The Ethics and Values of Crowdfunding | MIT Center for Civic Media

The Ethics and Values of Crowdfunding

In a recent piece for the Center for Digital Ethics and Policy, I discussed the ethical limits of crowdfunding: should platforms host campaigns that promote hatred? How should they handle campaigns that are legally dubious? Should they be worried about their success crowding out the activities of other worthy organizations?

I made the argument that platforms can play a positive role in shaping the kinds of crowdfunding campaigns that succeed on their watch.

For the crowdfunding industry to establish and retain a sound ethical footing, it should embrace the interplay of community and platform to develop conversations and opportunities that are productive and avoid harm to individuals and institutions.

Clearly platforms cannot be expected to handle unlimited liability. But active stewardship is worthwhile for two reasons. Firstly, it's not in the interest of platforms to sit back and allow campaigns that promote hatred or are misleading to operate using their resources and their brand name. Secondly, what is allowed to happen on a platform reflects (or will soon reflect) the community who feel excited about using it. Happy, productive communities don't typically rally behind activites that aim to bring unhappiness to others.

In civic crowdfunding, the ethical issues are more complex because the stakeholders involved are more likely to hold themselves - or be held to - higher standards than the average startup. In most cases these stakeholders will be held to higher standards than the crowdfunding platforms themselves. These standards go beyond pure ethics, too, and probably better described as values. But again, platforms have an opportunity to lead by example, and to articulate the values and practices that civic crowdfunding should stand for. And that goes for the rest of us too - as researchers, fundraisers, backers and community members.

In broad terms, the moral imperative intrisic to civic crowdfunding has been called 'fairness'. But what does a fair system look like?

I'm starting to think about a framework for good practice in civic crowdfunding based on three core ideas.

  • Capacity: Does the campaign seek to serve needs that are otherwise not being met? Does it promote greater social equality? Will it build capacity in a community for future projects?

  • Engagement: Has the campaign sought the backing of the groups and communities likely to be most affected by it? Does it cooperate with and build on the work of existing groups working on similar issues? Has the campaign engaged in a discussion about its proposal prior to fundraising?

  • Accountability: After successful funding, do campaign organizers report regularly to their supporters and the wider community on the progress of the project, explain any challenges that arise, and, barring major unforeseen problems, execute the project on time and within the agreed budget?

To be sure, these values have a lot in common with the principles of strong, participatory democracy. That's no accident, and it shouldn't be a surprise, either. As I've argued on several occasions, civic crowdfunding has important implications for the future of local decision-making. It's now time to think concretely about what the best version of civic crowdfunding looks like, to ensure we're heading in the right direction.

Thanks to the MIT Public Service Fellowship program, for the next few weeks I'll be in Kansas City, MO, working with non-profits considering running civic crowdfunding campaigns. I'm excited to be working through issues such as capacity, engagement and accountability with them, and will be sure to share what we learn.

(cross-posted at