London city innovation: Pay-it-Forward

Pay it Forward London so far has helped businesses raise around £200,000, and is an example of partnership and iteration with the tech sector to make a real difference to businesses.

When the Covid-19 virus hit, the GLA’s Economic Development function became for the first time a frontline service. As well as offering advice, guidance and listening to the needs of businesses, there was a clear call for direct financial intervention to support businesses.

The lockdown was in essence a whole-market-failure — businesses reliant on physical trading were immediately put into a cash flow crisis.

The response from the central government whilst generous, did not cover everyone and was not available at the speed that some businesses needed in order to keep afloat.

Pay it Forward London was spun up in order to address this gap in provision.

With zero fees to any party, the platform, generously powered by Crowdfunder LTD, offers small businesses the ability to sell goods/services now on a promise of delivery once it is safe to reopen.

The power of ‘rewards-based Crowdfunding

We began by assessing alternative means of supporting cashflow: whether through booking platforms or the GLA managing a voucher scheme in-house.

We found these had numerous drawbacks — both in terms of their market coverage, and the fact that they required a level of administration which would create costs and mean less money going to the SMEs in need.

At the same time we conducted some basic market research to road test our assumptions with 30 companies from across London — which whilst not quite a randomised control trial, did have some interesting — if predictable — findings:

  • All but 2 businesses we spoke to expected to suffer cash flow problems resulting from the Covid-19 lockdown.

Obviously the pre-pay model is not suited to all businesses — for instance those which sell many items at low cost, or those who need to operate same day delivery — for whom it is irrelevant. However the message was clear: businesses were expecting to lose almost all of their income and if supported by the Mayor they’d spend this money to stay afloat — securing jobs and livelihoods through this crisis.

Paying it forward in exceptional circumstances

There are some differences to ‘paying it forward’ in normal times. On one hand there is an additional risk to business survival, and on the other hand is the fact that Londoners actively want to help businesses in their area.

Rewards-based crowdfunding works by facilitating a direct relationship between a business and a member of the public, and the wisdom of the crowd means money ends up in the hands of campaigns which are trustworthy, known to supporters and serious.

Funds don’t get off the ground if the crowd has no faith. This trust is even more important during Covid-19 when even good businesses acting in good faith could cease trading for reasons outside of their control.

For this reason — and because we know Londoners were looking for a way to support businesses in their locality — we needed to make campaigns searchable and discoverable based on area.

So Crowdfunder introduced a map function for the first time on our site — something which is not generally used or needed in normal crowdfunding situations.

Marketing is really the superpower of paying it forward in this way — as business owners are incentivised to shout about their project, to reach out to potential supporters and grow their ‘crowd’. This means people generally find campaigns because they’ve been sent them, however because we are harnessing the power of community support, we need to ensure Londoners can find them.

The results have been great so far.

Pay it Forward London has helped over 150 companies raise around £200,000 through the support of Londoners. You can check out, search and hopefully donate to, the London businesses trying to survive and thrive after Covid-19 here. Some highlights have been:

  • The Woodman — a pub in Southgate which has seen an outpouring of support from it’s local community
Live campaigns

Across the wider Crowdfunder platform the numbers for London are huge (not all campaigns originate on our site, and many predate our own). We have now on-boarded them, mapped them and now promote them alongside the campaigns which started on

The larger number is around £1.3m in donations aimed at supporting 269 businesses. Across other funding platforms, there will be even more examples of community support for small businesses.

Music venues have been some of the biggest winners across London and account for much of this higher number, with the Jazz Cafe in Camden accounting for around £130,000 alone. London’s Night Czar Amy Lame’s blog about the importance of supporting this sector is available here.

The next iteration

Pay it Forward was created as a means of supporting cash flow in businesses who were unable to physically trade due to the lockdown restrictions.

Obviously as businesses have begun to reopen, this begs the question about what next for Pay it Forward, and how it could support safe re-opening, business diversification and digitisation, and how it could ensure London’s small businesses can survive and thrive through the economic shocks likely to follow Covid-19.

As with everything we do, we will start by speaking to those who we want to support.

@MayorofLondon CDO & Smart London Board putting data & technology at the heart of making London an even better place to live, work and visit

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