Mobile donations may grow tenfold from $500,000 in 2008
Mobile donations are said to have crossed $500,000 in 2008, indicating the growing acceptance of a new channel for nonprofits to raise funds for causes.
In what is recognized as the first year of mobile giving, donations through the mobile phone are said to have exceeded the $300,000 raised through the Internet in 1997 -- acknowledged as the first major year for online giving. Thus is the assessment of Mobile Accord Inc., an approved service provider of the Mobile Giving Foundation.
"What it tells us is that people are adapting to new technology faster than they ever have before," said Tony Aiello, senior vice president of business development at Mobile Accord, Denver, CO. "That's a good sign.
"Mobile giving has the ability to match or even outperform online," he said.
According to Ted Hart, CEO of Columbia, MD-based Hart Philanthropic Services Group, online donations in 2007 are estimated to have reached $10.44 billion -- more than half the total donations made worldwide. It took 10 years for the wired Internet to get there.
Mobile campaigns up
While the American Red Cross has run sporadic mobile fundraising efforts, it is only last year when the charity managed to attract an estimated $200,000 in pledges for its disaster relief funds.
That initiative encouraged individuals to make $5 donations by SMS text whose charges would appear on the mobile subscriber bills sent by participating carriers (see story). Both the Obama and McCain presidential campaigns plugged the Text 2HELP program.
Text 2HELP donations go to the Red Cross Disaster Relief Fund to offer shelter, food, counseling and help to victims of the many disasters nationwide.
Subscribers of participating wireless carriers could donate $5 up to five times per month by texting the keyword GIVE to 2HELP (24357). Activated during crises, the latest campaign ran September through December.
CTIA: The Wireless Association's Wireless Foundation partnered with the Red Cross for that campaign. VeriSign handled the messaging.
In February, United Way ran a 10-second television commercial during the Super Bowl broadcast, setting off a slew of mobile-giving events.
Mobile Accord, whose mGive.com site allows nonprofits to set up mobile fundraising efforts linking to carriers, claims to have added more than 100 clients to its list last year.
Customers of mGive include nonprofits such as Veterans of Foreign Wars, Operation Smile, Defenders of Wildlife, Amber Watch, Columbus Zoo, Chicago 2016 Olympic Bid, The Salvation Army and Make-A-Wish Foundation.
The list also includes high-profile fundraisers such as Public Broadcasting Systems, UNICEF, American Heart Association, Children's Miracle Network and the Susan G. Komen Breast Cancer Foundation.
Each one of these charities allows mobile donors to make $5 donations at a time.
Under the mGive system, subscribers of participating carriers can text a pre-determined keyword linked to a nonprofit or fundraising campaign to the 90999 short code. A text-message donation will lead to a charge on the monthly mobile phone bill, with a receipt available at http://www.mgf.me/receipt.
For example, consumers can text the keyword WISH to the 90999 short code to donate $5 to the Make-A-Wish Foundation for making terminally ill children's wishes come true.
In essence, mGive.com lets nonprofits create, launch and track mobile fundraising campaigns. Mobile Accord charges a monthly service fee and gets a small percentage of the donations.
"Right now it's limited to $5, but we do anticipate that it'll go up to $10, and then ultimately with a monthly recurring option," Mr. Aiello said.
Channel addresses challenges
The charm of mobile giving is its reach. There are an estimated 112 million television households nationwide, including 65 million basic cable and more than 20 million satellite subscribers. Also, there are an estimated 220 million Internet-connected households.
By contrast, there are 270 million mobile subscribers nationwide, according to the CTIA. And 99 percent of these subscribers have the ability to send and receive SMS text messages on their mobile phones.
That's a huge universe for charities, especially the smaller players who struggle for donations when larger nonprofits such as the Red Cross and Salvation Army suck up all available dollars during disasters.
A couple of other worries bedevil charities. One is the cost of raising donations -- administration, postage, staff salaries and health care and rent. Many charities have come under fire in recent years for spending disproportionately on administration rather than the cause touted.
Another challenge is the falling minimum amount of single donations. A few years ago the amount is said to have dropped to below $10, indicating how stretched consumers are or unwilling to pony up more after allocating funds to larger charities with more marketing muscle.
That's where mobile can play a constructive role for nonprofits.
"It allows people to certainly respond on impulse, sort of an impulse give," Mr. Aiello said. "It also helps with ongoing communication with the donor by cutting through today's media clutter."
Indeed, the mobile effort need not be restricted to simply asking for money, although it is ideal for time-sensitive appeals.
Nonprofits could also send a targeted message to the donor base to thank them or update them on progress made with fundraising or cause objectives.
Adding to the nonprofit world's woes is the current state of the economy. It is no surprise, then, that mobile giving looks increasingly attractive. Plus, the $5 donation does not seem an imposition.
"The economy is difficult and it really is a nice alternative," Mr. Aiello said. "And text messaging is simple and growing and people use it every day.
"There are people out there who are watching their pennies, so it depends on the socio-economic group you're targeting," he said.
If not anything else, mobile certainly removes a major fear associated with online giving: credit cards.
Not only are people maxed out, those who aren't may also worry about the security of their transactions online. But that may disappear over time as consumer confidence with online grows.
"There are a lot of folks reluctant to use their credit card," Mr. Aiello said. "This is a nice alternative for folks to make a small donation."
Universe will expand
Mr. Aiello estimates there were 100,000 mobile donors last year, making $5 donations via their phone bill. He expects the number of mobile donors and mobile donations may increase tenfold or even more this year.
"I believe it's a year that it'll spike," Mr. Aiello said. "We project that it could be as much as $5 [million] to $10 million.
"A lot of the major nonprofits we're talking to are feeling the [slow] economy and many of them are now willing to experiment with mobile in their direct response television," he said.
"It's an easy way to give. People are watching their TV, they don't have to go to their computer."