Philanthropy Via Text Message

Jodi Sperber March 10, 2010

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Philanthropy via Text Messaging: The Future, or Just a Fad?

With four out of every five Americans owning a cell phone, they have become nearly

ubiquitous. Originally designed as a means to place and receive calls from anywhere,

they have evolved into a confluence of hardware and software capable of interacting

with the world around us in ways Alexander Graham Bell likely never even

considered when the first telephone was created.

While many homes in the United States still contain land lines (i.e., traditional phone

wires traveling through a solid medium), more and more individuals are cutting out

this service, electing to only utilize a mobile phone. According to recent study data

collected by the Centers for Disease Control and Prevention as part of their twice-‐

yearly National Health Interview Survey, over 20% of US households have opted to

give up land lines and use only cell phones (Park, 2009). With this in mind, it can be

argued that for the majority of people in the US, the cell phone has become an

effective tool to get in touch or rapidly transmit information. This extends beyond

using our voice and reaches into the ever-‐growing world of text messaging.

For further confirmation, just ask the closest teenager; texting now far outpaces

phone calls when it comes to communicating. According to data collected by the

Nielson Company, teens aged 13-‐17 are 623% more likely to use their fingers rather

than their voice when talking to friends (Rosen, 2010). Similar research has

supported these numbers (Horrigan, 2008; Lenhart, Purcell, Smith, & Zickuhr, 2010;


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Yen, 2009). While text messaging is becoming a routine way to communicate among

teens, the activity is certainly not exclusive to this age group (Amoruso, Bosanko, &

Verclas, 2010; Currie, 2009; Health 2.0," 2007; Stepanek, 2010; Yen, 2009).

The sheer penetration of mobile phones in the US market, combined with an

expanding wireless network and increasing sophistication in both hardware and

software, has led to a host of innovative uses. One area that has seen particular

attention in the past six months is the use of text messaging to transfer money. For

example, it is now possible to purchase an item or pay an individual using commercial

services like PayPal ("Paypal," 2010). On a less commercial note, the recent

earthquake in Haiti highlighted the ability provide monetary support to nonprofit

organizations to carry out their mission with simple text messaging.

Donating money via text is not an entirely new concept, having been used successfully

in 2005 to raise $400,000 after Hurricane Katrina and $200,000 in 2004 after the

Indian Ocean tsunami that devastated Sri Lanka (Choney, 2010; MacLaughlin, 2010).

It wasn’t until the recent earthquake in Haiti, however, that a turning point was

reached with text donations, resulting in both a tremendously popular avenue for

providing support as well as an emerging controversy within philanthropy circles.

The essential question being raised is whether mobile giving is a viable long-‐term

strategy to support philanthropic efforts, or if it is just a fad that will not result in

increased engagement and unnecessary fees.


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Public response to the disaster in Haiti provides a useful illustrative framework.

When news of the earthquake in spread, the response was swift and massive. In

addition to the expected reporting on the aftermath of the catastrophe, news outlets

for the first time publicized the ability to make donations using text messaging. This

was reinforced across social networks such as Facebook and Twitter, where

instructions on how to easily donate $5 or $10 to organizations were shared among

peers.

In the days that followed, the ability to provide financial support via text messaging

was promoted heavily. Both traditional news outlets (TV, radio, newspapers) and

newer media outlets (blogs, Twitter, Facebook) encouraged the use of mobile giving.

Major nonprofits such as the Red Cross, along with many smaller groups, also

encouraged this route, both to increase total cash raised as well as to discourage the

donation of goods that provide zero benefit (Assiciated Press, 2005; Durham, 2010;

Shaikh, 2010). With a swell of donors providing small amounts, over 30 million

dollars was raised in a matter of days to provide relief support (Choney, 2010).

While the ease and volume of donating via text message had an undeniable impact,

several details of this approach need to be reviewed to provide a more complete

portrait of text-‐based giving. By considering the full cycle of text donations, including

processing time, fees associated with mobile giving, and systemic limitations, a more

informed opinion can be formed to address the question of whether or not this is a

viable long term philanthropic strategy.


