Is mobile giving about to take off in the United States?

Posted by KatrinVerclas on Feb 13, 2008

Mobile donations to nonprofits have been stymied in the United States - hampered by the high fees charged for text message gifts that are then billed to a mobile phone customer.

When a donor gives to a nonprofit via text, more than half of the contribution goes to the telephone carrier, leaving less than 50% to the nonprofit, an unacceptable margin for most charities. Combined with low donation caps -- no more than $5 per SMS with a total of five SMS for a $25 donation -- and other charges for short codes and mobile vendors, nonprofits have determined that mobile giving is not worth it.

This is about to change.

If the Mobile Giving Foundation plays its cards right, mobile donations via text message may just explode this year.

The Mobile Giving Foundation, a Washington-based nonprofit organization, recently brokered a deal with the four major carriers in the United States, and with the United Way. During the Superbowl football finale, the United Way aired a 10-second advertisement pitching viewers to donate via text to the organization's Youth Fitness Fund. We wrote about the fundraising campaign here.

What went largely unnoticed was the fact that the Mobile Giving Foundation managed to negotiate agreements with the carriers which waived all fees, allowing the United Way to collect 90% of the donation (with 10% going to the Mobile Giving Foundation).

This has not happened before other than in major disasters like Hurricane Katrina and more recently the California fires, when the carriers waived their fees for mobile text donations to the Red Cross.

In an interview with MobileActive, Jim Manis who is the CEO of the Mobile Giving Foundation and a former wireless executive, anticipated that in the next six months the Mobile Giving Foundation will have agreements with all carriers, waiving fees for approved nonprofit organizations and campaigns. The Mobile Giving Foundation already has application guidelines on its site, even though agreements are not all in place yet.

The Mobile Giving Foundation is positioning itself to be the approval and payment processor for nonprofits in the U.S. with an anticipated April 1 public launch.

Here is how it will work:

  • A nonprofit applies to the Mobile Giving Foundation.
  • Carriers waive all fees for premium SMS donations for the approved nonprofit campaign through the Mobile Giving Foundation.
  • The Nonprofit hires a vendor for campaign execution (the fulfillment vendor for the United Way was Mobile Accord) with Verisign as the mobile delivery service.
  • The Mobile Giving Foundation takes a 10% cut of text donations; anticipated to be reduced to 5% if the volume of campaigns increases. Payments are processed within 60 days post-billing at which point the nonprofit receives a check.

Jim Manis says: "We are trying to change the game for nonprofits. We want nonprofits to have access to new demographics, so rather than look for that one person who can write a $10,000 check, an organization can tap into a younger demographic of 10,000 people who text a in a $10 contribution."

The Mobile Giving Foundation is now courting some of the largest nonprofits in the country for additional fundraising campaigns in this initial charter phase.

So how did the United Way campaign do? In a call with Jeff Slobotski and Michael Schreiber of the United eWay which provides technology, including mobile solutions, to the national and local United Way groups, we learned that the 10-second ad that ran during the Superbowl on air and in the stadium generated $10,000 in donations via text.

6,000 people responded to the ask with a text message reply, and 2,000 followed through with a donation. We were not able to ascertain from the United Way how many people responded to the in-stadium ask as opposed to the commercial on television.

Both stressed to MobileActive that the fundraising campaign "was clearly a success." Schreiber acknowledged that the on-air spot on television was brief -- too brief for many viewers to remember the short code (six-dgit number to text to in order to donate).

The ad has also been on YouTube where it had been viewed 19,850 times by the time of this writing, and on the United Way website.

Some other groups, including the John Edwards campaign, have used their list of cellphone numbers to direct constituents via voicemail and text message to a live phone bank. Donors then can make their donation on the phone with a credit card rather than via text message.

In a conversation with Mobile Active, James Eberhard, CEO of MobileAccord, the mobile vendor for the United eWay, said that "the Mobile Giving Foundation played an essential role in this technical environment." He noted that one of the carriers did not approve the campaign until the day before the Superbowl. He also emphasized the importance of having an organization of the United Way's stature (and non-political nature) as the prototype nonprofit campaign in order to get the mobile carriers on board.

Asked whether this effort has revolutionized mobile giving in the United States, Eberhard said, "No, it didn't. But we took it to mass market, and it works."


The $10k Superbowl Ad

I blogged a little about the dollars raised and what might be done to optimize results...

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