A successful large crowdfunding effort in a medium-sized community is, ipso facto, widely popular. If roughly 40,000 people have donated to buy a beach and sandbar, they’re going to be proud of themselves and not want the effort criticised. And it’s hard to argue that the two million dollars spent on Awaroa beach is a worse use of money than, say, the twenty million spent in a typical week on the lottery. The government did end up kicking in $350,000, but the property must be worth nearly that much to the nation.
Crowdfunding is like the lottery in another way. As long as it’s mostly for fun, there’s no problem, but if we start relying on it we’re in big trouble. Public funding through government is, and should be, mostly boring; crowdfunding isn’t. Crowdfunding will work better for buying a popular camping beach than for the sort of inaccessible and unknown forest or swamp that’s actually of conservation value. It’s intrinsically impossible for more than a few crowdfunding campaigns to get the wide media attention that Awaroa beach it, and there’s no reason to expect the ones that do get this support to be the most valuable.
I do need to distinguish big-ticket public-good crowdfunding from two other types that are more valuable. One is old-fashioned fundraising through personal contacts – asking people you know to ask people they know to support a cause that’s important to you. The ‘Twitter Aunties’ givealittle page for Te Whare Marama refuge is an example– the internet makes it easier (and potentially more anonymous), but the idea isn’t new. The other is the Kickstarter model of finding interested buyers for products that don’t yet exist, in order to raise initial capital. Kickstarting is new, and it while it doesn’t always work, it’s a good option.
So, two cheers for crowdfunding. The internet has made it easier to connect willing donors and buyers with causes and products, and that’s entirely good. We can have a few lucky fundraising schemes that make it to the big time, and that’s mostly good. But crowdfunding decisions can rarely manage the tedious and careful accounting of alternatives that lie behind sensible public spending by governments or charitable NGOs.
Personally, I don’t even try to do any serious analysis when thinking about crowdfunding appeals, and I expect most people are the same – and as long as the money isn’t being subtracted from other sources of public-good funding, that’s not a problem.