P2P Fundraising Tool Market

Market Overview

The global P2P fundraising tool market size is expected to grow at a CAGR of 15.2% during the forecast period (2023–2031). The world is rapidly transitioning towards digitization in recent times. The extensive utilization of digital technology and online platforms has significantly eased the proliferation of peer-to-peer fundraising tools, thereby driving the global market. Moreover, the proliferation of smartphones and the emergence of mobile payments, which have increased dramatically in no time, further drive the market expansion.

Peer-to-peer fundraising refers to individuals arranging personal campaigns to raise donations from their peers. These fundraising activities may involve requesting donations through crowdfunding platforms, organizing fundraisers tailored to specific occasions (such as birthday fundraisers), and engaging in events such as team fun runs. Peer-to-peer fundraising is also called social fundraising. Nonprofit organizations, educational institutions, and individuals frequently employ these resources to facilitate the mobilization of their supporters, expand their outreach efforts, and enhance their fundraising efficacy.

Peer-to-peer (P2P) fundraising tools are software platforms or applications specifically developed to enhance and simplify the management of peer-to-peer fundraising campaigns. These technologies allow users to generate customized fundraising pages, establish fundraising objectives, and conveniently disseminate their campaigns over diverse internet platforms. Subsequently, proponents have the opportunity to make direct contributions to these specific fundraising pages, whereby the collected cash has a role in advancing the overarching objective of the campaign.

Market Dynamics

Market Drivers

Increasing Social Networks and Penetration Rate

An enormous adoption of digital technologies and online platforms has greatly facilitated the expansion of peer-to-peer fundraising tools. These tools utilize the internet and social media capabilities to reach a wider range of people, facilitating the connection between individuals and potential donations. The growth of P2P fundraising tools is facilitated by the widespread use of social media platforms like Facebook, Instagram, LinkedIn, Twitter (now known as X), and others.

Furthermore, the capacity to effortlessly spread campaigns, narratives, and donation links on social media platforms facilitates the escalation of campaigns and the attraction of a greater number of donors. According to Statista, in October 2023, the global internet user count reached 5.3 billion, or 65.7 percent of the total global population. A total of 4.95 billion people, representing 61.4 percent of the global population, were active social media users. Thus, the growth of the internet and social media networks is anticipated to drive the market growth.

Growth of Smartphones and Mobile Payments

The growing prevalence of smartphones has facilitated the ease with which individuals can engage in fundraising initiatives while on the move. For instance, as per Statista, in 2023, the global smartphone user count will be 6.92 billion, indicating that 85.74% of the world's population possesses a smartphone. This figure has significantly increased since 2016, when there were just 3.668 billion users, accounting for 49.40% of the global population that year.

P2P fundraising platforms that are optimized for mobile devices and have dedicated applications take advantage of this current trend, simplifying the process for supporters to make contributions using their mobile devices. Also, the evolution and development of mobile payment methods have further eased fundraising. For instance, in 2021, the mobile payments transaction industry reached an impressive USD 1.7 billion, experiencing a significant annual growth rate of 27%. Such factors augment the market expansion.

Market Restraint

Lack of Awareness

One major obstacle in the market for P2P fundraising tools is the lack of awareness and understanding among potential users. The lack of knowledge can be ascribed to several issues, such as inadequate marketing endeavors by solution providers, a conventional mindset prevalent in certain areas of the nonprofit sector, and a general reluctance to embrace new technology without a comprehensive comprehension of its effects.

Based on a report by The Chronicle of Philanthropy, 45% of polled nonprofit organizations indicated that they are not presently employing peer-to-peer fundraising methods. The main explanation stated was a deficiency of understanding regarding these instruments and their potential advantages for their fundraising endeavors. This underscores the urgent requirement for extensive education and awareness initiatives within the nonprofit industry to emphasize the functionalities of P2P fundraising platforms, present exemplary instances of success, and offer practical training to prospective users. Such factors hinder the market's growth.

Market Opportunities

Technological Advancements

The development of novel and technologically advanced peer-to-peer donation fundraising platforms is expected to create opportunities for the P2P fundraising tool market. For instance, in November 2022, UFANDAO, an Estonia-based technology startup, unveiled a groundbreaking fundraising platform of the highest caliber that boasts transparency, exceptional performance, and other distinctive attributes. UFANDAO is the first fundraising platform in the world to operate on decentralized and peer-to-peer donation principles, enabling the hosting of campaigns without the involvement of third parties.

UFANDAO employs the DAO fundraising model, which ensures transparency and safeguards members against institutional and corporate exploitation, empowering them to execute campaigns autonomously and triumphantly throughout the process. In contrast to conventional fundraising platforms, UFANDAO offers a broader range of opportunities for individuals to conduct personal fundraising campaigns, including financing for educational expenses, mountaineering excursions, or the construction of animal shelters. Commission-free transfers of funds occur among campaign participants, with the platform not deducting any fees. All donations between members are executed in real-time, directly, and securely on the platform.

