Peer-to-Peer Giving is a “Front Door” to Long-Term Donor Relationships

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It is an old saying, to be sure, but what fundraisers don’t know can indeed hurt them. While they understand that a well-balanced revenue portfolio is a prerequisite for the financial health of their organization, many overlook three proven fundraising methods — monthly giving, peer-to-peer giving and face-to-face giving — because of misunderstandings about what they are best used for and how to manage them successfully. All three are effective ways of asking, but is your organization ready to benefit from them?

Over the next few blog posts, I’ll be looking at each of these three methods in detail. Last time, I looked at monthly giving. This week, I look at peer-to-peer giving.

What peer-to-peer giving is

This fundraising program is the engagement of supporters through participation in activities for which they raise funds from friends and families. Examples include fun-run sponsorships, donations in lieu of a birthday gift, hoop-shooting contests, walk-a-thons, swim-a-thons—any group fundraising activity in which participants are engaged to raise funds through their network for your organization. Both nonprofits and individual donors can organize campaigns. According to the Peer-to-Peer Professional Forum, in 2015, the top 30 programs in the United States raised $1.57 billion, nearly 10 percent more than the amount raised 10 years earlier.

However, it is a volatile field. The Peer-to-Peer Forum reports that last year, total revenue of top U.S. programs was down more than 2.5 percent, while in Canada, 20 of the top 30 programs reported revenue declines in 2015, a trend that is prompting many Canadian charities to rethink their approaches and experiment with innovative new programs. Fundraising revenue at these programs totaled $254.1 million in 2015, according to the Peer-to-Peer Fundraising Canada Top Thirty Benchmarking Survey. That figure is down 8.6 percent from 2014, a substantial drop that was somewhat offset by growing totals at a number of newer and smaller programs.

Nevertheless, rather than pulling back in the face of these declines, a number of Canada’s biggest charities have reported that they are stepping up their investments in peer-to-peer fundraising. “2015 was a wake-up call for many nonprofits,” says David Hessekiel, president of Peer-to-Peer Fundraising Canada. “Many organizations are seriously examining their peer-to-peer initiatives, investing in new concepts and overhauling existing programs.”

What peer-to-peer giving is not

Fundraisers are often surprised to learn that peer-to-peer campaigns are not special events in the traditional sense. Although both involve getting people together to raise funds in support of a common cause, peer-to-peer fundraising doubles as a means of generating leads for loyal sustained-giving and legacy donors, explains Katrina VanHuss, CEO of Turnkey in Richmond, Va. “We use volunteer fundraisers to reach people we don’t know yet, who aren’t on our lists. It is a revenue-positive lead generation device.”

Because of their similarity to special events, VanHuss says, sometimes staff tries to manage them the same way. Special events are most often staff-driven, with volunteers doing tasks. In contrast, the highest-producing peer-to-peer campaigns have true volunteer leadership committees who run the events for the most part. When a staff person tries to take control in peer-to-peer scenarios, which thrive on autonomy and delegation, participation and fundraising suffer. “The ideal staff person for peer-to-peer is a relationship manager, not an event manager,” VanHuss points out. “Not someone who sets up the tents but someone who empowers others to set up the tents themselves.”

What peer-to-peer giving does best

VanHuss says that the real strength of peer-to-peer is that it opens the door for fundraisers to build relationships with new donors, which can lead to long-term support for the cause. The trick, she says, is to develop the right type of relationship with the fundraiser. A market relationship sets a financial condition for engagement, such as a registration fee or high-minimum fundraising. A social relationship invites participation with no terms, except for an attachment to the mission. “People in market relationships will shop around for a better deal in a year or two,” she explains. “But people in a social relationship will come back year after year. Market relationship peer-to-peer events manifest as retail-worthy offerings, such as high-profile bicycle rides. Social relationship events manifest typically as walks.”

While peer-to-peer fundraising looks like a lot of work to a staff person, its efficiency at getting a “yes” to a donation ask is powerful. “The typical direct-response campaign gets a 1 to 2 percent response rate,” VanHuss explains. “Typically, it takes a peer-to-peer fundraiser four requests to get a donation — a 25 percent response rate.

“In a lot of ways, for acquisition peer-to-peer is better than a bought list,” she adds. “It is the front door.”

How to succeed with your peer-to-peer giving program

“A successful peer-to-peer event has to provide a great experience for the participant,” says J.D. Beiting, a fundraising consultant with Benefactor Group (www. benefactorgroup.com) in Columbus, Ohio. “It should offer support, recognition and incentives. The more fertile the environment a nonprofit can provide, the more money will be raised.” This requires good communications, sufficient financial support and the commitment of the organization’s executives, fundraisers and staff.

Although almost any type of nonprofit can run a successful peer-to-peer program, preparation is required. Beiting advises nonprofits to start by assessing both their assets and their constituencies in order to get a sense of the type of program they want to establish:

  • Proprietary, in which an organization creates and manages an event
  • Third-party, in which an organization leverages an existing event and recruits people to participate on its behalf
  • Do-it-yourself, in which supporters create their own activities and encourage people to donate in support of them

Once the type of program has been decided, a nonprofit should set a reasonable goal, keeping in mind that it takes time to build momentum and reach a critical mass of support. With that information in hand, the organization can then develop a budget that suits the level of effort and expectations. There are several companies that offer software to help nonprofits run and manage successful peer-to-peer campaigns without placing undue burdens on staff. “Technology is decentralizing peer-to-peer fundraising,” Beiting says. “It behooves an organization to take advantage of it.”

Next week: Face-to-face giving

This post was adapted from “Power Tools: How Monthly Peer-to-Peer, and Face-to-Face Programs Can Be Powerful Tools in Your Fundraising Tool Kit,” by Paul Lagasse, Advancing Philanthropy, Winter 2017 (reprinted with permission). You can read the whole article here.

Author: Paul Lagasse

Paul Lagasse provides expert-to-expert communications services to nonprofit, business, and government clients in the metro Baltimore-DC area. Specialties include science and medical writing, technical report editing, and content marketing.