Peer-to-Peer Fundraising: Easy Money Is Not the Best Money
If you run a peer-to-peer event, you’ve heard or thought this: “If we just charge $35 to every person who shows up at our event, we’d make a lot of money.” The problem with this thinking is that it’s a price tag, and after people pay the price, they’re a lot less likely to fundraise. That’s not just what we think; it’s what the data tells us. It happens that way because you’ve framed your event in market terms—people have paid the price of admission, so to speak, and that makes them less likely to consider doing more.
Peer-to-Peer acquisition is often thought of as the “front door” of the organization. It is the high-volume lead producer that can feed opportunities to the rest of your income streams. A problem with a registration fee is that it comes at the beginning of a peer-to-peer relationship. Think of your relationship with a peer-to-peer volunteer fundraiser as going on a first date. You may have snuck secretive glances and shared witty repartee with them before, but this is the big move. You are asking them out. Who knows what could come of that date? You have to decide if you’ll make them pay to date you. And yes, when you look at it that way, it already seems like a messed up relationship.
Once the relationship has been framed in market terms, recovering the social relationship is difficult. If you specify out of the gate that you are in a market relationship with your fundraiser, you not only are headed for low retention and low fundraising, you’ll also face low transition to other ways to engage, such as major gifts. See yourself staring into the doe-like eyes of your date, the peer-to-peer participant who paid a registration fee, wondering, “Why is there no spark?” It’s because you doused it.
Take, for example, the Omaha Tour for Hope, a cycling fundraiser to benefit the American Foundation for Suicide Prevention. I was honored that they brought Turnkey in to help several months before the event. Their dilemma is typical of what staff and volunteer leaders face each and every day as they try to support their missions. The volunteer board pressured event management to have a $50 registration fee and no required fundraising minimums.
First, that $50 is a price. Second, that’s a high price for a charity bike ride in Omaha. The board members, in the absence of better information and with the best of intentions, thought, “If we just charge a registration fee at least we get that money.” What they didn’t know is that they changed the entire nature of the relationship with the potential fundraisers.
With a registration fee, a couple things happen:
- Riders expect more and expect differently. A set price seems to promise delivery of something tangible and significant in terms of the experience.
- Riders don’t anticipate that they need to do more, like fundraise. They bought their experience, then they are done.
The $50 registration fee also had some unintended consequences. The event just wasn’t highfalutin enough for people to buy it in large numbers. While many mission-minded folks did ride, 67 percent of riders had not been touched by suicide loss. Those people were there for the $50 bike ride. Per-cyclist funds raised dropped precipitously when the organization went to the $50 fee. Management scrambled and tried to motivate cyclists and volunteers to fundraise by offering high-end, custom Tour for Hope athletic shirts for the $200 fundraising level and a custom bicycle jersey for the $500 fundraising level.
A Change in Fundraising Behavior
They asked me, “How can we influence their fundraising behavior more, just months before event day?” I told them, “You’ve got to have an experience that will almost force them fundraise, like a high minimum amount. You can charge that if your experience is ‘worth the price.’” But, knowing the event was already underway, and with no budget to make the experience grander, I suggested they lean more on recognition. The recognition items they proposed were good ones to help transcend the market relationship inspired by the registration fee. Perhaps we could layer in recognition with experiences, such as being lead rider, or having a ceremony at which fundraisers are honored, or inviting them to a board meeting to be appreciated.
As for motivating them to register at this late date? They had wisely published an email newsletter listing the top 15 fundraisers and awarding them honorary bib numbers from prior Tours. It went to 7,500 people, with about a 9 percent open rate.
I applauded the social-relationship-inspiring idea and encouraged them to ask for help from anyone connected, including the board. “Ask other people to recruit. Ask current registrants to recruit. Ask your friends to help you recruit,” I told them. “Peer influence is the best possible push to get them to register. Make the goal getting all riders back. And have personal outreach either by you, someone who has benefited from the organization’s work, someone on the board or another rider as the push.”
