Hi everyone. So we'll get started here in just a minute, but before I get started, I just want to make sure that everybody can hear me and see my screen. You should see the title slide on your screen before you and hear me speaking. So if that is all happening for you, if you could just type yes into the questions box on your go-to webinar panel, that would really help me out. Awesome. Thank you, Kristi, Jack, and Emily. So I'm going to put myself on mute for just a few seconds and then we'll go ahead and get started right at top of the hour. And actually, we're there already. So welcome everybody. Hello, and welcome to today's webinar, which is all about peer-to-peer fundraising. One of my favorite shows when I was a teen was Mythbusters, which was a discovery show where they take a myth or an urban legend and they would sort of test it out to see if it was possibly true. And they blow up a lot of stuff in the process. So that's why you're seeing an explosion on the title slide. And I just thought this would be a really fun way to talk about peer-to-peer fundraising and some of the misconceptions, fears, and myths that are out there about peer-to-peer. My name is Linda Gerhart, and I'm the Senior Community Engagement Manager here at Mighty Cause. I have been with this company since 2016. And when I first started out at the company, one of my primary responsibilities was actually teaching people how to do peer-to-peer fundraising. So I've got a lot of experience under my belt on this specific topic. And I hope that helps me bust some myths about peer-to-peer for you. Here's a look at our agenda today, just as a bit of housekeeping. There will be a Q&A session at the end of the webinar. So if you think of anything that you want to ask or talk more about while I'm presenting, please just pop it into the questions box of your GoToWebinar panel, and we'll make time for it at the end. We are recording this webinar and everybody will get access to the recording. So I'm going to try my very darnedest to keep it to 30 minutes. But if we do go over and you need to leave, I totally understand. I'll make sure that you have the recording so that you can catch up on anything that you may have missed. So before we can really dig into peer-to-peer fundraising myths, we all need to be on the same page about what peer-to-peer fundraising actually is and how it works. So we're going to go through that first. Peer-to-peer fundraising is actually pretty simple. All it is is a fundraising technique where a non-profit leverages existing supporters to bring in donors and donations. So instead of fundraising directly by asking your supporters to donate, you're essentially deputizing your supporters to fundraise for you. And they'll be going out and asking their social network to contribute through their fundraiser that's connected to your organization. That's what peer-to-peer means in this context. Instead of an organization that's asking for donations, a person who supports your organization is asking their peers to donate. So if you've never done peer-to-peer before or just aren't too familiar with it, that all sounds probably a little bit strange. Like why would you take this indirect path when you could just ask your donors to give money? But it does have some very specific and huge benefits, which is why it's something that a lot of nonprofits do. Chief among the benefits is donor acquisition. The question I get asked most often by small nonprofits especially is how to expand beyond their existing list of supporters and reach new people. And peer- to-peer is one of the most low-effort high-reward ways to do it. Let me look at reports of why people made their first donation to a new nonprofit, what actually got them through the door. The most common reason that they gave for the first time was that somebody that they know in their lives asked them to donate. So people tend to give when someone they know is asking them to make a donation. And that's how a lot of people get in the door at nonprofits. And hearing from a person that someone trusts is a huge way to attract people. So somebody is less likely to listen to you, the nonprofit, unfortunately, but more likely to listen to a trusted friend or somebody that they know in their personal life when considering where to make a donation. And it also gives you access to people that you otherwise would not have permission to solicit for a donation. So for instance, you cannot ask my Aunt Debbie for a donation because she has no relationship with your organization. But I can ask my Aunt Debbie to donate to your nonprofit through my peer-to-peer fundraiser that I created. So that gives you access to people that you wouldn't otherwise be able to ask for donations and may not even know about your nonprofit. It basically has a supporter who is already on board with your cause acting as a bridge to your nonprofit. And it also puts more boots on the ground. You can only send so many emails and post on social media so many times. But getting more people to be a champion for your cause and ask for donations means that you're going to be casting a wider net. And it's also something that people who do the fundraising really enjoy and get a lot out of, which is something we're going to be talking about a little bit later on in the presentation. So in case you are a visual learner, I made a little graphic to illustrate how peer-to-peer