Crowdfunding for smart cities in Albania
Let’s start with a little bit of recent history. Innovative financing for the UN goes back to the International Conference on Financing for Development in 2002. The hope was that innovative financing would help to bridge the gap between what was available and what was needed to reach the Millennium Development Goals (MDGs) by 2015.
As the name suggests, innovative finance means raising funds for development by using unconventional mechanisms. For example, micro-levies, public-private partnerships, and other mechanisms that go beyond financial contributions. It can also mean optimising the use of traditional funding sources to transfer assets to where they are needed the most.
Fast forward to 2012, when the UN, governmental institutions, and donors started to mull over realistic ways to finance the achievement of the Global Goals by 2030, bearing in mind the estimated total costs which vary between $90 and $ 120 trillion, and with a funding gap of $2.5 trillion per year. The concept of innovative financing came up again.
#Crowdfunding4Children
We at the UN in Albania decided to test out alternative forms of financing, which are progressively being mainstreamed across the agency’s interventions. Ever since the internet made it possible to use crowdfunding to finance projects, individuals and the private sector have used this new tool to their advantage, so why not us?
We saw the potential of using crowdfunding as an integral part of our mission to achieve the 2030 Agenda. Our first successful experiment was a crowdfunding campaign launched in July 2016 that allowed the construction of the first all-inclusive playground in Albania suitable for children with special needs and diverse abilities.
This work builds on our previous open data project with the Municipality of Tirana where we blended and opened up data sets on safety of our cities in the Open Data Portal of Tirana Smart City.
Out of 22 play grounds currently under management by the Municipality of Tirana, only one is suitable for children with special needs. Building better parks will help all children interact with their peers and develop their personalities in a safe and healthy environment. And it went pretty well! By tapping into a large pool of individuals, mainly via social media and crowdfunding platforms, and through advocacy initiatives we raised our goal of $20,000 for the #Crowdfunding4Children campaign.
Supporting youth employment through equity crowdfunding
UNDP, the United Nations Population Fund (UNFPA) and UN Women are also testing out how to build financial connections between mature enterprises willing to invest in promising start-ups through equity crowdfunding.
The goal is to set up a sustainable system that supports emerging businesses. United Nations Albania, in partnership with the Chamber of Commerce and Industry Tirana, was able to engage with 100 VIP companies in an exploration survey, probing their potential participation in equity crowdfunding schemes.
Another component of this joint initiative relates to the assessment of a reward-based crowdfunding model among small communities in Tirana. This tool allows individuals to contribute towards a specific project with the anticipation of receiving a tangible –non-financial– reward at a later date.
We are building on this model by involving private services providers. For example, integrating the option to financially contribute to a social project at the time as making a routine payment, for example, for an electricity or telecommunications service bill. We hope that these alternative mechanisms will play an important role in transforming Tirana into a smart city.
We believe that crowdfunding deserves more trust in the development world. Crowdsourcing enables resource mobilisation, promotes innovative initiatives, and galvanises active citizenship!