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From the individual donor perspective, there is instantaneous satisfaction. For

example, if you wished to donate $10 to the Red Cross to support relief efforts in

Haiti, all you would have needed to do is send a text message with the word “HAITI”

to 90999. A confirmation text would arrive almost instantly, and once you responded

in the affirmative a second message thanking you for your generosity would be

received. Thus, you would assume that $10 is now on the way to Haiti by way of the

Red Cross. Figure 1 illustrates the process, as it would look to a donor using an

iPhone.

The actual course of action, however, is not as expeditious. Behind the scenes, the

following activities take place

(MobileActive.org, 2010; Stanger &

Giorgianni, 2010):

1. You send a text message to your

organization of choice

2. You wait for your phone bill

3. You pay your phone bill

4. Your wireless carrier pays an

intermediary set up for such funds

5. The intermediary pays the charity

you selected

When all is said and done, it can take 60-‐120 days for your donation to make it to the

intended organization, pending the timing of the billing cycle and how quickly you

Figure 1: Sample Text Donation


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remit payment. Thus, your full donation amount would make it to its destination as

intended; it simply would take longer than you probably anticipated.

The reason behind this delay is in fact coupled with the convenience of using text

messaging. The steps a donor is spared in the giving process are mediated by two

agents previously uninvolved in the giving process: an individual’s wireless service

provider and a third party entity established to set up and administer mobile

donations. From the donor perspective, all that is witnessed is an additional $10 fee

added to their monthly bill, and possibly any associated charges with sending a text

message (unless your wireless provider opts to waive fees). If the donor had a

prepaid calling plan, the funds would be donated from their remaining balance

assuming they had enough funds to cover the donation. As a for profit enterprises,

wireless providers want to ensure that the customer pays their bill, including the

donation amount. Thus, the donation essentially remains in limbo until the monthly

bill is paid.

It should be noted that in the case of the Haiti earthquake almost all wireless carriers

opted to waive normative fees associated with text messaging, and Verizon Wireless

chose to advance the $2.8 million donated by its customers to the Red Cross

(MobileActive.org, 2010; Richtel, 2010). In the recent Chile earthquake, wireless

carriers have followed a similar pattern of waiving fees, although it is unclear if any

have offered to advance funds donated to speed relief efforts.


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The intermediary handling the administrative aspects of mobile giving also requires

monetary support to continue functioning, growing, and supporting the organizations

that take advantage of the service. Revenue is generated through monthly fees

charged to the nonprofit organization, which vary based on the number of ways the

nonprofit chooses to employ mobile services ("mGive Pricing," 2010; Mobile Cause,

2010). While these fees are necessary to operate a functioning business, they create

(perhaps unintentionally) a dividing line between those who can or cannot take

advantage of the mobile giving channel.

In addition, there are limits set by the wireless carriers regarding how much a single

person can donate in a single billing cycle via text message, typically $55 (Stanger &

Giorgianni, 2010). The rationale behind this monetary ceiling underscores the very

reason the channel was created: it is so easy to make a donation that protections

were put in place to ensure that children do not use text messages to donate more

funds than the person paying for their monthly bill can afford. Setting limits,

however, eliminates the opportunity for a mobile donor to contribute more than the

maximum amount unless they choose to a) space out their donation over multiple

billing cycles, or b) follow up a text donation with a donation via the web, telephone,

or by simply sending a check (which has unlimited donation potential). Recurring

donations are currently not available, although this is under development.

As a result, prior to setting up this type of service, a nonprofit organization would

need forecast how many donations they anticipate receiving via text message and


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strategize on how they will advertise the opportunity. If they did not believe they

would receive enough donations (or perhaps publicity) to make the effort worthwhile

– the fiscal break even point is estimated at 750 $5 donations or 375 $10 donations

over the course of a year – it likely makes sense to avoid this channel. Thus, smaller

nonprofits may not be able to incorporate mobile giving as a fundraising strategy,

potentially placing them at a disadvantage when compared to larger, more

established organizations. This also implies nonprofits situated locally in an effected

area might have less of a chance for support when compared to larger, international

organizations that have wider name recognition.

Balancing the adoption of a new and exciting avenue for donating/raising funds with

the realities of supporting its implementation is not easily accomplished. On one

hand, it is likely that many donations received via text messaging would have not

been collected if the conduit had not been so easily and rapidly accessible. Mobile

phones are increasingly omnipresent, with the average person having a mobile phone

within arm’s reach 19 hours a day (Fox & Jones, 2009). This makes it possible to

immediately respond, decreasing the probability that an individual will get distracted

and neglect to follow through on intent to donate. Another possible outcome is that

the act of donating via text encourages an individual to become involved on a longer-‐

term basis with a specific issue or cause, which would be beneficial to the

philanthropy field.


