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HERTFORDSHIRE COUNTY COUNCIL

EDUCATION, LIBRARIES AND LOCALISM CABINET PANEL WEDNESDAY, 23 OCTOBER 2019 AT 10:00AM

CREATING A HERTFORDSHIRE CROWDFUNDING PLATFORM

Report of the Director of Resources

Author: Nathalie Calonnec, Senior Policy Officer, Corporate Policy (Tel: 01992 555071)

Executive Member: Terry Douris (Education, Libraries & Localism)

1. Purpose of report

1.1 To enable Members to consider the commissioning of a Hertfordshire-wide crowdfunding platform.

2. Summary

2.1 It is proposed to commission Hertfordshire Community Foundation (HCF) to deliver and externally host an online crowdfunding platform to help fund community projects in Hertfordshire. This will initially be on a 1-year pilot basis to test the merits of the platform before deciding whether to proceed with a longer-term solution.

2.2 Crowdfunding is a digital method of raising finance by asking a large number of people each for a small amount of money. Organisations and individuals are able to add their projects onto a crowdfunding webpage and use social media and their networks to build support and enthusiasm for their ideas, amassing pledges from the community, public and private organisations to achieve their funding target.

2.3 Offering an additional way of funding local projects, a crowdfunding

platform for Hertfordshire would enable the County Council to leverage considerably the money it allocates through community grants by matching pledges from the community, local partners and national organisations. It would also fit well with the Council’s localism principles of encouraging active communities and supporting and maintaining a strong, vibrant voluntary and community sector.

2.4 Many of the county’s District and Borough Councils have also been looking into the benefits of procuring a crowdfunding platform and the possibility of jointly commissioning this project is being explored.

3. Recommendation

3.1 That the Panel recommends to Cabinet that Cabinet agrees to commissioning a crowdfunding platform for Hertfordshire.

Agenda Item No.

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4. Background

4.1 Crowdfunding is defined as a ‘method of raising finance by asking a large number of people each for a small amount of money’. The approach has traditionally been used to fund a wide range of for-profit and non-profit entrepreneurial ventures such as artistic and creative projects.

4.2 Civic crowdfunding is a form of crowdfunding which invites local community groups to pitch ideas and gather financial support for local projects. It provides a new way of encouraging community involvement, enabling residents to take an active role in improving their local area.

4.3 Over 45 local authorities across the country use online crowdfunding platforms. It has become particularly popular in the past couple of years with evidence of positive results in terms of leverage on money invested, connecting with the community and supporting projects in a more transparent way, creating positive social impact and delivering social value. Some examples of crowdfunding projects successfully funded on local authorities’ crowdfunding platforms can be found in Appendix A.

4.4 A number of pilots are also taking place at national level:

Sports England teamed up with a crowdfunding platform provider to deliver some of their grants: https://www.crowdfunder.co.uk/active?utm_source=SportEngland

The Arts Council England has recently started working with a

crowdfunding platform provider to support their Music Education Hub work: https://www.spacehive.com/movement/artscouncil

5. Why a specific crowdfunding platform for Hertfordshire?

5.1 Organisations and individuals in Hertfordshire already have access to a range of commercial crowdfunding platforms for them to use and try and attract funding for their projects. However, because there is not a Hertfordshire specific page:

Local projects have to compete with thousands of other projects, meaning they are not as visible as they could be to their local communities. Projects generally have to rely on the project owners’ own restricted networks, which are often not sufficient to fund projects.

As they do not get exposure as local projects, they miss out on key areas of potential funding such as match funding from local authorities, local businesses and charities/grant givers.

Without a dedicated Hertfordshire page, pledging from local authorities is not currently possible, as this require financial planning to allocate grants which will be specifically pledged through the crowdfunding platform.

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Project makers do not benefit from the same level of support they would with a dedicated local page and access. This is key to developing skills for small community groups who may need that extra help to succeed.

5.2 A Hertfordshire specific page would help consolidate existing pots of money from various local authorities, with a wide set of other potential providers, as well as making projects local and visible.

