[NEW STUDY]: Examining a Recent Trend in Online Fundraising

Charity Dynamics, a leading marketing agency for nonprofits, recently released a study that examines the rise of “Independent Fundraising Events” (IFE’s) in nonprofit fundraising. Different people use different terms to describe the concept, but IFE’s are essentially a type of peer-to-peer fundraiser. Unlike traditional campaigns that are heavily organized by the nonprofit, IFE’s are initiated and driven by supporters themselves with little or no involvement from the nonprofit’s staff.

On this blog we most commonly refer to such programs as “rolling” or “year-round” p2p campaigns. Organizations adopting this approach provide tools to create fundraising pages on their websites so supporters can start fundraising whenever they feel like it. Generally people choose to fundraise around personal events and milestones like birthdays, anniversaries, and athletic endeavors. What’s particularly nice about programs like these is that they create a new revenue stream while allowing supporters to integrate moments of personal significance with the causes they care about.

OK, so it’s established that we’re fans of this newer style of peer-to-peer fundraising, but what did the study say?

1. Different Nonprofits Embrace Different Models

As it turns out, there is more than one way to organize an IFE program, and different organizations embrace different approaches. In the report, Charity Dynamics breaks down IFE programs into three basic types.

The Open Model: “Participants fundraise however they wish. The broadest option, this model allows you to apply the same tools to any kind of fundraising activity, either physical or virtual.”

The Hub Model: “Participants fundraise in a set number of ways. With a customized registration pathway, this model allows you to provide an online experience surrounding specific motivations.”

Campaign Model: “Participants fundraise in support of one focused campaign. A highly targeted option, the single campaign model allows you to build robust marketing promotions around a single concept.”

According to the study 60% of responding organizations chose the open model, while 27% chose the hub model, and only 10% chose the campaign model. Our anecdotal experience tends to align with these results, although the most common variation we see is a hybrid of the open and hub models. In this hybrid scenario the nonprofit provides certain default selections (like birthday fundraisers, or runs/walks) and then includes a catchall option for everything else.

2. More Revenue, Happier Donors

So why are organizations adopting this free form style of peer-to-peer fundraising? Well, according to the study the two biggest reasons are additional revenue and happier donors.

The number one reason though (by far) was donor happiness. 57% of respondents cited donor satisfaction when discussing motivations for adopting an IFE program. This squares completely with our experience. Donors like the ability to choose when and how they engage with the causes they support. They also appreciate weaving events of personal significance into that support. IFE programs provide these options to donors, and by extension, they can increase satisfaction. Nonprofits seem to be picking up on the demand for options like this, and implementing IFE programs to help keep their supporters happy.

3. Bullish on the Future

There’s a lot of optimism about the future among organizations that have adopted an IFE program. The study notes that most traditional peer-to-peer events tend to grow about 1% to 3% year over year, but 63% of organizations that adopted an IFE program in the last three years expect growth of more than 10%. Beyond that, 25% of those organizations are expecting above 20% yearly growth. It seems that most organizations that have recently adopted an IFE program are encouraged by the initial traction and see it as a channel for significant growth in the future.

If you’re interested in checking out the full study you can find that over here!

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Photo Credit: Inf-Lite Teacher (image cropped)

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