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From the August 2010 Charity Rating Guide & Watchdog Report

Charitable Giving Via Your Cell Phone: Is the Convenience Worth It?

Text messages, brief digital notes sent to and from mobile phones, have gotten a lot of attention this year as a fast and easy new way to donate money to charities. Given the growing popularity of giving via text, it is worthwhile to consider how text donations work and to think about potential pitfalls before getting swept up in the trend.

From a donor's point of view, donating to charity via texts sent from mobile devices is very convenient. The donor simply sends a message containing the campaign's specified "keyword" to a "short code" phone number; for example, texting "CURE" to "27722" initiates a $10 donation to The Breast Cancer Research Foundation (BCRF). The donor then receives a text message requesting confirmation, responds affirmatively and voila-the donation is sent. This is a quick way to initiate a donation; however, the process of a text donation reaching the intended recipient is not fast or simple. After a donor confirms the donation, the amount, usually $5 or $10, is added to the donor's next monthly mobile phone bill. Once the bill including the donation amount has been paid, the donor's phone company passes the donation amount to a "Mobile Application Service Provider" (MASP) who then passes the money on to the charity. This process can take as long as 120 days, and wireless carriers may limit the number of times a user can donate via text within a given month. A charity will generally receive your donation faster if you mail a check or donate directly to the charity online using its secure web site. (Note: AIP is not familiar with the specific terms of BCRF's agreement with its MASP.)

Be wary when you see claims that 100% of your donation will go to the nonprofit. With text campaigns or any other type of charity solicitation, fundraising costs are involved. According to current advertised prices, a MASP fundraiser can receive between forty-five and seventy cents per text donation. In addition, the charity is often obligated to a minimum one-year contract in which the charity pays a campaign set-up fee and then a monthly service fee. There may be additional costs to donors as well. With most text donations, potential donors will be told that "Standard messaging fees apply." This means that the donor will be charged by their cell phone company based on what kind of messaging plan they have. Some plans offer unlimited free texting, while others allow users to send only a limited number of free texts per month. Still others charge users between five and twenty-five cents for each text message sent or received, including donation texts.

Charities increase their efficiency as they develop strong relationships with recurring donors, and it might be difficult for charities to build relationships with donors who make initial contact via text message. It is also possible that some texting donors satisfy their charitable impulse with a small donation, whereas they might make larger donations if they had more options than the $5 or $10 currently offered via texting. Most texting donors opt out of permitting the charity to contact them further. If the charity does get permission to contact the donor, the organization only receives the donor's cell phone number without a name or an address. Potential donors should consider what personal information they prefer a charity to have and how they wish to be contacted or solicited in the future. What you disclose to a charity when you donate helps to determine how the charity can follow up. Of those donors who wish to be contacted, some might prefer to receive text updates or calls from a charity to their cell phones, while others might consider that an unwanted expense or an invasion of privacy. Other donors would rather receive letters or e-mail.

After the January earthquake in Haiti, the American Red Cross launched a widely publicized and successful texting campaign that raised a record-setting $32 million in the month following the disaster. Some carriers waived user messaging fees and expedited the process of getting texted donations to this charity, but did not necessarily waive fees or speed up donations to other relief charities using text campaigns.

The major benefit of successful text campaigns is that they bring in younger donors, who might be less likely to donate otherwise. Mobile giving is just starting to catch on, so the rules could change at any time. Wise donors understand the difference between impulsive giving and thoughtful giving. New technology and social networking will almost certainly inspire more new methods of charitable giving that might bring in new donors. Hopefully these new donors will also learn the importance of vetting charities rather than giving impulsively.

 
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Last Update: August 31, 2012