Table Of ContentContributions to Finance and Accounting
Regina Lenart-Gansiniec
Jin Chen Editors
Crowdfunding
in the Public
Sector
Theory and Best Practices
Contributions to Finance and Accounting
The book series ‘Contributions to Finance and Accounting’ features the latest
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Regina Lenart-Gansiniec Jin Chen
Editors
Crowdfunding in the Public
Sector
Theory and Best Practices
Editors
ReginaLenart-Gansiniec JinChen
JagiellonianUniversityinKraków TsinghuaUniversity
Kraków,Poland Beijing,China
ISSN2730-6038 ISSN2730-6046 (electronic)
ContributionstoFinanceandAccounting
ISBN978-3-030-77840-8 ISBN978-3-030-77841-5 (eBook)
https://doi.org/10.1007/978-3-030-77841-5
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Preface
Inrecentyears,crowdfundinghasbecomeimportantandithasbeenenthusiastically
used not only by commercial organizations but also by the public sector. In the
public sector context, crowdfunding is the funding of projects which, directly or
indirectly,benefitfrom governmentfunds, assets, orsponsorship,andmayinclude
thedevelopmentofpublicassets.Itisexpectedthatcrowdfundingasanexampleof
processinnovationandinnovationinpublicsectormanagementwillhelpinsolving
social problems and to carry forward politically contentious services. This alterna-
tivesourceoffinancingintimesofconstrainedgovernmentbudgetsenablescitizens
to vote with their dollars online to bring ideas into reality. However, despite the
growing participation of public organization in the crowdfunding industry, little is
known. The lack of scholarly attention to crowdfunding in public sector is an
important omission in the literature, given that many public organizations around
theworldarealreadyactivelyutilizingit.
Thebook“CrowdfundinginPublicSector:TheoryandBestPractices”isafirst
comprehensivebookonthecrowdfundinginpublicsectorItheoryandpractice.This
bookshedsmorelightonthedevelopingconceptofcrowdfundinginpublicsector,
with an overview of current academic discussions and best practices on
crowdfundinginpublicsector.Thisbookapproachescrowdfundinginpublicsector
fromanintegratedperspective,addressingthedearthofpublicationsonthesubject.
This book explores the relationship between crowdfunding and collaborative gov-
ernance.Italsodescribesatypologyofcrowdfundinginpublicsectorwhichwillbe
useful to others in categorizing their crowdfunding approaches. It documents and
disseminates the veritable treasure trove of practical experience currently available
on crowdfunding in public sector. It offers a unique overview of what public
organizations around the world are doing to implement crowdfunding and how
theireffortsrelatetocarryforwardpoliticallycontentiousservices.Thebookgathers
awealthoftheoreticalinformation,ideas,bestpractices,andlessonslearnedinthe
context of executing concrete crowdfunding projects, and assesses methodological
approaches to integrating the topic of crowdfunding in public organizations
curricula.
v
vi Preface
Thisbookprovidesaglobaldefinitions,insights,andexamplesofthismanagerial
perspective resulting in a theoretical framework of crowdfunding in public sector.
Thisbook alsoexploresdifferentcrowdfundingapplicationsinpublicsectorssuch
as local government, higher education, schools, arts and culture organizations,
healthcare,energysector,andpoliceservices.Includingcontributionsfrominterna-
tional academics, scholars, and professionals within the field, this book provides a
global,multidimensionalperspectiveoncrowdfunding.Wehopethatyouwillfind
them informative and that they will help you shape your own thinking on
crowdfundinginpublicsector.
Kraków,Poland ReginaLenart-Gansiniec
Beijing,China JinChen
Introduction
Crowdfundingunderstoodasanopensearchofideasandmoneyhasproventobean
important and enduring concept. In the past decades, the crowdfunding platforms
suchasKickStarter,IndieGoGo,orCauseshavebeensignificantlyincreasingtheir
popularity.Scholarshavebeenpredominantlystudyingcrowdfundinginthecontext
ofnewventures,butexploringitinthepublicsectorisamissingpiecethatwillhelp
us in understanding the big picture of citizens’ engagement in innovation, science,
andgovernance.
I have researched the idea of Open Innovation for over a decade. As much as
OpenInnovation(Chesbrough2003,2020)highlightingtheimportanceofpurpose-
fulknowledgeinflowsandoutflowsisalmost20yearsold,theOpenInnovationin
Science(SusanneBecketal.2020)andOpenGovernance(Almiralletal.2014)are
still emerging phenomena. Open Innovation in Science encompasses purposeful
knowledge inflows and outflows within and across organizations and disciplines
along the entire research process. Open Governance also called Civic Open Inno-
vation concerns the knowledge inflows and outflows within and across the
governing boundaries of cities, municipalities (or counties), and regions where the
wider public—citizens (and often residents) get a chance to actively shape and
reshape the growth directions. As a result, services and decisions become more
open,transparent,andinclusive.
