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Peer-to-peer fundraising and crowdfunding are both effective fundraising strategies. However, because of their similarities, they are often confused with one another or thought to be the same fundraising strategy. As a result, these two powerful fundraisers are regularly misapplied.

Generally speaking, when discussing these strategies, crowdfunding refers to a process where an individual or organization collects donations directly from a large number of supporters for one specific project, while peer-to-peer fundraising refers to a process where supporters collect donations from their networks of family, friends, and colleagues on behalf of a nonprofit. But their differences also run much deeper, and this article will dive into five core ways these fundraisers are unique from one another:

• Difference #1: Hosts
• Difference #2: Goals
• Difference #3: Audiences
• Difference #4: Resources
• Difference #5: Platforms

After reading each section, take some time to identify where you or your organization falls according to each difference. For example, after reading Difference #2, do your goals better align with that of a crowdfunding campaign or a peer-to-peer fundraiser? Your answers will help you determine the kind of fundraiser you should run. Let’s dive in!

Difference #1: Hosts

Crowdfunding and peer-to-peer fundraising have the same general purpose to raise funds, but each campaign has different requirements for who can run it. While crowdfunding can be used by both individuals and organizations, peer-to-peer fundraising is used primarily by organizations.

Crowdfunding for Individuals and Organizations

Because of their ease to set up and manage, crowdfunding campaigns can be run by individuals, for-profit businesses, nonprofits, advocacy groups, and other organizations. With crowdfunding, supporters can submit donations via a single donation page directly set up by either an individual or organization.

With only one donation form, organizations or individuals running a crowdfunding campaign have almost complete control over their messaging and can customize their donation page to display a cohesive branded experience for supporters. It will be up to you to design your donation page and promote your campaign by sharing your story with text, images, and video, distributing incentives, and regularly updating your followers across communication channels.

Peer-to-Peer Fundraising for Organizations

On the other hand, with peer-to-peer fundraisers, instead of the organization fundraising by directly soliciting supporters, individual supporters fundraise on the organization’s behalf with their own decentralized donation pages.

Because managing so many individual fundraisers can be resource-intensive, peer-to-peer campaigns are usually run by organizations—from nonprofits and universities to churches and soccer teams—with institutional support. Additionally, as each individual fundraiser sets up their own donation page, your organization will give up a degree of control, as individual fundraisers can decide how to present your organization. Plus, while you should provide fundraisers with as much support as they need, whether their individual campaigns succeed will be in their hands.

Difference #2: Goals

While both fundraising methods focus on collecting donations from donors, they each take unique strategies that align with specific goals.

Crowdfunding Goals

Typically, crowdfunding is used to raise money for a one-time purchase, expense, program, or project.

For individuals, these campaigns are often related to covering health costs, college tuition, and other major expenses. For nonprofits, crowd fundraisers are usually used to fund new programs and capital campaigns, such as constructing a new building.

With this in mind, Fundly’s guide to crowdfunding suggests this fundraising method is best used if you want to:

• Raise money for a one-time expense or time-bound project
• Raise awareness about your cause among new donors

Ultimately, you can use your crowdfunding campaign to unite your followers—new and old—to advance your mission by funding one major objective.

Peer-to-Peer Fundraising Goals

In contrast, peer-to-peer fundraising’s strength lies in deepening your existing relationships with supporters while leveraging their networks to raise funds.

Common peer-to-peer fundraising goals include:

• Build relationships with your most loyal supporters
• Diversify your revenue streams
• Promote an accompanying fundraising event

Since their goals are different, crowdfunding and peer-to-peer fundraising often operate on different timelines. Crowdfunding campaigns, built around a single purchase or project, are generally constrained by specific start and end dates with the time limit creating a sense of urgency that pushes donors to contribute quickly. On the other hand, while peer-to-peer fundraisers can have set start and end dates, they are often kept open year-round, with donors setting up pages for life-related events such as birthdays or marathons on a rolling basis.

Difference #3: Audiences

One of the starkest distinctions between peer-to-peer fundraising and crowdfunding is their target audiences. Let’s take a look at how these differ!

Crowdfunding Audiences

Approximately 62% of those who donate to crowdfunding campaigns are new to an organization. In this sense, crowdfunding’s success relies heavily on reaching new supporters who are likely unfamiliar with your cause. If you go with a crowdfunding campaign, leverage your social media followers (donors and non-donors alike) to share and help promote your campaign to bring in new supporters.

This is because crowdfunding campaigns tend to have large fundraising goals that can only be met when a crowd of people come together to offer small and moderate donations. Due to the sheer number of donations required to achieve a large fundraising goal over a short period of time, most nonprofits need to attract new supporters to meet their goals.

Peer-to-Peer Fundraising Audiences

In contrast, peer-to-peer fundraising campaigns’ structure means nonprofits must begin with their existing supporters. While the donations you receive come from your supporters’ network of family, friends, and colleagues, your campaign relies on having strong relationships with your current base of passionate supporters.

