At first glance, peer-to-peer fundraising and crowdfunding do not seem all that different. In fact, peer-to-peer fundraising is often considered a type of crowdfunding campaign. Both rely heavily on social media and sharing with personal connections for success, although preparing for each can look quite different. 

Similar to any type of fundraising event, there are planning best practices that pertain to each and are important to know. According to statistics from Fundly, campaign success increases 20% per every 100 Facebook friends that a fundraiser or supporter has. Sharing is an essential element to these campaigns, but it is not the only important consideration! 

Even though they’re similar, there are a few crucial differences in how to choose between them, how to prepare for them, and how to drive them to success. We’ll be looking at these differences through five important questions:

  • What are crowdfunding and peer-to-peer campaigns?
  • Who uses each of them?
  • How do they work?
  • What do you need to execute each?
  • Which one should you choose?

After getting these five questions answered and having the key differences explained, you’ll be well-equipped to pick whichever is best for your purposes and get a start on running a successful fundraising campaign.

What are they?

Both crowdfunding and peer-to-peer campaigns are methods of fundraising that utilize people’s personal networks and social media sharing—making both ideal choices for easy virtual campaigns when operating remotely!. 

With peer-to-peer fundraising, volunteers set up their own fundraising pages and personally call on friends and family to donate, with the funds ultimately going to the organization. A crowdfunding page is usually set up either by an organization themselves or by individuals for their own personal causes, like medical expenses or creative projects. 

While both are focused on garnering as many individual donations as possible, for crowdfunding, people donate to one source that was directly set up by an individual or organization. In a more decentralized peer-to-peer fundraiser, individuals can share their own donation pages on behalf of an organization, with donations flowing to the nonprofit.

An example of a crowdfunding campaign would be an individual’s Fundly campaign for help with healthcare bills or a nonprofit’s campaign page for help securing new equipment or funding for a specific, time-bound project. A peer-to-peer fundraising campaign instead involves a nonprofit organization creating a central campaign page, setting goals, and inviting supporters to personalize their own giving pages to share online. In both cases, any donor can send the campaign directly to someone else asking them to donate, but crowdfunding campaigns do not have participants who have volunteered for that express purpose. 

The difference: Peer-to-peer fundraising relies on individuals who fundraise on behalf of the organization through personalized giving pages. Crowdfunding is more centralized, with donations flowing through a single campaign page.

Who uses them?

Both can be run by an organization, but typically, individuals do not run peer-to-peer fundraising campaigns. From an organizational aspect, peer-to-peer fundraisers require a wider network with dedicated volunteers

When it comes to the actual fundraising, organizations are doing a lot more of the work to raise money in crowdfunding campaigns. While the hope is that supporters will share your campaign, no one is directly required to and the initial grunt work to get your campaign out there will fall on your organization. Because this method mainly relies on methods like social sharing, it can be done much more easily by an individual than a peer-to-peer fundraiser. 

In a peer-to-peer fundraising campaign, the organization is putting in a lot of work to organize and train participants to fundraise, but they are more hands-off with the actual fundraising, which is the whole purpose of recruiting active participants. 

The difference: Peer-to-peer campaigns are only hosted by organizations since they require more resources, but crowdfunding can easily be done by an organization or an individual and are usually for one-time projects or expenses.

How do they work?

First and foremost, you’ll need to set a fundraising goal and create a crowdfunding page or (for a peer-to-peer campaign) a central campaign page that explains your goals.

For a peer-to-peer fundraiser, you’ll also need to set up participant pages. Peer-to-peer fundraising software should make it easy to offer supporters the option to quickly launch and personalize their own pages.

Once your page(s) are up and running, focus on sharing your fundraiser far and wide through social media, email newsletters, and personal connections. Regardless of which type of campaign you’re running, it’s a good idea to share it on social media and encourage your staff to spread it. Ina peer-to-peer fundraiser, actively encourage and empower your participants to use their personal networks to get donations on their individual participant pages.

Crowdfunding will take much less planning than a peer-to-peer campaign and will primarily be run from that one fundraising page. For a peer-to-peer campaign, in addition to donation pages, you’ll need to come up with a more specific plan for executing your campaign, training volunteers to fundraise, planning any events tied into the campaign, and/or an event to mark the end of the campaign. Even though you won’t be doing the day-to-day work to get people to donate to your campaign, planning it well and tying it to an event is great for building excitement and ensuring success. 

The difference: In general, crowdfunding takes less pre-planning but more effort from the organization to spread the word on social media, while peer-to-peer takes more up-front planning and background management but requires less day-to-day fundraising work from the organization.

What do I need?

For a crowdfunding campaign, you’ll need a fundraising page. You’ve likely heard of platforms like GoFundMe, which many individuals use, but there are lots of alternative websites that may better suit your needs as a nonprofit organization rather than an individual. 

Peer-to-peer fundraising requires more software and planning. This will not only mean more pages that are being managed, but also training volunteers, more meticulously planning out the fundraiser, and tracking more complex sources of incoming revenue. You’ll want to make sure you have enough staff and the proper management skills to smoothly execute a peer-to-peer fundraiser. 

The difference: A crowdfunding campaign requires a single donation page that’s shareable, but peer-to-peer fundraising requires more software, people, and time.

Which one should I choose?

This will largely depend on the size and nature of your organization and your particular fundraising goals for the campaign. As mentioned in the last section, you’ll need specific resources and enough staff to help you train your participants if you want to do a peer-to-peer fundraiser. 

Here are some signs that a peer-to-peer fundraiser may be best for your organization:

  • You have a larger and capable staff 
  • You have a lot of passionate and engaged supporters
  • You have the time and resources to plan a longer, more complex campaign
  • You have an upcoming major event and want to raise awareness and donations online leading up to it

Alternately, these characteristics are better suited for crowdfunding:

  • Your staff is smaller 
  • You’re raising money for a one-time expense or time-bound project
  • You have the time to regularly update a campaign page and share updates 
  • You have the time and means to share your message widely

It’s very possible that you may be able to use both for different fundraising purposes. Especially since crowdfunding is better suited to one-time or infrequent fundraising, your organization can use both to raise funds and get your supporters more involved year-round.

Now that you have a better understanding of which kind of fundraiser will best suit your needs and how to execute it, it’s important to make sure you really focus on promoting it properly. Fundly’s guide to sharing your crowdfunding campaign will make sure you don’t miss a thing! 

Lastly, as you start planning your fundraiser, don’t forget to plan out a way to express your appreciation for donors and participants in peer-to-peer campaigns – whether through automated messages, gifts, or any other method. They deserve your gratitude!

About the Author

Lomesh Shah has over 25 years of experience in international corporate leadership with a strong emphasis on marketing technology and data management systems. Lomesh has worked with small to mid-size businesses, privately-held companies and Fortune 500 corporations in various capacities; from sales and marketing to overseeing automation and re-engineering of processes and operations.

As CEO of Fundly, Lomesh spends much of his time immersed in the nonprofit industry both as an industry leader, speaker, and in service to several organizations as a board member and volunteer. Outside of the industry, Lomesh is a technology junkie and will give anyone willing to listen an assessment of the latest trends in anything from espresso makers and mobile gadgets to electric cars and wind power.