Text-to-donate SxSW Core Conversation Preview

Published on Feb 21, 2011 by Todd Reifenrath | Category: mobile

I am excited to facilitate a core conversation at the 2011 South by Southwest Interactive (SxSWi) conference titled Text-to-Donate Fundraising for Non-Profits. This session will be Saturday, March 12th, at 3:30pm. Our Twitter hashtag will be #text2donate.

The core conversation format was introduced to the conference in 2008 as a way to capitalize on the informal between session hallway banter that many have come to love SxSW for.  Core conversations are one hour long and are kicked off by a moderator that will facilitate and encourage group discussion.

Following is a logistical overview of setting up a text-to-donate campaign.

Popularity of text-to-donate on the rise

After the 2010 earthquake in Haiti, interest in mobile giving spiked when the Red Cross ran a highly publicized text-to-donate campaign that earned millions of dollars within days of the tragedy.  Appeals to donate on TV and through social networking channels led to media coverage, more donations, and put text-to-donate on the map.  Since the Haiti earthquake there has been an increase in the popularity of text-to-donate services.  

A text-to-donate campaign enables nonprofit organizations to solicit donors to text a keyword to a specific shortcode (abbreviated phone number) to make a charitable donation of a predetermined amount (usually $5 or $10).  The donation is added to the donor’s monthly phone bill.

Getting started (TTPs and ASPs)

We undertook this research on behalf of Bridge Communities who came to us with the idea to start a text-to-donate campaign in tandem with their many fundraising events (e.g. Sleep Out Saturday).

We began by learning how to launch a text-to-donate campaign.  Important factors were cost, administrative effort, and determining whether our Bridge Communities constituent demographics were likely to lead to a successful campaign (we thought the many teen-aged participants in the Sleep Out Saturday event made the campaign a good fit).

The first point of contact in establishing a text-to-donate campaign is choosing a Trusted Third Party or TTP.  TTPs serve as a link between a charitable giving campaign and the mobile carriers (e.g. Verizon, AT&T, T-Mobile, etc), providing accreditation to prove that the charity is a legal, tax exempt 501(c)(3), and assuring donated funds collected on their behalf by mobile carriers will be credited to the nonprofit organization.  The money moves from the carrier to the TTP as a contribution. It is reported by the TTP on its Exempt Organization tax return (IRS 990).  The TTP re-grants the appropriate amount to the nonprofit organization.

There are two major TTP’s in the U.S.  They are both nonprofit organizations that work with mobile carriers to facilitate donations via text message: The Mobile Giving Foundation (at the time of our original research it was the only approved and bonded company in the US) and The mGive Foundation. Both organizations have standards they require of the nonprofit organizations they work with:

• the organization must be a 501(c)(3)
• the organization must have raised a minimum of $500,000 via donations in the previous year

Please refer to their websites for more information about what is required to be an approved text-to-donate organization.

Application Service Providers (ASPs) are another key player.  ASPs work directly with the nonprofit organization, serving as the primary point of contact - behind the scenes they arrange and manage contracts with the TTP.  They are typically for profit companies that own the five or six digit shortcodes to which text messages are sent.   They manage the keywords that are used for individual campaigns ensuring they do not conflict with other organizations' keywords sharing the same shortcode.  The ASP also helps nonprofit organizations with the TTP application process, ensuring 501(c)(3) status, and approval by the mobile companies (which can take 6-8 weeks).

Every nonprofit that wishes to launch a text-to-donate fundraising campaign and collect donations via text messaging must be under contract with a TTP and an approved ASP.

Understanding the fees involved is another important factor in deciding about a text-to-donate campaign. Pricing is not standardized in any way among the ASPs.  Nonprofits are advised to be diligent about understanding the fees associated with mobile marketing and fundraising through these service providers.

Standard one-time fees:

• Verisign set-up fee $150 (required for each new campaign) 
• TTP set up/application fee (Mobile Giving Foundation set up fee is $350 and the mGive.org set up fee is $500)

Choosing the right TTP and ASP providers is similar to choosing any other vendor.  We asked around, performed online research, and read articles.  Once we decided on  the Mobile Giving Foundation as our TTP, we obtained a list of their approved ASPs from the MGF website and began researching the right ASP for Bridge Communities. 