Below is an example taken from Devon, which shows how funds from various local authorities can be added onto a crowdfunding platform, still reflecting their own locality and different funding criteria (https://www.crowdfunder.co.uk/crowdfund-devon)

5.3 From a County Council perspective, discussions with Adult Care Services have indicated they would be keen to use crowdfunding to help distribute their Community Innovation Fund.

5.4 Many of the county’s District and Borough Councils are interested in using crowdfunding to help distribute money they are receiving through the Community Infrastructure Levy (CIL). Initial discussions have shown there is interest in working with the County Council on a joint project.

5.5 East Herts District Council recently held a well-attended crowdfunding workshop aimed at community groups and Parish and Town Councils. At the workshop there was a clear appetite for crowdfunding and understanding how this would work in practice. A representative from a Parish Council, for instance, indicated they were finding it difficult to identify funding streams to try and fund their renovation of the village hall

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to transform it into a village hub. Other attendees mentioned that they often found grant applications complicated and lengthy and felt crowdfunding offered an easier process to help gather funding for a project.

5.6 Appendix B provides more detail on how such a platform would operate.

6. Proposed approach

6.1 It is proposed to commission Hertfordshire Community Foundation (HCF) to deliver and externally host a countywide crowdfunding platform for Hertfordshire. This will initially be on a 1-year pilot basis to test the merits of the platform before deciding whether to proceed with a longer-term solution.

6.2 HCF is an independent charity that aims to encourage local philanthropy, the giving of time, resources or both by local people to help support their local communities.

6.3 HCF already manages the Community Innovation Fund on behalf of the County Council’s Adult Care Services. They also help allocate the Police and Crime Commissioner’s Action Fund and manage their own grant funds. As such, it is felt they have the expertise and links with community groups and other external funders to make this project work.

6.4 Discussions are also being held with District and Borough councils, with the hope that some may be willing to jointly commission this project and therefore share the setup and ongoing costs.

6.5 Subject to approval for the project, it is envisaged the crowdfunding platform would be in place by March 2020 at the latest.

7. Benefits of establishing a crowdfunding platform for Hertfordshire

7.1 Establishing a crowdfunding platform for Hertfordshire fits well with the County Council’s localism principles of encouraging active communities and supporting and maintaining a strong, vibrant voluntary and community sector. By offering an additional way of funding local projects, it enables initiatives that would normally struggle to attract finance through traditional avenues to proceed.

7.2 Crowdfunding provides an efficient opportunity to unlock and maximise funding for local projects and initiatives. Crowdfunding enables:a) Greater leverage on money invested – crowdfunding has enabled

local authorities to benefit from significant leverage on their community funding. It also provides the opportunity to link in with district and borough council funding streams such as the Community Infrastructure Levy (CIL). The diagrams below provide some illustrations on the funding amplification generated by crowdfunding in Dorset and Wigan.

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b) Potential access to funding from national organisations –using an external crowdfunding provider enables local community groups to tap into funding that has been put up by national organisations, such as Big Society Capital, Santander and AXA, to support local community projects, on top of local authority grants, local businesses and Hertfordshire crowd.

The diagram below gives an example of how various funding streams on a crowdfunding platform could look like. This example has been taken from an existing crowdfunding platform provider.

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7.3 At a service level, it would enable Adult Care Services to distribute their Community Innovation Fund to a wider range of organisations and people across Hertfordshire. Once the platform is set up, all County Council services could also benefit from using the crowdfunding platform for any grants they may wish to allocate. It may also enable Members to broaden the potential range of recipients of their locality budgets.

8. Potential risks

8.1 Deliverability, accountability and quality of the projects Some of the research points out that as civic crowdfunding projects are in the public realm, there is potential for local authorities to be held indirectly accountable for projects promoted on their crowdfunding site, regardless of whether they initiated or funded the project. Ensuring ongoing maintenance costs of successful projects are factored in is also a potential issue. Key to this will be the robustness on the checks that are undertaken before a project is promoted through the crowdfunding platform. Commissioning HCF to provide a platform on our behalf will also help mitigate this risk as the solution will not be directly run by the County Council. Conversely, it will also mean the County Council is likely to receive less credit for taking this initiative forward.

