"Those who live the problem own the solution."

Bill Huston, crowdfunding expert and Strong Towns member.

Last year, Strong Towns senior editor Daniel Herriges wrote an article about the stark choice facing many neighborhoods—the trickle or the fire hose; neglect and disinvestment (sometimes decades long), or a sudden, massive flow of resources that will soon leave your neighborhood unrecognizable. Daniel connected this to the cult of big-ness. Americans, he wrote, believe that “big problems require big solutions, and that those big solutions must take the form of big plans orchestrated by big institutions. Corporate power, state power, take your pick. Nassim Taleb calls this notion the ‘Soviet-Harvard Delusion,’ which perfectly captures how the cult of big-ness transcends ideological boundaries. This is not an issue of left vs. right understandings of the world.”

More often than not, this isn’t even a “choice” neighborhoods get to make for themselves. Someone else, somewhere else, is making the decision to turn off the spigot of money and attention in one place and turn it on somewhere else.

Part of the shame in all this is that, in these very same neighborhoods, there already exists an enormous amount of homegrown potential. Entrepreneurs with businesses ready to launch or expand. Community advocates with a club or nonprofit they want to start. Conventional thinking would have these local leaders wait for permission from a few gatekeepers—in the form of a bank loan or grant, for example—or max out their own credit cards to fund the venture. But there is another way.

For many people, when they hear of “crowdfunding,” what comes to mind is a Kickstarter campaign to fund a new gadget — some, like the world’s first flying bicycle, less realistic than others. But crowdfunding can be much more than that. In fact, it is a powerful tool for community-led economic development. Crowdfunding and crowd-investing is an opportunity for communities to come around a shared vision, and to build an economic ecosystem that will thrive quite apart from what those gatekeepers may be feeling on any given day.

Strong Towns member Bill Huston is a board member at the National Coalition for Community Capital (NC3) and was ranked by Inc. Magazine as one of the top 19 global experts on crowdfunding. Back in January, Bill did a webinar on crowdfunding with Jacob Moses, then Strong Towns community builder (and now executive director at the Denton Affordable Housing Corporation). In the webinar, Bill identifies a few of the benefits of local crowdfunding—including, but not limited to, its efficiency (no, seriously), the way it can provide feedback and market validation, the way it enfolds local residents into the process of wealth-building, and how it can provide a pathway to community-led economic development. Bill also talks about different types of crowdfunding, its advantages over top-down funding, and the way crowdfunding can infuse community capital into disinvested communities.

In his “Trickle or the Fire Hose” article, Daniel wrote:

When we, as a society, worship big, we completely lose the ability to even do small where needed. We concentrate wealth and power in fewer hands than ever, and we take away agency from our neighbors and fellow citizens. We take away the ability to start with nothing and end up with something.

Crowdfunding is a way entrepreneurs and other leaders can take the future of the neighborhood into their own hands. As Bill says (quoting the Community Farm Alliance), “Those who live the problem own the solution.”

After watching the webinar, check out these other Strong Towns resources. What could be possible in your neighborhood if residents tapped into the assets that already exist there?

• “How to Get Funding (and an Engaged Crowd) for Your Big Ideas” (Podcast)

• “The Bottom-Up Revolution is...an Entrepreneur Creating Opportunities for Fellow Entrepreneurs” (Podcast)

• “Why you should consider crowdfunding your neighborhood project (instead of writing a grant),” by Katie Lorah

• “5 Low Cost Ideas to Make Your City Wealthier,” by Charles Marohn

• “Why Does So Much High-End Redevelopment Occur in Once-Devastated Neighborhoods?” by Daniel Herriges

• “Why Grocery Co-ops Build Strong Towns and How to Start Your Own” (Podcast)

Cover image of Portland food carts by Sean Benesh

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