Mobile Giving Update

(Editor’s Note: Mobile maven Katrin Verclas let us know last week that there have been some pretty positive developments on the mobile-giving scene since she last wrote about it for Giving 2.0 sister e-letter the FS Advisor in February. Here’s her latest update, in case you missed it at MobileActive.org.)

Mobile donations to nonprofits have been stymied in the United States — hampered by the high fees charged for text message gifts that are then billed to a mobile-phone customer.

When a donor gives to a nonprofit via text, more than half of the contribution goes to the telephone carrier, leaving less than 50 percent to the nonprofit — an unacceptable margin for most charities. Combined with low donation caps — no more than $5 per SMS (text message) with a total of five SMS for a $25 donation — and other charges for short codes and mobile vendors, nonprofits have determined that mobile giving is not worth it.

This is about to change. If the Mobile Giving Foundation plays its cards right, mobile donations via text message may just explode this year.

The Mobile Giving Foundation, a Washington-based nonprofit organization, recently brokered a deal with the four major carriers in the U.S., and with the United Way. During the Super Bowl football finale, the United Way aired a 10-second advertisement pitching viewers to donate via text to the organization’s Youth Fitness Fund.

What went largely unnoticed was the fact that the Mobile Giving Foundation managed to negotiate agreements with the carriers, which waived all fees, allowing the United Way to collect 90 percent of the donation (with 10 percent going to the Mobile Giving Foundation).

This has not happened before other than in major disasters like Hurricane Katrina and, more recently, the California fires, when the carriers waived their fees for mobile text donations to the American Red Cross.

In an interview with MobileActive, Jim Manis, who is the CEO of the Mobile Giving Foundation and a former wireless executive, anticipated that in the next six months the Mobile Giving Foundation will have agreements with all carriers, waiving fees for approved nonprofit organizations and campaigns. The Mobile Giving Foundation already has application guidelines on its site, even though agreements are not all in place yet.

The Mobile Giving Foundation is positioning itself to be the approval and payment processor for nonprofits in the U.S., with an anticipated April 1 public launch.

Here’s how it will work:

* A nonprofit applies to the Mobile Giving Foundation.

* Carriers waive all fees for premium SMS donations for the approved nonprofit campaign through the Mobile Giving Foundation.

* The nonprofit hires a vendor for campaign execution (the fulfillment vendor for the United Way was Mobile Accord with VeriSign as the mobile delivery service).

* The Mobile Giving Foundation takes a 10 percent cut of text donations, anticipated to be reduced to 5 percent if the volume of campaigns increases. Payments are processed within 60 days post-billing, at which point the nonprofit receives a check.

Jim Manis says: “We are trying to change the game for nonprofits. We want nonprofits to have access to new demographics, so rather than look for that one person who can write a $10,000 check, an organization can tap into a younger demographic of 10,000 people who text in a $10 contribution.”

The Mobile Giving Foundation now is courting some of the largest nonprofits in the country for additional fundraising campaigns in this initial charter phase.

So how did the United Way campaign do? In a call with Jeff Slobotski and Michael Schreiber, manager of marketing and sales of volunteer technologies and chief executive officer, respectively, of the United eWay, which provides technology including mobile solutions to the national and local United Way groups, we learned that the 10-second ad that ran during the Super Bowl on air and in the stadium generated $10,000 in donations via text.

Six thousand people responded to the ask with a text message reply, and 2,000 followed through with donations. We were not able to ascertain from the United Way how many people responded to the in-stadium ask as opposed to the commercial on TV.

Both stressed to MobileActive that the fundraising campaign “was clearly a success.” Schreiber acknowledged that the TV spot was brief — too brief for many viewers to remember the short code (a six-digit number to text to in order to donate).

The ad also had been on YouTube, where it has been viewed more than 21,000 times, and on the United Way Web site.

Some other groups also have used their lists of cellphone numbers to direct constituents via voice mail and text message to a live phone bank. Donors then can make their donations on the phone with a credit card rather than via text message.

In a conversation with MobileActive, James Eberhard, co-founder and chairman of Mobile Accord, said that “the Mobile Giving Foundation played an essential role in this technical environment.”

He noted that one of the carriers did not approve the campaign until the day before the Super Bowl. He also emphasized the importance of having an organization of the United Way’s stature (and non-political nature) as the prototype nonprofit campaign in order to get the mobile carriers on board.

Asked whether this effort has revolutionized mobile giving in the United States, Eberhard said, “No, it didn’t. But we took it to mass market, and it works.”

Katrin Verclas is with MobileActive.org, a global network of people focused on the use of mobile phones in civil society.