How does mobile giving work?

Mobile fundraising is taking off — or so at least hope nonprofits hard hit by the economic downturn. Organizations are looking for a new channel for people to give on the spot, wherever they are, with their phones and a quick text message.

Mobile giving via SMS in the United States and many other parts of the world, has been out of reach because of high carrier charges — up to 50% of a donation would go to the telcom — unacceptable to most charities.

But this has changed in the last two years. Mobile donation campaigns in the United States that go through the Mobile Giving Foundation are not subject to the high carrier fees. The Mobile Giving Foundation charges a smaller percentage fee — currently 10%. As a result, in 2008 the field of mobile giving in the U.S. attracted the attention by organizations large and small, including by such brands as UNICEF, the Salvation Army, and the American Society for the Prevention of Cruelty to Animals.

in England, there is also talk about establishing an entity similar to the Mobile Giving Foundation that would negotiate a no-fee arrangement with the operators and vet charities for SMS giving campaigns.

How does mobile giving work?

The most-often talked about method of mobile fundraising and the one deployed by most mobile fundraising campaigns today are premium SMS campaigns (SMS refers to text messaging). Premium SMS fundraising campaigns were initially deployed to much publicity for disaster relief such as for Katrina victims and those of the California Wildfires. Customers of participating mobile carriers could send a text message to the short code “2HELP” (24357), activated during times of disasters, to make a tax-deductible donation of $5 to the American Red Cross’ relief efforts. 100% of thew donation benefiited the Red Cross as carriers wauved their fees. Now mobile fundraising shortcodes are available to all nonprofits, not just during the disasters.

Short codes are often referred to as the “mobile URL” — short, five digit codes or even vanity codes that customers can text to receive information or participate in a campaign. These donations via premium SMS then appear on customers’ monthly bills or are debited from prepaid cell phone account balances.

The Mobile Giving Foundation in the U.S. currently operates ten donation shortcodes and has enrolled over 65 nonprofits in its program. Each nonprofit has to go through an application process to qualify and then works with one of the mobile vendors that the Mobile Giving Foundation has approved, following strict guidelines.

Approval and then receiving the actual donations is not a quick process. Currently, there is a wait time of at least a month to get approved by the Foundation and the carriers. Donations solicited via mobile minus fees are collected and forwarded to the nonprofit within 90 days.

The size of mobile giving in the United States

Mobile giving via premium SMS is still small despite some valiant efforts. In 2008, the first full year of mobile fundraising in the United States, mobile giving crossed only half a million dollars. Not much, given the ubiquity of mobile phones in the US. But, as James Eberhard of Mobile Accord, a mobile vendor, points out, donations exceeded those raised on the Internet for the first year in 1997, when proceeds were a reported $300,000.

Eberhard cautions that “most nonprofit mobile campaigns are brand awareness campaigns right now rather than a direct response mechanism for an organization.” He points out that the current limit of $5 per SMS is too low an amount to yield much revenue. Nonprofits may furthermore fear that they cannibalize donors with a low mobile contribution when that same person could be giving more online.

But there is a growing number of campaigns — and lots of experimentation. For example, some of the more interesting campaigns used mobiles to draw attention to their brand, or used mobiles as part of a one-time holiday campaign. The Salvation Army in several cities, solicited mobile donations in its kettle ringing campaigns during the holidays. UNICEF deployed a similar strategy, soliciting donations via SMS during its Trick-or-treat for UNICEF campaign during Halloween. Both campaigns sought to capitalize on the just-in-time giving mobiles enable, though arguably it’s still much easier for donors to throw a few dollars into the kettle.

And then there are celebrity campaigns — Alicia Keys, most notably, who aggressively deployed and marketed mobile giving for her charity Keep a Child Alive. Keys included specific appeal for mobile donations during a concert tour last year and prominently displays a mobile giving short code for a $5 donation on the charity’s web site. According to Mobile Accord, the vendor for the campaign, 8,000 donors gave $5 via SMS during the concert tour, for a total of $40,000 for the charity.

These are still tiny numbers in comparison to the $10 billion in online donations purported to have been given online in 2007, and even smaller in comparison to the $300 billion in charitable giving overall.

But when taking into consideration the growth trends in mobile use and texting not just in the younger demographic but in the over-35 group, mobile giving via SMS is a channel nonprofits ought to at least consider. Mobile subscribers in the U.S. between 35 and 54, according to Nielsen, a rating firm, see especially explosive growth in SMS use: in 2007, just 37 percent of them regularly sent text-messages, while in 2008 that number grew to 59 percent. There are currently 270 million mobile subscribers in the US, according to industry group CTIA, all of which have the ability to send and receive text messages.

What works in mobile giving?

As the much-lauded Obama mobile campaign showed, mobile marketing is effective when deployed in a way that reinforces marketing messages through other channels and takes into consideration what is uniquely valuable about messaging via mobile phones. As good communication staff and fundraisers know, reinforcing messages that build a relationship with a donor, that are timely and urgent, and that have specific goals tend to be effective. Mobile messaging can play a role in well-thought-out campaigns and provides another, potentially very effective channel for reaching a target audience.

Share Our Strength, the national organization focused on child hunger, recently launched a text donation challenge — an effective way to reach new donors. Says Chuck Scofield, Share Our Strength’s VP for Development, “AT&T came to us as part of President Obama’s call to service.” Share our Strength and AT&T then partnered on a text-to-donate challenge: Donors who text in “SHARE” to 20222 on their mobile device for a $5 donation will be matched by AT&T for a total contribution up to $100,000. At the same time, as Scofield points out, Share our Strength also leads, together with AT&Ts employees a nationwide food drive to benefit community food banks in 32 cities. The food drive has so far generated 20,000 pounds of food alone, the mobile texting challenge is ongoing until March 1.

