Philanthropy Via Text Message

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Donating money via text is easy from a donor perspective, but it it efficient? Originally written for a class at The Heller School, Brandeis University.

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Philanthropy Via Text Message

  1. 1. Jodi  Sperber   March  10,  2010       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;   Page 1  
  2. 2. Jodi  Sperber   March  10,  2010     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.     Page 2  
  3. 3. Jodi  Sperber   March  10,  2010     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.     Page 3  
  4. 4. Jodi  Sperber   March  10,  2010     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   Figure  1:  Sample  Text  Donation   (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   Page 4  
  5. 5. Jodi  Sperber   March  10,  2010     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.       Page 5  
  6. 6. Jodi  Sperber   March  10,  2010     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   Page 6  
  7. 7. Jodi  Sperber   March  10,  2010     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.     Page 7  
  8. 8. Jodi  Sperber   March  10,  2010     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.       Page 8  
  9. 9. Jodi  Sperber   March  10,  2010       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,   Page 9  
  10. 10. Jodi  Sperber   March  10,  2010     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   Page 10  
  11. 11. Jodi  Sperber   March  10,  2010     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.   Page 11  
  12. 12. Jodi  Sperber   March  10,  2010     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   Page 12  

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