In the summer of 2010, three designer friends decided to build a swimming pool. But they wanted to build it in an unlikely place: the middle of New York City’s pollution-choked East River. (They figured New Yorkers are surrounded by water, but never get to swim in it.) It was an odd idea. They would build a floating pool and use river water to fill it through a sophisticated filtration system. But it was even odder because municipal projects like a public swimming pool usually start inside government, not outside. And the designers wanted people to fund it directly -- not through taxes, but by donating money.
In June 2011, they posted a video of their proposed project on Kickstarter, the online fund-raising site best known for funding iPod watches, folding bikes and artisanal cheese shops. It was the first time anyone used Kickstarter to crowdfund a capital project. The designers sought $25,000. Within a week, their "+ pool" had gained so much buzz -- thanks in part to a cool animated video of the proposed pool -- that they had pulled in $41,547.
“We’re talking about this as a new model for how parts of the city can get made,” says Dong-Ping Wong, who with his two friends, Archie Coates and Jeffrey Franklin, is designing the pool. “People can take charge and reclaim parts of the city for public use. It’s an ability for the public to engage and have a say in what’s being built around them.”
Crowdfunding capital projects is gaining momentum. In Bogota, Columbia, the 66-story BD Bacata Downtown skyscraper will be partly owned by the community. In Rotterdam, the Netherlands, locals crowdfunded a bridge. On New York’s Lower East Side, a pair of architects are creating, and crowdfunding, the first-ever underground park in an abandoned trolley car station. And in February, the American Institute or Architects weighed in on the trend with its new report, Crowdfunding Architecture. It argued that architects -- whose role in funding is limited by real estate developers -- could seize on crowdfunding to start their own “self-selected” (not dictated and demanded) “passion projects,” building what they and the community need, not just what a developer wants.
The business opportunities -- for entrepreneurs, architects, community activists and Web startups -- are immense. There are several sites tapping into this innovative business model, including Neighbor.ly, ioby, Smallknot, Luky Ant and an entire city in Finland.
But crowdfunding a skyscraper -- or a $15 million public pool -- is not the same as funding a bike. First, the audience and funders of a simple consumer product could be worldwide, because the product can be shipped and the people supporting it probably want to buy it as well. But the pool is static. It stays in one place and you come to it. And the pool of funders for a pool is limited by geography. Cities like New York, London or Paris have millions of citizens and tourists who may have an interest in funding something they may one day use. But not necessarily. And smaller cities, with localized capital projects, will surely have a harder time.
Secondly, raising $15 million is impossible in a single Kickstart post. As a result, crowdfunding capital projects needs to be done in phases. And what’s funded in those phases isn’t really a pool. It’s something boring, like a feasibility study or a lab test. So how do you keep people, and their money, coming back for more?
“The biggest trick is how do you start breaking down the scale of a project like this and start funding the pieces?” Wong said, “And how do you keep people excited about it? That is the trickiest part about funding capital projects. Keeping funders motivated.”
Wong and his team needed their initial $25,000 just to test a primary filtration system. In their next round, they’ll be looking for $100,000 to build a test piece of the actual pool. Add in what Wong calls the “un-sexy” business of consulting fees, engineering revues and planning board approval and + pool’s cheerleaders could be seriously challenged.
Because of that, one of the crucial tools that he and other crowd funding designers use is a good narrative. “In a multi-year campaign, you need to keep things new and fresh and re-tell your story over and over,” said Dan Barasch, half the design team putting together the underground Low Line, a nod to its highly successful Chelsea predecessor, the High Line. Last year, the Low Line raised $150,000 on Kickstarter, 50 percent more than its goal. Since then, it has kept its social media audience and fans excited by regular posts. Barasch is also working places like the TED conference, ensuring further exposure. “You need to show the incremental progress as it relates to the overall goal,” he said, “without bogging people down in the unglamorous, behind-the-scenes work needed to get it done.”
Can a city be designed by its citizens?
