24 January 2010

Text me, tease me: non-profit edition

Was listening to Science Friday on Talk of the Nation this week, whose opening segment was about the surge of interest in text-to-give campaigns we've seen recently.  This, of course, is the result of the Red Cross' campaign for Haiti.

The interest is certainly understandable - $30 million is no laughable result from a simple text campaign.

Unfortunately, news reports of their success is giving non-profits (NPs) a skewed, unrealistic perspective of text-to-give program success.  I've heard rumblings in our office in interest in this medium, and I know other NPs are facing similar circumstances.  However, there are still some practical and philosophical issues that for the immediate future will prevent these from taking off.


Text-to-give campaigns are traditionally expensive; moreover, 100 percent of the transaction does not reach the NP.  To give you a framework, mGive is one vendor that handles this service.  They charge $399 / month for their 'bronze' package, $.35 per transaction and a 3.5 percent 'successful transaction fee.'

So, let's say someone gives you $5 via text message.  Of that amount, SEVEN PERCENT of their gift doesn't reach your non-profit.  While it doesn't seem like much, if your campaign reaches a similar level of success to that of the Red Cross (and all donors give at the $5 level) that would mean $2.11 million of the $30 million you raised would go toward transaction fees.

Granted, mGive is waiving the Red Cross' transaction fees for this campaign; smaller NPs would have a much more difficult time getting the same.

Our approach to donor data

One of the reasons, I believe, the Red Cross has been so successful with this effort is that they've allowed their donor to remain anonymous, if they so choose.  That means the Red Cross receives their transaction information, but cannot see your billing information, name, etc.  

During the show, the single caller brought up a very valid point - most donors would like the option to remain anonymous so the aren't peppered with follow up pieces.

Admittedly, this is the fault of traditional-minded non-profits that run bad campaigns, for whom "concern that they are able to properly steward the donor" is nothing more than a thinly-veiled spin on their desire to capture as much data as possible so they can persist you.

There are three key points here.

  • The first is despite the increasing level of transparency the internet age has brought, people still want to feel some semblance of privacy.

  • The second is non-profits need to do a better job of targeting their donors.  We are notorious for blanket direct appeals (AKA junk mail) that are poorly written and convey a lack of professionalism.  If I give $10 to a NP and they send me $5 worth of direct appeals, how confident can I be in their management of my gift?  If we improve execution of our appeals, I believe this will be a smaller issue.

  • The third is NPs need to reach a level of comfort with anonymity.  Regardless of your feelings as a NP, there will always be someone that simply wants a one-and-done relationship with your NP.  Again, if we improve the targeting, I think this will be a smaller issue.  But let's wake up people.  Be realistic.

So, why has the Red Cross been so successful despite these obstacles?
  1. The immediacy of the gift
  2. The fundraising event was tied to a very specific cause, with a limited time frame
  3. The ability of donors to remain anonymous
  4. The simplicity of the giving process
  5. The fees were waived for each transaction
In a later post, I'll address point number two, because I believe it is absolutely critical in how NPs approach the use of SM for fundraising.

In conclusion, while the Red Cross campaign has been successful, remember this particular case is the exception and not the rule.  There are still some outstanding obstacles - cost and donor data control - the will prevent text-to-give from becoming mainstream in the immediate future.

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