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Peer to Peer vs Crowdsource: What is the Best Fundraising Tactic

Crowdfunding and peer to peer fundraising are two very similar ways to raise funds for non-profit organizations. In this blog, we’ll break down the differences between the two and explain how and why these methods work.   

While the purpose of crowdfunding for nonprofits is to collect many smaller donations from multiple supporters in efforts to reach a set goal, peer to peer fundraising is a method that allows your supporters to raise money on your behalf through their various personal and independent networks.    

For example, say you are raising money for your annual Giving Tuesday campaign. For a crowdfunding campaign, your organization would create a single page that would be shared with your existing donors or followers (i.e., a landing page you have created). Alternately, for a peer to peer campaign, you would create a parent page that gives an overview of your organization. Within this, your followers will be able to create their own personalized pages to share with their networks, which gives you access to donors who perhaps weren’t familiar with your mission beforehand.   

So, which method is best for you? Let’s break it down. Here are the fundamentals of how each approach works and why they are successful.   

Crowdfunding for Nonprofits:    

Crowdfunding is the less complex of the two methods and works well when an organization has an active group of supporters who regularly donate. The focus is on a single campaign fundraising page, with a more general message or request, rather than multiple campaign pages.  

These pages tend to be active for longer periods of time and are more focused on ongoing, sustaining efforts or a large capital campaign.  

When to use crowdfunding:  

If you have a smaller staff, have a reliable audience who will help share your campaign and want to take a less complex approach, crowdfunding for nonprofits is an easy way to get a fundraising campaign up and running quickly.  

By using only one page, crowdfunding requires fewer resources when compared to peer-to-peer. When using this approach, organizations are choosing to raise funds using the set tools they currently have, instead of learning and using new tools or relying on volunteer fundraisers.   

Best practices:    

  • Begin by determining your goal and setting up your campaign. Think about who your target audience will be for this campaign. Do you have an existing network that you communicate with regularly, or will you work to build a new network for this campaign?   
  • Engage as many people as possible with the campaign. This can mean leveraging phone calls, emails, social media, advertising , etc. The more people who see the campaign, the more likely they will be interested and donate.    
  • Track the progress of the campaign and analyze the results. This information will help with the dos and don’ts for the next campaign and determine the best fundraising channels and tactics.    

Benefits of crowdfunding:    

  • Crowdfunding for nonprofits is an easy way to get more donations because you are asking a large audience to donate smaller amounts.   
  • For smaller groups this method is quick to set up and easy to share.   
  • If you have an active base of donors who donate to your campaigns on a regular basis, you can count on them to support your campaign.   

Peer to Peer Fundraising:   

The peer to peer fundraising technique is also referred to as social, team or personal fundraising.   

This approach is different from crowdfunding because it uses multiple smaller fundraising campaigns to reach new audiences through your existing donor’s various personal and professional networks to enable maximum impact.    

Your existing supporters become your fundraisers and recruit their friends and family members as participants to make donations to the campaign they are driving.   

Not only is this a great opportunity to raise funds and grow your donor base, but this is also the perfect opportunity to engage your existing supporters and increase their impact to keep them involved and energized.  

Variety can be key. By allowing your fundraisers to customize their message to their particular network or target group, the various fundraising campaigns become highly personalized which can drive emotional engagement and create friendly competition between groups.  

When to use peer to peer fundraising:  

If you’re looking for a way to build stronger relationships with your existing supporters, while also reaching a larger audience and meeting new donors, peer to peer fundraising is the perfect strategy to implement in your next campaign.    

How it works:   

  • Begin by determining your goal and setting up your campaign. Be sure that your goals are clear, and your execution is thoroughly thought out.    
  • Recruit supporters from your existing group of donors or volunteers. Look for people who are friendly, honest, well-connected, and passionate about your cause. These people may be prior top donors or just people who have continually voiced support and shared or retweeted past campaigns.  
  • Engage these donors with a personalized appeal and then set them up with their own individual campaign pages.   
  • Have those existing donors share their campaign pages with their family, friends , and contacts on different platforms and networks such as through email, Facebook, Twitter, etc.    
  • Track the progress of various fundraising campaigns and continue to be of assistance to the supporters.   

Benefits of Peer to Peer Fundraising:    

  • Campaign pages are customizable to each individual supporter and are reflective of their personal mission, which adds a human touch.   
  • It allows staff and donors an opportunity to bond and build stronger relationships through working together closely.   
  • Donors will feel closer to your organization after raising money through their personal network and that engagement, emotional connection, and pride can result in great momentum.   

Which should you use:  

Like anything else, fundraising can get frustrating, but the best thing to do before setting up any campaigns is to sit down and make a well-thought-out plan to help determine the approach that will work best for your organization.  

When distinguishing which approach to take, the factors that come into play are largely dependent on the resources of your organization. Some of these factors may include the size of the staff, the campaign goal, the timeframe of the campaign and your existing network.   

Questions to ask yourself before deciding between crowdfunding or peer-to-peer fundraising:  

  1. What resources do you have available and what tools can you leverage effectively? Are there new resources you can use and how can they help in your campaign efforts?  
  2. What is the size of your staff?  
  3. Who is in your existing network?  
  4. What is the timeframe you have to work with? 
  5. How will you encourage your supporters to stay active and motivated in sharing the campaign with their family, friends and social media?  
  6. How will you appeal to new audiences? (i.e., having a contest between donors or matching donations).  

In most cases, peer to peer is likely to show a better return on investment, as the campaign is prone to be seen by more people, but if you want to limit your resources and already have a strong, active group of donors, crowdfunding may be the way to go  

Crowdfunding for nonprofits may be less complex and require fewer resources than peer to peer fundraising; however, it also has more limitations in reach and messaging which can result in worse results, especially in a short time frame.   

If maximizing campaign efforts is your ultimate goal, peer to peer fundraising is likely the more efficient of the two.  

In Summary:  

  • Crowdfunding and peer to peer fundraising are similar fundraising approaches and both are great tools for reaching donors and driving campaigns.  
  • Of the two, crowdfunding campaigns consume less resources and require less staff and volunteer training, but peer to peer is likely to generate more donations and have a broader reach.  
  • Crowdfunding works well if you have an active group of donors who regularly support your campaigns because it focuses on one campaign page where general donations will be made directly to the organization over a longer period of time.   
  • Peer to peer uses multiple customized pages and engages existing volunteers and donors to become fundraisers by soliciting and involving their personal and professional networks.   
  • Peer to peer requires having more strategic planning but generates maximum donations.  

Overall, crowdfunding and peer to peer fundraising are both critical tools in reaching your nonprofit’s financial goals. Choosing the best approach for you will largely depend on the tools your organization has access to and how much time you have to dedicate to either strategy.    

For more information please reach out to us. We’d be happy to discuss your goals and recommend solutions or strategies to help your organization.