Historically “lay” citizens were only the recipients of science education and
legislationsmadebytheeducationalinstitutionsandgoverningbodies,respectively.
Theemergenceofmoredemocratizedmodelswasstimulatedbythedevelopmentof
search-expanding technologies. These allowed wider dissemination of innovative
ideas, popularization of exchange platforms, and (voluntary) participation in both
sourcing and funding activities (Dahlander et al. 2021). Although there may be a
different level of engagement, both crowdsourcing and crowdfunding may be
considered as very promising approaches to boosting citizens’ engagement in
innovation,science,andgovernance.
Besides technological developments, we have been also witnessing a strong
politicalbackupinembracingopenness.In2009,onhisfirstdayinoffice,President
vii
viii Introduction
Obama signed the Memorandum on Transparency and Open Government, which
wasfollowedbymultipleOpenInnovationinitiativessuchascontests,hackathons,
and campaigns. This Open Government initiative followed three principles for the
governmenttobetransparent,participatory,andcollaborative.Themainaimofthis
Memorandumwastoempowerthepublictoinfluenceimportantdecisionsthataffect
their lives. This gave them a possibility to track how the government spends the
money. The open data catalogue created in the USA was an inspiration to many
Europeancitiesandgovernments.Asaconsequence,EuropeanParliamentadopted
the Public Sector Information Directive in 2013 and Open Data Directive in 2017.
Built on the extensive consultations, these directives cover the reuse of publically
funded public sector information. With the changing mindset of citizens and
supportinglegislations,thelastbutnotleastelementistheexchangeplatform.
Crowdfundingfallsintooneofthedigitalwaysofaccessingexternalknowledge
(Bogers et al. 2017), which typically happens through a dedicated platform. The
platform links people who network and pool their money—the bakers with other
people ororganizations—theproponents.Thebackers emerging fromthecrowsof
the Internet users offer financial support for the proponents of project ideas. The
proponentsnotonlygetachancetocollectthenecessaryfundingforimplementing
their projects but also get exposure to feedback and early market entry screening
data.Scholarstendtofocusontheircrowdfundingstudiesonentrepreneurialideas
(Belleflammeetal.2014;Colomboetal.2015;Mollick2014),whichlargelycover
thecommercialside ofcrowdfundingwherethebakersexpectsomereturnoftheir
investment.Crowdfundinginthepublicsectorleansmoretowardsthephilanthropic
sideofcrowdfundingwherethebakerswanttocontributetoagreatergood.
Studyingcrowdfundinginthepublicsectorputsourattentiontothebroadersetof
institutional and infrastructural open innovation arrangements. Crowdfunding
enables, enhances, and empowers citizen’s innovation. The funding aspect is very
important for supporting various types of initiatives, but at the same time, it offers
citizen’s a way to influence the innovativeness, compliance, and integrity of the
publicsector.Tosomeextent,itmayalsochallengeitsperformanceandqualityby
highlightingpotentialareasofattentionandimprovement.
CrowdfundinginthePublicSector—Theory andBestPracticesoffersanexcel-
lentreminderofthetheoreticalfoundationsofcollaborativegovernancealongwith
very powerful practical examples from higher education, healthcare, the energy
sector,andbeyond.Theinterestincitizenconsultationsandparticipatoryfinancing
practices extends well beyond the United States and European Union, to Canada,
China, and the United Kingdom. Digitalization of crowdfunding practices allows
widerreachandimpactthuscreatenewopportunitiesforinnovation.Thedefinitions,
frameworks,andtypologiesfollowedbytheselected6diversecountry-sectorcases
canbefound onthepages here thatfollow.Itisexcitingandconvenienttohaveit
gathered all together in one book, covering multiple contributions. As it will
encouragescholarsandcitizensforfurtherexplorationofthetopicofcrowdfunding
inthepublicsectorandimplementationofitsbestpractices.
This new approach to Open Innovation will help cities, municipalities
(or counties), and regions create more effective, useful, and participatory services
Introduction ix
fortheircitizensandotherinvolvedstakeholders.Astheseparticipatoryandcollab-
orativegovernancepracticeshavebeenslowlyemerging,thechallengeistogetthem
morewidelyspreadbysharingbothgoodandbadexperiencesofOpenGovernance.
Further research and implementations inspired by Crowdfunding in the Public
Sector will allow us to write new chapters on purposeful knowledge inflows and
outflows within and across the governing boundaries where the citizens actively
contributetoservicesanddecisions,whichinturnbecomemoreopen,transparent,
andinclusive.
GarwoodCenter,UCBerkeley& AgnieszkaRadziwon
BusinessDevelopmentandTechnology,
Berkeley,CA,USA
AarhusUniversity,Aarhus,Denmark
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