works. So your nonprofit is the starting point. And you get, say, two supporters to fundraise for you. Then they create a fundraiser and ask their friends to donate. And those friends make their donations. So instead of just asking two donors to support your organization and make two donations, you're asking two donors to fundraise for you. And you end up with many more donations. And just as a note, people who sign up to be peer-to-peer fundraisers usually donate to their own campaigns. So you're going to get their donations as well. So you're going to get donations from their friends and their family as well as them. So you are getting their donation in the process of them being a peer-to-peer fundraiser. So hopefully this is helpful in visualizing how this works if this is a new concept for you. There are a lot of platforms that offer peer-to-peer fundraising. It's something that has been on the internet for a long time. But Mighty Cause was actually one of the first when we started out as Razoo in 2006. So I wanted to chat for a minute about how Peer-to-Peer works on our platform specifically. So on Mighty Cause, each person who starts a peer-to-peer fundraiser has their own page that is connected to your nonprofit. And it essentially acts as a funnel to your organization's profile. The endpoint is always your organization. They can customize their page and talk about their connection to your cause, add personal information and media, like pictures that helps them tell the story of why they care about your organization and want people to donate to you. So each peer-to-peer fundraiser has their own page that is where they direct their family and friends when they're trying to get donations. And donors make their donations basically to show support for the person that they know. They don't necessarily end up sold on your cause from the outset, but they are trying to support someone they know. So they have a little landing page of their own where they can collect donations and talk specifically to the people in their lives. And those donations that come through the fundraising page show up on your donations report. They go directly to your organization and you'll see them in your donation report. The money that is raised from peer-to-peer fundraising is always bundled into your regular disbursements from Mighty Cause. And I wanted to make sure that I clarify that because sometimes people are worried with peer-to-peer that the supporter or the fundraiser kind of acts as a middleman with the money. And that is never ever the case on Mighty Cause. It goes directly to your organization and the page is just a bridge from the donor to your org. On Mighty Cause we also have several different types of peer-to-peer fundraisers. So these are all things that are underneath the peer-to-peer umbrella. So a peer-to-peer or fundraiser page is the basic thing that we've been talking about so far. You have one supporter and they have a page of their own where they send their family and friends to make a donation to your nonprofit. And a step up from that would be a team, which is a group of peer-to-peer fundraisers. So for instance, for Giving Tuesday, if your volunteers wanted to start a team and fundraise for you, they get their own main page for the whole team, the volunteer team. And each team member, each individual volunteer has their own peer-to-peer fundraising page. And they're all working together to hit a fundraising goal that they've come up with on their own. And they're all doing their individual parts by directing people in their lives to the fundraising page that they've created, which is connected to the team. And a step up from that would be an event where you have loan peer-to-peer fundraisers, these individuals, and you have teams of peer-to-peer fundraisers who are all working together to raise money for a cause. And they're also competing on a leaderboard, which adds a little bit of friendly competition. And we'll mostly see events for larger scale peer-to-peer efforts. But for the purposes of this webinar, we're talking about all of these things. These all fall under the umbrella of peer-to-peer. So we're talking about every single one of these. We're not talking specifically about one of these over another. I wanted to finish up with some examples of peer-to-peer fundraising that we've all probably seen in the wild if we haven't run them ourselves. So charity walks and marathons are kind of the gold standard for peer-to-peer. And everyone more or less understands how those works. They're very simple. You have a runner or a walker, and they sign up, they start a fundraiser, and they ask people they know to pledge or donate to support them in their efforts. But there are also more passive peer-to-peer fundraisers like birthday fundraisers. So for my birthday, and I've actually done this before, I might decide that I don't need any gifts, I don't need a party, I don't need a fancy night out with drinks and dinner, but I really want to help a cause that I care about. So I start a peer to peer fundraiser and ask my friends and family to wish me a happy birthday by making a donation to this cause, because it's close to my heart, and that's a meaningful gift for me. So that's something that is usually not involving the organization. They don't facilitate this usually. I do this on my own. And one thing I do want to note is that this is a thing that people