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Crowdfunding for community development? Yes!

Editor's note: Five of LISC's partners had successfully funded their Seed Chicago Kickstarter campaigns as they approached their funding deadlines on May 16, raising more than $48,900 for community improvement projects. View the results.

When World Business Chicago launched its Seed Chicago campaign in early April on the “crowdfunding” website called Kickstarter, it was a bold enough idea that the national news site Atlantic Cities asked, “Could Kickstarter Work as a Tool for Neighborhood Economic Development?”

It’s still early, but the answer looks like: “Yes.”

Photo: Patrick Pyszka, City of Chicago

Mayor Rahm Emanuel picks up lunch from The Tamalespaceship food truck in Pilsen, one of the first 11 projects to be posted for funding consideration via Seed Chicago.

It took only four days for Teamwork Englewood to fully fund its $5,500 project to teach 15 youth how to build a simple computer (called Raspberry Pi) and code a website. Blowing past the initial goal so quickly, project leader Demond Drummer of Teamwork Englewood asked supporters for “stretch goals,” then doubled the planned summer program to 30 youth. Donations topped $9,000 last week, closing on the new goal of $10,000.

The second of 11 first-wave projects was fully funded a couple of weeks later. That one, called Global Gardens Bees ‘n Seeds, will add beehives and a seed-saving garden to an Albany Park farm where refugees from Bhutan and Burma are growing food for their families. More than $5,000 has been raised so far.

But it’s not a slam-dunk for every project.

The urban-farming-and-job-training organization Growing Home Inc. has attracted more than 170 backers. But it still needs $11,000 to reach its $20,000 goal. And some of the for-profit participants, who were recruited into the program through the micro-lending organization Accion Chicago, set ambitious fundraising goals. A hair-braiding school in Englewood, for instance, hopes to raise $32,000, and the Tamalespaceship food truck business needs $34,000 to build out a storefront restaurant in Pilsen.

Kickstarter uses an all-or-nothing approach. If you reach your goal, all backers’ credit cards are charged. If you don’t, no one is charged.

“You have to have a great idea, first,” says LISC Program Officer Dionne Baux, who helped surface the first round of nonprofit participants from within LISC’s Neighborhood Network. “But you also have to set your fundraising goal to a level you can reach, and you have to really promote the project to all of your networks of supporters.”

Photo: Patrick Pyszka, City of Chicago

World Business Chicago will soon announce an "open call" for new projects.

Another hurdle is that Kickstarter accepts donations only through the Internet. To back a project, one must first register on Kickstarter, and then create or link to an existing Amazon Payments account. This could be a significant barrier, Baux said, in neighborhoods with lower Internet usage and income levels.

Still, World Business Chicago (WBC) is excited about the potential of Kickstarter to “catalyze reinvestment, grow small businesses and spur employment growth.” On April 15, Mayor Rahm Emanuel engaged in a roundtable discussion with leaders of all 11 inaugural projects, noting that “we as a city will only be as strong as our neighborhoods are strong.”

Seed Chicago is an opportunity to highlight “the best of what Chicago has to offer,” said Julia Stasch, vice president of U.S. programs for the MacArthur Foundation. By learning from this initial group of projects and recruiting more, the project could generate $1 million in investment annually and create 250 jobs, Stasch said.

And that would provide a very clear answer to the question of whether crowdfunding can spur development of Chicago neighborhoods.

World Business Chicago will soon announce an “open call” for new projects, and it’s already soliciting ideas from interested individuals and organizations.

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