There are distinct differences between crowdfunding vs. peer-to-peer fundraising but both are popular fundraising tools that leverage the networks and social media to generate donations.
Crowdfunding often relies on word-of-mouth and is a one-and-done type of support.
Successful peer-to-peer campaigns require a bit of strategy between your organization and your supporters – like setting up individual fundraising pages.
Here, we’ll look at both types of fundraising so you can choose the one that most closely matches your campaign goals.
Crowdfunding
Crowdfunding is typically used to fundraise for personal causes such as creative endeavors or to help with healthcare bills. Individuals set up a crowdfunding campaign and share their idea or need to a large number of people, including their personal networks. I’m sure you can see how this is a similarity between crowdfunding vs. peer-to-peer. Once a crowdfunding campaign is created, the organizer can pitch their idea or need to a large number of people, usually through social media. Those who choose to give to a crowdfunding campaign are giving directly to the source.
Crowdfunding campaigns often have a set funding goal and a deadline. Sometimes, donors can make contributions in exchange for rewards or perks related to the project.
Advantages of Crowdfunding
- No application process with easy access to funds.
- No long wait periods to receive funds.
- It allows you to reach people outside of your network.
- It takes the fear out of asking for financial help.
- You can generate increased visibility for a specific need, like hospital bills or the funds needed to do something good in your community.
Disadvantages of Crowdfunding
- Some online crowdfunding tools comes with fees that take a percentage of all the funds you collect.
- Most third-party platforms don’t allow much control over the way you create the campaign online.
- You may run the risk of not getting paid out. That’s right! Some platforms won’t collect from your supporters unless your campaign is completely funded – read the fine print closely.
- You’re usually unable to collect donor data.
Crowdfunding campaigns may take less work on the backend, but require more effort from the organizer to spread the world and solicit donations.
While crowdfunding certainly has it’s place, it is typically a one-and-done type of fundraising event. For organizations with a long-term fundraising strategy, it may not be the best option. However, for needs-based fundraising, crowdfunding campaigns are a great option. You can create your own crowdfunding campaign with a WordPress website and GiveWP. By connecting your website with GiveWP, you’ll have powerful donation forms and tools to help make your project easy to manage.
Peer-to-Peer Fundraising
The similarities between crowdfunding vs. peer-to-peer fundraising start and end with this one: individuals leverage their personal networks to fundraise.
Crowdfunding donations are social campaigns in which donations flow through a single crowdfunding page. Peer-to-peer fundraising campaigns are created by an organization using a central campaign page that encourages their supporters to create their own participant fundraising page.
These supporters fundraise on behalf of your organization by networking with other individuals, such as friends, family members, and colleagues. Donations flow through an intermediary – the supporter – to the organization.
These campaigns work best with an element of gamification or online tools or leaderboards to help teams or fundraisers see their progress.
Advantages of Peer-to-Peer Fundraising
- Create a personal connection with donors to specific campaigns.
- Leverage social networks to generate visibility.
- It’s fun to design and easy to share.
- It takes the fear out of asking for financial help.
- Access to new audiences or potential fundraisers from peer networks.
- Empowering donors to serve as advocates and spread your nonprofit message.
There are a few pitfalls with peer-to-peer fundraising that you should also be aware of. Setting up a peer-to-peer campaign can be somewhat time-intensive. However, because your supporters are fundraising for you, there is less effort required from your fundraising staff.
The good news is that GiveWP tools include a peer-to-peer fundraising add-on, which can make setup and getting started easier. It’s got everything you need to gamify fundraising and help donors engage their networks.
Key Differences: Crowdfunding vs Peer-to-Peer
There are some distinct differences between crowdfunding and peer-to-peer fundraising. Choose the option that’s most aligned with your campaign goals, overall strategy, and works within the model you have established for generating funds.
Fundraising Types
Crowdfunding is typically used to raise funds for a specific project or idea, such as launching a new product, making a film, or developing a new technology. Peer-to-peer fundraising is usually done to raise money for an overall cause or charity and is less project-based.
The types of donations can be different, too. Crowdfunding includes multiple, small contributions; peer-to-peer often involves larger contributions from fewer individuals.
Donor Engagement
When it comes to donor engagement, crowdfunding campaigns often offer rewards or perks to donors who contribute to the project, while peer-to-peer fundraising focuses more on building relationships between the fundraiser and their personal network of donors.
Time-Bound
Timing is also a big differentiator. While peer-to-peer fundraising is often ongoing, with multiple individuals raising funds over a longer period of time, crowdfunding is usually a one-time event with a fixed goal and a deadline.
Audiences
Crowdfunding campaigns target a broader audience who may or may not have a specific connection to your project or goal. Peer-to-peer fundraising is usually limited to your supporter’s personal network.
Fundraising Control
Finally, peer-to-peer fundraising allows your nonprofit to have a little more control over the process by running it through your website and directly connecting to an overall mission or goals. Crowdfunding pages may be in the hands of the platform.
Which One Is Right for My Nonprofit?
There’s no right or wrong answer here. Tying your mission and your fundraising goals into this decision will allow you to make the best choice. There are benefits to each and they serve different audiences and purposes.
If your primary goal is to generate new donors or engagement, start with peer-to-peer fundraising. It’s quick and easy to set up, there are no percentage fees for trying this method, and it can be a fun way for your best donors to share your mission in their networks!
Learn more and get started today with GiveWP and the Peer-to-Peer Fundraising add-on.
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