UPDATE: Stephen Joos from mGive commented on the post below (second comment) and updated a couple of facts about mGive. Please take time to read his comment after the post.
(disclaimer: Due to the overwhelming number of inquiries that mGive has been receiving re: Haiti fundraising I was not able to get in touch with a representative to confirm their donation process. Any information I have published about mGive has been directly from their website. Any conjectures about the Red Cross’ giving practices are simply that; conjecture. I have not been able to get in touch with a Red Cross representative to ask how the campaign has shaped their relief efforts.)
We all know the stats: a six figure death toll, millions left as helpless refugees and more than a billion in damage dealt to a country that has been stricken with poverty for decades. The tragedy in Haiti has been one of the largest in recent history, but has also resulted in the largest outpouring of international aid since the tsunami that rocked the coast of Southeast Asia in 2004. One effort that stood out to many of us was the “text Haiti” campaign sponsored by the Red Cross. We’ve seen it as a trending topic on all the major social platforms, top searches in the major engines, and even primetime plugs by the first lady and presidential blogs. Mobile giving foundations and campaigns have been around for the past few years, but never has one been relied on so heavily to quickly and effectively transfer funds to a first response organization, where days count and hours mean the difference between life and death.
How Does it Work?
The overall process is fairly simple; however a few players are involved. Once the text donation is submitted, the information is sent by the wireless carrier to a foundation (The laws surrounding this information are very strict, and only the phone number and amount can be passed along, no other private information is transferred). In the case of the Haiti campaign by the Red Cross, it is submitted to the mGive foundation. The information is immediately passed on to an ASP (Application Service Provider) which generates reports and provides the ability for the non-profit to have real-time access to view the donations received. mGive in this case is not only the foundation, but the service and software provider as well. Usually there is a transaction fee per donation with the foundation and the ASP as well as a monthly ASP subscription fee depending on the size of the organization and traffic through the donation network (It should be noted that in the case of the Haiti campaign mGive has waived all transaction fees).
The process does take time. The wireless carriers pay out to the foundation on a regular cycle decided by the carrier (The full donation amount is paid to the foundation as regular text messaging fees do apply). After the foundation receives the donations it will divvy them up to the proper organizations, however this also takes time. Per the mGive website they pay out on a ninety day (overall) cycle. In the case of an organization the size of the Red Cross, they can immediately plug the numbers into their accounts receivable figures, and that would theoretically shape the amount of money they are willing to immediately send into the field; essentially post dating a check they know they will be able to cash. This is light years beyond waiting for checks to come in through the mail and clear, and is much easier and more trustworthy to the donor than calling in a credit card number. All parties win, and in a disaster relief situation this real time transfer of information becomes an invaluable tool.
Here is a visual of the process: (click to enlarge)
After the transaction is completed on the donor end, regulations state that they can receive no more than two follow up text messages from the foundation. In the case of mGive, the non-profit does not have the option to choose the first two texts. They do have the ability in these texts to ask if the user wants to receive more information on the organization, and if they answer yes the number is submitted into a data base where they can receive mass texts from the organization (via the ASP). If the user reply’s with anything but yes or doesn’t reply at all the users number is deleted from the database. This assures that there is no spam in this system, and the lists of numbers cannot be bought, so no future texts will come to the donor.
This experiment has proven the worth and necessity of this technology. It really covers every social requirement one can hope for in requesting donations. It’s easy, it’s fast, it doesn’t require an immediate exchange of currency and it’s one of the most widely spread platforms on the market now. Plenty of people aren’t on certain social networks, but who doesn’t have an SMS compatible cellular device these days? Also, it has been proven time and time again that the vast majority of the population is “impulse donors” and every step added to the process of making a donation greatly decreases the number of donations received. With this development, one has the ability to make a donation with two simple text messages with a mobile device that the donor will most likely have accessible at that moment, making this arguably the easiest way to contribute to a cause with current common technology.
The next question is, what is the most valuable channel of marketing? I think the answer is fairly obvious here; all of them. I first saw instructions on how to donate in this fashion spreading through the social media landscape like an indomitable blaze, apparently sparked the White House via their blog. I continued to see it float around the web through search engine traffic and trending topics as well as imbedded widgets on multiple sites. They even hit the prime time specials, where I saw the first lady plead for the nation to start using those thumbs to grant relief to the people of Haiti (I would have liked to see a ticker with donation info the entire program, but beggars I suppose…). With this blitzkrieg strategy on many of the large media outlets, we watched the number jump over a million in the first day, to just over eight million by week’s end. We can all agree that the massive support for this cause, especially considering it was delivered in fixed increments of ten dollars, is pretty incredible. The question though is what needs to be improved on before the next disaster? Should the wireless carriers be able to send “request to donate” texts directly to their client base? Would that even be legal? Now that this is an accepted technology how quickly can you get the instructions to donate out over the net and on the airwaves? Can this technology eventually gain the popularity to rival government outpouring of aid (currently topping four hundred million collectively)?
In this day and age the foundation also has to be more aware of the fact that the donor is more intelligent than ever. Is there an issue saying donations go towards Haiti when the Red Cross will not see the actual check for months? Is that negated by the fact that the Red Cross will most likely spend the money immediately anyway, and just use that check to replenish the funds already spent? Also, should there be more of an effort to make it transparent that the mobile giving service does cost the non-profit money? Is the fact that there is a cost negated by the fact that the full amount is granted from the foundation to the non-profit and the fees (Please once again keep in mind that mGive has waived all fees for this campaign in light of the crisis) are paid seperately? Is it simply enough to have a transparent website such as mGive has (although it is more aimed at selling potential non-profit customers their service) so that all the potential donor has to do is a little research? In my opinion, everything has been done right so far. I am a big supporter of the informed donor doing their own research into the methods and financials of a chosen non-profit or cause. With a few searches it is fairly easy for the laymen to assess the situation, and the cost of the service at hand (Which is relatively small).
I am, as always, wondering what you think about the situation, the advancement of this technology, and the responsibilities of transparency with the providers. I look forward to reading and responding.
P.S. I’m already working on a blog about the passive use of this technology for non-profits in everyday fundraising, so I would love to keep this conversation limited to immediate mobilization of funds in crisis and disaster situations. Thanks!