Will Mobile Giving Take Off In The Jewish World?

Gauging the Haiti effect on nonprofits.

02/03/10
Staff Writer
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Over the course of the past year, a group of volunteers affiliated with The American Jewish Joint Distribution Committee’s (JDC) Next Gen initiative has been looking into launching a mobile giving campaign. When an earthquake devastated Haiti last month, suddenly the race was on to get it up and running immediately.

JDC announced its text-to-donate campaign at “Help Haiti Now,” an emergency benefit held Jan. 19 at a popular music venue. The entire setup process took less than 48 hours after choosing a provider, says Sarah Eisenman, JDC’s director of next generation and service initiatives. In addition to the minimum $36 donation, attendees were asked to text “JDCHAITI” to 85944, which would result in a $10 donation added to their cell phone bills. “You could see people on their iPhones throughout the room beginning to text donations on the spot,” Eisenman says.

The event raised $8,200, and up to $3,600 raised through texting will be matched dollar for dollar, thanks to sponsorship by Linda and Jeremy Merrin, owners of the Havana Central restaurant chain. (The organization had raised a total of $3 million for Haiti as of press time).

Mobile phone giving has hit a tipping point, says Lucy Bernholz, a longtime adviser to philanthropic foundations who is also a well-respected blogger and analyst of philanthropic trends. Among Jewish organizations, the American Jewish World Service and the JDC are among the first to try their hands at mobile giving campaigns, while the UJA-Federation of New York has launched the Chai Society, which enables recent college graduates to donate $18 a month to the UJA by texting the word “Chai” to 58126.

The question is how successful these campaigns are and whether other Jewish organizations, especially those not involved in disaster relief and recovery efforts, will jump on the bandwagon, as well.

Industry analysts say that mobile giving is growing at a far quicker pace than online giving. In 2008, when mobile giving first got off the ground, $500,000 was donated via text messages. Last year, that number increased to $3 million. And last month, in the wake of the Haiti earthquake, The Red Cross alone raised more than $30 million via $10 text message donations. (The organization raised only $200,000 through mobile giving during the 2008 hurricane season).

“The tragedy in Haiti has raised the awareness among the general population of the ability to make a donation very quickly through a mobile phone,” says Douglas Plank, CEO of MobileCause, one of about nine service providers in the United States that are approved by the Mobile Giving Foundation.

Currently, only 500 of the more than one million U.S. nonprofits are running text-to-donate campaigns, but Plank envisions a large increase in the coming year. “The heightened awareness of mobile giving has caused nonprofits that support Haiti and those that don’t to realize that this is a viable fundraising tool that they need to start using,” he says.

One of the barriers to launching a mobile giving campaign is the assumption that it’s more difficult to use than it is. “With just a few clicks, you can initiate your campaign,” says Plank. “They’re often unaware of how easy it is from the perspective of the nonprofit.”

Costs have gone down in recent years. MobileCause, for example, offers packages that run from $99 to $250 a month, which includes a series of keywords (such as “JDCHAITI”) and access to the software platform. In addition, there is a 50-cent transaction fee for each $10 donation. (Some service providers have removed the transaction fee for Haiti donations, so that 100 percent of the money donated is earmarked to the relief effort.)

Part of the appeal of mobile giving is its “ability to bring in brand new supporters at a low adoption rate,” says Plank.

For the JDC, establishing a mobile giving campaign is part of an effort to attract young donors and show that a “95-year-old very established organization is getting out there and working with new technology,” Eisenman says. “We’re adapting to how people live and how they communicate and opening up as many entry points as possible,” she says. “That can only be a positive.”

Charitable giving is something everyone would like to do, says Kevin Smokler, CEO of BookTour.com, a startup based in San Francisco, and a volunteer with the JDC who has helped with the mobile giving campaign. “It’s incumbent upon an organization to remove barriers to the ease of doing so. It may not seem to someone who’s 70 that putting a check in an envelope is a barrier. But that’s not the way someone who’s 30, who sits at a computer all day with his cell phone in his pocket, gives money.”

Still, there are downsides to mobile giving campaigns, including the fear that potential donors will ease their conscience with a quick $10 text donation and not bother to give a larger gift.

That presents a dilemma to organizations like the AJWS, where the average online gift is between $100 and $115. While the organization is experimenting with a text-to-donate campaign to benefit the Haiti relief efforts (text “AJWS” to 25383), it has opted not to publicize its texting number on its Web site. “If we encouraged people to text, it’s $10. If they’re already on the donate page, why would we shoot ourselves in the foot?” says Riva Silverman, AJWS’s director of development. The point of the mobile giving campaign, she says, is to get to people who otherwise wouldn’t go to your Web site to donate.

The Haiti earthquake has indicated that more and more donors are heading online to donate. During the tsunami, half of the gifts came in online and half came “the old-fashioned way,” says Silverman. “And people were really nervous about giving more than $1,000 online.” Fast forward to present day. The organization has raised more than $5 million for the Haiti relief effort, and three quarters of donations came through the AJWS Web site. In addition, online gifts included a number of $2,500; $5,000 and even $10,000 donations. “It really shows how things have shifted,” she says.

While online donations don’t match traditional gifts in terms of dollars (“a foundation giving $500,000 a year won’t do it online,” she says), the percentage of gifts AJWS gets each year online is growing.

Currently, cell phone carriers have limited text donations to micro-levels of $10 or $20, since they have no desire to be in the business of collecting donations. As mobile giving continues to evolve, Plank predicts a growth in text-to-pledge, which allows donors to pledge any amount via text message. For the past three years, the UJA’s “Generosity” event for Jewish philanthropists in their 20s and 30s has featured donor pledge technology that enables attendees to text their pledges from their cell phones, along with messages honoring the honorees, which are then broadcast on multiple screens around the room.

“Our research has shown that younger people tend to think that we’re their grandparents’ charity,” says Michelle Waranach, director of Emerging Leaders and Philanthropists at the UJA. “This sends the message that we’re cutting edge and technologically savvy.” The text-to-pledge technology has replaced traditional pledge cards, which is an added plus for the environmentally conscious. Of the 600 people who attended Generosity in January, more than one-third contributed via text-to-pledge, in addition to the $180 ticket price. The amounts ranged from $10 to $6,500, and contributed to 40 percent of gross profits, according to the UJA.

The UJA requires attendees to list their cell phone numbers when they sign up for Generosity, which is crucial for tracking and following up on pledges. A major concern with mobile giving is the difficulty of tracking donors and establishing long-term relationships with them. “We see disaster gifts as entry points to the AJWS,” says Silverman. “We’ll send an e-mail thanking donors for coming to us to give to Haiti and share what we did in Haiti — and then, let us tell you all about the rest of our work. You can’t do that with texting.”

“Online giving was the new technology for the tsunami, and clearly texting has become the new technology for this disaster,” Silverman says. Still, it hasn’t taken off for AJWS like it has for the Red Cross. “We don’t have Michelle Obama getting on TV every night telling Americans what number to text.”

Last Update:

02/04/2010 - 14:56

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