Peer-to-Peer Crowdfunding Myths & How To Ensure Success

October 26, 2017

Estimated Reading Time: 9 minutes


The idea of using the Internet to aggregate a crowd to fund a project is a modern complement to, if not a full-on replacement for, traditional fundraising methods that are aging badly in the non-profit space.

Direct mail just doesn’t yield what it used to. Even email is falling off. Nowadays we’re all inundated with too much email. The average nonprofit email campaign has less than 25% open rates and less than 3% click-through rates. (source) 

The fundamental key for effective crowdfunding is engagement. We’re not talking about a list of 500 or 5,000 people who may or may not have given you money. We’re talking about putting together a core group of people that you can have reach out to their friends. Don’t focus on the thousands of friends they may have on Facebook and Twitter; you want them to focus only on their 100 or 150 closest friends.

If I ask Steve to do me a favor as a friend, he’s likely to do it. If you have a dozen such people reach out to 100 of their closest friends, now you’re starting to talk about real numbers. We’ve got a personal outreach to 2,000 and we’ve got a strategy to convert 50% of them into donors, now we’re talking about having 600 or 1,000 people donate to a single campaign. And it didn’t come from your list. It didn’t come from your email database or your direct mail piece; it came from personal relationships – people motivated by a cause and those personal relationships.

What frequently happens, is nonprofits try crowdfunding, it fails, and they think crowdfunding doesn’t work. What they haven’t appreciated is they haven’t done all the things we’ll been talking about. If you don’t do these things, you don’t get money – period. Sending to your email list where only 1% donate, that’s not going to get you a successful campaign. Tweeting it out, putting it on Facebook a few times, that is not going to create success. You should still do that, but that alone will not create a successful campaign.

So, how do you ensure a successful crowdfunding campaign? Below we’ll outline the strategies and the tools you’ll need.



KEY 1. Make it as specific as possible

The real reason that campaigns you see on GoFundMe have success is that they are set up for very specific and tangible projects: Help Bob get new teeth. Help pay for Sally’s cancer treatment. Build a school in Zimbabwe. The more specific, the better. The community cries out for that. They want that personal connection to a specific project or outcome. They want to solve a problem.

That’s challenging if you’re the American Cancer Society because you’ve got a big, broad anti-cancer mission and it’s hard to drill that back down to Sally’s cancer treatment. But the closer you can get to that model, the better.

These work especially well for emergencies such as our van was in an accident. That campaign was so successful because there are pictures of the actual van on there, with the exact funds needed and what those funds will go to pay for. Or better yet, add a video – campaigns with a personal video raise over 2x more than those without videos! Those quick 911 type fundraising projects are perfect for crowdfunding. People understand – “That’s a crisis and I can help you solve that. Here’s my $20 and I’ll share it on Facebook and maybe one of my friends will donate as well.”


KEY 2. Engagement

Blasting your campaign to your email list or posting to your social media is not going to do the trick. Successful fundraising comes from personal relationships, and for maximum success, we recommend a multi-stage approach –

Stage 1:  Face-to-face meetings with a small group, big checks
Set up face-to-face meetings with a very small group of people that can write relatively large checks. If you’re trying to raise $10,000, $500 is a large check. Pick 3-5 people you can sit down with who can write a $500 check. Make the list, make those calls and emails, and get the meetings.

Stage 2:  Calls to your best friends
The next step we recommend is calling 30 people who are your best friends that will do what you ask just because they are your friends. Make a quick phone call and tell them what you’re doing. The only reason for making the phone call is to make sure you actually, 100% for sure, communicate the need, because you know 100% chance you’re going to get the money. We all have a few friends who are jerks who won’t do it, so don’t call them. Call only the friends that you think are actually going to say yes, without any regard to the amount of check that they will write – you want this to be a pleasant experience. You tell them about what you’re doing, and they’re going to say, “Oh, yeah. I can give you $10, $20, $100.” It’ll vary. Don’t sweat it if it’s $10. Be glad you got $10 from making a phone call!

Stage 3:  Personalized emails to 100-150 people
Start by writing an email to your mother or your very best friend. You’re not going to over-hype a message to your mother or your very best friend. You’re going to give them some information about why you care about this cause and why you want them to donate to it. Then use that as a template, take out references to your personal relationship with your mother, and substitute it with references to your personal relationship with the new friend you’re writing to, and do that 150 times. My experience with that effort is that 50% of the people will contribute. That’s pretty wild. Have you ever had 50% of the people you emailed donate?

Of course, you can’t do this every single day. But once in a while, you can pull this off. Just make sure you’re reaching a group of individuals who aren’t exhausted about hearing about your cause already.

All of this process you’re doing here – this is all before you hit your email list. Chances are, once you go through these three steps, you could have 50% of your goal already raised.

Stage 4:  Go live and share on social media
You want to have commitments for about half the money before you go public with the campaign. So that when you do publish it to the world and share the link to donate, everyone can see you’re already 30-50% to your goal on the very first day, and that’s a huge social motivator.

That little progress bar, as that grows, there’s a psychological kind of influence that has on potential donors. The closer that is to achieving your goal, the more likely someone is to donate. It’s the social trigger – if you’re close to it, they’ll donate because they’re part of success. If you’re still at 2%, I’m less likely to do that. Having that inner circle donate prior to launching or being public is going to help influence those people who may come in from social media at that point.