8.2 Long term sustainability of the crowdfunding platformThe County Council, potentially in conjunction with district and borough council partners, will be providing the funding for the establishment and ongoing running of the crowdfunding platform. As such, there is a risk that if in future years the County Council is unable to maintain this funding, it will receive negative publicity if the platform is unable to continue to operate. It is hoped that the joint commissioning approach proposed will help reduce the County Council’s liability in this area.

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Moreover, if the platform does prove to be successful, it is hoped that alternative sources of funding to ensure the platform is continued could be found.

8.3 Ensuring a fair representation of Hertfordshire’s population Crowdfunding appeals to a younger part of the county’s population than

the traditional grant funding model, and some studies have shown ‘a strong correlation between age, education level and crowdfunding participation, with those who are university educated and aged between 25 and 34 years being most likely to participate1. As the County Council usually struggles to engage with this age group, this is a positive. However, there may be a need to ensure that effective support is given to other groups, including those who are less digitally aware, to ensure equality of access.

9 Financial Considerations

9.1 Market testing has been undertaken to establish the potential cost of establishing a crowdfunding platform for Hertfordshire. The table below provides an indicative costing for the setting up and running a crowdfunding platform for different lengths of contract. (NB: These costs do not include any additional match funding the council may wish to make available through the system).

Contract length(Years)

1 2 3

Cost(£)

15,000 27,000 30,000

9.2 As mentioned in section 6, it is proposed to commission HCF to undertake a 1-year pilot to explore the merits of funding a longer-term option. Working on the indicative costs outlined above, Adult Care Services have agreed to provide HCF with up to £15,000 of their Community Innovation Fund for the financial year 2020-21 to fund the setup of the platform. They propose to commit the remainder (c£75,000) from the 2020-21 funding to be used as match funding on the system. This is existing money that HCF are already spending on the County Council’s behalf and as such there is not an additional cost implication for the County Council in taking this project forward.

9.3 Discussions are ongoing with the county’s district and borough councils the possibility of working jointly with them on this project. One council is proposing to contribute up to £5,000 to the set-up cost (subject to formal agreement) and some others have expressed an interest. Depending on the result of these discussions, it is proposed to reduce the level of investment required from the Community Innovation Fund in line with the commitments received. It is expected that those Districts that are involved

1 Hannah Griffiths, Civic Crowdfunding: A guide for Local Authorities (Future Cities Catapult, 2018) https://futurecities.catapult.org.uk/project/civic-accelerator/

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will also contribute to the match funding available through the system using CIL monies.

10. Equalities Considerations

10.1 When considering proposals placed before Members it is important that they are fully aware of and have themselves rigorously considered the equalities implications of the decision that they are taking.

10.2 Rigorous consideration will ensure that proper appreciation of any

potential impact of that decision on the County Council’s statutory obligations under the Public Sector Equality Duty. As a minimum this requires decision makers to read and carefully consider the content of any Equalities Impact Assessment (EqIA) produced by officers.

10.3 The Equality Act 2010 requires the Council when exercising its functions to have due regard to the need to (a) eliminate discrimination, harassment, victimisation and other conduct prohibited under the Act; (b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it and (c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it. The protected characteristics under the Equality Act 2010 are age; disability; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion and belief, sex and sexual orientation.

10.4 An EqIA has been undertaken, is attached at Appendix C to this report.

Background Information

Hannah Griffiths, Civic Crowdfunding: A guide for Local Authorities (Future Cities Catapult, 2018) https://futurecities.catapult.org.uk/project/civic-accelerator/

Old Rosalyn, Bone Jonathan, Boyle Dave and Baeck Peter. Taking Ownership, Community empowerment through crowdfunded investment (Nesta, May 2019, p16) https://media.nesta.org.uk/documents/Taking_ownership_v4.pdf

Davis, Mark & Cartwright, Laura. Financing for Society: Assessing the Suitability of Crowdfunding for the Public Sector (University of Leeds, May 2019) The study was funded by the Department for Digital, Culture, Media & Sport. https://baumaninstitute.leeds.ac.uk/research/financing-for-society/

Crowdfunding for Local Authorities, LGiU: https://www.lgiu.org.uk/wp-content/uploads/2017/03/Crowdfunding-for-local-authorities.pdf

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Appendix A: Examples of successful crowdfunding projects undertaken elsewhere in the country

