz show Jeopardy! revealed how scientists and engineers at IBM and elsewhere are pushing the boundaries of science and technology to create machines that sense, learn, reason, and interact with people in new ways to provide insight and advice.
In Smart Machines, John E. Kelly III, director of IBM Research, and Steve Hamm, a writer at IBM and a former business and technology journalist, introduce the fascinating world of “cognitive systems” to general audiences and provide a window into the future of computing. Cognitive systems promise to penetrate complexity and assist people and organizations in better decision making. They can help doctors evaluate and treat patients, augment the ways we see, anticipate major weather events, and contribute to smarter urban planning. Kelly and Hamm’s comprehensive perspective describes this technology inside and out and explains how it will help us conquer the harnessing and understanding of “big data,” one of the major computing challenges facing businesses and governments in the coming decades. Absorbing and impassioned, their book will inspire governments, academics, and the global tech industry to work together to power this exciting wave in innovation.”
See also Why cognitive systems?