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Effective crowdfunding fizzes with the energy and creativity of the self-motivated. Musicians, filmmakers, artists, writers and product designers or startups routinely call for contributions through digital platforms such as Kickstarter. The success of crowdfunding in the creative and business sectors has cash-strapped councils wondering if it’s not the answer to their problems, too.

Crowdfunding is increasingly being put forward by local authorities as a way of enabling democratic participation and a means of funding initiatives. According to guidelines from the Local Government Information Unit and Spacehive, Manchester, Liverpool and Plymouth councils, Dorset county council, and 16 London boroughs have all used it as a means of raising revenue.

Spacehive, one of the UK’s leading civic crowdfunding platforms, is currently collaborating with the London mayor Sadiq Khan. He is backing 25 projects in London, including the refurbishment of Hackney’s art deco Rio Cinema and a community cafe for at-risk locals in Turnpike Lane. Such initiatives seem straightforwardly positive and inclusive.

But scratch beneath the surface of the community garden or light festival, and it quickly becomes clear that other forces are at work. Truly representative decision making may not be as easy as marrying populism with entrepreneurial get-up-and-go.

As with so many of our urban policies in the UK, this debate has already had a contentious hearing in the US. Proponents claim it as digital democracy in action, while critics see it as turning away from a commitment to the common good where considered decisions are taken by democratically elected representatives.

Instead, some American commentators claim it is a short-term solution and amounts to a privatising of policy making, outsourcing decisions about what should be funded to a populist conception of “the public”, where those with the funds set the agenda.

It goes without saying, too, that participants need to be digitally savvy – automatically excluding sections of the community.

Rodrigo Davies, who previously worked with Spacehive, wrote a thesis at MIT’s Center for Civic Media on civic crowdfunding. In it he highlighted that crowd activities are “coupled with an individualistic, libertarian mentality that seems pervasive on the web”.

More seriously, he points out that the model breeds inequality as the crowd funds “what the crowd wants to fund”. Projects with stigma attached to them, such as homelessness, addiction and mental health initiatives are rarely found on civic crowdfunding sites.

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