Creative Financing Options for Sustainability Projects

A March 12 Sustainable City Network article examined how local governments are exploring creative financing options for infrastructure or sustainability initiatives in light of ongoing budget challenges.  The article noted that while Colorado’s local governments can expect extra revenue from legalized marijuana, other local jurisdictions cannot utilize “[s]uch a distinctive way of generating new money.”  Instead, the article reported on presentations made at the 2014 New Partners for Smart Growth conference relating to crowdfunding and philanthropic foundations.


One session, “Follow the Crowd: New Funding and Civic Engagement Tools for Equitable Development,” addressed how funding models are shifting and new avenues are opening up to basically anyone with an internet connection, assisted by recent legislation and an increasingly civic-minded public seeking to connect with each other and support their communities.

One model discussed – crowdfunding – has become a buzzword in recent years. Popularized by platforms such as Kickstarter and Indiegogo, crowdfunding provides a way for many people to pool resources, typically through online donations, toward a larger goal. Ryan Stover, co-founder and chief creative officer for a Fort Collins, Colo.-based crowdfunding site called Community Funded, described the fundraising tool as “a big shift in the way things are being funded.”  …

Crowdfunding could be modified and used for many different purposes, Stover said, including use by government entities.

“We’ve had conversations with governments of all sizes,” he said. “There’s the idea of taking these tools and you can put them on any website and open up any platform. It works great for government programs aimed at revitalizing and creating startups and business incubators. Things are being created already. It’s a set of tools that can be adapted and fit to any niche.”

Philanthropic Foundations

Meanwhile, philanthropic foundations also remain a stable option for cities and organizations in need of supplemental funding to support programming. A session called “Where’s the Money: 2014 Smart Growth Funding Report” brought together representatives from several well-known philanthropic foundations to relate trends and offer advice on funding opportunities.

Panelists returned to themes of resilience and adaptability in their recommendations. Funding appeals related to climate change mitigation also are particularly appealing to foundations right now, they reported. Panelist Francesca Vietor, program director with the San Francisco Foundation, emphasized the need for grant applicants to also be cognizant of the country’s shifting demographics. …

Scot Spencer, associate director of advocacy and influence for the Annie E. Casey Foundation, emphasized the powerful role that philanthropy can play. He cited as an example the aftermath of Superstorm Sandy in 2012, when the Federal Emergency Management Agency (FEMA) was limited in the ways it could offer assistance to affected communities.

According to Spencer, about 20 early childhood centers were devastated by the storm, but FEMA was able to offer assistance only to federally-funded Head Start-affiliated centers. This not only created the burden of leaving a number of childcare centers closed for an extended period of time, but also caused some parents to be unable to work as a result of the absence of childcare.

“But a bunch of philanthropies came together to give money upfront to get some things taken care of,” Spencer said. “In times of emergency, philanthropy can come to a pretty hefty rescue and in a pretty good way that government cannot at all times.”

The article noted that the philanthropic panelists cautioned that philanthropy could be “additive” but should not be viewed as a primary means of funding.  They agreed that crowdfunding could become an important financing option in the near future.