BERLIN, July 21 — The shift is subtle, but real: crowdfunding has gone from a niche internet experiment to a multi-billion-dollar force in global finance. Yet for all its hype around sustainability, the numbers tell a different story. Crowdfunding, as defined by its practitioners, is the practice of funding projects by raising money from a large number of people, typically online.
It is a form of crowdsourcing and alternative finance that bypasses standard financial intermediaries. The modern model relies on three types of actors: the project initiator who proposes the idea, the individuals or groups who support it, and a moderating organization — the platform — that brings the parties together.
The term itself was coined in 2006 by entrepreneur and technologist Michael Sullivan to distinguish traditional fundraising from native internet projects and community efforts.
From Subscriptions to the Statue of Liberty
But the concept has deep roots. Books were funded through subscription schemes long before the web. War bonds, in theory, functioned similarly.
In the 1730s, London’s mercantile community saved the Bank of England by supporting the currency. The philosopher Auguste Comte issued notes for public support in 1850.
The cooperative movement of the 19th and 20th centuries pooled funds from many members. Perhaps the most famous early example: in 1885, a newspaper-led campaign attracted small donations from 160,000 donors to build the base for the Statue of Liberty. That was crowdfunding before the word existed.
The Internet Era Begins with a Rock Band
Online crowdfunding gained real traction in the arts and music communities. The breakthrough moment came in 1997, when fans of the British rock band Marillion raised US$60,000 to underwrite a U.S. tour. That was a watershed — proof that the internet could mobilize small contributions into a meaningful sum.
In Berlin, a company called Bonaverde used crowdfunding to obtain money for its project. It is one of many for-profit ventures that have tapped this model, which now funds a wide range of entrepreneurial projects: artistic and creative works, medical expenses, travel, and community-oriented social entrepreneurship.
The Sustainability Disconnect
Despite crowdfunding’s frequent association with green and social causes, empirical validation has shown that sustainability plays only a fractional role in why people back projects. The link is more rhetoric than reality. The platform has also drawn criticism for enabling quackery — particularly costly and fraudulent cancer treatments that prey on desperate patients.
By 2015, the total amount raised globally through crowdfunding had surpassed US$34 billion. That figure encompasses everything from for-profit ventures to artistic projects to medical expenses to travel to community-based social entrepreneurship.
So what’s changing? The trend underneath is that crowdfunding continues to evolve, but its environmental promise remains largely unfulfilled. Watch this space: as the model matures, the question isn’t whether it can fund sustainability, but whether funders truly want it to.
