Mobile giving is catching onJuly 30th, 2009 By Kristi Heim in Technology / Telecom
For most nonprofits, raising money means asking donors to write a check. But like music, maps and movies, charitable giving is also going mobile.
With a mobile phone, donating to a cause can be as simple as typing MEALS, WATER or ALIVE.
"Giving should be easy, it should be fun and it should be rewarding," said Jim Manis, chief executive of the Mobile Giving Foundation, a Bellevue, Wash.,-based nonprofit that provides technology for charitable organizations to run mobile campaigns.
A former wireless-industry executive, Manis started the foundation to create a channel for the millions of American mobile users to receive and respond to appeals from worthy causes.
Because most of the $300 billion a year in charitable giving in the U.S. comes from individuals, Manis saw mobile giving as a way to reach a new demographic. He could increase the pool of charitable donors by capitalizing on the popularity of text messaging, which is used by almost 70 percent of people aged 18 to 24.
Reaching younger donors also fits into an emerging trend in philanthropy: While nonprofits relied on a smaller number of donors making large gifts in the past, the new paradigm is appealing to a vast number of smaller donors.
Mobile giving is taking off and inspiring new kinds of fundraising campaigns. The American Red Cross raised $190,000 in donations last year from its Text 2HELP program.
The program uses the system that Manis helped build in response to the Asian tsunami and Hurricane Katrina. Working with the wireless-industry association CTIA and wireless carriers, he set up a system to allow people to give emergency donations on mobile devices.
The tool gave people the ability to act immediately on an impulse to help, he said.
At the time Manis was a senior executive with mobile-marketing company mQube, which was acquired by VeriSign in 2006 for $280 million.
The following year, he heard former President Clinton speak at an annual industry gathering. "He threw down the gauntlet," Manis said. "He said you guys need to do better. I knew he was right. The wireless industry has not done that much in terms of giving back."
That challenge helped motivate Manis to develop the Mobile Giving Foundation with co-founder Jenifer Snyder. Their goal was to provide a platform to connect mobile donors to nonprofits.
The foundation establishes standards and manages message delivery and billing across all carriers, and it acts as a billing and records clearinghouse between the carriers and the charities.
Anyone with a mobile phone can use it to initiate a donation of $5 at a time. Donors send a text message with a certain word, such as HUMANE for the Humane Society or MEALS for Food Lifeline, to a designated number that has been set up for the charity.
Donors immediately receive a message back asking for confirmation, which they can do by replying "yes" via text message. They receive a thank-you message back and a contact for questions. The charge appears on the donor's next cellphone bill.
The donations were originally set up in $5 increments with mobile-phone carriers, so that amount became the standard, Manis said.
It's important to maintain a standard amount to make the system simple and trustworthy, Manis said. People can donate more than $5 by texting several times, and some carriers are accepting donations in $10 increments.
The wireless carrier passes 100 percent of the gift to Mobile Giving, which passes 100 percent of it to the charity. The Mobile Giving Foundation charges 10 cents for each completed transaction to mobile marketing companies, such as mGive, that work with nonprofits to set up the campaign.
Manis said Mobile Giving sets a cap on the amount that marketing companies using its billing system can charge to nonprofits -- no more than 10 percent of the nonprofit's total fundraising cost.
In one of the most successful examples so far, singer Alicia Keys raised $130,000 from mobile donors during the BET Awards Show in June. On stage, she asked viewers to make a $5 donation. More than 26,000 mobile donors responded with donations to Keep a Child Alive, a nonprofit that supports children with HIV/AIDS.
"She's very committed and expresses that passion when she talks to her fan base," Manis said.
When it comes to young people, a celebrity request can make a difference, he said: "I think they respond not always to the cause but to who's asking."
In May Secretary of State Hillary Clinton called on Americans to text $5 contributions to help the U.N. High Commissioner for Refugees provide tents, food and medicine to people displaced by fighting against Taliban militants in Pakistan.
Locally, Food Lifeline tried its first mobile campaign in November. Channel Q13 helped spread the word on television, and Food Lifeline raised $8,000 from 54 donors.
"It made it exciting for us to participate in something new and cutting edge," said Camilla Bishop, director of development at Food Lifeline.
"In every industry you're trying to establish connections with the next generation," she said. "When you're trying to tackle an issue as large and pervasive as hunger, you need as many good friends as you can possibly have."
Food Lifeline is planning another mobile campaign in August with Car Toys, Bishop said. Portland-based Mercy Corps is also starting to work with the Mobile Giving Foundation to make mobile part of its fundraising.
Mobile giving isn't right for every nonprofit.
"This is not appropriate for your local Little League," Manis said. The foundation generally doesn't work with organizations that have annual revenue less than $500,000.
Some charities worry they will "cannibalize" their own donors. "Their concern is that a contributor might take a $20 check and become a $5 donor" instead, Manis said.
In its Q13 campaign last fall, Food Lifeline saw no drop off in existing donors, and text messaging beat Internet donations two to one.
So far, the Mobile Giving Foundation has facilitated about $1 million in pledges, but it still needs seed funding to operate, Manis said. At 10 cents per transaction, its success depends on heavy volume.
Manis thinks mobile giving has enormous potential and future applications in microlending and mobile banking.
The foundation is expanding to include wireless carriers in Canada in the fall.
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"Mobile giving is catching on." July 30th, 2009. http://phys.org/news/2009-07-mobile.html