In fact, peer-to-peer campaigns can be an opportunity to further develop and deepen your relationships with your most passionate existing supporters who are fundraising on your organization’s behalf.

Difference #4: Resources

While both peer-to-peer fundraising and crowdfunding require time and energy, each needs different types of resources to be successful.

Crowdfunding Resources

Without the proper strategy, outreach, and resources, crowdfunding campaigns can quickly fall flat. Your organization is likely in a good position for crowdfunding if:

• You have an engaging, well-branded, user-accessible donation website.
• You have time to regularly update a campaign page and share updates.
• You have the ability to share your message widely.

In a crowdfunding campaign, you and your organization (rather than your supporters) are the primary driving force behind your success. Your supporters can share and promote your campaign, but it’s ultimately up to your team to build momentum and visibility for your campaign.

Peer-to-Peer Fundraising Resources

Compared to crowdfunding, peer-to-peer fundraisers require more management and oversight, as well as an existing set of passionate supporters. Your organization is likely in a good position for a peer-to-peer campaign if:

• You have a large, capable team prepared to keep track of numerous fundraisers.
• You have a number of passionate and highly-engaged supporters.
• You have the time and resources to plan a longer, more complex campaign.
• You have an upcoming major event.

Here, while your volunteer fundraisers are doing a significant amount of the work necessary to build momentum and visibility for your campaign, you are responsible for giving your individual fundraisers the motivation, tools, and support they need. Offer these participants training opportunities and message templates to help them share their fundraisers via email and social media.

Difference #5: Platforms

Today, many crowdfunding and peer-to-peer fundraisers take place online. But not all virtual fundraising platforms are built alike. For your campaign, you’ll want to use a platform with features designed for your specific fundraising strategy that makes it as easy as possible for supporters to donate.

Crowdfunding Platforms

As discussed, crowdfunding campaigns need a primary fundraising page to promote your campaign and accept donations. For best results, this platform should:

• Be easy for supporters to make their donations. Your platform should be mobile-friendly, meet web accessibility guidelines, and make it as easy as possible for visitors to donate without having to sign-up for an account.
• Enable sharing across email and social media. According to crowdfunding statistics from Fundly, your campaign success increases 20% per every 100 Facebook friends that a fundraiser or supporter has. Your platform should make it easy to share your campaign to popular social media platforms with the click of a button.
• Track your supporter data. Your crowdfunding platform should allow you to track your progress, reach out to donors, and run reports.
• Keep your donations (securely). If you didn’t meet your goal but did get close, you should be able to keep the donations you earned. Choose a platform that can automatically process donations and transfer the money to your bank account.
• Integrate with other software and apps. Your fundraising platform should seamlessly connect with your website and any other software fundraising and marketing software you use.
• Be customized to your brand. Present a seamless experience for donors by branding your platform with your organization’s colors and logos.

Peer-to-Peer Fundraising Platforms

Likewise, your nonprofit should use a dedicated peer-to-peer fundraising platform to create individual fundraising pages for volunteer fundraisers and keep track of donations. Because a peer-to-peer fundraiser involves tracking numerous individual fundraising pages, it requires several extra platform features and more advanced reporting tools.

In addition to the crowdfunding platform features listed above, peer-to-peer platforms should be easy for your volunteer fundraisers to set up, customize, and share their pages with their networks. Moreover, your peer-to-peer fundraising platform should allow your organization to track, organize, and analyze every individual fundraiser’s progress in real-time from a single dashboard.

As you compare fundraising software solutions, closely consider each option’s price, associated fees, and your fundraising budget. Choose a platform that’s upfront about its pricing and fees and fits your organization’s fundraising needs.

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While these fundraising strategies have their differences, there are certain steps you should take when running either type of campaign:

• Track your metrics. Make your donor database your best friend. Before, during, and after your campaigns, keep an eye on your data to determine where your campaign is succeeding and where it needs more attention. Focus on noteworthy trends and patterns to make informed decisions to improve your campaign.
• Thank and acknowledge your supporters. No matter how much you raise, always send your donors—and anyone who helped fundraise on your behalf—a note thanking them for their support. As nearly 70% of supporters prefer email over other communication channels, use your fundraising software to send automatically personalized thank-you emails immediately after each donation is made.

By choosing the right strategy for your fundraising campaign, leveraging your metrics, and showing your post-fundraiser appreciation, you are not only more likely to meet your fundraising goals, but you can also set yourself up for further success in your future campaigns.

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Missy Singh, Fundly

Missy Singh is the Director of Operations, Client Services & Sales at Fundly. She has been working there since 2011 when she started as a Customer Experience and Implementation Manager. As an integrated platform for social impact, Fundly serves as an industry leader in crowdfunding and peer-to-peer fundraising. In 2015 Fundly combined with NonProfitEasy to offer enterprise-level technology that addresses nonprofit needs with features such as a CRM, volunteer management, membership management, and event registration.