Examples of crowdfunding projects successfully funded on Local Authorities’ crowdfunding platforms:

Portsmouth's First Plastic-free Community ShopExceeded its target of £40,000 with over 900 supporters.https://www.crowdfunder.co.uk/packagefreelarder-portsmouth-s-first-plastic-free-community-shop

Horsham Children's Parade 2019 – The project was set up by a charity and proposed to enable Horsham's young people to showcase their artistic talents through a creative and fun shared experience as part of the Horsham District Year of Culture 2019.The project raised £10,360 with West Sussex CC and Horsham District Council investing £6,500 in the project. The rest of the money pledged came from small amounts from backers in the community. https://www.spacehive.com/horsham-childrens-parade

Dive in and heat up Jubilee Pool!A renovation project in Penzance that successfully raised £528,680 with 1380 investors in 153 days, with investment from various local councils in forms of grants and locality budgets of under £200,000. https://www.crowdfunder.co.uk/jubileepool#start

Mill Hill East Community Garden in Barnet –set up by Mill Hill East Church and Community Centre to transform some empty and unloved space into a vibrant and creative community garden. The project raised £45,626 from 115 backers, with the Borough of Barnet pledging £5,000.https://www.spacehive.com/mill-hill-east-community-garden

Let's Heat St. Michael's - set up by St. Michael and All Angels Church in Lancing to replace a broken boiler to ensure their continued work in the community, which included concerts, exhibitions, civic events and providing hot food for children in need. £4,222 was raised by 73 people, with West Sussex Council pledging £2,812.https://www.spacehive.com/letsheatstmichaels#/idea

Infrastructure and services‘Community-run transport is often set up to help people access employment, services or facilities in places that lack adequate bus or train services. Investment crowdfunded examples include Hayfield Sustainable Transport Ltd in the Peak District, which raised £50,000 through community shares to provide affordable, volunteer-driven mini-bus hire, to not-for-profit groups and organisations which are unable to afford their own minibus, including the local school and sports clubs.’2

2 Rosalyn Old, Jonathan Bone, Dave Boyle & Peter Baeck. Taking Ownership, Community empowerment through crowdfunded investment (Nesta, May 2019, p16) https://media.nesta.org.uk/documents/Taking_ownership_v4.pdf

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Renewable energy‘Community energy projects involve a group of people coming together to generate, own and manage a renewable energy supply e.g. solar, wind or hydro energy. Renewable energy is the largest sector in the community investment crowdfunding space, with around £6 million raised for energy projects through community shares alone in 2018.’3

3 Rosalyn Old, Jonathan Bone, Dave Boyle & Peter Baeck. Taking Ownership, Community empowerment through crowdfunded investment (Nesta, May 2019, p16) https://media.nesta.org.uk/documents/Taking_ownership_v4.pdf

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Appendix B - How crowdfunding works

What process if followed?

Individuals, charities and community organisations upload details of projects that require funding onto the crowdfunding platform. In doing so, they set a desired funding target, a timescale in which they are looking to raise this funding (usually between 4-8 weeks) and decide whether they wish to offer supporters any form of reward for pledging their support for the project.

The crowdfunding platform provider reviews the project to determine if it is robust and meets set criteria on financial viability. If so, the project goes live on the crowdfunding platform.

Each funding organisation sets their own criteria which must be met for a project to be considered for funding (e.g. it must gain a certain proportion of their funding total). If a project meets a funding organisation’s criteria it is flagged for their attention.

The project is monitored to see if the public or other corporate funders are prepared to help fund it. A funding organisation then determines whether it is appropriate for it to help fund the project.

The funds are transferred to the project owner if and when the project closes successfully. Checks are carried out to ensure the proposer are who they say they are before doing so.

When do pledges leave a supporter’s account?

-Project supporters are charged at the time they make their pledge. -Money is held by the platform provider until the project closes successfully.

Only once the project has closed successfully will the money raised be transferred to the project owner. -If a project does not close successfully (see below), supporters will receive a refund.

What different funding methods are available?There are two options available:

‘All or nothing’ - this is where a project is only successful if it hits its funding target. This method tends to raise more money but only if the target is hit. If the target is not reached, supporters receive an email informing them that the project has not been successful, and they receive a refund.

