Nonprofits Should Consider SMS Fundraising With Eyes Wide Open

Photo by OxMour

Maybe I'm jaded.  But having been in the nonprofit technology since 1993, I've seen a predictable pattern of cycles with new tools and technology.  It closely follows Gartner's Technology Hype Cycle

• Technology Trigger
• Inflated Expectations
• Trough of Disillusionment
• Slope of Enlightenment
• Plateau of Productivity

With nonprofits, the Trough of Disillusionment comes when we start to understand the real challenges in implementing a new technology and stop looking at as a panacea that will solve all our problems.  Or be bailout for our nonprofit.

The Haiti crisis demonstrated that text to give fundraising can be a powerful tool, particularly as an "early responder" fundraising technique in disaster. But will the dramatic text fundraising that we saw the Red Cross experience translate to every non-profit that wants to add it to their tool bag?

I like the way that Allison Fine reflected on this question last week.  How does she feel about text to give?  Trepidatious.

Geoff Livingston has written a good piece on Mashable that throws a little cold water SMS/Text To Give Campaigns by pointing out the challenges and limitations.  The reality is that there are challenges - cost, vendors, and other limitations.

The technology isn't cheap to set up.  In fact, according to the post it can be expensive, anywhere from $3,000-10,000.   And, just like other technology tools, like online credit card transactions, nonprofits end up paying a transaction fee of 5-10% back to the vendor.     So, deciding to incorporate a SMS campaign should  include a traditional nonprofit technology ROI analysis that analyzes the benefits, value, and financial analysis.  It may not make sense for your nonprofit to get mobile  

The set up cost is out of reach for many smaller/mid-sized nonprofits, and especially since the vendors require a minimum budget of $500,000 to have the right to purchase service.  Geoff also points out that text donations are limited to small donations and organizations don't get the donor contact information, thus closing the door to ongoing engagement and relationship building not to mention potentially missing out on an important ROI - the lifetime value of a donor. 

Geoff goes onto make a point that I find myself making over and over about the need to link the use of the tools to an overall communications and engagement strategy.  He also encourages nonprofits to look at other ways to incorporate the use of mobile technology as part of a communications strategy or program delivery. (The place to look for lots of ideas and advice is MobileActive.

Allison Fine makes another good point: "It seems to me that relationship building with a first engagement being a cell phone number is going to be inherently difficult."  

Geoff ends his piece with a point about looking at other options which may be the only choice for the smaller nonprofits.  Recently, AppMakr rolled out its service that lets anyone create a iPhone app for less than $200.  In fact, I created one for Beth's Blog!  But be careful, I was asked a lot of questions about my blog's audience size and reach and only after looking over my stats (subscribers, page views, Twitter followers) was my app accepted.

For me, the most interesting piece is looking to the future.  When will we see a Network for Good for text fundraising campaigns?  What are some of the best practices for incorporating mobile into your communications and engagement tool box?

Comments

[Anonymous]

Just FYI, there is also a company called iSites where you can create an iPhone/iTouch app and/or an Android app for a one time fee of $25...instead of $200. The website is http://isites.us/.

[Barbara Talisman]

Also check out greatergiving.us working with smaller nfp with less budgets of less than $500K and use as you go/better pricing! Thanks for all your info Beth - as always appreciated!

[John Kenyon]

Great piece Beth. I agree with you, Allison and Geoff. There has to be a strategic "why" you would go to text or attempt fundraising for it. As Geoff said well, you need a large crowd or widespread media attention to make fundraising via mobile worthwhile - you need a large volume to make the costs and effort equal the return. I think for the many nonprofits for whom SMS fundraising is not appropriate, they should still consider a possible role in communications strategy.

One point I did not see mentioned, and I would add, is that while I don't think SMS fundraising is right for a majority of nonprofits, it can be useful as a communication vehicle. I think of the immigration rights protests in California not long ago, which mobilized a lot of hispanic youth. Smart orgs that work for the rights of immigrants have kept in touch with that population (many of whom have none or little access to computers or the internet) via SMS. This can include protest announcements, updates on changes in the law, reminders to vote, etc. As you mentioned I think there are some great case studies on Mobile Active. This is just one example of how small and medium size orgs can consider adding text to the mix of channels they use to communicate with stakeholders.

[Mark Brooks]

I do hope this post gets wide coverage. My fear has been that we are throwing the baby out with the bath water in our race to embrace new trendy technology. I have always felt that tools like Social Media were more useful as an entry point rather than an end to point. The media, even non-profit media, tends to trumpet the successes of Social Media while never looking at it critically. Posts like these can help us know what truly is best for us and how to apply these new tools to our clients needs.

[Mazarine]

COLORS magazine, published out of Italy, did a piece a year ago about money. The whole magazine was made up to look like a 100 dollar bill. Do you remember it? They had sections on everything that they found in the dollar bill, including cocaine, fecal matter, blood, sweat. And they had a section on SMS bill pay in Africa. People would text their payment for their wedding, for instance.

As you say, a lot of people do not have access to computers, but not just in poorer sections of America (which are growing to resemble third world countries), but also in Africa. People do have cellphones. Perhaps SMS fundraising would work well in African communities, when there is more of a nonprofit and fundraising structure and system there. What do you think?

Mazarine

PS. Thank you so much for the resources, ideas, and thoughts on SMS fundraising. I am so curious about this method of fundraising, and was already writing a blog post about this (for Monday), but now I've got more tools to give. Beth, you're getting a linkback, of course!

[Mendi]

What are some of the best practices for incorporating mobile into your communications and engagement tool box?

In countries where mobile money transfer (e.g. Kenya, Uganda etc.) is the default way of sending and receiving funds, this is a strategy that African activists could adopt with little to no upfront costs. This has been used by large NPOs (e.g. Kenya Red Cross) to people seeking money to pay off hospital bills. While I haven't seen a study on the RoI on mobile money tx for NPOs yet, I suspect that providing another channel for giving that allows for instantaneous gifts is worth a second look.

[non-profitplace.com]

Presumably, as time goes on, the software will become cheaper (as that seems to be part of the cycle), which will make consideration of it more possible for non-profits other than the huge Nationals.

Personally, I like the idea (once its a financially justifiable prospect), as it may increase a non-profits reach to parts of the country where they don't have representatives, and also to those donors who would be comfortable texting off a few dollars rather than sitting down with a credit card on the net.

http://non-profitplace.com

[Eric]

Beth - this is great! There are alternatives worth looking at. One from Artez certainly. The issues some other commentators have raised with access to donations, etc., are taken care of via direct mobile-to-web credit card access that actually increases the amount of the donation going to the cause.

http://www.artez.com/blog/introducing-artez-mobile-communicator