We looked at each ASP’s website and compared the following criteria:

• fees (application fee, monthly fees, % of donated dollars taken by ASP)
• flexibility of plan(s) (e.g. contract terms and duration)
• technical support
• reporting capabilities
• courtesy and responsiveness of sales representatives and customer service
• marketing capabilities such as a mobile website, web-based campaigns (videos), print media such as handouts & posters, connecting to social media, and smartphone apps

After weighing the pros and cons of several ASP’s we chose Give by Cell partially due to promotional pricing they were offering in June 2010.

• 3 month trial for $49/month (one month paid up front), and continued at $89/month for the next 9 months if extended
• Waived the set up fee
• 1 keyword
• 24/7 dedicated support
• Deluxe reporting package
• Per donation fee $0.48
• Annual renewal fee $175 
• Add ons: Web Widgets $25/month, Email Collection $25/month, Future Text Alerts $25/ month & $0.08/text, XML Interface $25/month, and Facebook API $25/month

Other factors were bad experiences with two previously selected ASP’s who did not return phone calls, emails, or answer questions honestly. Give By Cell had excellent customer service, web reporting tools (personal log in, real time activity, report printing, downloadable reports), experience (they have been in the mobile technologies industry for over four years) and the possibility of future technologies (“Future Texts” allowing donors to sign up for “text mailing lists”).   They were also able to meet our timeline and had the campaign up and running in one month rather than the usual 6-8 weeks (this was key since we had already started the process with two other ASPs and needed to launch in time for a Bridge Communities fundraising event).

After we selected our ASP the next step was to complete the MGF application and get approval to run a text-to-donate campaign. We had to provide proof of 501(c)(3) status, a previously filed 990, financial statements, IRS determination letter, a list of board members, trustees, and officers, etc.

Once approved we chose the keyword “bridge” and a donation amount of $10 (at the time the choice was $5 or $10).  We were assigned the shortcode of 20222.

The campaign

The next challenge was figuring out how to design a text-to-donate campaign and incorporate it with the other fundraising that Bridge was already doing. Bridge Communities promoted their shortcode and keyword by modifying event signage, mentioning the campaign in radio spots, and through  print, email, and word of mouth campaigns.

The future of text-to-give includes new price points, such as $20 and $25 donations, currently in trial, and the use of different message formats including MMS (multimedia messaging service), mobile video, mobile barcodes,  and smartphone apps.

Pros and Cons of Mobile Donations

Questions to think about before starting a mobile fundraising campaign

• Is texting for charity right for your organization?
• Who is your audience?
• Can you afford it?
• Can you afford not to do it?
• Can you provide technical support?
• Can you collect the needed mobile numbers?
• Do you completely understand the fees?
• Can you break even or otherwise justify the expense?
• Can you integrate mobile giving with your current fundraising strategy?

Pros

• It is easy and fast, making it more accessible to donors (19% would rather text than write a check, use their credit card, or pay online)!  The average mobile donation takes about 1 minute.
• 27% of Americans are more likely to donate via text to a credible endorser.
• Mobile giving does not require a credit card.  An estimated 1/4 of American consumers do not have credit cards.
• The donation happens through a private entity, reducing donor fear of identity theft.
• There are approximately 263 million mobile phone subscribers in the US, compared to only 221 million on the internet, and only 112 million households with television.
• 87% of North Americans are mobile subscribers, and 38% of them say their mobile phone is more important than their wallet.
• 96% of US mobile phones are SMS capable.  Social media helps get the word out for various fundraising campaigns.
• Over 84 billion text messages are sent each month in the U.S., and over 1 trillion text messages are sent every year.
• If there is a natural disaster and money is needed quickly, mobile donations are one of the fastest ways to get money to those who need it.
• Mobile fundraising does not replace traditional forms of fundraising, so the money earned is normally in addition to that which is normally raised in a year.

Cons

• Mobile fundraising provides limited interaction with donors.
• The cost vs. reward is still to be determined and will depend greatly on the organization and the number of people who support it.
• The dollar limit amounts are low ($5 & $10) and number of donations per month limited by carriers.  However, it is being debated whether the number of monthly donations can be increased, and if donation amounts can increase to $20, $25, or $30 per text.
• The most successful text campaigns have been associated with an exceptional event like an earthquake or celebrity appeal.
• Mobile carriers do not share donor information.

Special thanks to Tahirih Klass for her in-depth research of text-to-donate and for co-authoring this post.