Crowdfunding vs. P2P Fundraising

Crowdfunding vs. P2P Fundraising

crowdfunding for your capital campaign

If you’re a nonprofit organization using inbound marketing and you’ve used crowdfunding for your capital campaign, then you might have heard of Peer-to-Peer fundraising. The terms crowdfunding and Peer-to-Peer fundraising (a.k.a P2P) are often used interchangeably, but they are actually quite different.

Crowdfunding usually refers to an effort to pool money for a campaign or initiative from people online. In a traditional crowdfunding campaign, an organization sets up a central campaign page that acts as a central hub on their non profit website. Then the organization works to drive traffic to that page through inbound marketing strategies in hope that visitors will engage with the website, take action, and become donors.

The target audience of crowdfunding and capital campaigns usually includes the organization’s donor base but also individuals on the web. Because the internet is this such a vast community that connects millions of people daily, the potential of increasing your network through crowdfunding is limitless. In fact, 72% of donors who give in crowdfunding campaigns are first time donors. Granted that you have a donor retention plan in place, you’re almost guaranteed to see growth in your network.

P2P fundraising is a little different. It started out as a niche form of crowdfunding, but it’s beginning to grow into something of it’s own. In a P2P campaign, individuals from your donor base set up their own pages on behalf of your cause. The individual who sets up that page is then responsible for driving traffic there, and any funds collected on that page are siphoned to your organization. Basically, your supporters to do all the work, and you get to keep the donations.

Because it’s more of an individual initiative instead of an organizational one, it gives your supporters the chance to make your cause their own. Many people like to use P2P fundraising to raise money in place of a life event.

For example, let’s say one of your donors has a birthday coming up. Instead of receiving gifts this year, they would like for their friends and relatives to donate to your cause. Your supporter goes online and uses your P2P platform to set up their own page. They then promote that page on their Facebook and Twitter accounts and collect donations from the people in their network.

While it does give non profit organizations the chance to really engage their supporters, P2P fundraising is not an effective way to make sure your bills are paid every month. Because it will be your supporters who are doing the fundraising, you have very little control over the outcome.

To really make P2P campaigns successful, you’ll need to teach your supporters how to fundraise for you. That means you will not only have to educate your supporters to use your P2P platform but it could also mean a lot of hand-holding and coaching throughout the process.

Additionally, P2P fundraising does not have the same potential for network growth and donor retention as traditional crowdfunding does. Don’t get me wrong, the potential is there. It’s just not the same kind of potential.

The target audience of a P2P campaign is not the general community of the internet but rather your networks’ networks: your supporters’ friends and family. Because the campaign will be focused on specific group of individuals, it’s less likely to reach as many people as a traditional crowdfunding campaign.

However, first time donors who donate through a P2P campaign already have some sort of connection with your organization. Your supporters will represent your organization, and if their friends and family trust them, then they will trust you. If they trust you, they’re more likely to give to your organization again.  

Lastly, because P2P campaigns use a lot of individual pages instead of one central page to collect donations, everything is more difficult to track. If you want measurable data, we recommend you stick to traditional crowdfunding. But if you have a trustworthy group of supporters who wouldn’t mind doing a lot of work for you on their own time, then you might consider P2P fundraising.  

All in all, online fundraising is a great way to recruit new donors, build a donor retention strategy and build  support of your organization online. Running successful crowdfunding and capital campaigns require the same amount of time and energy. Need to be convinced? Download this case study of one of our clients.{{cta(‘aa04b664-0099-45db-9a6d-0c99a3c63e89′,’justifycenter’)}}