7 Ways for Nonprofits to Use Mobile Phones to Rake in Cash

Submitted by Brett on Mon, 09/13/2010 - 10:10am

Ben Rigby, CTO & Co-founder, Sparked.com

If you’re like most people working at a nonprofit, you probably had a “Holy Mobile!” moment in January, 2010, when an outpouring of donations followed the devastating Haiti quake. This, you expected.

But what you may not have anticipated was that $41m of these dollars flowed through mobile phones via “premium text messages.” The Red Cross received 4.1 million messages valued at ten dollars each, 95% of which were from first-time donors.

You breathed in... hard. Did you miss mobile? Where did all of these donors come from? Did a fantastic fund-raising opportunity pass you by? How do you jump on the bandwagon?

If any of these thoughts raced through your head last January -- or if any are racing now -- not to worry. Mobile giving is just about five years young. There’s plenty of time to put together a thoughtful mobile fundraising strategy.

Best of all, many of the kinks have been worked out. There’s never been a better time to start a mobile campaign.

How does it work?

As it turns out, The Red Cross used but one of several common methods to generate revenue from mobile phone owners. These methods are:

  1. Text message donations
  2. Text to voice donations
  3. Text message warmers
  4. Mobile Web site donations
  5. App sales
  6. In-app sales
  7. Sponsored apps

1. Text message donations

Using this simple method, your nonprofit advertises the availability of your designated fundraising phone number to potential donors. Donors send a text message to this number indicating that they would like to donate. Voila! Your nonprofit receives a check in the mail 30 to 90 days later.

This is precisely the kind of mobile fundraising campaign run by The Red Cross in support of Haiti. Hundreds of nonprofits around the US -- and around the world -- are running and have run similar campaigns with great success.

There are some gotchas, processing fees, and common frustrations, but overall, setting up and operating a text message donation campaign is a fantastic way to reach donors at the moment of inspiration. Mobile Active, the excellent and definitive source for all things mobile, has an exhaustive writeup covering the details of setting up and operating a text message donation campaign.

The biggest gotcha is that your nonprofit needs to have earned $500k in the past year to qualify. Unfortunately, this puts many many nonprofits out of the running. If this includes you, onwards to option #2!

2. Text to voice donations

This lesser known method avoids the ten dollar maximum donation limit imposed by text message donations (described above). Using this method, you’d similarly promote your designated fundraising phone number. When a potential donor sends a text message to this number, however, your nifty automated system would forward this message directly to your staff, or if you can afford it, to a call center. The staffer or call-center worker would then call that donor back, creating a nice personal touch point -- and collecting a credit card number in the process.

This method was used by the John Edwards campaign with great success directly after an incident in which the candidate was maligned by Anne Coulter. Clearly, this example dates back a bit (2007). I haven’t been able to locate a more recent example, but the technique remains solid.

Online services such as TextMarks.com can get you up and running in about 5 minutes and starting at $19 per month (not including the call center). Vendors such as Mobile Commons and Mobile Accord can set everything up (including the call center) for a significantly higher monthly rate, but accompanied (as you might expect) by a higher level of service.

3. Text message warmers

Here’s a riddle for you. How can you use a mobile phone to fundraise without collecting funds via the mobile phone?

The answer should be reassuring to those of you who like to think holistically about your fundraising strategy: use text messages to keep supporters warm.

By sending just a couple of text messages per month, you can keep potential donors excited about your cause and primed for your big yearly ask. In a campaign run by the Humane Society, supporters who received a text message donated online with an increased response rate of 77%.

4. Mobile Web site donations

If you live in a city populated by smartphone fanatics, it won’t surprise you that the number of people accessing the Web from their phones continues to double year over year. Depending on the configuration of your current website, it may be a relatively simple process to publish a “mobile friendly” version. You can ask for donations using exactly the same system that you ask for money on your web site: via a big red “Donate Now” button. Your donors can then pay using an identical transaction process.

