Mobile donations, also known as text giving, are a growing piece of the mobile payments ecosystem, according to Jenifer Snyder of the mGive Foundation. The mGive Foundation is a 501(c)(3) established to make it easy for non‐profits to quickly execute effective mobile giving campaigns and for mobile operators to support them. The foundation has partnered with more than 60 of the nation’s leading mobile carriers and has supported more than 7,000 mobile giving campaigns for more than 500 nonprofit clients and processes around 85 percent of all mobile donations made today.
The mGive Foundation recently published a study, the Text Giving Donor Survey Report  (available by filling out a form), which was based on 253 responses from nonprofit organizations. Among other findings, the study reported that most respondents rated their experience with text giving as excellent or good.
TelecomEngine met with mGive Foundation's director, Jenifer Snyder, to learn more about mobile donations and what they mean for the telecommunications industry.
TelecomEngine: Why are mobile donations an appealing model for nonprofits?
Snyder: If you travel around the globe, such as UK you'll see mobile donations already being used and already successful. The first U.S. campaign with big visibility in 2008 tried to implement text giving with The United Way in a Superbowl commercial featuring Tom Brady. This was very successful, receiving $10,000 in 10 seconds.
There has been a period of time for adoption, especially with nonprofits who are more traditional with their operations. The Haiti event was the tipping point, though, and gave mobile giving its greatest visibility. $49 million was raised through mobile for Haiti. Our organization processed around $41 million of that amount.
Mobile donations such as the sending an SMS to donate $5 to the Red Cross, have a pretty strong foothold. What about bigger donations? Are people ready to give hundreds or thousands by text?
Initially we introduced a $5 price point. In late 2009, we moved to a $10 price point, and saw that the conversion rates between 5 and $10 were the same, so we determined if you're going to ask for 5 you might as well ask for 10. We've kept 5 and 10 as two price points in the market.
We did a $25 trial which was very successful and we're still looking for the sweet spot. We're also talking with carriers. Does a $25 price point translate effectively for the entire ecosystem? Is a higher phone bill going to deter people from donating $25 as opposed to $5 or $10?
Are you interested in soliciting larger philanthropists with lots of money or is the market just focused on more people who can give smaller amounts?
We'd love to see higher price point; it's just a matter of how to introduce it, and who it would be most effective for.
On the receiving end, do you see smaller nonprofits benefiting from mobile donations?
We actually represent over 500 nonprofit clients, and we have very small to very large clients. Mobile is a critical component for every nonprofit to adopt into their fundraising and advocacy.
In our Text Giving Mobile Donor Survey Report, 18% of folks who gave through mobile said it was their preferred method of giving. It's convenient; it's very easy to send two text messages and feel you're giving without getting a credit card or check book. 80% of mobile donors had a really positive experience. Because of that -- and the increasing number of mobile devices -- we are encouraging all nonprofits to develop a robust mobile strategy along with their traditional fundraising tools.
Text messaging can be a way to increase attendance at events, remind potential donors about upcoming events, and increase participation. For example, if we're talking about an organization that deals with blood donors, you can send out a specific message for the blood type most needed at your blood drive. It's an effective way to engage with constituents.
How can small nonprofits get into using mobile donations?
mGive works to educate the community. We have a contract with the wireless carriers to make sure that the organizations are actually 501 nonprofits. We recommend the nonprofit agencies work with the mobile vendors. For the broader mobile strategy of apps, we recommend they go through a mobile marketing agency. Nonprofits can go to mGive.com and get set up to start using mobile more broadly in outreach.
Part of our mission it to educate nonprofits as to how they can be using this technology to its fullest potential and get their board to embrace it.
One of the pitfalls of mobile donations thus far has been that carriers take a cut of the donation. Why do they take such a large chunk? Have you been able to ensure that more of the money goes to the organization who needs it?
That's a myth we are working to debunk. One of the benefits working with our foundation is that the carriers don't take a dime. You pay $10 to T-Mobile, they pay it to our organization, and we pay it to the Red Cross.
The watchdog group American Institute of Philanthropy warns that it can take as long as 120 days for a charity to receive a text donation, and recommends mailing a check or donating directly to the charity online using its secure website. How fast can you get donations to the charities and what are you doing to speed up the process?
You have 30 days to pay your bill in your billing cycle so the wireless carrier often doesn't receive your money until the end of the month. We've worked with wireless operators to decrease the time lag, so we're actually seeing 30 day payment turnarounds.
When you think about the billing cycle and chain of events, it would be very difficult to speed it up faster than 30 days. But for some campaigns, wireless operators have been concerned about accelerating funds. In Haiti we were able to remit payments in 5-10 days.
So it sounds like the carriers are actually making the donation ahead of time and then getting the money back from their subscribers.
Wireless carriers actually making the donation and getting paid back. Wireless carriers have been really generous in this, floating the funding for nonprofits. In the downturn of the economy, they're taking more of a risk. The carriers are doing something really nice in their service.
Mobile donating seems to be SMS and web focused. Do you see any opportunity to use NFC or some other format in the future?
We're actually working on that now, looking at a suite of alternative payment options. We're working to implement mobile giving 2.0, to optimize and cultivate the channel so it is the most robust. Could we use iTunes, QR codes, etc.? We want to work with partners to make sure 100% of the donation goes to the nonprofit, and further expand the opportunities that nonprofit has.
What are the major privacy and security concerns of mobile giving, and how are you dealing with those?
One of the biggest concerns has to do with unsolicited text messaging. Right now text messaging is so effective -- most messages are read within 15 minutes -- so it's important we don't oversaturate subscribers with text messages. Opt-in is a critical aspect of the ecosystem we have to keep in mind. We don't want to send so many messages that we lose effectiveness.
DoCoMo was conspicuously absent from CTIA because of the tsunami, with an empty booth and a sign indicating how to donate money to the Red Cross by texting. How were you involved with the Red Cross donation for Japan relief?
CTIA was actually the genesis behind that booth and the fundraising effort there. I think it really made an impact for the disaster relief effort and the global community. It seemed to bring the wireless community together for acknowledgement for one of their peers being unable to participate. It was a generous move of CTIA to implement that.
How much money was raised for Japan through CTIA?
Over the days at CTIA (March 22-25), our organization helped to raise $350,480.00 for all Japan Tsunami/Quake Relief Efforts. This number includes funds raised from donors responding to the DoCoMo booth at CTIA.
The mGive Foundation was recognized with a special ‘Analyst Choice’ award for its impact on promoting social good via mobile at the Wireless Innovators Dinner at CTIA. Care to comment?
We were so honored to receive that award. There are so many folks out there doing amazing things in the wireless space and we're very appreciative to be honored among that group.