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Funding community action
Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people, today often performed via internet-mediated registries, but the concept can also be executed through mail-order subscriptions, benefit events, and other methods. Crowdfunding is a form of alternative finance, which has emerged outside of the traditional financial system.
The crowdfunding model is based on three types of actors: the project initiator who proposes the idea and/or project to be funded; individuals or groups who support the idea; and a moderating organization (the "platform") that brings the parties together to launch the idea.
In 2013, the crowdfunding industry raised over $5.1 billion worldwide. W
Participatory grantmaking, also known as "shared gifting," puts a twist on the traditional grant giving process by shifting the power to the grant applicants. Rather than have one donor or foundation decide where their money will go, applicants from various organizations work closely with a grant giving organization to make that decision. The applicants then collaborate to decide how they will split the grant up amongst themselves.
Whereas traditional grant giving includes strict stipulations for how money is to be used, participatory grantmaking focuses on collaboration. "By moving control of funds from donors to organizations, we create the trust, accountability, reciprocity and community that are absent from traditional philanthropy models," according to RSF Social Finance's website. Not only that, the shared gifting process allows nonprofits to honestly share their vulnerabilities and consider riskier and more creative propositions.
At RSF Social Finance, the grant giving process starts when the team works with a donor to narrow down the focus of the donation. Once a particular field has been selected, staff members determine a geographic region to focus on and reach out to a large number of nonprofits that may be interested in participating. They then review the nominations they've received and invite around a dozen organizations to submit a proposal. The proposals are then shared between all the participating organizations in preparation for the shared gifting circle day.
The shared gifting circle is a day-long event where grant applicants get together to ultimately decide how the grant will be distributed. On the first half of the day, "people come together and get to know each other on a personal level," says Lanphier. In the afternoon, the group listens to each other's proposals and starts the process of divvying up the funds. This is an involved two-round process during which participants first focus on the funds they need and then decide on whether to share some of their funds with other members of the group. Lanphier says that "it is common for the organization that has the most need to walk away with the most amount of money." 
News and comment
Participatory grantmaking puts new spin on how nonprofits receive funding, Feb 20 
How Innovative Funding Models Could Usher in a New Era of Worker-Owned Platform Cooperatives, Aug 28 
Open Collectives: transforming our cities from the bottom-up, Apr 11 
see also: Belgium, Funding
Community philanthropy: a brave new model for development funding? Nov 29 
Democratic Money and Capital for the Commons, David Bollier, January 14 
Can soup change the world? March 13 
Collaborative Funding is the New Collaborative Consumption, April 9