Pros & Cons of Text-to-Give Campaigns

After the devastating 2010 earthquake in Haiti, disaster relief organizations raised an incredible $43 million by text, all in increments of $10 added on to donors’ cell phone bills. And in the five years since, text-to-give campaigns have only increased in popularity.

So how do they work?

1. A charity partners with an organization (like mGive Foundation or the Mobile Giving Foundation) that acts as a broker with major cell phone carriers.
2. Donors text a specific code (provided by the charity) to a set phone number (also provided by the charity).
3. Upon confirmation (the donor texting back “Yes”), the donation is added to the donor’s monthly cell phone bill.
4. The cell phone company pays the intermediary (broker).
5. The broker pays the charity.
   

Pros:

• Huge Reach: Over 90% of American adults own a cellphone and 81% use them to send and receive text messages.
• Fast, User-Friendly Process for Donors: It’s incredibly fast and convenient for donors; they don’t have to fill out an online form or even possess a credit card. Later, they don’t have to pay a separate bill or remember to send in a check. All they have to do is send and confirm a text.
• Equivalent of an Impulse Purchase: Donations by text are like impulse purchases; they involve little to no research or forethought on the part of the donor, which means that nonprofits don’t have to capture donors’ attention for very long to be effective.

Cons:

• Delay in Receiving Donations: It can take 30-90 days for a charity to receive a donation because it is only processed after users pay their phone bills. (Although in the case of the Haiti disaster relief campaign, cell phone carriers promised to pass along funds as soon as they were pledged, rather than waiting for donors to pay their bills.)
• Potentially Large Fees: Software, licensing and transaction fees can easily add up to 5-10% of the total donations received.
• Smaller Donation Amounts: These campaigns usually collect $5 – 10 donations, so if that’s smaller than the typical donation your organization receives, you could be taking a hit. However, these donors might not be the same people who typically give to your organization so you could also be gaining a whole new revenue stream.
• No Built-in Option for Recurring Gifts: There is no easy option to generate recurring donations.
• No “Next Step” for Donors: Engagement is limited to that single transaction; there are no clear “next steps” for donors to connect with a nonprofit. So are you building up your donor base? Will any of these people make a donation in the future? Will they volunteer? Or will their involvement stop after they’ve confirmed the donation?