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For cash-strapped cities, crowdfunding comes to the rescue

Ottawa city councillor Marianne Wilkinson poses for a photograph in front of the under construction community centre in Ottawa on July 6, 2012.

DAVE CHAN/The Globe and Mail

It has been used to raise money for theatre productions, book projects and even bullied bus monitors.

And now, urban thinkers are hoping a type of Internet-enabled microfinancing can fill a gap in municipal funding created by budget cuts in an age of austerity.

Cities across Canada and around the world have been inspired by crowdfunding websites, such as Kickstarter and Indiegogo, online venues where people donate money to bankroll everything from theatre productions to book projects.

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"I do think we're entering a new phase where we're going to see more of a public-private partnership of sorts," said Bruce Katz, director of the metropolitan policy program at the Brookings Institution. "It's a natural progression from crowdsourcing ideas to crowdsourcing finance. The question is, how?"

At the recent North by Northeast (NXNE) conference in Toronto, community organizer Jerry Paffendorf proposed crowdfunding huge swaths of a revitalization in Detroit by asking people to buy vacant properties collectively and decide what to do with them.

In New York, a group called In Our Back Yard crowdfunds local environmental projects, from chicken coops to sewage monitoring.

And in Europe, I Make Rotterdam crowdfunded the construction of a bridge in an underused part of the city, hoping that increased traffic would revitalize it.

"It's as easy as buying a book online," said Chris Gourlay, whose site, Spacehive, is crowdfunding urban projects in Britain. "For people who are used to long, drawn out, multiyear urban planning consultations, this is really refreshing."

Some worry the model is incompatible with the complexities of municipal planning, and that it could promote a two-tier environment in which only affluent communities get what they want.

To counter this, Spacehive's first project focused on the building of a new community centre in Glyncoch, a low-income former mining town in Wales.

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Most of the funding had already been secured by local and federal grants that were set to expire if an additional £791,433 ($1.26-million) was not raised.

In a matter of weeks, Spacehive collected £792,021, mostly from corporate sponsors who got on board after the campaign gained momentum via Twitter.

"This model doesn't remove the need for people to work hard to bring projects to the stage where they're ready to accept funding," said Mr. Gourlay, who is looking into franchising his model overseas, including in Canada.

In Toronto, citizens have proved their interest in donating directly to community projects. More than $60,000 has been raised to keep the High Park Zoo open, and community members and corporations pitched in to rebuild the Jamie Bell Adventure Playground just months after an arsonist torched it.

But Phyllis Berck, director of Toronto's office of partnerships, said most municipalities need a technological upgrade before they can ask people to donate directly.

Her office is putting together a request for proposals to enable electronic donations through the city website. At present, only cheques can be accepted.

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"Certainly, every city is looking at other models of raising money," she said.

To complete the construction of a new recreation complex in the Ottawa suburb of Kanata, city councillor Marianne Wilkinson is banking on the public coughing up $1.75-million lacking in the budget. But she is not asking for a property tax hike. She would like people to donate the cash, even just $5 at a time.

"We're hoping individuals will donate money to support a specific element, like the youth room or the sculpture garden," she said. "If you give $1,000 or more, you can get your name engraved on one of the entry tiles."

Ms. Wilkinson has already raised $800,000 for the Richcraft Recreation Complex, much of which came from selling the naming rights to a local contractor. Another $200,000 came in the form of $25,000 donations from eight individuals whose names will be engraved at the end of each lane of the pool.

"My city manager said if I don't raise the total, he'll take it out of my hide," Ms. Wilkinson joked. "But I think this is the answer. This is one of the ways we'll end up having better communities."

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