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Some have raised concerns the immediate satisfaction of donation facilitated by

mobile giving will encourage a form of “slacktivism,” or the practice of doing

something that feels good and provides immediate satisfaction but does not involve

much personal effort and has no political or social impact (Livingston, 2010b;

Moroziv, 2009; Wikipedia, 2010). In this instance, the term would be applied to

include those that donate once via text, and then assume they have done their due

diligence.

It is simply too early to tell, however, if those who used text messaging to support

Haiti relief efforts will remain engaged, or repeat the act for other causes. At this

moment in time, we exist in a transitory period between established and emerging

approaches to crate social benefit, and debates on how to best move forward are

topics of animated discussion on philanthropic circles (Bernholz, 2010; Bernholz,

Skloot, & Varela, 2009; Stannard-‐Stockton, 2010).

Nonetheless, what is apparent is that the ability to contribute to and participate in an

issue of personal meaning is changing with the advent of new media. Upon reviewing

evidence both supporting and dissuading the use of text messaging for fundraising, a

reasonable case can be made for either side. Some would argue that the ease of

donation, wider pool of donors, and attention to a cause gained is worth the costs

associated with the effort. Others would disagree, indicating that the delays in fund

disbursement, administrative costs, limits on giving, and uncertainty regarding long-‐

term impact outweigh the benefits.


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While earthquakes are relatively common, it is highly unusual that two earthquakes

of such magnitude would strike in such a short time period. The result of this

experience, however, highlights the fact that this is an area devoid of clarity and ripe

for policy development. With mobile donations receiving such mainstream attention,

policies and standards need to be created, revisited, and amended to incorporate

response to natural disaster. At the time of this writing, standard policies do not

exist, and any decisions regarding fees or advanced payments are at the discretion of

each individual provider for each individual event.

Having explored both sides of this conversation, one thing is absolutely clear:

philanthropy can and should take advantage of mobile avenues to attract, engage, and

maintain networks of supporters. The success of text based donations and other

mobile activities indicates there is a population willing and able to engage using their

phones. Efforts to develop applications, ideas, and methods to support these efforts

should be promoted and sustained. It is easy to see how an organization or

grassroots effort could share organizational updates, event announcements, requests

for support (monetary or otherwise), or related news as an effective part of an overall

strategy.

The wireless service provider’s current position as an intermediary, however, is

problematic and makes text message donations a less appealing approach. The

general focus for these companies generating maximum profit (they are, after all,


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commercial entities), evidenced in part by the fact that there are even charges

associated with text messaging, an activity that requires little from an infrastructure

standpoint and is arguably free (Bender, 2009). Until a universal “crisis response”

policy is created by the industry – or the FCC and other affected parties working with

the industry – outlining what fees are waived, when they are waived, and guidelines

for rapid fund disbursement is established, it is cumbersome to involve them in

ongoing philanthropic efforts. It only delays the distribution of funds to the intended

organizations and places arbitrary limits on the amount that can be donated by a

single person.

From the organizational perspective, having wireless companies involved is also

problematic as no individual contact information is not transmitted with the text

donation – the nonprofit simply receives a check in the amount of total donations

(Livingston, 2010a). This makes it less useful for long-‐term engagement purposes

with potential supporters. Thus, mobile strategies are useful for engaging current

supporters, but less useful as an ongoing fundraising strategy unless coupled with

broader activities.

As smart phones continue to increase in popularity, and with applications for these

devices becoming more sophisticated, the possibility of using mobile applications

rather than text messaging is already here. A dynamic community exists, developing

ideas to simplify the process of connecting organizations and causes to those who are

interested in participating. For example, Mobio is a service that allows an individual


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to store payment information within an application that can read barcodes, so all an

individual has to do is point their phone camera at the barcode, enter a pass code, and

confirm payment (Mobio, 2010). Other services allow organizations to create and

brand applications quickly and cheaply, so that messages and alerts can be pushed

out to supporters. This arena is where we will likely see significant growth in

adoption in the coming years. The result of these efforts would minimize or eliminate

the need to use a wireless carrier as an intermediary, freeing up the potential for

larger and more frequent donations, and helping to encourage a broader segment of

the population to be engaged.