do. There are some really amazing people who do this every year for their birthday. They have tons of friends, tons of former classmates, and they really make a big to-do out of their birthday fundraiser, and they've raised thousands upon thousands of dollars for charities every year just by having a birthday. And peer-to-peer does not have to, there's also, you can add peer-to-peer to a campaign, so add a peer-to-peer component. So for instance, for Giving Tuesday, you might have your own fundraiser where you're talking directly to your donors and asking them to make a contribution, but then you can also ask people to fundraise for you so that you have more boots on the ground when there's a time limit or you're trying to reach a goal and you're trying to raise as much as possible. So they don't have to exist on their own. They can also exist as part of a larger campaign or as a complement to a campaign, which brings me to Giving Events. We have a lot of these on our platform, and Giving Tuesday is a great example of what a Giving Day is. Right now we have Given May happening for Asian American Pacific Islander Heritage Month. We have Give Out Day happening next month for Pride, and there's also a lot of local community-based events that happen all year round on Mighty Cause, and these have a built-in time limit. So a lot of nonprofits will, as part of their participation in the day, involve peer-to-peer fundraising because they need as many hands as possible on deck to raise as much as they can because there are prizes at stake. And then something that you'll see kind of in a lot of these things is a board challenge. So sometimes board members will band together, start a team, or work individually to raise money and compete against each other as its own fundraiser, and it's also a really common add-on to a fundraiser. So board members often get involved in peer-to-peer. All right, so now we're going to move on to the myths. I will be using the standard myth-busters format that you should be familiar with if you've ever watched the show. I'm going to present a myth and then talk about whether it's busted, meaning it's false, whether it's plausible, which is maybe it's true or is true under certain circumstances, or confirmed, meaning that the myth is unequivocally true. So our first myth is that peer-to-peer is really hard to manage. Peer-to-peer campaigns are a ton of work. You have to spend time recruiting people to fundraise for you, and then you have to hold their hands through the whole process and teach them how to fundraise and cheer them on. And why do all of that when you can just fundraise directly? This is something I hear a lot about peer-to-peer, that it's just way too much work and way too hard to manage, especially for small nonprofits. They'll be concerned about the amount of effort that is required and say that peer-to-peer is just way too much to manage. So this myth is straight up busted. I mean this sincerely, because I've seen a lot of campaigns on Mighty Cause over the years. Peer-to-peer campaigns are not more work than a direct fundraising campaign of similar size and scope.  It's literally no more work. And in a lot of ways they can even be easier because you're offloading a lot of the legwork of soliciting donations to your supporters. So on Mighty Cause we have a plethora of tools that you can use to manage your peer-to-peer campaign. You have templates that you can create so people can just easily publish a fundraiser. You have your campaigns tool which gives you sort of a bird's-eye view of all of your peer-to-peer fundraising and you have some controls that you can use on your campaign screen on your organization profile. And then we also have teams and events and each one of those products has their own set of tools that you can use to manage people as part of your peer-to-peer campaign. So if you're running a huge event where you're planning on having hundreds of people fundraising on your behalf, we have your back. You have tools to support you. We're not going to just make you do all of that in spreadsheets. There are tools there like registration, participant management. There's a lot there to support you.  And that's something you want to keep in mind when you're choosing a platform for peer-to-peer. So Facebook may be cheap and they may be easy but they're not there to support you. Mighty Cause has products that are specifically designed to make this easy for you and support you through the process so it doesn't add more work. We definitely don't want a peer-to-peer to become an albatross. And you will need to do some work to recruit fundraisers. So that part is true. Some nonprofits do a little bit of work. They just ask them on social media or in an email to start a fundraiser and send them to a link where they can get started. And some orgs are much more involved. So some of them will actually create pages. It's basically your choice, how involved you want to get in helping people get set up and how closely you want to manage them. But your effort is basically front-loaded. If you set your fundraisers up for success and do a little bit of work at the offset to help them get set up and set them up so that they understand what they're doing, you can really just sit back and watch the donations come in for a lot of the campaign. So this myth is totally busted. Peer-to-peer is not more effort than any type of fundraising