donation by text message

In the wake of the Haiti tragedy, a number of organizations have set up earthquake relief funds that have encouraged donations of $5 or $10 by text message.  The American Red Cross campaign has been the most publicized of these, having surpassed $20 million in SMS donations from the U.S. in the first five days (here are the current totals, broken down by state).  Other organizations accepting donations include Yele Haiti, the Clinton Foundation, the International Rescue Fund, and the International Medical Corps (details on how to donate to each here).

If you plan to donate $30 or less to the Haiti efforts, is SMS a good way to do so (mobile donors are allowed to donate more than once, up to $30 per campaign depending on your mobile carrier)?  The answer seems to be a qualified yes — it’s not a bad way to donate, at least if you’re donating to the Red Cross, and if you’re intent on donating to Haiti specifically.  Other organizations are more questionable as to their effectiveness (especially Yele Haiti), and earmarking funds (for Haiti or any disaster zone) is also possibly not the best idea.

There are various factors at play here.  First, how much of your money is going to the organization you’re donating to? MGive, the mobile donation company which is running all the big campaigns, normally charges non-profit organizations a fee for each successful donation — somewhere around $0.32 + 3.5 % of the donation.  So that’s a big chunk of your donation that is going to MGive, although they claim (possibly quite reasonably, but I can’t find data) that this is less than companies normally pay in dealing with other methods of collecting donations.  In the case of donations to the Red Cross for the Haiti disaster, MGive is waiving all processing fees and 100% of the donations go to the Red Cross.  (Of course, the Red Cross may not be optimally efficient in its use of those funds; evaluating organization efficiency is, I’m afraid, a post for another day.  For now I’ll just say that in a disaster, they’re probably still a good place to be giving money.)

Another concern, raised by The Consumerist, is that text donations take a while to get to their intended recipient, and may therefore not be the best idea when the need is urgent.  Because wireless carriers don’t pay MGive until customers have paid their bills, there is a delay in payment to the non-profits of up to three months:

The distribution of funds is based on the quarterly carrier payout schedule. Every 90 days the carriers disburse the funds generated from your mobile donation campaign to The mGive Foundation which then passes those funds along to your organization along with a detailed remittance report for each donation campaign you have.

However, in the case of the Red Cross’s Haiti relief fund,  some of the wireless carriers are trying to speed that process up.  Verizon Wireless just opted to advance the Red Cross $2.8 million on January 15 (approximately the amount donated by its customers at that point, as near as I can tell), and other carriers are apparently considering following their lead.  Therefore, it looks like there might not be much delay in getting funding to Red Cross, depending on your carrier.  In general, though, delays tend to be 60-90 days.

(Edit: Maria Tchijov of Change.org contacted me to inform me that Sprint has followed Verizon in advancing money to the Red Cross, which is great.  Someone at Change.org is leading a petition to get AT&T and T-Mobile to follow suit.  They asked me to promote their petition, which is somewhat ironic given our previous coverage on how ineffective petitions generally are.  But while I’m skeptical of the efficacy, feel free to check out their link if you want to find out more and/or sign — I don’t think it’ll do any harm, either.   I suspect AT&T and T-Mobile will probably try to follow their competitors in any case to avoid looking bad, but we’ll see.)

One nice thing about SMS donation is the lack of unwanted snail mail forever following you and asking for more money — both from the organization you donated to, and from whoever they sell your address to.  This is a big deal for me; I’ve been irritatedly trying to cut down on unwanted non-profit mail for a long time, especially since I think many of the organizations have more than spent my modest donations to them just sending me more pleas for money (and I end up with way more dead trees to deal with than I’d like).  On the other hand, spam to my cell phone would be bad as well.  I’ve never been spammed after a text donation — though I’ve only donated by SMS a couple times. I can’t quite tell, but MGive’s FAQ makes it look as if receiving any follow-up texts from someone you donate to is an opt-in process only.  That’s certainly how it should work.

SMS donations are on the rise.  The Haiti relief effort has generated far more money via SMS donations than any previous efforts — compare $20 million to the Red Cross as of January 17, vs. a total of $400,000 during Katrina. That’s also about one-fifth of the total $103 million that the Red Cross has raised so far.  One question is whether people are donating via SMS instead of other means, or whether these donations are coming primarily from people who would not have otherwise donated (or from people who are also donating via other means).  I have no firm data on this question.  But MGive says of the general demographics of SMS donors,  “Typically, commercial mobile participation rates are highest among younger, urban & minority populations (though that curve is flattening),” and they point out that these are not the typical non-profit donors.  Additionally, the Red Cross points out that they reach a wider audience by not requiring supporters to either pay by check or have computer access.  Additionally, the text campaigns can easily raise awareness on Twitter, Facebook, and other social media (in a far more useful way than the recent alleged breast cancer awareness bra meme on Facebook, if I may be permitted to snark for a minute), and probably encourage wider audiences to donate that way, as well.

So what about donating to organizations other than the Red Cross?  There will be higher fees (for the non-profits) and more delays involved in getting your money where it is supposed to go — that may be fine for non-disaster efforts, but is something to keep in mind right now particularly.  Additionally, there is some controversy about the Yele Haiti fund — Wyclef Jean’s organization to improve life in Haiti through a number of means.  The Smoking Gun and Gawker reported evidence that the organization is generally shady in terms of strange expenses and missing tax returns.  And then a “source familiar with the foundation’s operations” told Gawker that the organization is not set up to handle the size or immediacy of a disaster relief effort.   Countering that, the president of Yele Haiti says that

the organization’s relationships and knowledge of Porte-au-Prince make it better suited, in some cases, to get relief into the neighborhoods than larger organizations. And … the established charities that have sought out Yele Haiti for collaboration—including the World Food Program and Americares—wouldn’t have done so if it couldn’t actually get the job done.

So, in summary, proceed with caution if you’re considering a donation to Yele Haiti.  Your money may be best used by another organization, no matter how well-intentioned Yele is — and with all the attention and promotion the organization is getting, they probably don’t need help as much as other organizations.

Should one make a donation earmarked specifically for Haiti?  Felix Salmon of Reuters argues that it’s not a good idea (donating to non-profits who are helping in Haiti is a good idea, but specifying that funds should go to Haiti is not), in part because having insufficient funds is not the bottleneck in Haiti at the moment.  And the blog Good Intentions Are Not Enough (which appears awesome and which I intend to follow from now on) gives a list of DOs and DON’Ts for disaster donations which includes the tip DON’T earmark funds (and also DO consider holding off on some donations until later in the rebuilding process). If you trust an organization, then trust it to allocate funds where they’re most needed — which requires donating via other methods than text message.

That’s it from me for now — except to say that if you do decide to donate via text message, don’t forget to get your tax receipt!