Share Our Strength did extensive outreach on blogger networks, and through Twitter. Says Suzy Twohig, Director of Donor Relations: “This is an opportunity for us to reach out to a new constituency. Our donors are giving more this year in response to the challenging times and for us, mobile giving is complementary to our other forms of giving.”

According to industry insiders, there may also be an inccrease in the premium SMS limit from $5 to $10 as well as SMS monthly recurring donations. At that $120-year price point, even if each SMS donation would have to be approved by the donor every month with a reply confirmation, mobile giving via SMS is beginning to look more lucrative for organizations than just a one-time $5 donation.

The hope is, according to Eberhard, that “if you can get a donor committed, even with a relatively small amount, it shows their involvement and can be tapped in the future.”

As usual in this field, there is little public data available, and most nonprofit campaigns have not been very strategic in converting their mobile donors or even activists into longer-term supporters, as we have often pointed out.

Eberhard also points out that most people do not know they can give via a text message, requiring still a large amount of donor education. He cautions that mobile revenue is not going to happen overnight for nonprofits but rightly notes that the trends are pointing in the right direction.

A new blog, Mobile Giving Insider, run by mobile vendor Mobile Commons, is keeping track of developments in this space, though it is currently only focused on premium SMS as a fundraising mechanism.

Going beyond SMS

But SMS is not the only way on which people can give. Mobile Commons, for example, has an application — mConnect — that is deployed by advocacy campaigns for legislative call-in campaigns. Planned Parenthood recently used the tool for a thank-you call to President Obama.

Here is how is works: An organization sends a text message including a phone number to its mobile list. The receiver replies CALL via text or simply dials the indicated number and is connected to a customized voice recording. This could be talking points or an overview of the situation — or a pitch to give. The caller is then forwarded on to a destination number, such as a legislative switchboard, or a phone bank.

Mobile Commons powered such a call-to-give for then-presidential candidate John Edwards who used his list of cellphone numbers to direct constituents via voicemail and text message to a live phone bank. Donors in this scenario then make a donation on the phone with a credit card rather than via a $5 text message.

Another tool, Twitter, has also been much in the news lately as a way for mobile peer-to-peer and micro-fundraising. Twitter, a microblogging service accessible via mobile phone or on the web, allows users to post 140-character messages to a list of followers. Nonprofits have been quick to take up Twitter as a way to get their messages out and converse with constituents. During a recent ‘tweetsgiving,’ an enterprising nonprofit raised $11K in just a few days through its network of supporters and peers to build a classroom in a Tanzanian school.

Twestival, an impromptu, all-volunteer-led series of events on the same day in the United States and the UK organized via Twitter raised a reported $250,000 for Charity: Water.

Share our Strength, through its outreach on Twitter for the mobile donation campaign, was mentioned on a prominent blog which resulted in a $1,000 matching grant from yet another reader, creating a ripple effect of attention and money. Says Scofield: “Our mobile campaign and outreach was opening the door for further engagement.

Though not strictly mobile giving, Twitter and other social networks such as Facebook are yet another channel for nonprofits to build networks reachable via mobile to turn people into supporters and donors of an organization.

There is still much to be explored in this multi-channel universe and the organizations that are thinking creatively and innovatively about mobile giving but it is clear that this channel is going to take off as people get used to the idea and nonprofits become more clever in integrating mobiles into their strategies.

A few more examples

A nice example of mobile-inspired giving recently is the campaign by Stand Up for Kids, a nonprofit working to alleviate kid and teen homelessness. The organization teamed up with Virgin Mobile’s Generation RE campaign and American Eagle Outfitters. A user texts in “karma” to shortcode 68450 and a piece of clothing is donated to a homeless kid on the texter’s behalf by American Eagle. The donor can also text in his or her name to appear on the Stand Up for Kids website. The campaign did a number of things right: It was a great use of texting to team up with a company to make a donation on the donor’s behalf AND build a mobile list in the process. The medium is right for the group that is appealing to a younger audience that feels empathetic to teen homelessness. Even though the organization’s website clearly cries “poor nonprofit,” the Karma page is cool enough. Streaming the donor names makes people feel engaged and recognized.

Virgin has a text2donate program, too — you can give $5 to the nonprofit itself by texting “DONATE” to 7845, but it seems Stand Up for Kids is too humble to mention that anywhere on their site. So, if you read this, have a heart. Donate $5 by texting DONATE to 7845 to alleviate child and teen homelessness, and then give a kid some clothes from American Eagle by texting in “karma” to 68450 – which will cost you nothing but the cost of the SMS.

One of my perennial favorites, even though it is by now a few years old, is a campaign by Meir Panim, a network of soup kitchens in Israel. It ran an “SMS for Lunch” campaign, a promotional interactive campaign: On their website a boy was seen, facing an empty plate. The site invited you to donate through SMS. The moment the system received the SMS, the banner changed: the plate filled and the boy smiled. The amount of the donation — each SMS — covers the cost of one meal for a child.

In South Africa, Nelson Mandela’s charity raised $85,000 with the cooperation of Zain, a South African mobile operator. Using Mandela’s 90th birthday last July as the ‘call to give’, well-wishers from around the world could text in a birthday wish and make a donation at the same time. Shared and dedicated premium SMS codes were set up in over 20 countries around the world including the U.S., U.K., South Africa, Australia, Spain and Germany as well as many African nations,making this one of the biggest premium SMS fundraising initiatives launched.

Photo courtesy Nelson Mandela Foundation

This entry originally appeared at MobileActive.org.