Community crowdfunding is a fundraising method where individuals, businesses, and organisations contribute financially to community projects. It includes debt-based, equity-based, and donation-based models.
Resource
Funding mechanism: Community crowdfunding
Community crowdfunding is a fundraising method where individuals, businesses, and organisations contribute financially to community projects. It includes debt-based, equity-based, and donation-based models.
*Local authorities could assume both an investor and project owner/fundraiser role (see Cheshire East Council case study).
The example in the diagram represents a donation-based model.
Fundraisers create project campaigns on crowdfunding platforms, which outline objectives, funding targets, and timelines. Once the campaign ends, funds are transferred to the project owner and distributed to recipients.
Community crowdfunding is typically employed to reduce the costs of heat pump installations in buildings that serve a community, rather than individual homes. However, this model could have the potential to work for domestic properties if funds are raised through donations for community-focused organisations that could, in turn, use the funds to support heat pump installations in individual homes.
Donations may come from businesses seeking to support local initiatives that align with their own decarbonisation and sustainability goals. They could also come from local individuals passionate about sustainability and looking for ways to support their community.
Local authorities could also provide match funding to supplement any donations received.
Case study: Cheshire East Crowd
Overview
In 2023, Cheshire East Council launched the Cheshire East Warmer Greener Community Buildings Fund – a crowdfunding initiative supporting rural community projects focused on decarbonisation.
The initiative is being delivered in partnership with Spacehive, a community fundraising platform.
The fund offers grants to organisations across the borough for:
- The provision of Net Zero infrastructure for rural communities.
- Kitchen facilities in community hubs.
- Resilience infrastructure and nature-based solutions that protect from natural hazards, including flooding.
Once submitted by organisations, projects are reviewed and verified by Spacehive before going live on the platform to start receiving pledges from the community.
Financials
Once projects are live, Cheshire East Council’s evaluation panel can choose to pledge up to 75% of total project costs, supported by the UK Rural and Shared England Prosperity Fund.
Scale of deployment
Although the fund is currently closed, Spacehive reports that 23 projects successfully met their funding goals, with £208,652 pledged by 1,405 projects.
- Cheshire East Council. (2023). Council launches warmer greener crowdfund initiative.
- SpaceHive. (2025). Cheshire East Crowd.
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