Yeah, assurance contracts make the "figuring out what to fund" easier, since there's sort of a natural selection process. You still have execution risk, though, which is probably the biggest problem right now: if I'm contributing to fund the creation of some software, how do I know the funded people will actually deliver?

That's where a trusted intermediary probably has to come into play. The best thing I can think of at the moment is a version of Kickstarter that vets the candidate projects almost as thoroughly as a VC would and takes a cut for providing that service. Not sure how the business economics would play out in practice, though.