Can SMS be the next big fund raising tool?

American novelist Edith Wharton once famously said, "The only way not to think about money is to have a great deal of it." Organisations such the Red Cross Society and the Salvation Army were set up by their founders to bring help during times of great need to the vulnerable and often destitute. Non-profit organisations, otherwise known as non-governmental organizations (NGOs), are able to deliver their services largely as a result of donations made by conscientious members of society, be they private or corporate citizens. Traditionally NGOs have used, and continue to use, direct mailing as a tool to raise funds and to encourage giving.

More recently, NGOs have started using the internet as a platform to raise funds. According to a study carried out in 2006 and published in 2007 by the Target Analysis Group in the USA, "online giving has begun to account for a significant and rapidly growing portion of donations for many non-profits". According to the same study by the Target Analysis Group, of all those who donated via online mediums to the NGOs that were the focus of the study, 56% were new or first time donors. Which seems to strongly point to the fact that the Internet has certainly served as a tool to increase the overall pool of givers.

The SMS phenomenon

The adoption of mobile telephony has certainly been far higher than internet as accessed via PC or laptop, especially in developing markets, which then begs the question: Can the mobile medium, specifically SMS, serve as the next big avenue through which NGOs can raise funds for their causes?

According to Jim Manis, Chairman and CEO of the Mobile Giving Foundation (MGF) the answer is "an emphatic yes". MGF is a US-based wireless application service provider (WASP) that has set itself up as a the custodian of a unique SMS Donation mechanism aimed at leveraging the vast mobile subscriber base in the US market.

Manis explains that "the challenge in most countries around the world", South Africa included, "is that whenever a premium rate (a rate above the standard SMS rate) is charged on a SMS by WASPs, the networks can claw back up to 50% of the price charged to the end-consumer, which means that after all the other costs and fees are accounted for, any NGO running a SMS fund raising campaign would end up with less than 50% of the donation made by the giver".

The role of MGF therefore was to lobby mobile networks in the US market to arrive at a situation where the mobile networks would allow NGOs to receive 100% of the funds raised. "After months of negotiations, in early 2008, our company reached agreement with four mobile networks in the US where these networks agreed to transfer the full 100% of each SMS donated to any of the NGOs registered with us or our affiliate WASPs," says Manis.

Upon registration, the NGO pays an small obligatory set up fee and MGF and the affiliated WASPs receive up to 5% of the total SMS revenue raised from each campaign. This means that the NGOs bank more than 90% of the amount donated by mobile givers. Manis explains that "the benefit for the mobile networks who are signatories to the agreement is that they get to be associated with each of the good causes participating under the MGF umbrella but more importantly the benefit for the NGOs is that SMS", like the Internet before it, "seems to broaden that pool of givers."

Once registered, each NGO would be allocated an SMS short code along with the relevant keyword that the giver would have to SMS to effect their donation.

One of the most recent high profile SMS giving campaigns run under the auspices of MGF was a campaign to raise funds for an NGO know as "Keep a Child Alive", an organisation co-founded by singer Alicia Keys. "Keep a Child Alive" is registered with mGive, one of the WASP affiliates of MGF. In May 2009, Alicia Keys made an appearance on American Idols (one of the biggest TV audience-drawing programmes) where she made an appeal to viewers to simply SMS the word "ALIVE" to a pre-determined short code and each SMS was charged at US$5.00. According to www.mGive.com this call to action resulted in a total of US$450,000 funds raised for "Keep a Child Alive" from more than 90,000 mobile users.

South Africa has its fair share of NGOs making a difference across many different spheres of society ranging from animal welfare to hospices for the terminally ill. No doubt many of these NGOs would welcome an arrangement where they would receive a greater percentage of the funds raised from SMS short code campaigns. While NGOs will never stop thinking about money, finding a way to effectively leverage the 50 million mobile subscribers in South Africa, can go a long way in reducing these money worries for NGOs. To ignore SMS as a fundraising tool therefore, would be like looking the proverbial gift-horse in the mouth.