Guest post by Dale Knoop, CEO of Social: IRL sponsor RAZ Mobile, a Kansas City-based startup that helps non-profit causes, campaigns, and candidates better engage a new generation of supporters via the power of mobile and social media. The post is published in response to attendee questions submitted during the course of Social: IRL’s ongoing nonprofits workshop series.
We’ve seen the terrible pictures and videos on TV and the Internet when a natural disaster strikes. It’s at times like this that millions of caring individuals respond to the call to action to donate to the victims of these tragedies via their mobile phones. They text a keyword such as “Sandy” or “Haiti” to a short code such as 90909. A $5 or $10 donation is then billed to them via their mobile carrier bill. This so-called text-to-give tool is a great vehicle for fundraising but it has many limitations that make it a less-than-favorable option or, in a majority of cases, completely off-limits.
Let’s run through a few of the biggest limitations of text-to-give as a mobile donor engagement and fundraising solution.
Not open to everyone:
Text-to-give is not open for nonprofits that have less than $500,000 in annual revenues, because the carriers have set this as their rule for who can use text-to-give. Most charities operate on far less than $500,000 per year.
Donations are limited in dollar amount:
The carriers cap donations at a low amount in case their subscribers don’t pay their bill, since this is how the money gets collected from a text-to-give donor. I understand their economics but if I want to give more through my mobile phone I should be allowed to. In effect, the wireless carriers are setting limits on a transaction between a caring donor and those in need.
No donor information is shared:
Other than the donor’s mobile number, nonprofits that use text-to-give don’t get any information about the donor, such as name, street address and email address. Text-to-give doesn’t help nonprofits build and grow a base of supporters. Instead, it treats donors like ATMs, which is precisely the reason many donors stop giving.
All nonprofits should seek to become the favorite cause of their supporters. Studies have shown the path to becoming a favorite involves educating them and sharing information with them on your work rather than simply asking for money all the time.
This is impossible if you don’t know who gave to you using text-to-give.
Text-to-give can be very expensive for those nonprofits that meet the carrier rules for who can use it. Keywords like “Sandy” or “Haiti” can cost a few hundred dollars each month. The carrier and the aggregators can take a sizable chunk of the donation and you may face per message fees as well.
In disaster situations where text-to-give is used, the carriers have agreed that they won’t charge their normal per donation fee. But if you’re not a disaster and simply trying to keep a food pantry stocked, the carrier and the aggregator will take their normal cut.
A long wait for your money:
Since text-to-give relies on people paying their wireless bill, it can take 90-120 days for you to see the money donated to you through text-to-give.
There are also stories from nonprofits that have used text-to-give that suggest actual fulfillment rates can be in the single digits. For example, if 100 people donate to you with text-to-give you may see less than 10 donations actually be delivered to you.
In many instances, when people see the name of a charge on their bill that isn’t the name of the cause they donated to, they ask the carrier to remove that charge.
No fast set-up:
Depending on how you proceed with text-to-give it can take months to get going. There are other solutions that can have you up and engaging and fundraising in a day.
There are superior solutions for mobile donor interaction and fundraising that don’t have the many impactful limitations of text-to-give.
According to a January 2012 Pew Internet report, completing an online credit card form is virtually the same in appeal as text-to-give. Donors will make donations by entering their credit card information into their mobile phones.
As with any solution the pros and cons must be weighed. In the case of text-to-give my suggestion is to ensure your nonprofit focuses on creating a great mobile experience and let donors give as much as they want without the wireless carriers in the middle. Your supporters will reward you with higher engagement and that in turn leads to higher fundraising potential.