Mobile Giving: From Grassroots Beginnings to a Promising Future

Mobile Giving: From Grassroots Beginnings to a Promising Future

Every year, in late August, many of us in the nonprofit community are reminded of the tragedy that struck our nation on August 29, 2005, when Hurricane Katrina made landfall in southeast Louisiana and caused catastrophic damage to the Gulf coastline, killing hundreds of people and displacing tens of thousands more.

That natural disaster was a transformative event on many levels for a great number of people, including those in the nonprofit community. Never before had there been such an emergency response in the U.S. with so many individuals and charitable organizations coming to the aid of storm victims. An estimated $4.25 billion was donated for relief efforts by the public to the American Red Cross and a host of other organizations, with some $1 billion more coming from corporations.

Hurricane Katrina relief also holds a special place in the annals of one of the nonprofit community's newest technologies: mobile giving, or text-to-give donations. The first mobile giving campaign using a text-to-give methodology with a donation appearing on a donor's monthly phone bill actually occurred in January 2005 in response to the Indonesian tsunami that happened at the end of December 2004. That campaign raised approximately $100,000 through word-of-mouth marketing.

Mobile giving became "repeatable" for hurricane relief in the late summer of 2005, raising more than $200,000 despite very limited marketing.

In the wake of these disasters, the opportunity to standardize and institutionalize this technology was evident. As a result, the Mobile Giving Foundation (MGF) was formed in 2007 as a 501(c)(3) nonprofit organization with a mission to enable other charities to raise funds through the mobile channel. In 2008, hurricane relief, primarily for storms Hanna and Ike, raised another $350,000.

Mobile giving moved from being an emerging technology to mainstream awareness with Haiti earthquake relief in January 2010, as approximately $45 million was raised through the mobile channel for victims of that natural disaster. Since then, other disaster relief efforts such as the Gulf oil spill, Japan's natural and manmade disasters, and tornado relief in the southeastern United States have further validated the effectiveness of text-to-give fundraising.

Today, the question for charities everywhere regarding mobile giving is no longer "if or when," but rather "how?"

Numbers Tell the Story

The argument for mobile giving becomes clear when one looks at the market opportunity. According to Census Bureau figures released early this year, the population of the country in 2010 was 310 million people. According to CTIA-The Wireless Association, there are more than 302 million mobile subscribers in the U.S, and the nation as a whole is getting close to 100 percent saturation in terms of mobile subscribers, meaning virtually everyone has a mobile phone. CTIA also reported that more than 187.7 billion text messages a month were sent during 2010, and analyst firm comScore reports that 68 percent of U.S. mobile subscribers send text messages regularly.

What do all these numbers mean? It's simple: for nonprofits, mobile offers an enormous addressable market opportunity and a uniquely effective engagement channel.

Why? First, mobile is more convenient. Nearly all (91 percent) Americans have their cell phones within arm's reach twenty-four hours a day, according to Morgan Stanley. Second, mobile is more effective. Texting has become pervasive and generates response rates two to ten times higher than Internet display ads, according to Opus Research. Third, mobile is more efficient. Text messages are opened and read within five minutes and responded to within fifteen minutes, according to the Technology Association of Georgia.

Finally, it is worth repeating that wireless operators in the U.S. and Canada support mobile giving on a no-cost basis. Every donation is collected from their customers and processed with 100 percent of the contribution passed through to the beneficiary charity.

Everyday Use and Driving Higher Response

There's an interesting transformation occurring in mobile giving as more charities and corporate foundations operationalize text to give fundraising for everyday use (as opposed to only for emergency or disaster relief).

A recent study by the Association of Fundraising Professionals and research firm Kaptivate found that by the end of 2011, 20 percent of U.S. nonprofit organizations will adopt mobile giving to raise funds and engage consumers, up from 9 percent at the start of the year.

This growth has been driven by the growing sophistication of charities with respect to mobile giving. Increasingly, charities understand the medium and costs involved, and are collaborating with technology providers to enable text-to-give campaigns. Philosophically, many charities now view the mobile channel as another revenue stream, rather than as a threat to their online, direct mail, other income streams.

From a marketing perspective, charities realize that they need to reinforce their text-to-give campaigns as part of larger cross-channel marketing initiatives that use event, print, online, direct marketing, broadcast, and social networking promotions.

The charities on the leading edge of mobile giving view it as a means to engage their communities and recruit new donors and followers. Given the deeply personal nature of people's mobile devices (how many of you would rather lose your wallet than your mobile phone?) and the capability to access that device with a donor's phone number to encourage engagement, the key issue in mobile giving transcends raising funds and becomes a question of how to drive higher response rates.

Stated differently, how do charities extend the power and effectiveness of mobile giving into donor activation (e.g., volunteerism, advocacy, etc.)?

There are entire conferences, such as the 2nd Annual Mobile Giving Forum in New York on October 27, that are dedicated to the subject of converting donors into engaged enthusiasts, with the mobile channel playing a key role in that engagement.

What's Next?

The growth of mobile giving and ultimately greater adoption by charities lie primarily in two areas: education and technology.

Further educating nonprofit organizations and consumers about the safety of text-to-give donations is critical. Industry standards designed to protect consumers at all times exist for technology providers and nonprofit organizations that deploy mobile-giving campaigns. Indeed, technology will play a key role in increasing text-to-give response rates and increasing donor engagement.

And while it may seem as if text-to-give itself is relatively new, there will soon be other mobile technologies that nonprofit organizations will need to be aware of in order to maximize the effectiveness of their fundraising initiatives. They include:

  • MMS (Multimedia Messaging Service): MMS is a standard way to send messages that include multimedia content to and from mobile phones, including videos, pictures, text, and ringtones.
  • Mobile barcodes: Mobile barcodes use the camera phone on a mobile device as a link between the physical world and the digital world.
  • Smartphone apps: Branded applications on a donor's mobile device.
  • Mobile Web using alternative billing processes: Browser-based engagement offering billing and collecting options beyond a donor's monthly billing statement from his or her service provider.
  • New price points beyond standard $5 and $10: Providing different increments (e.g., $20) for donors to use when contributing to a cause.
  • Location-based services: Geo-targeting mobile campaigns based on a donor's specific location. For example, a national charity will be able to distribute funds to its local affiliates based on the geographic source of the donation and communicate to the donor based on local charitable services.

Conclusion

While mobile giving has come a long way since the days of Hurricane Katrina, more remains to be done to spread the word about the trusted nature of the medium. Still, the message is clear: Charities of all sizes are adopting the technology in greater numbers and will continue to do so. Text to-give works.

Jim Manis is president and CEO of the Mobile Giving Foundation.