effort. And it's maybe just a little bit of a different kind of effort but it's not more work. The next myth is that peer-to-peer is overhyped and it's just not nearly as effective as people say. I've heard some people even suggest that the heyday of peer-to-peer is over and now it's run its course and peer-to-peer is not effective. So is peer-to-peer effective? This is super busted. So I can tell you as somebody who has been working at Mighty Cause for many years at this point, teams and events in particular consistently raise more money than anything else on the platform except maybe giving events which have sometimes hundreds of nonprofits participating in them. But they raise more money consistently. They bring in a huge number of donations and this has been consistent through the years. This has never not been the case in the time we've had teams and events as products. So let's really break that down and really noodle it out. A single peer-to-peer page gets on average around 10 donors. So if you have three people fundraising for you, that is 30 donors, many of them are going to be new to your nonprofit. And if each of those 10 donors gave $25, that's $600 that you really didn't have to do anything to get. So that would be a super small peer-to-peer campaign. And when you scale up to the size of some of the efforts that we see on Mighty Cause where sometimes an entire school is fundraising, you're going to see sometimes like 200 people fundraising as part of an event. You can imagine just the sheer impact of the volume of people. So peer-to-peer is effective. On a small scale, it's effective. And on a large scale, it's hugely effective. So the thing I do want to note here is that peer-to-peer is not going to replace all of your fundraising efforts. Like you can't just cancel all of the fundraising that you do year round and only do peer-to-peer and expect that it'll be the same. But it can certainly be a cornerstone of your fundraising strategy and consistently bring in revenue to your organization. So the next myth is our donors are not going to get this. We know our donor base. This is going to be confusing and weird for them. We've never done anything like it before. So they're going to be confused. And then we're going to have to spend time working with them and helping them understand it. And then the effort may not even pay off. So what's the point if they don't even know what it is and can't raise money? So I hear this a lot that our supporters are just not going to get it. So this is actually plausible. There are a lot of people who already know what peer-to-peer is and how it works. And maybe they've even run one on Facebook at one time. Then it might be a new concept to a lot of people. There's a very good chance that your supporters will not immediately be experts on peer-to-peer. So an easy way to avoid confusion and help set them up for success is by creating a small toolkit for them. It does not have to be a novel. It doesn't have to be super extensive and Mighty Cause has a lot of resources on our blog and in our support library that you can incorporate that are already built for you. But the average person is not a fundraising expert. You guys are fundraising experts.  So it's really a good idea if you're going to run a peer-to-peer campaign to spend a little bit of time onboarding, set them up for success, give them a toolkit with some information about how to fundraise.  So it is plausible that some of your donors may not get it, but there are some steps you can take to make this a much more approachable and easy thing for them to do, even if they come in having no idea what peer-to-peer fundraising is. So the next myth is one that drives me a little bit crazy.  They're just older people. They're not computer savvy. They prefer to write checks. They don't even really trust online donations. So they're just really going to be confused and alienated by peer-to-peer fundraising. So this is something I've heard a lot and I just want to say that it is plausible. So you do know your donors and I want to make space for that. You know your donors and there are some nonprofits. I have seen them. I've worked with them. A lot of them are in rural areas where there's not reliable internet access, where peer-to-peer may not be a good fit. So there's definitely a chance that maybe for your donors this does not make sense for them. You are the ultimate judge of that. But I do want to take a moment to address sort of the ageism in this myth because it's very strong and it's not accurate with what we know about how older Americans interact with the internet. So according to the AARP in 2020, three quarters of all adults ages 50 and older use social media on a regular basis. They're all over Facebook. They're on YouTube. They're on Instagram. They're on LinkedIn. So sometimes we make assumptions about our donors, but that may not actually be true. Most older Americans are wired. They are using the internet to make purchases. They're using it to order groceries, manage health care, learn information. They're using it for entertainment and interacting with their friends and family. And over 2020, a lot of older Americans got really comfortable using Zoom even if they had never used it before in their lives. So just make sure we aren't we're not falling into stereotyping our donors. A lot of our older Americans in this country are just as much online as