Crowdfunding

The idea

Growth in internet use has made it easier for large numbers of people to access money from many small contributions instead of few large ones.

The problem

Banks and other large funders are struggling to meet society's funding needs in the wake of the recession. From the arts sector, to scientific research to funding innovative businesses, alternative methods of providing finance are needed.

What are we doing?

The 'Crowding In', 'Venture Crowd' and 'P2P Business Lending' reports looked at the breadth of areas crowdfunding is having an impact on as well as examining the challenges and opportunities for some specific applications of the model. Through the Innovation in Giving Fund Nesta has supported three crowdfunding intermediaries that are applying the model to increase levels of charitable giving. We are also producing practical information to those looking to engage with the model including a tips guide for those raising finance and a directory of sites to inform people which site best suits your funding needs.

The background

Nesta estimates that although only £120 million of funding went through crowdfunding in 2011 it has the potential to grow significantly in the future. Should this model address the challenges it faces as it grows, up to £15 billion of finance annually could be delivered through the model in the coming years.