That brings our final piece – the media. Using the media is frequently overlooked but can be absolutely. In fact, rarely is there a case of a wildly successful crowdfunding campaign where the media didn’t get involved. That visual success on the first day, that also gives the media another story. When you go to them and say, “I raised 38% of my goal on the very first day, you ought to cover this,” you’ve given them a hook, a reason to cover it, because they want to write about something that’s successful.

People look at crowdfunding campaigns and they perceive the success to come from putting up a page and tweeting about it on Twitter or posting about it on Facebook. In fact, social media, as far as I can tell, has relatively limited influence on the success of a crowdfunding campaign. What really seems to work the best is engaging people and the media.

Your focus should be on trying to get your local television station, your local newspaper, your local radio station – or maybe you pitch the national news (depending on the nature of the story). It won’t hurt. It’s just a copy of the same email you already sent to your network. A lot of radio stations have 24 hours a day to fill of something approaching news. Look for bloggers both locally and nationally who are covering your space that may be interested in writing about you.

Yes, all the big ones do get pitched a lot, but remember, they have to write something. Where you can leverage a relationship, I promise you that gets you access that a cold email won’t achieve. For example, Steve Vick of Noble Paws (and Nonprofit Ally) had great success when he first started his non-profit. When they just started their nonprofit, they launched a crowdfunding campaign along with press releases about their new non-profit. Noble Paws teaches people with disabilities to run their own dog team, which was a very unique idea in Alaska. Within weeks of putting out the press release, they got calls to be featured on local radio and being asked for written interviews. Before they knew it, the press release was picked up by a local radio station, then got replayed on statewide radio, which was then picked up in the local newspaper, which got picked up by the state, which got picked up by a senator at that time. He even signed the newspaper they were featured in and then sent it to them saying, “Good luck with your non-profit.”

A lot of crowdfunders overlook the opportunity – especially if you’ve got a great cause. Everyone in the media is a human being, and they love a good cause. If you can connect with some – and you don’t have to connect with all – then you can have legs, and it could have that ripple effect. People forget about the media helping them because they think they’re not big enough, but you never know. When you put out that press release or however you contact them, it may be that they are looking for a story that day. They may have a one-minute segment they’re trying to fill.

That brings us to the last piece –


What platforms should you use?

Even though you’re doing most of the fundraising legwork via “offline” methods and personal outreaches, you’ll still need a platform to launch your campaign on and accept donations. A PayPal button on your website won’t cut it, because it doesn’t offer the key pieces that make this campaign shareable, promotable, and socially engaging:

  • That fundraising progress meter or thermometer is a huge social motivator. You need a platform where the progress bar is built in and updates automatically, in real time.
  • You’ll need a landing page that can be shared on social media to enable that positive social reinforcement
  • Media outlets will want to have a dedicated page to link to and that serves as the home for this fundraiser

There are loads of options out there for nonprofits, and the most popular are Classy, Razoo, Crowdrise, FundRazr, and Fundly. With these platforms, expect to give them an 8-10% cut of what you raise. It’s not free, but it’s absolutely worth it. If you were going to employ the same technology on your own website it would cost tens or hundreds of thousands of dollars to get the same quality technology, the same robustness, the same ability to deal with traffic. If you want the same benefits, including teams and personal campaign pages, but at a fraction of the cost of the above platforms, Flipcause has a capped 1.5% effective rate – almost a tenth of the cost of the above platforms. Whatever you use, keep in mind that simply pointing people to a PayPal button on your website – that is not likely to achieve the same success.


To recap all of this:  you start out with a very clear project, message, and financial goal and timeline. You begin the asks with a face-to-face conversation with your big check writers. Then you move on to a phone call with up to 30 friends, close relatives, which is still very personal; who calls nowadays? After that, move on to that email of 100 or so friends who know you. They’re more than acquaintances, but maybe not the people you’re going to sit and have a cup of coffee with. Finally, launch the campaign and don’t forget to engage the media and announce to your social media audience.

There’s been a big misunderstanding about what it takes to be successful. Yes, all of these steps is a lot of work. Some may say it’s not worth the effort. That’s a rational decision you may want to make. But we would point out that crowdfunding not only brings in small donations; it brings in donations from new people. It can help you grow your audience. These are new people that you can add to your email list, you can add to your annual campaign drive, whatever it is. Whether you’re inviting them to a gala or a fun run, you’ve got those opportunities now because now you’ve got their information and you know they’ve given to you in the past. There is real value that comes in the long run, even though it is a lot of work.

That’s really the key – personal relationships. It’s a very different mindset for a development officer or a nonprofit leader than the old model of an email list that’s carefully cultivated or a direct mail campaign. It’s a nice complement to, and maybe a full-on replacement, for those direct mail and email campaigns.


Huge thanks to Steve Vick and Devin Thorpe for the content for this article which was adapted, with permission, from the Nonprofit Ally Podcast #067: The Quest for Funding. Nonprofit Ally offers fantastic resources for nonprofits of all sectors. For more, check out CROWDFUNDING A TO Z: Your complete guide to nonprofit fundraising – a free ebook and email course here.

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