Demystifying Mobile Giving: How it Works and Can Work for Your Nonprofit
Mobile giving gained recognition
following its incredible success at raising funds for the victims of the
Haiti earthquake in January 2010. The Red Cross alone raised an
astounding $32 million when more than 3 million people texted the word “haiti”
to make a $10 donation. That success has since spurred an interesting
discussion about the potential that mobile giving has as a fundraising
tool going forward.
Now, obviously we cannot expect
to replicate this kind of success. These were unique circumstances: an
extremely large organization operating with huge amounts of funding, and
help from the press and celebrities. But is there some use for mobile
giving for smaller organizations? Now that’s an issue worth exploring!
This article cuts through the hype to see mobile giving for what it is:
a unique tool with a great deal of potential.
An in-depth Look at Mobile Giving
Key Players
With
mobile giving, it isn’t just you and your donors anymore. There are
three other key players that are involved:
Application Service Provider
(ASP). The ASP serves as your primary point of contact for your
campaign. The ASP will help you design your campaign, deal with the Cell
Phone Provider to arrange a short code (a five or six digit number)
along with a keyword (like “aid” or “give” or “haiti”), and assist you
in handling incoming and outgoing messages. They will also deal with the
Trusted Third Party (TTP) on your behalf to arrange a contract. There
are many ASPs to choose from: Mobile
Matters, Causecast, and
TextCaster just to name a few.
Cell Phone Provider.
Because you have hired an ASP, you don’t
have to deal with the Cell Phone Provider yourself. The Cell
Phone Provider will work with the ASP to arrange all of the details of
your campaign.
Trusted Third Party (TTP).
A TTP is a nonprofit organization that acts as a mediator between
non-profit organizations and the Cell Phone Provider to regulate mobile
giving by ensuring
a. donations made through a Cell
Phone Provider actually go to a legitimate tax-exempt non-profit
organization, and
b. the Cell Phone Provider credits
charities appropriately for donations made on their behalf.[1]
In the US, the
Mobile Giving Foundation and
mGive foundation serve as TTPs. In
Canada, the Mobile Giving
Foundation Canada serves as the TTP. You also never have to deal
directly with the TTP, as your ASP will do this on your behalf.[1]
How it Works
Here
is a break down of how a mobile donation makes it from the donor to the
non-profit: Donors see a call to action at a live event, on a billboard,
Twitter, Facebook, or any other form of marketing. They text a keyword
like “Give” to a short code like “55555” to donate $5 or $10. The charge
then shows up on their next phone bill. Once the Cell Phone Provider
collects that money, they pass it onto the TTP. The TTP in turn passes
it on to the non-profit itself in full.
Cost for the Non-profit
A common misperception about
mobile giving is that it is expensive and that only a small percentage
of what is raised actually goes to the non-profit itself. We had the
pleasure of speaking to Andrew DellaPietra, the founder and CEO of
Mobile Matters, an ASP that also
offers mobile services to follow-up and engage with your supporters. He
explained the fees as follows:
Besides a one time fee which
ranges from $350-$500 to set up a contract with the TTP, the ASP
generally charges 3 sets of fees for the service. Here is what Mobile
Matters charges:
·
Monthly Fee:
$350 which covers the connection to the CCP as well as dedicated
support, campaign strategy and implementation.
·
Text Messaging Fee:
$0.36 per successful donation
·
Transaction Fee:
3.5% per successful donation.
Collectively, the messaging and
transaction fees total approximately 8%, so non-profits actually end up
seeing 92% of the donation, and with an annual commitment of $4,200
($350 x 12 months), a nonprofit would need to get 420 $10 donors to
break even in any given year.
Beyond Haiti: Mobile Giving for Small and
Mid-Sized Non-Profits
Now that you know exactly how
mobile giving works, you can get a better handle on how you might be
able to use it in your organization. Without celebrities and national
networks on your side, the biggest challenge will be getting the message
about your campaign out there.
Gaining visibility for your
campaign, however, is not a new challenge or one that is limited to
mobile giving. Like any campaign, the success of a mobile giving
campaign depends largely on strategy. Think about where the
opportunities exist for your organization to reach people, particularly
new supporters. Here are some ideas:
Inspire People at Live Events
Maybe you’re hosting a live
event, or have the opportunity to speak at a city festival or concert
where you have a large audience. If so, use this opportunity to call on
people for support. With mobile giving, supporters can act immediately
right at the event while they are thinking about the cause.
Find an Opportune Place to Spread Your Message
If you don’t have access to
large numbers of people through live events, there are other options for
reaching new supporters. Be creative and work with what you have. For
instance, let’s say you run a community centre that is falling apart and
requires funding to stay in operation, you could use the side of the
building to spray paint the following message to the public: “Save our
community centre. Text ‘save’ to 90909.”
The Salvation Army is using
mobile giving to supplement its Red Kettle Christmas campaign this year.
It’s quite ingenious really. They will be able to reach thousands of
people walking by in malls who don’t always have cash on them, but
certainly have their cell phones!
Crate a Buzz with Social Media
You can also use social media
like Twitter and Facebook to reach out to people and create buzz about
the campaign quickly, easily and cheaply.
Common Concerns Addressed
One of the biggest concerns with
mobile giving is that, besides a mobile number, donor information is
kept anonymous. ASPs, however, can help you do a lot with that mobile
number now to engage supporters, even getting them onto your website to
provide additional information.
Also, with donation amounts
currently capped at $5 and $10 by the CCP, the worry is that donors who
might have given a whole lot more, might feel like they have done their
part by texting. For the most part, however, mobile giving shouldn’t
take away from your current supporters. It should instead be used as a
way to tap into a whole new group of supporters; supporters who are
younger, on the go and willing to support if they can give $5 and $10
immediately and anonymously.
Notes
[1]
Verclas, Katrin. Texting for Charitable Dollars: The Definitive Guide to
Mobile Fundraising. April, 2010. Available here:
http://mobileactive.org/mobile-fundraising
[2]
For information on mobile giving best practices provided by the Mobile
Marketing Association, including how to generate ethically legitimate
mobile lists and how to phrase opt-out language, check out:
http://mmaglobal.com/policies/education
Written by Sumac Research. Sumac is a complete software solution for
non-profits that can integrate your mobile giving campaign with your
in-house database. For information on Sumac or additional articles
published by Sumac Research, visit:
sumac.com