Updated: January 16, 2009
83% of adults have cell phones or smartphones. 35% of users have accessed the Internet via their phones, according to a December 2009 report by the Pew Research Center's Internet & American Life Project. So in times of natural disasters like the catastrophic earthquake that hit Haiti and affected more than two million people, can a mobile strategy help raise money in times of crisis?
Just three hours after the earthquake devastated Haiti, the American Red Cross launched a "text to donate" campaign, in which individuals in the US can text "HAITI" to 90999 and donate $10 to the American Red Cross to support Haiti relief efforts. The carriers are allowing individuals to donate $10 up to three times, and 100% of the donations will go to the American Red Cross.
In the first 24 hours, the American Red Cross had raised an estimated $800K via the "text to donate" campaign. By day two, they raised $5 million via mobile, which accounted for 14% of the total $35 million they raised. Approximately 50% of the donations were contributed online, according to the organization's press release.
The biggest barrier nonprofits face in raising money via "text to donate" campaigns is the price tag associated with setting up unique shortcode campaigns through a mobile app vendor, who works not only with nonprofits but also with mobile carriers like AT&T. According to the mobile vendor mGive's website, "New shortcodes are leased through the Common Short Code Administration. Leases are a minimum of three months and must be paid upfront. The cost is $1,000 per month for a vanity code and $500 per month for a random code."
Nonprofits Should Also Know:
- Mobile vendors will charge a one-time setup fee, ranging from $3,000 to $10,000 for unique shortcodes and up to $1,500 for shared shortcodes.
- Nonprofits are legally permitted to collect donations ranging between $5 and $10. The donation will appear on the donor's cell phone bill.
- Currently there is no mechanism to implement recurring donations, but vendors are working to change this, according to Jed Alpert, Founder of Mobile Commons, a mobile vendor who works with several nonprofits.
- Constituents can't donate more than five times monthly.
- It can take up to 90 days for a donor's gift to reach the nonprofit.
"Historically, carriers try to use texting as a means to raise revenue. So they ask for a share to use their mobile network. It's the cost of doing business. When you see Bono asking you text to join the U2 fan group campaign or the like at a concert, there is a transactional fee, and cents per text," said Geoff Livingston who recently launched Zoetica, a communications firm that specializes in word-of-mouth marketing.
"Increasingly, especially with major events like Haiti, carriers waive these fees for the halo effect of social marketing. However, as the American Red Cross it's easier to get this done, than say, the Earthquake Foundation who has an annual budget of $2 million. Smaller charities may experience a hard time with carriers," said Livingston.
Nonprofits can bypass carrier fees and collect 100% of donations by applying to the Mobile Giving Foundation nonprofit program. Nonprofits are required to go through an application process to qualify. Once approved, nonprofits must commit to work with one of the mobile vendors that the foundation has partnered with.
How to Setup a "Text to Donate" Campaign
There are two basic routes nonprofits can take to setup a "text to donate" campaign.
Create a Proprietary Shortcode:
Shortcodes are five or six-digit codes used to route text messages from mobile phones to mobile messaging applications. Creating a unique shortcode can take several weeks and is the most expensive option. However, it does give nonprofits the opportunity to brand themselves around a code, as well as to launch different types of fundraising appeals and action alerts. Nonprofits don't share this shortcode with any other groups.
Use a Shared Shortcode:
A cheaper route is to use a shortcode where the keyword is unique but the shortcode is shared with other groups. However, using shared shortcodes can be problematic. For example, if donors mis-type the keyword, the donation will not go through. Mobile vendors like Mobile Commons have tried to address these issues by designing their app to pick up common misspellings. They also do not allow similar keywords for other campaigns.
Marketing a Mobile Fundraiser
Though the American Red Cross campaign has made mobile fundraising history, it's important to remember that the $10M raised via mobile is unique. People rally together in times of natural disasters, especially when it impacts poor countries. The American Red Cross has huge brand recognition and their staff leveraged their reputation and coordinated and executed a strong multi-channel marketing plan within three hours after the earthquake hit Haiti.
If your nonprofit is launching a mobile fundraising campaign, it's critical that you develop a multi-channel marketing and outreach plan to spread the word and maximize donations. For example:
- Start with emailing your online activists and donors, and place your shortcode and keyword front and center. Include a "Forward to a Friend" link and a "Share This" app on the landing page, so people can promote the campaign to social networks too. Reinforce this in a follow-up thank you email as well.
- Leverage social networks. Tweet the "text to donate" campaign. Ask followers to pass it on. Post it to your Facebook Fanpage and any other social networks your organization is active on. Report back to your donors when you reach key milestones. The American Red Cross has done a terrific job in the last 72 hours of reporting how much money they are raising via mobile and the work they are doing on the ground.
- Paid advertising such as banner ads, keyword and text ads are excellent and fast ways to promote your campaign to millions of people and grow your list at the same time.
- Follow up with your donors. Tell them about the progress you have made towards reaching your fundraising goals. Explain how their money is being spent. Share some personal stories by people who have been impacted by their donations.
Stay tuned for our upcoming article exploring the issues around nonprofits collecting cell phone numbers in the marketing battle to reach constituents everywhere.