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Municipal Crowdfunding Breaks the 10 Million Euro Barrier in Germany and Austria

Over 50 German and Austrian municipal companies use VKU Verlag’s digital crowdfunding platform to fund community projects, raising over €10 million for diverse needs from insect hotels to flood relief. By integrating crowdfunding into corporate communications, municipal utilities amplify donations, transforming €1 into €3-€7. Personalized support and strategic planning enhance project success and strengthen community connections.

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After three years, the first million, two years later 5 million and now the sound barrier of 10 million euros has been broken: more than 2,000 mostly non-profit projects have been made possible since the start of the pilot phase of municipal crowdfunding in May 2017.

More than 50 companies in Germany and Austria have already successfully used municipal crowdfunding in recent years

The majority of them still operate their own crowdfunding platform using the white label solution from VKU Verlag. The range of projects that have been implemented using this platform in the just over seven years is huge.

It ranges from very small projects such as insect hotels for the schoolyard to everything that organized sports need, right up to the really big issues of recent years: climate protection, corona, flood disasters, the war in Ukraine. For example, sports fields were equipped with LED floodlights for more than 50,000 euros, local companies were saved from the consequences of the corona crisis, uncomplicated emergency aid was provided for flood victims in western Germany, and orphans were evacuated from the war zones in Ukraine.

The municipal crowdfunding platforms strengthen the community

“The amount of money raised so far is impressive. It is mainly the result of innovative ideas, charitable initiatives and creative projects that have been realized as a result. This would not have been possible with traditional donors. Our platforms strengthen the community, increase visibility and create a direct connection to supporters who actively contribute to success through their donations,” said Carsten Wagner, Managing Director of VKU Verlag.

“Reaching the 10 million euro mark impressively shows what is possible when committed people have the right tools at their disposal to provide more ‘help for self-help’. Our municipal partner companies are becoming active ‘enablers’ of this social development,” praised Torsten Lührs from Fairplaid’s management.

“In addition to the hard facts and figures, the many great stories, pictures and shining eyes of the project starters after successful financing of their heart projects are a great confirmation of our work,” added Nils Schuon, project manager for municipal crowdfunding at the strategy consultancy Steilpass.

What all projects have in common is that they have a high level of social relevance. Only those projects that are supported by a significant group of supporters achieve their goal. And each of these projects tells a story. To ensure that the stories become success stories, each project starter is personally advised and supported by experienced coaches from the municipal crowdfunding specialist Fairplaid.

Thanks to the tried and tested interaction of digital tools and person-to-person contact, committed volunteers can finance their favorite projects with the help of a municipal crowdfunding project without any prior knowledge.

“Close involvement in brand and corporate communication as a success factor”

The municipal companies provide the platforms and fill the funding pots. The crowdfunding mechanism multiplies every euro invested and ensures that significantly more money flows to the individual project (multiplying the funding budget by a factor of 3 – 7). As a result, more projects can be funded with the same budget than is possible through traditional donations and sponsorship (1:1 funding).

Municipal crowdfunding is particularly successful where the platform is closely integrated into brand and corporate communications and is consistently considered, for example, in two or three campaigns per year. With the appropriate strategic planning, crowd projects provide the brands of municipal utilities and energy suppliers not only with more quantity but also with more quality of contacts.

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(Featured image by Stock Birken via Unsplash)

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First published in ZfK. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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J. Frank Sigerson is a business and financial journalist primarily covering crypto, cannabis, crowdfunding, technology, and marketing. He also writes about the movers and shakers in the stock market, especially in biotech, healthcare, mining, and blockchain. In the past, he has shared his thoughts on IT and design, social media, pop culture, food and wine, TV, film, and music. His works have been published in Investing.com, Equities.com, Seeking Alpha, Mogul, Small Cap Network, CNN, Technology.org, among others.