References Cited

Amoruso, M., Bosanko, J., & Verclas, K. (2010). 2010 Nonprofit Text Messaging Benchmarks. Retrieved February 22, 2010: www.e-‐benchmarksstudy.com/mobile Associated Press (2005). Useless tsunami aid includes thong panties. MSNBC.com.

from http://is.gd/9TfPI. Bender, E. (2009). Guess What Texting Costs Your Wireless Provider? Retrieved

March 1, 2010: http://is.gd/9TxMp Bernholz, L. (2010, February 22). What Matters About Mobile? http://is.gd/9TqlP. Bernholz, L., Skloot, E., & Varela, B. (2009). Disrupting Philanthropy: Technology and

the Future of the Social Sector. Retrieved from http://is.gd/9Toop Choney, S. (2010). Mobile giving to help Haiti exceeds $30 million. MSNBC.com.

Retrieved March 2, 2010, from http://is.gd/9RgdT. Currie, D. (2009). Public health leaders using social media to convey emergencies.

(Cover story). Nation's Health, 39(6), 1-‐30. Durham, C. (2010, March 4). Help not hinder Haiti. http://is.gd/9TeTi. Fox, S., & Jones, S. (2009). The Social Life of Health Information: Pew Internet and

American Life Project. Health 2.0 (2007). from Economist Newspaper Limited:

http://resources.library.brandeis.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=26523211&site=ehost-‐live&scope=site

Horrigan, J. (2008). Mobile Access to Data and Information: Pew Internet and American Life Project.


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Lenhart, A., Purcell, K., Smith, A., & Zickuhr, K. (2010). Social Media and Young Adults: Pew Internet & American Life Project.

Livingston, G. (2010a). 5 Real Challenges For Non-‐Profit Texting Campaigns. Retrieved March 4, 2010, from Mashable.com: http://is.gd/9RtVy

Livingston, G. (2010b). Why We’re In the Age of the Citizen Philanthropist. Retrieved March 4, 2010, from Mashable.com: http://is.gd/9RM5L

MacLaughlin, S. (2010, March 3). Online Giving and Rapid Response Trends. http://is.gd/9UWOz.

mGive Pricing (2010). Retrieved March 3, 2010, from http://www.mgive.com/Pricing.aspx

Mobile Cause (2010). Pricing Retrieved March 4, 2010, from http://clients.mobilecause.com/plans/retail#text2give

MobileActive.org (2010). SMS Text Donations and the Haiti Earthquake Retrieved March 2, 2010, from http://is.gd/9QuTY

Mobio (2010). Mobio Identity Systems, Inc. Retrieved March 3, 2010, from http://is.gd/9UZkB

Moroziv, E. (2009). The brave new world of slacktivism. Retrieved March 4, 2010, from Foreign Policy: http://is.gd/9RKWw

Park, W. (2009). Latest study finds 1 in 5 US homes are wireless only. Retrieved March 4, 2010: http://is.gd/9LIUO

Paypal (2010). Retrieved March 4, 2010, from http://is.gd/9RvYZ Richtel, M. (2010, February 18). Wireless Companies Speed Up Texted Haiti

Donations. Blog posted to http://is.gd/9RDvW. Rosen, L. (2010, February 22). Generation 'Text': FB me. http://is.gd/9LAUz. Shaikh, A. (2010, March 4). Nobody wants your old shoes: How not to help in Haiti.

http://is.gd/9Tewc. Stanger, T., & Giorgianni, A. (2010, January 14). Haiti relief update: What to know

about text donations. http://is.gd/9QEIQ. Stannard-‐Stockton, S. (2010, March 2). The Cost of Information Sharing in

Philanthropy. Blog posted to http://is.gd/9TpKL. Stepanek, M. (2010, January 15). TextAid: The New Normal? http://is.gd/9Lhun. Wikipedia (2010). Slactivism Retrieved March 4, 2010, from http://is.gd/9RK6B Yen, H. (2009). Popularity of text messaging is edging out cellphone calls. Retrieved

March 4, 2010, from Associated Press: http://is.gd/9RbMx

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Philanthropy Via Text Message