Check out http://www.mofuse.com/ for an easy way to mobilize your existing Web site.

5. App sales

If you’re willing plunge into developing a smartphone application, you can sell it and collect the revenue. Thousands of for-profit enterprises are making billions of dollars selling apps. Nonprofits with compelling narratives and smart creative can do the same. Charge $1.99 for your application. Be sure to convey the fact that the revenue will go towards a great cause.

The top two obstacles to employing this method are:

  1. Both Apple and Google charge a 30% commission in their respective mobile phone application marketplaces.
  2. Development costs for mobile applications are high. A simple app may cost anywhere from $5,000 to $150,000.

While these sound like formidable barriers, they’re not stopping for-profit businesses from raking in cash. If you can deliver a compelling mobile experience -- or even just tell a story convincing enough to galvanize sales -- your nonprofit may be one of the first to capitalize on the app gold rush.

Also note that developing apps is getting ever easier with development frameworks such as PhoneGap.com and Rhomobile.com, as well as publishing tools like MobileCause’s App2Give or Appmakr.com.

6. In-app sales

A close corollary to the method described above is to transact sales from within your mobile phone application. For-profits often use in-app transactions to sell digital goods, such as a new barn for your virtual farm acres or a shiny new sword for your favorite pirate game. Services like Urbanairship.com make cakewalk out of setting up in-app purchases (assuming you already have an app).

7. Sponsored apps

This category is frothy and highly intriguing. Over the past year, a series of for/non-profit partnerships have developed apps that promote businesses in exchange for donations. Causeworld leads the pack with its tight design and plethora of relationships.

The concept is simple: you walk into a participating business (or locate a product from a participating sponsor); you earn personal rewards; and a nonprofit receives a donation (from the sponsor). If you’re one of these sponsored nonprofits, apps like Causeworld can bring you the benefits of mobile fundraising with very little effort.

Other apps in this category are Bliss (for Blackberry), Phospho, and Pet Earth (both for iPhone).

What’s smart about many of these apps is that they combine a low barrier to entry (just walk in a store) with personal rewards and prizes. Even better, for nonprofits, you don’t need to know much about mobile phone technology to take advantage of this revenue stream.

There you have it: 7 ways to use mobile phones to rake in cash for your nonprofit.

I’ll be the first to admit that this article title may suffer from hyperbole. None of these methods is as easy as yard work. They all require a concerted effort, smart folks, and some financial investment. Moreover, its advisable to consider each of these opportunities in the context of your broader strategic plan.

There’s little doubt, however, that over the next several years, mobile devices will continue to overtake personal computers as our primary access points to the Internet (as they have already done in many countries around the world). Now is a great time to start outlining and implementing your mobile strategy.

8. Bonus! Micro-Volunteering

I’ll close with a plug for my organization, The Extraordinaries (www.beextra.org) -- because sometimes the best way to fundraise is simply to save money. We run an online volunteering network that consists of experts (some in mobile fundraising) who are eager to solve your problems for free.

When you post a “challenge” to our network, such as “What’s the best use of mobile technology to fundraise for my nonprofit?” or “Can you set up a mobile Web site for my nonprofit?”, a group of volunteers will work through the problem with you -- arriving at a solution usually in a matter of several days. So if you need help thinking through -- or implementing -- any of these seven mobile phone fundraising tactics, be sure to sign up at The Extraordinaries and post your challenge to the network.

We’ve even got a set of pre-written challenge templates focused on mobile fundraising. I look forward to seeing you there -- or reading about your mobile phone efforts online.

Ben Rigby is the CTO & Co-founder of Sparked.com (by The Extraordinaries) and the author of Author of Mobilizing Generation 2.0, (Wiley Press), The “Mobile Technology” chapter in Internet Management for Nonprofits, (Wiley Press), and Setting up an SMS Campaign from your Desktop (MobileActive.org).