Philanthropy Via Text Message
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Transcript of Philanthropy Via Text Message
Jodi Sperber March 10, 2010
Page 1
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;
Jodi Sperber March 10, 2010
Page 2
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.
Jodi Sperber March 10, 2010
Page 3
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.
Jodi Sperber March 10, 2010
Page 4
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
Jodi Sperber March 10, 2010
Page 5
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.
Jodi Sperber March 10, 2010
Page 6
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
Jodi Sperber March 10, 2010
Page 7
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.
Jodi Sperber March 10, 2010
Page 8
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.
Jodi Sperber March 10, 2010
Page 9
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,
Jodi Sperber March 10, 2010
Page 10
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
Jodi Sperber March 10, 2010
Page 11
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:
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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
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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