I remember working the Urban Fresh project creating popup farmers markets for underserved communities that were food deserts. This was a great idea that was garnering tremendous results, but getting funding was nearly impossible and totally controlled by a non-profit that had complete power of the purse. No matter what results came from the community engagement the business depended on the non-profits ability to secure loans to grow the business. Flash forward to today and the advent of equity crowdfunding and the game has completely changed. I think about the Roots and Vine on Buy the Black real estate crowdfunding portal and how different the situation has been transformed.
The Power of Crowdfunding
Roots & Vines was able to create an offer on Buy the Block and get the initial funding that they needed in order to grow the business, but the funding was not the only benefit that was received. Crowdunding is a public event and anyone with an internet connection is able to view the offer, so not only was the campaign able to meet its funding goal, but it was able to secure add-on funding that allowed it to expand to a second location and engage multiple Black Farmers and community member on the Southside of Chicago to conduct business. The organization is now onto their second campaign with high hopes for their expansion.
The Multiple Benefits of Crowdfunding
The internet has revolutionized individuals’ and organizations’ ability to accumulate funding for things people care about, for things that are needed in underserved and disinvested neighborhoods that would not get done if it only depended on market forces. Crowdfunding is so much more than funding it empowers community organizing by adding a financial component to the organizing. Crowdfunding adds a pathway to inclusive investing and wealth building while providing access to capital for small businesses and real estate development.
Crowdfunding As The Community Rally Point
Just like the rally point in a military operation where everyone meets up to get organized crowdfunding helps communities in many ways. It can build lasting local buy-in, help groups avoid reliance on grants, and serve as a springboard to more major funding, and most importantly change the conversation about who gets funding because now the community has capital to run parallel to the entity that was raised by a group of individuals, which demonstrates social proof and market validation.
The Liberating Power of Crowdfunding
Crowdfunding has the ability to democratize financial systems, where empowered citizen investors catalyze the growth of locally-owned businesses and real estate ventures creating economic opportunity for everyone in the community. Crowdfunding provides a mechanism for community-led economic development that provides a paradigm shift in the way communities approach the local CDFI, CRA funders, and Community Foundation. The above mentioned organizations provide capital for market-driven economic development in underserved communities and when these organizations come to the table empty-handed they have no power to negotiate, but capital from a crowdfunding campaign empowers the community.
Crowdfunding is a game changer for the community organizer and communities that are moving in the direction of community-led development. This post went deep into the story of Roots and Vines and how that effort to combat the insidious impact that food deserts have on urban populations and how this organization was able to make an impact using community organizing and crowdfunding to move its concept forward by raising the needed capital and demonstrating social proof in the community. Crowdfunding has the ability to bring change to the stagnant and antiquated way that philanthropy and community finance are done. If you want more information on how to use crowdfunding in your community to raise capital for local businesses and real estate development and to grab your FREE comp of the eBook “The Crowdfunding Essentials” please visit ProjectCrowd.co!