younger people. Pew Research found in 2021, so this is a current number, that 25% of older adults, meaning over 65, don't really go online on a regular basis. But that means that 75% do go online regularly. So try not to stereotype your donors. It's very possible based on your situation that it may not be a good fit for your donors. But honestly, a lot of older donors are active on Facebook. They are active on LinkedIn. They are connecting left and right. So they are going to be peer to peer powerhouses. So just make sure not to stereotype your donors. They are online. But certainly you are the best judge of whether or not peer to peer is appropriate for your nonprofit and your donors. Another myth that I hear a lot because I work a lot with small nonprofits is that we are just too small. We have a small donor base. We're not big enough to make peer to peer work for us. We don't know enough people. I don't even know who we would ask. And it's something that maybe you could do down the line when you have more people in your network. But when you're very small, it may not work. So this is busted. Peer to peer, it's all about donor acquisition. So if you are a small nonprofit, if this will help you grow, this will help you get more people interested in your nonprofit. It'll help you expand your list and it'll get more donors involved in your organization. And the question is who do I ask? So in this case, you might not be asking people who are supporters on your donor list, but you may ask your staff members. You may ask volunteers. Volunteers are often more than happy to do this for you and your board members. So you have people in your inner circle who can be really great peer to peer fundraisers if you just think outside the box and aren't thinking about asking people on your donor list. But people who are involved in your nonprofit in other ways, they can be really great peer to peer fundraisers for you. And if you're very small, you can always consider adding a peer to peer component to your next fundraiser like a board challenge. That's a really easy way to dip your toe into peer to peer fundraising. And it'll help you grow. It'll help you get more donors. Like this is a consistent thing with peer to peer fundraising is that it's going to help get more people interested in your nonprofit. So make sure that you don't think that you're too small. You probably have people around you even at the smallest nonprofits who would be fantastic peer to peer fundraisers. So the next one is we will lose control of our messaging. So one of the things I do in my job at Mighty Cause is I work a lot on nonprofits with communications and messaging. And a lot of nonprofits work really hard to find a message that works for them. And it can seem really scary and reckless to sort of just let random people fundraise for you when you've been working really hard to get messages across to the public. And you've been working really hard to hone in on your messages as a nonprofit. You can worry that they're going to spread information. They're going to tell people things that aren't true. You're going to want to micromanage what they say because they're going to say things that you don't want them to. And it can be really stressful when you've been working on creating a strong communications plan. So this is plausible. You will have to let go a little bit to make peer to peer fundraising work. You cannot micromanage every one of your peer to peer fundraisers. So what you can do instead is create the toolkit that we were talking about earlier. You can give them talking points. You can give them some graphics and photos that you have approved so that they have resources that you've already looked at that they can put up. You can also give them a few examples of how you talk about the work that you do. I've worked in animal welfare organizations and we had very specific language that we used that we landed on through a lot of conversation and debate. And through studies that had been done about how to communicate with the public, you can package all of this together into a toolkit. You could have an info session to sort of introduce them to it and make sure that they understand how to talk about your cause if you are concerned about this. The other thing that you can do is you can use fundraiser templates on Mighty Cause. That allows you to pre-fill parts of your fundraiser's pages so that they've already got a running start and the running start is things that you want them to say. So you may have to give up a little bit of control of your messaging with peer to peer fundraising. Everybody is not a PR expert, but you can certainly set them up for success and guide them so that they are consistent with your messaging. But it is plausible that you'll lose a little bit of control, but that is worth it in most cases. So peer to peer is just too much to ask. Our volunteers, they work really hard for us. Our donors give so much money to our organization. They're always there to support us. Our board is here all the time doing work for us. We love them. They're awesome. Our staff works really hard on a shoestring budget. And it just seems like a bridge too far. It's too much to ask of them. And you run the risk of annoying them. Like what if they get annoyed with you and go, oh gosh, you need to lay off of me. I do enough for you. So this is something that a lot of nonprofits are really