Crowdfunding vs. P2P Fundraising: When to Use Which

Without question, it is a fascinating time to be a Fundraising Professional. With the influx of technology, fundraising is being thrust into some very exciting and positive places.

 The two main catalysts in this are crowdfunding and peer-to-peer fundraising(P2P) who are swiftly positioning themselves as the go-to strategies for many. With the opportunity to greatly enhance fundraising goals, it’s not hard to comprehend why these are compelling strategies. Unfortunately, both of these approaches can be confused or improperly implemented. While on a Venn-diagram, many can argue the commonalities, both have stark differences, lending themselves more appropriately to certain initiatives. Let’s take a look at 2 common scenarios and the tactic to utilize.

 Scenario 1: Raising money for needed documentary and trip

 While obvious to some, for others its not: this fits best into a crowdfunding campaign scenario. Arguments could very well be made to utilize P2P tactics, but with so much overlap and the specificity of the goal, it is best to utilize crowdfunding.

One thing to see crowdfunding as, and most do not, is a marketing campaign or a supporter recruitment. Use the visitors to these sites as potential lifetime supporters. If there’s interest in your campaign, provide them with incentives driving to other involvement. Always push for database growth. Remember: supporters, in this strategy, are expecting some type of incentive in return. This is proper protocol, whether or not you agree with it. Also, make sure to use sites that align with your ultimate mission. While Kickstarter and Indiegogo reign supreme, both are geared towards Film, Arts and new technology. Crowdrise or a personally developed platform may be more advantageous. Lastly, use ranking systems such as Alexa to ensure that visitor rates will provide visibility for your initiative. You don’t want to spend the time on the content build if no one will see it. Strategize, strategize, strategize.

Scenario 2: Expanding fundraising for annual Walk

More than likely, your walk has had a kernel of peer-to-peer methodologies built into it, but a way to achieve real dollar growth, is to employ peer-to-peer strategies and software that allows for your fundraisers to truly succeed. Even more so than with crowdfunding, the platform is key to the success of a P2P campaign, so ensure that it is easy for your constituents to send information to their friends, keep them engaged, and convert them to fundraisers themselves. If your tools do not enable this, shop the marketplace.

 With the advancement of User Centered Design, more often than not, possible donors are expecting comparable experiences to those of large e-commerce sites. Think of it this way: if it’s too hard to donate on mobile; takes too long, you’ve lost a donation and possible fundraiser/supporter in the long run. This is crowdfunding’s advantage currently: better digital environments. Push the envelope. Don’t be afraid to customize and fundamentally, do not fear change. You can handle the technical implications.

 A great point of reference is that our current clients have seen a 10-15% uptick in their year-over-year fundraising when switching over from older, less intuitive software. Our nonprofits quickly realized that the troubles assumed, were not as great as the troubles with their current software’s design.

 2014 is an exciting year for fundraising. With advanced technology continuing to push into the non-profit sphere, organizations are pushing the envelope, trying new things and being truly innovative. Both crowdfunding and peer-to-peer have advantages and disadvantages, but both offer a new world to NPOs. No matter which strategy you choose, realize that each is moving you in the right direction and that both are not mutually exclusive: blend, push software and push the developers to the limit. Remember, great vendors want you to succeed and our willing to build to help you. Great vendors are your partners! 




Leave a Comment


Request a Demo Today

See how a modern fundraising solution can grow revenue year after year!