Civic crowdfunding now finances civic infrastructure, but these platforms must navigate tension between growth and their social mission, says a study co-authored by Dr Matthew Grimes of Cambridge Judge Business School.
The advent of alternative finance has created opportunities for “civic crowdfunding” in which people raise money online to develop public assets such as playgrounds, sports centres and walkways – earning the name “platforms for the people”.
Yet unlike other platforms or networks such as membership organisations or social activities that attract like-minded people with similar agendas, the cross-sectoral nature of social-mission platforms (SMPs) increases challenges associated with divergent interests and goals. Such challenges are only rendered more difficult as participation increases on these platforms, stretching the platform into unanticipated directions.
So how do these SMPs rectify the desire for user growth with the need to maintain their original social missions? That tension is explored in a study co-authored by Dr Matthew Grimes, Reader in Innovation & Organisation at Cambridge Judge Business School, recently published in Strategic Management Journal.
“The possibility of mission drift is a threat to many platforms and organisations as they grow, but navigating mission drift is particularly crucial to social-mission platforms as such drift can challenge their very existence,” says Matthew. “The study describes the process by which these platforms encounter and address such dilemmas”.
Specifically, the study stresses the importance for SMPs to develop institutional boundaries (such as through mission statements which clarify platform activities) in order to ensure cultural and structural coherence as they enter new markets or sectors; to build institutional bridges (through value propositions which clarify the possibility of “win-win” outcomes) to welcome new cross-sectoral participants; and to draw up institutional blueprints that outline how multiple stakeholders should interact to create inclusive value (such as through templated processes).
The paper is based on a case study of one of the world’s leading civic crowdfunding platforms, UK-based Spacehive, which launched in 2012 with a mission to “make it easy as possible for as many people as possible to bring their civic environment to life”. By the end of 2018, the platform had raised more than £10.5 million for hundreds of civic projects around the UK, with 51 per cent of these labelled as “successfully supported”. (Spacehive applies a five per cent fee to funds collected by successfully funded projects).
The research examines 537 projects listed as having succeeded between 2012 and 2018 – looking at project growth over time, how various participants used the platform, and how this participation was consistent with or diverged from the platform’s social mission.
The study found that Spacehive successfully grew by presenting itself in very practical terms as an “online store for social goods” that provides a novel way of ensuring that community organisers’ goals were realised – and contrasting itself against idea-choking bureaucracy which it perceived as dooming civic projects.
“The trouble is there’s a gap between nice ideas and action – funding. Spacehive cuts to the chase. We let people put their money where their mouth is and contribute towards the costs of the improvements they want,” as Spacehive put it in a blog post heralding its launch.
The study said that this approach helped Spacehive win acceptance by groups whose interests may not always dovetail.
“By theorising the platform’s capacity to fit with existing solutions from each of the groups, and by doing so in a way that celebrated the intersectional nature of these separate stakeholder groups, Spacehive created the perception of optimal distinctiveness across different sectors, obtaining legitimacy within each,” the study found.
The study – entitled “Platforms for the people: enabling civic crowdfunding through the cultivation of institutional infrastructure” – is co-authored by Dr Danielle Logue, Associate Professor at the University of Technology in Sydney, Australia, and a Visiting Associate Fellow at Cambridge Judge Business School, and by Dr Matthew Grimes, Reader in Innovation & Organisation at Cambridge Judge Business School.