concerned about with peer to peer. And it's busted. It's not true. The worst that anyone can do if you ask them to start a peer to peer fundraiser is say no. They can choose not to start a fundraiser for you. That's the worst that can happen. And peer to peer fundraising is really something that donors get a lot out of. It's fun for them. They get to talk about the causes that they care about. They get to have something to talk to their friends about. That's really important to them and close to their heart. And they want to make a difference. They want to help your nonprofit. They care about your cause. The best predictor of future behavior is past behavior. And these people have shown you that they care about your nonprofit and they are driven to help you. So it would be very uncharacteristic of them to turn around and say, how dare you ask me to start a fundraiser? They're usually not going to do that. I've never heard of that happening with a peer to peer fundraising request. The worst that they do is they delete the email or they politely decline. And it's also really great for donor engagement when you ask people over and over again just to write you a check or make a donation. That can get a little monotonous and that can feel a little bit boring. And that can be a reason why people stop making donations. But peer to peer is a way to get them engaged. It gets them more involved. You're asking something new and different of them. And it can keep them at your nonprofit. So somebody who's been giving, I don't know, $30 a month, that gets a little monotonous. This is a way to shake things up and keep them engaged and keep them excited about your cause. So this one is totally busted. Most people want to help your nonprofit if they are already involved with your nonprofit. So another myth is that you need an in-person event. So most of us, when we think of peer to peer fundraising, we think of charity walks. We think of fun runs. We think of things along those lines. And those can be a lot of effort.  So if you don't have an in-person event, does peer to peer really make sense for you? Or do you need to conceive of an in-person event in order to make peer to peer work? So this one is busted. You can certainly have an in-person event. If you want to have a charity walk or a fun run, those are fantastic ways to reach out to your community. But it's certainly not required. Most of the peer to peer campaigns that we see here on Mighty Cause are just online. They don't have an in-person component at all. And in 2020, we saw a huge increase in that for reasons that should be obvious. So you don't need an in-person event to do peer to peer fundraising. It's largely about social media and people connecting with each other online. So the real legwork happens online. So you don't need something in-person if you don't want to or it doesn't make sense for you. And if you'd really like to keep them motivated, a lot of people worry if I don't have something like a walk or a marathon that people are working up to. How do you keep them motivated? Setting many challenges, many goals, and things that happen online can help build excitement and keep everyone engaged. Like if you had your group of fundraisers and you were saying, oh, well, hey, our goal is to raise $1,000 by the end of the week. And maybe you give a bumper sticker to the person who raises the most in a week. Whatever you want to do, you can sort of create these many incentives if people are not gearing up for a big in-person event. Most people don't think that way, but if that's something that you are concerned about, there are definitely ways you can proactively keep them engaged in the campaign that's going on. All right. So I'm a little bit over my time. I apologize for that. I did want to make time for any questions. And just to reiterate, I am going to send out the recording of this. So if you have to check out now, that's absolutely fine. You will get the recording. So if you have a question, just go ahead and type it into the questions box of your GoToWebinar panel. Now you have a captive audience. If you have anything you want to ask, make sure you ask it now. And we've got a question here from Emily. The biggest question I've had is how to make the ask. I definitely feel like I'm going to be inconveniencing folks. So I want to shape my wording for the best effect. So yeah, this is one of the myths that we were talking about earlier, is that it feels like a lot to ask of people. So I would say in terms of where you make your ask, there's a couple of ways you can do it. You can do it through social media if you have a social media following. You can do it in an email. So for instance, if you're gearing up for a spring or summer campaign, spring's almost over, but if you're gearing up for a summer campaign and you want to get a peer-to-peer component going, you can send an email. You can target that email to people who are good donors, who've been with you for a while, people who have participated in events with your nonprofit before. And so you can ask social media. You can, through social media, you can ask through email. You can even ask in person. Sometimes having an info session or you can have a virtual info session can be a great way to get people on board with it. And in terms of how you thread that needle, the best way to do it is to flatter people and tell them how important they are to your