Both the Low Line and + pool didn’t only raise awareness and money. They created a community that didn’t exist before. Each one now claims 20,000 to 30,000 followers on social media, along with up to 2,000 money-giving funders for each of them. This is why crowdfunding a city has enormous business potential. A generation of people who use social media, or who create their own tweeting channels, are accustomed to the idea of personalizing and shaping the world that they experience. And they are starting to ask why they shouldn’t be allowed to do this in what architects call the built environment. “More citizens expect, or at the very least desire, to be involved in the decisions in the built world around them,” says Bryan Boyer, a 32-year-old Harvard-trained architect.
Last year, Boyer helped found an experimental Web site called Brickstarter. Inspired by Kickstarter and the success of the + pool crowdfunding, he and his team from the Finish Innovation Fund, Sitra, a hybrid think tank and economic innovation incubator, put together a proto site to research this growing field and its larger business applications. “One of the problems you suffer in New York or anywhere is that it takes a lot of time to put together a legitimate proposal and shop around for financing and get local authorities behind it,” says Boyer. “If we help get that money up front, we can make it plausible.”
To do that, a site like Brickstarter -- built as “a provocation as much as a prototype,” says Boyer -- must educate people to ask the right question. “It’s not, ‘Can we scrape together $1 million for a fire station?” says Boyer. “It’s ‘Can we get enough money for a proposal?’”
It can also bring together disparate businesses or activists who might support or oppose an existing capital project and thus challenge its economic outcome. The California High Speed Rail project, a $9.9 billion public works project to connect several major cities, from Sacramento to San Diego, has diverse opponents, from anti-tax groups worried about footing the bill to environmentalists concerned about disrupting migratory habitats. These groups are most likely not in the same room strategizing. Having separate conversations and being divided strategically gives more power to developers. Boyer says he can see a site like Brickstarter offering to bring these people into one community. “The average citizen tends to not have time to attend planning board meetings,” he says. “We can make things transparent and easily accessible and give them combined power.” On the other hand, says Boyer, it can offer the same power to those who favor a project.
Another idea Boyer and his colleagues floated for Brickstarter: using your own tax money to fund a project of your choice. “You could imagine a situation where some of your tax money is given back to you as currency, or credits, on a site like Brickstarter, allowing you to decide what gets funded,” says Boyer. In Finland, something similar happens with the church. If you are Catholic or Anglican, part of your tax money is directed to the denomination you belong to. “This could help you shape your world.”
Boyer has taken the Brickstarter model and is now helping a city in eastern Finland, called Kotka, use it to apply it to their own capital projects. One project will let citizens use the platform to decide what to build on an empty piece of land next to a city museum, whether it be a flea market, a flower shop or a fish and chips stand. Another is a wind farm planned for the middle of the city and people will use the site to discuss its impact.
Perhaps the most remarkable thing about Brickstarter, which was funded in part by money from the Finish government, is that Boyer wants someone here in the United States to either take it over or use its research to build a money-making, community-generating site out of it. “From the beginning, I didn’t care if we built it or someone else does it,” he says. “It was meant as a way to show people this can be done and how to do it.”
Still, the creative business leaders who have helped blaze this trail, the guys from + pool and the Low Line, say a new model needs to be developed, and that’s where a lot of the innovative energy is now focused. “Kickstarter is a great platform, and we love them because of their amazing community of people who are looking to fund you and who have great enthusiasm for projects,” says the Low Line’s Dan Barasch. “But it’s not for every phase of development. You need to have tangible goals with a physical result, and so much of a big capital project is about intangible, yet very important steps you need.”
As result, Barash and his team are looking toward the High Line model of fundraising for their next round, tapping into foundations, wealthy benefactors and family trusts, as well as their core Kickstarter backers and cheerleaders. “The broadest base of our supporters probably don’t have 20 or 30 bucks to give every time we ask,” says Brarasch. “And that’s great, that’s OK. There are distinctions between donors and people at the community level of support. We saw seriously engaged people there and we can’t lose them. We don’t want to lose them. They’re a big reason that we are trying to build this.”
Photo: David Berkowitz/Flickr
This post was originally published on Smartplanet.com