Peer-to-peer fundraising: when supporters raise money for you

This guide is for small charities whose supporters want to raise money for them: a birthday fundraiser, a sponsored run, a "shave my head" challenge, a page for a walk you organize. This is peer-to-peer fundraising: each supporter asks their own friends and family, usually through their own online page, and the money comes to your charity. After reading, you'll know how to set it up, who sends the tax receipt, which fees to check, where state rules come in, and how to keep supporters' fundraising honest and safe.

For the basics of donate buttons, crowdfunding and giving platforms, start with our guide to online fundraising and crowdfunding.

Why it works, and what it asks of you

Peer-to-peer fundraising reaches people who have never heard of you, through someone they already trust. A supporter's friends give because the supporter asked. That makes it a good way to find new donors, but those donors are loyal to the supporter first. Your job is to make it easy for supporters to ask, and then to welcome and thank the new donors so some of them stay.

It does take work: setting up pages, answering supporters' questions, tracking who raised what, and thanking both the fundraisers and their donors.

Three common setups

• A campaign you run. You set up a walk, a run or a "give up something for a month" challenge, with a team page and individual pages under it. You choose the platform, the dates and the goal.
• Supporter-started pages on a platform you use. Your giving platform lets supporters create their own page for your charity whenever they want, for a birthday or a memorial.
• Supporter-started pages on platforms you didn't choose. Social media and crowdfunding sites may let anyone start a fundraiser for any registered charity. Your charity may show up there even if you never signed up.

The third kind is the one to watch. Check which platforms list your charity and how money reaches you from them.

Who sends the tax receipt

This is the question to answer before any supporter starts a page. The rule follows the money: the receipt comes from whoever legally received the gift.

• The gift goes straight to your charity. When the supporter's page runs through your own giving platform and the money is paid into your account, the donor gave to you. Your charity receipts the gift, as with any other donation. For any single gift of $250 or more, the donor needs a written acknowledgment from you to claim a deduction. Some platforms send an automatic receipt in your name; check that its wording meets the IRS list.
• The gift goes to another charity that passes it on. Some platforms are run by, or pass gifts through, a separate charity that then grants the money on to you. The donor legally gave to that charity, so that charity sends the receipt, not you. You'll usually receive the money later, sometimes in one combined payment.
• The gift goes to the supporter. If a supporter collects money on a personal page or in cash and then hands it over, the donors gave to an individual, not to your charity. IRS Publication 526 says people can't deduct contributions to specific individuals. Ask supporters to use a page that pays your charity directly, and don't receipt money as if each friend gave it to you.

Whichever setup you use, record the fundraiser's name with each gift, so you can thank the right supporter and see what each page raised.

Platform fees: check every layer

Peer-to-peer tools charge in different ways, and prices change often, so we don't list them. Read each platform's own pricing page, note the date you checked, and look for:

• Platform fees: a percentage of each gift, a monthly subscription, or both.
• Payment processing fees: a percentage plus a fixed amount per card payment, often charged separately.
• Optional "tips": the platform asks donors to add something for the platform. Check how the request is worded and whether donors can easily set it to zero.
• Donor-covered fees: an option for donors to add a little to cover your costs.
• Payout terms: how often money reaches your bank, and whether that costs anything.
• Event extras: registration tools, shirts, timing and shipping, which may be charged separately.

Work out what reaches you from a typical $50 gift on each platform you compare. Tell supporters honestly how fees work if they ask.

State solicitation rules

Some states require charities to register before asking the public for donations. Peer-to-peer pages are still asks for your charity, and they reach people in many states at once, through supporters' networks rather than your own list. The Charleston Principles, advisory guidelines for online fundraising from the National Association of State Charity Officials, suggest that a charity based elsewhere should register in a state where it specifically targets people or receives gifts through its website on a "repeated and ongoing basis or a substantial basis." They were approved as advisory guidelines in 2001. They are not law, and each state sets its own rules.

Practical steps:

• Register where you're based first, and keep it current.
• Watch where the money comes from. Your platform's reports usually show donors' states. If gifts from one state start adding up, check its rules.
• Know the rules for platforms. Some states also regulate the platforms themselves. California, for example, requires charitable fundraising platforms to register with its Attorney General's Registry of Charities and Fundraisers, and says platforms may solicit only for charities in good standing in California and with the IRS, and, with some exceptions, only with the charity's prior consent. Keep your own state registrations and IRS filings current, so platforms can keep listing you.
• Paid helpers are different. If you pay a company or person to run the campaign or ask for money on your behalf, some states treat them as paid fundraisers who must register. New York and California are examples.

Our guide to charitable solicitation registration explains how to find each state's rules.

Set your supporters up to succeed

• Write a one-page fundraiser guide. What your charity does, one short story, three things each gift buys, and your charity's exact legal name.
• Give them words and pictures. A sample message, two or three photos you have permission to share, and your logo with simple rules for using it.
• Set a deadline and a goal. A page with an end date and a target raises more than an open-ended one.
• Check in. A short email when they launch, halfway through, and at the end.
• Thank fundraisers twice. Once when they start, and again with what their page raised and what it will do.

Keep it honest and safe

Supporters speak for your charity when they fundraise, so agree a few simple rules:

• No promises you can't keep. Supporters shouldn't say money will go to one named person, or to a program you don't run. Donors can't deduct gifts earmarked for a specific person, according to IRS Publication 526.
• No tax advice. Supporters shouldn't promise that gifts are deductible. They can say your charity is a 501(c)(3).
• Privacy. Don't let supporters share photos or stories of the people you serve without your permission.
• Fake pages. Search for your charity's name on major platforms now and then. Tell supporters which pages are yours, and report fakes to the platform.
• Your right to say no. Reserve the right to ask a supporter to change or take down a page that misrepresents your charity.

Welcome the new donors

Most donors to a peer-to-peer page gave because of the fundraiser, not your charity. Thank them quickly, tell them briefly what you do, and invite them to hear more. Some platforms don't share donor contact details with you, or let donors choose not to share them; respect that choice. Our guide to donor stewardship shows how to keep new donors.

Peer-to-peer checklist

• We know which platforms list our charity and how money reaches us from each
• For each platform, we know who legally receives the gift and who sends the receipt
• Receipts for gifts of $250 or more meet the IRS rules
• Any T-shirt, meal or entry given back for more than $75 comes with the IRS disclosure
• We compared fees using each platform's pricing page, and noted the date
• Our state registration is current, and we watch where donors live
• Supporters get a one-page guide, approved photos and simple rules
• We record the fundraiser's name with each gift
• Fundraisers and their donors are thanked within days