‘Keep what you raise’ – this where all projects that raise any funds are considered successful and therefore the proposers receive all pledges made.

What fees are project proposers charged?

Providers will charge a small fee for promoting a scheme on their site - typically around 3% plus VAT. All fees will already have been taken by the time the funds arrive in a proposer’s account. If a project does not collect any money, the proposer is not charged a fee. Likewise, proposers are not charged a fee for an 'All or nothing' project if they do not reach their target.

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Appendix C

Equality Impact Assessment (EqIA)

1. Who is completing the EqIA and why is it being done?

Title of service / proposal / project / strategy / procurement you are assessingi

Creating a Hertfordshire Crowdfunding Platform

Names of those involved in completing the EqIA Nathalie Calonnec, Michael Longfellow

Head of Service or Business Manager Alex James

Team/Department Corporate Policy Team

Lead officer contact details Nathalie Calonnec, nathalie.calonnec@hertfordshire.gov.uk Comnet: 25071

Focus of EqIA – what are you assessing?

It is proposed to ask Hertfordshire Community Foundation (HCF) to manage an externally hosted online crowdfunding platform to help fund community projects in Hertfordshire. This will initially be on a 1-year pilot basis to test the merits of the platform before deciding whether to proceed with a longer-term solution. HCF will choose which crowdfunding platform (Crowdfunder, SpaceHive) to work with.

Crowdfunding is a digital method of raising finance by asking a large number of people each for a small amount of money. Organisations and individuals are able to add their projects onto a crowdfunding webpage and use social media and their networks to build support and enthusiasm for their ideas, amassing pledges from the community, public and private organisations to achieve their funding target.

Stakeholders

This is a new initiative which offers an additional way of funding local projects. Local community groups, charities and residents more broadly will be provided with a digital way to set up and raise funds for projects. This will change the way the County Council has been distributing its Adult Care Community Innovation Grant.

The County Council will work in partnership with HCF who will procure the crowdfunding platform on the County Council’ ’s behalf. HCF is a charity that already administers the Adult Care Community Innovation Grant. As a result, the County Council won’t be directly setting up and running the project. However, it is important that the agreement with HCF has specific requests around the effective engagement of all communities, this will be reviewed at the end of the pilot year of the programme. A Diversity Review will be established, the purpose of which will be to create a Lived Experience Advisory Panel (LEAP) to establish the extent and impact of work with disabilities (physical or learning), Black and Minority Ethnic and LGBT communities in particular.

Stakeholders should be positively affected by the new initiative; however, as this project is an online platform and accessibility may be an issue for:

People with disabilities including users with impairments to their:

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o vision - like severely sight impaired (blind), sight impaired (partially sighted) or colour blind people

o hearing - like people who are deaf or hard of hearing

o mobility - like those who find it difficult to use a mouse or keyboard

o thinking and understanding - like people with dyslexia, autism or learning difficulties

People who do not have access to a computer or the internet

Older people, who may not be as IT aware as the younger generation

People on lower income who may not have access to the internet

2. List of data sources used for this EqIA (include relevant national/local data, research, monitoring information, service user feedback, complaints, audits, consultations, EqIAs from other projects or other local authorities, etc.)

A range of useful local data on our communities can be found on Herts Insight and on the Equalities Hub

Title and brief description Date Gaps in data

Accessibility: the path to website accreditation 18/6/19

WCAG 2.1 guidelines - internationally recognised set of recommendations for improving web accessibility. 18/9/19

Herts Insight: https://www.hertfordshire.gov.uk/microsites/herts-insight/home.aspx 18/9/19

Joint Strategic Needs Assessment (JSNA): https://www.hertfordshire.gov.uk/microsites/jsna/jsna-documents.aspx?searchInput=&page=1&resultsPerPage=10&view=card

18/9/19

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3. Analysis and assessment: review of information, impact analysis and mitigating actions

Protected characteristic group

What do you know?What do people tell youii?

What does this mean – what are the potential impacts of the proposal(s)?

What can you do?

Age

Officers recognise that over the last decade the trend has been for an increase in internet use among the older population. However, a substantial group – including the majority of those age 75 and over – are not online.