I also warned against discounting registration fees to inspire registration. Discounts are for shoe shoppers, not supporters of nonprofits. And for the next year, here were my recommendations for the event:
- Restructure and ditch the registration fee, unless you decide to put on an event that has great retail appeal. If you go that way, it is a different beast. Frankly, without a great, big old budget to create a fantastic event, it will be tough to create a retail-attractive offering. Lean on mission connection instead of sales price and discounts to raise money and get registrations. Use recognition to drive fundraising and participation.
- Create a recognition structure that expands on the good start you have this year. And recognize relentlessly. For fundraising. For last year’s fundraising. For recruiting others. For getting sponsors. For being a sponsor. For leadership volunteerism. For being a survivor. For being a surviving family. For being born on Tuesday. Whatever you can find.
- Recruit a volunteer leadership committee for the ride, with the full blessing of your board. Ask people to help in meaningful ways. People on the volunteer leadership committee are likely to fundraise, recruit and participate if you put them in charge of something. Giving a volunteer a responsibility does several things. It lightens your load by turning you into a manager rather than a doer, it makes them more connected and likely to recruit and fundraise, and most important, expands your connections into the community for recruitment purposes.
- Scrap expensive mass media advertising if you go the social relationship route, with a focus on mission connection. Mass advertising is for when you are selling something anyone will buy. If you go with a mission-connected/social relationship-type event, you are not selling something people will buy. With this kind of event, go to the connections you already have—including the newly recruited committee’s connections—and do peer-to-peer recruitment. It is just as powerful as peer-to-peer fundraising.
And what happened to the Omaha Tour for Hope that year? They raised over $15,000, double the board’s goal.
Katrina VanHuss and Otis Fulton have written a new book, Dollar Dash, on the psychology of peer-to-peer fundraising. Click here to download the first chapter, courtesy of NonProfit PRO!
Otis spent most of his career in the education industry, working at the psychometric research and development firm MetaMetrics Inc., Pearson Education and others. Since 2013, he has focused on the nonprofit sector, applying psychology to fundraising and donor behavior at Turnkey. He is the co-author of the 2017 book, ”Dollar Dash: The Behavioral Economics of Peer-to-Peer Fundraising” and is a frequent speaker at national nonprofit conferences. With Katrina VanHuss, he co-authors a blog at NonProfit PRO, “Peeling the Onion,” on the intersection of psychology and philanthropy.
Otis is a much-sought-after copywriter for nonprofit fundraising messages. He has written campaigns for UNICEF, St. Jude’s Children’s Research Hospital, March of Dimes, Susan G. Komen, the USO and dozens of other organizations. He has a Ph.D. in social psychology from Virginia Commonwealth University and a Bachelor of Arts from the University of Virginia, where he also played on UVA’s first ACC champion basketball team.
Katrina VanHuss has helped national nonprofits raise funds and friends since 1989 when she founded Turnkey. Her client’s successes and her dedication to research have made her a sought-after speaker, presenting at national conferences for Blackbaud, Peer to Peer Professional Forum, Nonprofit PRO, The Need Help Foundation and her clients’ national meetings. The firm’s work is underpinned by the study and application of behavioral economics and social psychology. Turnkey provides project engagements, coaching, counsel and staffing to nonprofits seeking to improve revenue or create new revenue. Her work extends into organizational alignment efforts and executive coaching.
Katrina also regularly shares her wit and business experiences on her and Otis Fulton's NonProfit PRO blog “Peeling the Onion.” When not writing or researching, Katrina likes to make things — furniture from reclaimed wood, new gardens, food with no recipe. Katrina’s favorite Saturday is spent cleaning out the garage, mowing the grass, making something new, all while listening to loud music by now-deceased black women, throwing in a few sets on the weight bench off and on, then collapsing on the couch with her husband Otis to gang-watch new Netflix series whilst drinking sauvignon blanc.
Katrina grew up on a Virginia beef cattle and tobacco farm with her three brothers. She is accordingly skilled in hand to hand combat and witty repartee — skills gained at the expense of her brothers. Katrina’s claim to fame is having made it to the “American Gladiator” Richmond competition as a finalist in her late 20s, progressing in the competition until a strangely large blonde woman knocked her off a pedestal with an oversized pain-inducing Q-tip. Katrina’s mantra for life is “Be nice. Do good. Embrace embarrassment.” Clearly she’s got No. 3 down.