nonprofit because of you messaging is going to go a really long way here. So, you know, Emily, you're such a great supporter of our cause and we have this campaign coming up and we could really use your help in fundraising for us. We need more people to get the word out about what we're doing and we really think that you would be a fantastic person to start a fundraiser and get the word out about our cause because you've been such an amazing supporter. So, using that kind of framing, you're not really asking them to do something that's a chore. You're asking them to do something because they're amazing and they help your nonprofit and you really need their support. So, in a way, it's not that different than asking them for a donation. The actual thing you're asking of them is slightly different. You're letting them know that they are valuable, they are important and you really need their help. So, it's kind of not that different but that's sort of how you can thread that needle so that you can get people interested. Everybody likes to be flattered. Everybody likes to feel important and most people are going to feel, you know, they're going to feel seen if you tell them how important they are at your nonprofit and that you've specifically singled them out to help you if you're having a conversation and you could also do it on social media in a much more general way. That is more in line with just how you ask for a donation, use the because of you framing because our community is so amazing. We're asking people to sign up to be peer-to-peer fundraisers for our next campaign. All right, let me just double check. It looks like that's the only question. I'll give everybody just a minute or so. If you have a question, just type it into the questions box and I'm happy to answer it for you. I can also answer questions offline. So, linda at mightycause.com is my email address. If you wanted to contact me about something that is specific to your organization or if you just think about something tomorrow and you go, oh, I wish that I had asked that question yesterday on the webinar, you're more than welcome to email me and I will do my best to get back to you quickly. But it looks like that's it for now. So, thank you guys so much for attending this webinar today. I hope it was a fun way to sort of talk about what peer-to-peer can do for your nonprofit and how to run a peer-to-peer campaign. I will be sending out the recording and the slides as soon as I'm able to get this uploaded to YouTube and get the slides up on Dropbox so you can look for that in your inboxes. And again, thank you for spending this time with me today. I really appreciate it and happy fundraising and a happy Memorial Day.


Hello and welcome to the session in which we will discuss the research credit from the name of the credit research credit It's designed. It's aimed to encourage to entice taxpayers and company to invest in Related research and development activities. The reason is is to improve the economy improve technology improve the discovery of new businesses and processes so a credit is available to taxpayers for qualifying expenses related to Research and development. So you spend money on research and development We will give you some sort of a credit an incentive to to help you in this process also known as business related research and Experimentation the aim is to promote research and research credit is composed of three components Incremental research activities credit a basic research credit and an energy research credit So we have different type of credit will discuss each one of them separately Starting with incremental research credit before we proceed any further I have a public announcement about my company farhat lectures calm Farhat accounting lectures is a supplemental educational tool That's gonna help you with your CPA exam preparation as well as your accounting courses My CPA material is aligned with your CPA review course such as Becker, Roger, Wiley, Gleam, Miles My accounting courses are aligned with your accounting courses broken down by chapter and topics my resources consist of Lectures multiple choice questions through false questions as well as exercises. Go ahead start your free trial today The incremental research credit provides 20% for the amount of eligible research expenses However, the 20% applies to the amount that exceeds what's called the base amount The base amount is giving or the company will determine what the base amount is You don't have to worry about the base amount the base amount will be given for us But any amount you spend above a base amount simply put You are spending quite a bit of money on research and development. The government is gonna give you a credit research expenditure qualify if they are aimed at uncovering mean discovering new technological information for the use in developing or Improved business component of the taxpayer So the purpose has to be for that purpose if the research is performed in-house in other words You are using your employees. You are using your equipment Well the expenses are all expenses are eligible as long as they are qualified research expenses If you are outsourcing this process Outsourcing means you are paying an outside party Consultant and that's very common in the research industry. For example, my work my wife work at J&J and they do use Outside resources to conduct the research some of the research