Two projects each collect the same amount. One receives it from a single wealthy supporter; the other receives many small contributions. Ordinary fundraising treats the totals as equal. Quadratic funding is designed to notice the difference and direct more matching support toward broader participation.
Its basic calculation squares the sum of the square roots of individual contributions. An outside subsidy supplies the matching funds, so contributors’ payments can attract additional resources.
Counting people changes the game
Imagine a community funding public workshops. A beginner-friendly project backed by many small donors could receive more matching money than a specialist project with one large donation. That is a choice about what the fund wants to reward, not proof that the broader project is better in every respect.
Once the number of contributors matters, identity matters too. One person pretending to be many people can distort the result. Groups can also coordinate donations to capture matching funds. Verification and rules against collusion become part of the mechanism rather than optional platform features.
A finite matching pool introduces another constraint: supporting one project affects what remains for others. The amount available, the reliability of identities, and coordination among donors can all change how closely the allocation reflects independent support.