Venmo and Kickstarter: Peer Pressure Meets Donations

At this point, just about every millennial has heard of Venmo, the wildly popular peer-to-peer mobile processing platform. In this piece I want to explain why I think Venmo has the potential to be the single best medium for raising small dollar donations from young adults this campaign season.

For those that don’t know, Venmo allows users to link their bank account to the app, meaning they have to provide the same identifying information campaigns require by law. However, unlike the clunky campaign websites that can require up to 2 minutes (!!!) to make a contribution, Venmo can process a payment in less than 5 seconds. Open the app, enter the amount, click the user you’re paying and boom, you’re done.

Simplicity, however, is not the only selling point Venmo has going for it. In addition to its ease of use, whenever you make a payment to someone that payment is shared to the rest of your friends on Venmo. This social component could prove to be a powerful peer pressure tool that creates feedback loops that encourage further donations. It’s similar to how seeing your friends donate to a kickstarter makes you more likely in turn to donate to that kickstarter.

In fact, Kickstarter itself is a criminally underutilized tool going into the 2016 season. Of course, Kickstarter is not set up to be a campaign’s main fundraising platform. However, it is perfect for organizing “special” fundraising drives with special prizes. Think of President Obama’s “Dinner with the President” drives. A candidate could set up reward tiers for people donating and provide better rewards for higher contributions. And here again, the social component of the service would pressure your friends into contributing to the same campaign you did.

In essence, I just want campaigns to take a closer look at crowdfunding and peer-to-peer payment applications this cycle. Having a donate button on a website is nice but the fact is a lot of people are never going to go to your campaign website so you’d better figure out a way to raise money elsewhere. And if you want money from me and my friends, Venmo and Kickstarter would be two great places to start (we still love you Indiegogo!)