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Advancing Philanthropy

The ‘Science’ of Peer-to-Peer Fundraising

Peer-to-peer fundraising seems straightforward. A nonprofit gets its supporters to create fundraising pages, supporters ask friends and family for contributions, and people make donations. Simple.

 

On one level this is true. Peer-to-peer fundraising is not rocket science, and there’s no sense in pretending like it is. Yet, despite the veneer of simplicity, there’s actually a surprising amount of nuance that goes into running a successful peer-to-peer fundraising campaign.

 

One interesting nuance that we recently learned about was how progress (or lack of progress) towards your fundraising goal can directly impact the probability of receiving your next donation. And learning about this led us to another interesting discovery. There’s actually an optimal way for your fundraisers to be reaching out to friends and family to maximize donations (but more about that part later).

 

Goal Proximity and the Kiva Study

 

In a study performed in conjunction with the online microfinance platform Kiva.org, a group of researchers measured the giving rate at various stages of a project’s funding. Interestingly enough, they were able to show that as the project got closer to its ultimate goal the rate of contributions progressively increased.[1] In other words, people were increasingly willing to give to a project as it got closer to reaching its funding goal.

 

What explains the outcome of the Kiva study? And how were the researchers able to predict that outcome before they even conducted the experiment? The basic insight they relied upon has to do with the way that people perceive the importance of actions happening towards the end of a larger sequence of events. Let’s dive into an example to illustrate.

 

The Shootout Example

 

Imagine that you’re attending a professional hockey game. The teams are tied and are heading to a shootout. Both teams select three players and each player gets one penalty shot. The team with the most goals at the end of the shootout wins. Here’s how everything unfolds:

Now imagine that you are sitting in the crowd watching all of this happen. The final player from Team 1 steps up to the mark with the score tied at 1-1. He takes his shot and misses, leaving the door open for Team 2 to win. The last shooter for Team 2 skates up to the mark, takes his shot, and scores. The crowd erupts. Team 2 wins.

 

Now a quick question. As a matter of intuition, who would you say is the most responsible for Team 2’s victory? Team 2’s first shooter or its last shooter?

 

Most people would pick the last shooter because his goal sealed the victory. People tend to give more credit to the last shooter’s goal even though, as matter of pure logic, the goal scored by the first shooter had an identical impact on the outcome. In other words, people tend to favor the later event in the sequence.

 

This is the basic insight that led the researchers to setup the Kiva study in the first place. They hypothesized that potential donors would mentally anticipate receiving more “credit” for donations made to campaigns that were already close to reaching their fundraising goals (just like the last goal scorer got more credit for the victory than the first goal scorer did in our example). This effect, they continued to theorize, would lead more people to give as a campaign progressed toward its overall fundraising goal.[2] As it turned out, they were right.

 

Implications for Peer-to-Peer Fundraising

 

So how can this help you with your peer-to-peer fundraising strategy? Well, we know that as an individual fundraiser makes progress towards his or her fundraising goal, people will become more likely to make contributions. And we also know that each individual fundraiser will have some people who are very likely to make contributions and a range of other people who are less likely to do so.

 

By putting these insights together, we can come up with a solicitation sequence that’s optimized for peer-to-peer fundraising success:

 

Step 1: Reach Out to Family and Very Close Friends

Start with the people you know will make a donation.The hardest time to bring donations in is when you’ve made zero progress towards your goal, so start out with the sure-things!

peer-to-peer fundraising image one

Send out individual e-mails to these folks so you can begin collecting donations without driving other people to your page before you’re ready for them.

 

STEP 2: Reach Out to People Impacted by the Cause

Identify any of your contacts that have a personal connection to the cause you are fundraising for and reach out to them with short personal e-mails

p2p fundraising image

The initial progress you’ve made, combined with the personal connection these people have to the cause, should lead most of them to contribute.
 

STEP 3: Reach Out to Close Friends

Now send a group e-mail to your close friends. These should be people you think are more likely than not to make a donation.

With solid progress already established, you’ll really be able to start leveraging the “Kiva-effect” at this point.

 

STEP 4: Make Your General Appeals

Now that you’ve built a good base of support, it’s time to send out general e-mail appeals to other friends, coworkers, extended family and the rest of your contacts.

As you send out your general appeals, make sure you also start making full use of social media by posting calls to action on Facebook and Twitter.

 

By phasing your communications this way, you’ll be able to leverage the natural increase in donation frequency that happens as you move towards your goal. With the most likely donors being targeted at the beginning (when it’s hardest to get donations) and the least likely donors being targeted at the end (when it’s easiest to get donations) you can maximize your chances of success.

Ready to Raise More Money Online?

 

[1]Cryder C. & Loewenstein G. (2011). The Critical Link Between Tangibility and Generosity.  In Olivola C., & Oppenheimer D. (Eds.), The Science of Giving: Experimental Approaches to the Study of Charity. New York, USA, Taylor and Francis Group LLC.

[2] Id.

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