This may impact on this age group negatively as studies show4 that more older people may not have access to online devises and/or may not have the skills to use the internet, compares to other groups.

Providing support to access the online resource and help people gain or improve their IT skills would help reduce the impact. Providers such as Crowdfunder support people with setting up their projects and are aware of accessibility issues. In the agreement with HCF, particular attention to accessibility will be mentioned.

Library staff could also help access the website and provide guidance

Disability

Accessibility of the online platform may be an issue for people in this group

People with disabilities including users with impairments to their: vision - like severely

sight impaired (blind), sight impaired (partially sighted) or colour blind people

hearing - like people who are deaf or hard of hearing

mobility - like those who find it difficult to use a mouse or keyboard

thinking and understanding - like people with dyslexia, autism or learning difficulties

May need extra support to access the process

Work with carers, support workers and charities to help access the platform more easily.

Make the training information for the platform available in accessible formats, such as easy read, large print, braille or foreign languages.

Gender reassignment

Currently there appear to be no specific impact on this group

The position will continue to be monitored

4 Digital Inclusion Evidence Review 2018 by Susan Davidson

Joint Strategic Needs Assessment (JSNA): https://www.hertfordshire.gov.uk/microsites/jsna/jsna-documents.aspx?searchInput=&page=1&resultsPerPage=10&view=card

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Protected characteristic group

What do you know?What do people tell youii?

What does this mean – what are the potential impacts of the proposal(s)?

What can you do?

Pregnancy and maternity

Currently there appear to be n specific impact on this group

The position will continue to be monitored

RaceThere could be an issue with accessibility for this group

There could be a negative impact on this group for whom English is not their first language to allow them to use the website

Offering access to translation services for crowdfunders for whom English is not their first language, to allow them to use the website would help reduce the impact.

Religion or belie

The position will continue to be monitored

The position will continue to be monitored

Sex/GenderThe position will continue to be monitored

The position will continue to be monitored

Sexual orientation

The position will continue to be monitored

The position will continue to be monitored

Marriage and civil partnership

The position will continue to be monitored

The position will continue to be monitored

CarersThe position will continue to be monitored

The position will continue to be monitored

Other relevant groups

More generally, people on a lower income may not have access to the internet or devices to go online5.

Accessibility for this group may be an issue

Ensuring that free access points such as libraries are signposted as this may help mitigate the impact.

5 Low income and digital exclusion

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Opportunity to advance equality of opportunity and/or foster good relations

Conclusion of your analysis and assessment -

OUTCOME AND NEXT STEPS SUMMARYi. No equality impacts

identified

ii. Minimal equality impacts identified

iii. Potential equality impacts identified

Adverse impacts such as accessibility have been identified and should be highlighted in the contract for the commissioning of the crowdfunding platform by HCF.

iv. Major equality impacts identified

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4. Prioritised Action PlanImpact identified and group(s) affected

Action planned

Expected outcome

Measure of success

Lead officer and timeframe

Potential impact on accessibility for Age, Disability and Race have been identified

Mitigation measures:

Adverse impacts such as accessibility have been identified and should be highlighted in the contract for the commissioning of the crowdfunding platform by HCF

Officers will encourage HCF to provide extra support to access the website by:

Making the information for the platform available in accessible formats, such as easy read.

Working with carers, support workers and charities to help people access the platform more easily.

Encourage ‘Train the trainer’ sessions in the Voluntary and Community Sectors, particularly for organisations working with people with older people, disabilities and BAME, so they can provide extra support to those who need it most.

Offering access to translation services for those who do not understand English enough to use the website

Ensuring that free internet access points such as libraries are signposted

Reduce the impact and monitor usage by equality groups

The report at the end of the project would show take up from the different groups, and the the success of the mitigations should be able to be measured and put in place, as well as considering possible future mitigations if the project is progressed

A Diversity Review will be established, the purpose of which will be to create a Lived Experience Advisory Panel (LEAP) to establish the extent and impact of work with disabilities (physical or learning), Black and Minority Ethnic and LGBT communities in particular.

The project is a 1-year pilot that should end by March 2020.

This EqIA has been signed off by:Lead Equality Impact Assessment officer: Date: Nathalie Calonnec Head of Service or Business Manager: Date: Alex JamesReview date: TBC