Butte may soon be a forerunner for a new concept in the world of rural economic development.
This is because the folks at Headwaters RC&D are teaming up with a Wyoming-based company to bring crowdfunding to Butte.
On Wednesday, Headwaters officials announced that Butte has been selected to be one of among 20-plus test sites for a research project that will investigate the effectiveness of crowdfunding as a tool for economic development.
In case you don’t have your finger on the pulse of everything tech, crowdfunding is an internet-based fundraising technique that’s gained popularity in recent years.
Sites like GoFundMe and Kickstarter have led the way in the concept, and they work like this: instead of applying for grants or getting a bank loan, businesses, organizations, or individuals can harness the power of the internet by submitting fundraising campaigns to websites where users can donate to projects of their choice.
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In 2015 alone, crowdfunding platforms raised more than $34 billion worldwide, and their websites have yielded some sophisticated campaigns replete with slickly produced promotional videos.
While crowdfunding seems to have demonstrated its usefulness in the marketplace of ideas, The Local Crowd, the company behind the research project, plans to give the concept a grassroots, community-driven twist.
Company co-founder Diane Wolverton said both she and her business partner Kim Vincent are passionate about promoting economic development in rural America.
Wolverton has over 21 years of experience in economic development, having served as the state director of the Small Business Development Center at the University of Wyoming and the executive director of the Wyoming Smart Capital Network.
Vincent, meanwhile, is a counselor at the Wyoming Women’s Business Center in addition to running her own small business in downtown Laramie and lecturing in an adjunct position at the University of Wyoming.
In 2012, Wolverton said, the duo started The Local Crowd after hearing about crowdfunding’s success in other spheres.
“When I saw crowdfunding come on the scene, I thought there must be some way it can be tooled for rural America,” said Wolverton, noting that small businesses in rural communities often have difficulty locating the capital they need.
To solve this problem, Wolverton and Vincent came up with the idea of creating a crowdfunding platform geared toward fundraising at the local, community level.
They received a $100,000 grant from the USDA to conduct a feasibility study, and in 2015, they got a $500,000 grant to implement the platform and conduct a research project using different test sites.
To take part in the project, Headwaters officials submitted an application for Butte to become one of the test sites.
Julie Jaksha, the Small Business Development Center director at Headwaters, said she decided to take part in the project after hearing about The Local Crowd from economic development leaders in Bozeman, who are also taking part in the study.
Jaksha said she thought Butte would be a good candidate because of the level of community engagement among its business owners.
“They want to support each other,” said Jaksha. “I think that it’s pretty exciting, and I think it’s going to be a good tool for economic development.”
Wolverton agreed.
“They had an awesome and enthusiastic team and a real desire to help local businesses,” she said. “Also we thought the story of the building of Our Lady of the Rockies shows that the community has a history and culture of coming together for projects they care about.”
Wolverton added that one cornerstone of The Local Crowd — and what sets it apart from other crowdfunding platforms — is its emphasis on local people supporting local projects.
But what also sets it apart, Wolverton said, is the multiple ways that residents can support campaigns.
In addition to donating money, donors can also offer in-kind support or matching donations. Similarly, the platform allows businesses to donate sponsored rewards for donors while the funds from offline fundraisers can also be added to the campaigns.
So far communities that have signed up for The Local Group study are Driggs, Idaho; Fulton County, Illinois; Laramie; and Bozeman, among others, and projects have included everything from funding an artist incubator to helping launch a dried fruit company.
The next step in the process for Headwaters officials will be to take part in an eight-week online training program to introduce them to the crowdfunding software.
“We’re training the trainers,” said Wolverton.
After the training, Headwaters officials will be versed in promoting the platform and teaching organizations how to use the platform and submit and run a successful campaign.
The target date for the launch of Butte’s crowdfunding page — which will be hosted on The Local Crowd website — is early 2017.
All in all, Jaksha said, innovative solutions like crowdfunding can help those entrepreneurs who have difficulty raising the capital necessary to start their business.
Also, she said it’s a great way to double down on investment.
By investing in local projects, Jaksha said, she hopes residents will also become invested in their success.
