Matching the crowd - Combining crowdfunding and institutional funding to get great ideas off the ground
This study examines the impact of matched crowdfunding as a new means of getting ideas and projects off the ground, through analysis of a £251,500 matched crowdfunding pilot for Arts and Heritage projects.
This study examines the impact of matched crowdfunding as a new means of getting ideas and projects off the ground, through analysis of a £251,500 matched crowdfunding pilot for arts and heritage projects.
- Matched crowdfunding can help leverage additional funds. The £251,500 in match funding provided by Arts Council England and Heritage Lottery Fund as part of the pilot helped leverage an additional £405,941 from the crowd of 4,970 backers.
- The pilot largely attracted new supporters and finance for arts and heritage organisations, rather than drawing from existing philanthropic sources.
- Matched crowdfunding goes beyond increasing financial contributions. 85% of fundraisers reported receiving non-financial contributions such as voluntary work offers and campaign design advice.
- Crowdfunding improves skill levels for individuals and organisations: More than two in three fundraisers reported that running the crowdfunding campaign significantly improved their pitching and fundraising skills.
- While crowdfunding can help fundraisers easily attract a global audience, in the majority of cases backers live less than 20 miles from the project they supported and the majority stated that they were going to see or experience the project in person.
- While matched crowdfunding attracts a diverse mix of backers in terms of age, education and average income, it risks being dominated by a few large donors, with the top 1% of backers giving 24% of the total crowd contribution.
A diverse range of funders are now using matched crowdfunding as a new way to raise money and support for new ideas and projects. In 2016 alone, crowdfunded projects received more than £1 million in matched funding. This figure is set to rise substantially in 2017.
Despite the rising interest and growth, until now there was little evidence on the financial and non-financial impacts of matched crowdfunding, and there had been no match funds that focus specifically on the arts or heritage sectors in the UK to date.
In order to address this lack of evidence, a pilot programme between the Department for Digital, Culture, Media and Sport, Heritage Lottery Fund, Arts Council England and Nesta set up two funds for arts and heritage projects, providing £251,500 in match funding for crowdfunded arts and heritage projects.
In total, 59 projects were funded through the pilot with support from 4,970 backers. Through surveys of backers and project owners, alongside analysis of crowdfunding platform data, this study looks at the financial and non-financial impact of match funding as a new means of getting projects off the ground.
- Try it… where funders are focusing on supporting small-scale projects they should, if they haven’t done so already, experiment with matched crowdfunding. While matched crowdfunding presents challenges to how funders currently operate, there are clear benefits that in most cases outweigh them.
- Help organisations make the most of crowdfunding through investing in crowdfunding skills alongside providing match funding.
- Make matched crowdfunding part of a wider funding strategy.
- Use crowdfunding to build skills and organisational resilience through the additional non-financial benefits that come with it.
- Look beyond matched crowdfunding for interventions that can help involve the crowd in decision-making.
- Invest time and resources into the co-design of match fund programmes with crowdfunding platforms.
Crowdfunding platforms should
- Develop more bespoke services to fit with the needs of funders.
- Rigorously measure and share evidence of what works.