if that's the case Only 65% of the amount paid is eligible for the credit So you cannot count 100% of the amount you paid for outsider insider. Yes people of the company Now incremental research credit you have to be aware that this credit cannot be claimed for certain activities. What are they? Once you reach commercial production, you can no longer You can no longer claim the credit and this should make sense because you already reached commercial production You're no longer in the research stage any Surveys and studies such as market research testing routine data collection. That's doesn't qualify Research that's conducted outside the US Puerto Rico and US territories. That's not considered That's not considered for the incremental research and research and social scientists Sciences arts or humanities is not. Let's take a look at a quick example. Just to see how they do the competition John Eligible incur eligible research expenses of 200,000. That's how much John spent The base amount we're gonna assume is 100,000 so what's gonna happen? We're gonna take the amount above the base amount, which is 100,000 above the base amount multiplied by 20% and the research credit is 100% 20% of 100,000 is 20,000 and that's the research credit now What can you do with this research credit the taxpayer can select from three options? The first option is to use the full credit and reduce the expense deduction for research expenses by 100% of the credit so one way to do it. It's a you would say, okay I spent 200,000 20,000 of it went toward the credit. Therefore. I'm gonna take a tax deduction of 180,000 Remember there's a difference between the credit and the deduction the credit reduces your taxes dollar for a dollar your tax bill the deduction reduce your taxable income and The higher your tax rate the higher your tax rate The more benefit is the deduction because it's gonna reduce higher higher Tax rate or the second option is to retain the full expense deduction and what you do this or you can do is you say Okay, I'm gonna take the full deduction 200,000 if that's the case What's gonna happen to the credit you're gonna have to reduce the credit by? 21% why 21% we're gonna assume the corporate the corporate tax rate is 21% as Of the day so we're gonna use 21% there for you the credit will be only 15,800 which is taken the 2020,000 which is the full credit multiplied by 21% and reduce this amount Which will become 15,800 or the third option is to use the full credit now and And amortize the remaining amount so you can take the full credit now Take the 200,000 and rather than reduce it now Expense it over 60 month, which is five years, which it means $40,000 of deduction for the next four years. So companies do have various options basic research credit and this basic research credit is for corporation not as not as corporation not personal service companies those are Corporation which is when we say corporation C corporations are eligible for additional credit of 20% of basic research payment again made above a base amount This credit is not available for individual basic research payment Referred to cash payment made to qualify research organization like universities tax exempt organization and the primary focus is scientific research basic research is Is an original inquiry aiming at advancing scientific knowledge without any specific commercial objective This is how we design basic research You're not looking for to commercialize that this thing you are looking to maybe discover some new technology Basic research again in social science Sciences arts humanities as well as basic research conducted outside the US are not eligible for this basic research Again, remember, what's the purpose of these credits the purpose of these credits is for the government for the Congress to entice Certain activities So this is in line with the Congress aim of using the credit to promote domestic High-tech research the basic research calculation is based on expenditure exceeding again a base amount Basic research expense do not exceed the base amount may still qualify for the incremental research activity credit so if it doesn't qualify for this you might be able to use it for the Incremental blue corporation pays one hundred thousand dollar to research organization for basic research Blue space amount for the basic research is 90 so which is the amount above as 30,000 multiplied by 20% will get a 6,000 the $90,000 base for the basic research can also be considered expenses for the purpose of the incremental Research activity, so maybe you can use that 90,000 to get the incremental research activities The last research is the energy research and the energy research is what is to entice Individuals is to entice companies is to entice consumer to find alternative energy Resources rather than rather than relying on fossil fuel and a good example will be Tesla the company Tesla the car electric car the energy research credit was created to encourage more energy research Taxpayer can receive a credit of 20% of the expenses paid or incurred for energy research through an energy Consortium, so basically those are the three research What should you do now go to far hat lectures whether you are an accounting student CPA candidate enrolled agent look at additional Resources for various credits that's gonna help you understand this topic better Study hard. Good luck and of course stay safe