Regional Analysis

Based on region, the global P2P fundraising tool market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America is the most significant global P2P fundraising tool market shareholder and is expected to expand substantially during the forecast period. The region is technically the most developed in the world. It has the highest number of smartphone and active social media users who engage in fundraising programs, thereby driving the P2P fundraising tool market. For instance, as per Statista, between 2024 and 2028, the overall number of social media users in the U.S. is projected to increase by 22.8 million people, representing a growth rate of 7.4 percent. Social media users are predicted to reach 331.09 million, setting a new record in 2028. Some of the key players operating in the North American P2P fundraising tool market are Aplos, DonorPerfect, FundRazr, GiveGab, and Classy.

Additionally, there has been a surge in the introduction of new P2P fundraising tools in the market. For instance, in November 2020, PayPal introduced a novel peer-to-peer (P2P) fundraising tool in the United States, enabling individuals to initiate campaigns to raise funds collectively for causes that are significant to them. The PayPal Generosity Network, an extension of its Giving platform, is currently limited to the United States. PayPal states that this initiative has been motivated by the increasing prominence of peer-to-peer crowdfunding, which the worldwide pandemic has expedited. Such developments are driving the North American market expansion.

Asia-Pacific is anticipated to expand at a significant pace. The Asia-Pacific is one of the fastest-growing economies in the world, with a potential surge in the number of internet and mobile users, particularly in emerging economies like China and India. For instance, according to DataReportal, India had 692.0 million internet users at the beginning of 2023, with an internet penetration rate of 48.7 percent. This has resulted in a surge of social media users. Similarly, as per the same source, in January 2023, India had 467.0 million social media users, accounting for 32.8 percent of the country's population. Thus, due to this surge in mobile and internet users, peer-to-peer fundraising has overtaken several other fundraising methods in several regional countries.

For instance, as per the Fintech Malaysia Report published in 2023, Malaysia has experienced a significant transformation in its financial sector over the past two years, disrupting the traditional hierarchy of venture capital (VC) funding. Peer-to-peer (P2P) and equity crowdfunding (ECF) platforms have emerged as the leading contenders, surpassing traditional venture capital (VC) funding in their capacity to offer capital for not just fintech startups but also for growing organizations in general. Thus, it is expected to boost the regional market expansion.

Segmental Analysis

The global P2P fundraising tool market is segmented by type, application, and end-user.

Based on type, the global P2P fundraising tool market is divided into cloud-based and on-premises.

Cloud-based peer-to-peer fundraising tools are stored online and can be reached via web browsers or mobile applications. On-premises peer-to-peer fundraising solutions are implemented and operated on nonprofit organizations or fundraisers' local servers or PCs. These technologies offer customers expedited and enhanced access to their fundraising data, enabling users to communicate and share records with individuals and teams. Cloud-based P2P fundraising tools have several advantages, including scalability, flexibility, cost-effectiveness, and seamless connection with other platforms and tools, driving segment growth.

Based on application, the global P2P fundraising tool market is bifurcated into SMEs and large enterprises. 

SMEs are independent enterprises with limited staff and resources compared to larger organizations. SMEs refer to firms with fewer than 250 employees or generate annual revenue of less than USD 50 million. SMEs are anticipated to have a greater market presence since they are more inclined to utilize peer-to-peer (P2P) fundraising methods to secure cash for their businesses or projects, owing to their limited access to conventional financial sources.

SMEs constitute the majority of firms globally and play a significant role in generating employment opportunities and fostering global economic growth. According to the World Bank, they constitute around 90% of all firms and over 50% of global employment. Thus, the development of SMEs has become a top priority for numerous governments worldwide, thereby boosting segment growth.

Based on end-users, the global P2P fundraising tool market is divided into nonprofit organizations, educational institutions, religious organizations, and others.

Nonprofit organizations are motivated by social objectives rather than profit generation; nevertheless, they must generate sufficient money to achieve their aims. Nonprofit organizations can generate funds through many means. This encompasses revenue from contributions made by individual benefactors or foundations, financial support provided by corporations, government grants, proceeds from programs, services, or item sales, and income from investments. Due to a rise in the number of nonprofit organizations (NPOs) in the past ten years, these organizations have implemented strategies to gain a competitive edge and generate income to maintain their financial stability.

Nonprofit organizations have been increasingly diversifying their financing sources due to fluctuations in funding from year to year. For instance, some nonprofit organizations that have traditionally depended on government subsidies have initiated fundraising campaigns to attract support from individual individuals. Thus, such factors are anticipated to boost the segment growth.

Recent Developments

• October 2023- Blackbaud, the dominant software provider for facilitating social impact, announced that it is intensifying its commitment to the peer-to-peer (P2P) fundraising industry by advancing Good Move™, its mobile application for tracking activities.
• April 2023- Prophet Exchange, the first peer-to-peer high-frequency sports betting exchange in the United States to be completely regulated, announced with great pride a new line of funding of over USD 10 million. This declaration follows the organization's formal introduction in August 2022 and a prosperous Super Bowl, during which the organization recorded transactions exceeding USD 1 million.