skip to content

Executive and professional education

 

Civic crowdfunding now finances civic infrastructure, but these platforms must navigate tension between growth and their social mission, says a study co-authored by Dr Matthew Grimes of Cambridge Judge Business School.

Person discussing an online platform with two other people, a laptop is in shot on the desk.

The advent of alternative finance
has created opportunities for “civic crowdfunding” in which people
raise money online to develop public assets such as playgrounds, sports centres
and walkways – earning the name “platforms for the people”.

Yet unlike other platforms or networks
such as membership organisations or social activities that attract like-minded
people with similar agendas, the cross-sectoral nature of social-mission
platforms (SMPs) increases challenges associated with divergent interests and
goals. Such challenges are only rendered more difficult as participation
increases on these platforms, stretching the platform into unanticipated
directions.

So how do these SMPs rectify the desire
for user growth with the need to maintain their original social missions? That
tension is explored in a study co-authored by Dr Matthew Grimes, Reader in
Innovation & Organisation at Cambridge Judge Business School, recently published
in Strategic Management Journal.

Dr Matthew Grimes
Dr Matthew Grimes

“The possibility of mission
drift is a threat to many platforms and organisations as they grow, but navigating
mission drift is particularly crucial to social-mission platforms as such drift
can challenge their very existence,” says Matthew. “The study describes
the process by which these platforms encounter and address such dilemmas”.

Specifically, the study stresses
the importance for SMPs to develop institutional boundaries (such as through
mission statements which clarify platform activities) in order to ensure
cultural and structural coherence as they enter new markets or sectors; to
build institutional bridges (through value propositions which clarify the
possibility of “win-win” outcomes) to welcome new cross-sectoral participants;
and to draw up institutional blueprints that outline how multiple stakeholders should
interact to create inclusive value (such as through templated processes).

The paper is based on a case study
of one of the world’s leading civic crowdfunding platforms, UK-based Spacehive,
which launched in 2012 with a mission to “make it easy as possible for as
many people as possible to bring their civic environment to life”. By the
end of 2018, the platform had raised more than £10.5 million for hundreds of civic
projects around the UK, with 51 per cent of these labelled as “successfully
supported”. (Spacehive applies a five per cent fee to funds collected by
successfully funded projects).

The research examines 537 projects
listed as having succeeded between 2012 and 2018 – looking at project growth
over time, how various participants used the platform, and how this
participation was consistent with or diverged from the platform’s social
mission.

The study found that Spacehive successfully
grew by presenting itself in very practical terms as an “online store for
social goods” that provides a novel way of ensuring that community
organisers’ goals were realised – and contrasting itself against idea-choking
bureaucracy which it perceived as dooming civic projects.

“The trouble is there’s a gap
between nice ideas and action – funding. Spacehive cuts to the chase. We let
people put their money where their mouth is and contribute towards the costs of
the improvements they want,” as Spacehive put it in a blog post heralding
its launch.

The study said that this approach
helped Spacehive win acceptance by groups whose interests may not always
dovetail.

“By theorising the platform’s
capacity to fit with existing solutions from each of the groups, and by doing
so in a way that celebrated the intersectional nature of these separate
stakeholder groups, Spacehive created the perception of optimal distinctiveness
across different sectors, obtaining legitimacy within each,” the study
found.

The study – entitled “Platforms for the people: enabling civic crowdfunding through the cultivation of institutional infrastructure” – is co-authored by Dr Danielle Logue, Associate Professor at the University of Technology in Sydney, Australia, and a Visiting Associate Fellow at Cambridge Judge Business School, and by Dr Matthew Grimes, Reader in Innovation & Organisation at Cambridge Judge Business School.