SMS could be the next big channel in fundraising, yet Australia’s networks are doing little to facilitate it. Sean Triner, Nicola Long and Keith Elliott look at how to unlock what potential there may be in SMS fundraising.
Face-to-face was definitely the last ‘big thing’ in fundraising, and while charities need to continue acquiring donors through face-to-face, where can they look for new growth and a fresh market of supporters? It could well be SMS donations, but if it is, what are SMS donations and how well placed is Australia to embrace this channel?
The most straightforward SMS donation campaigns are those advertised around emergencies or at concerts, where a number is advertised and people can SMS this number to make a donation. In the United Kingdom, this is really easy to set up – the charity just applies online for a service such as Vodafone’s ‘Just Text Giving’ program, and the charity also gets 100% of the donation.
Key in the hand of telcos
For Australian charities, there is no such off-the-shelf product. Telstra’s media team didn’t return our call, but Vodafone’s Karina Keisler, General Manager – Corporate Affairs and Public Relations, explained the company’s position on SMS giving.
“We have looked at the [UK Vodafone] program and love the concept,” she explains. “Unfortunately, we are not in a position to manage a project of this scale right now and have made a conscious decision to focus every dollar and internal action to count toward an improved customer experience.
“Our customers tell us a consistently good network experience is of most importance and this is what we are focused on delivering,” she adds. “We remain in conversation with our global peers on this initiative and we are very supportive of the concept in Australia.”
Keisler’s closing sentence leaves the Australian fundraising sector with some optimism.
How can we fundraise through SMS?
These big campaigns abroad have indeed raised money, but they only work for one-offs – like emergencies and concerts. Beyond the ‘big campaigns’, ongoing use of an SMS call-to-action to donate is not sustainable as this tactic rarely covers the cost of getting the number advertised in the first place. It is, after all, acquisition.
SMS donations alone can never scratch the surface of what face-to-face has achieved in Australia, but our British friends – who can take the credit for the explosion in face-to-face nearly 20 years ago – think they have the answer. Many charities there are advertising a premium SMS (PSMS) number, giving people a reason to donate, and then following them up with a regular giving call.
You may be thinking ‘this is not new’ and, indeed, it isn’t. Many campaigning organisations have been using a similar technique to generate leads for years. Ideas like ‘SMS this number to get your free climate change action pack’ have been used and clever online videos aimed at getting prospective donors to give mobile numbers are also around.
Converting generated leads is already proving effective in Australia, so SMS has the potential to become a great source for those campaigns if the right environment can be achieved. An Amnesty International Denmark campaign presented at last year’s International Fundraising Congress in the Netherlands showed the channel’s potential, with a 21% conversion to regular giving of responders to an SMS request.
Many hurdles ahead of SMS?
Jan Chisholm, General Manager of Fundraising at Vision Australia, believes the big hurdle is not quality of fundraisers, donors or agencies – it is getting the Australian telecommunication industry to follow the lead of British counterparts in agreeing to facilitate and pass on 100% of all PSMS donations to charity.
“The regulator doesn’t acknowledge donating by text as legitimate yet,” explains Chisholm. “I can buy a ring tone or sign-up to a chat line by SMS, but I can’t donate to charity without a special exemption – which is not easy or standardised.
“No Australian telecommunications providers yet waive gift processing charges, and the size of the donations is too limited when you do get the chance to do them,” she adds.
Australian telcos also need to work with aggregators so supporters can make a PSMS donation from any network they are subscribed to. That way, if a donor sends a PSMS to a Telstra number from a Vodafone number, the donation will pass through both parties for free.
Another potential barrier to entry is that even with a 15% conversion rate, an organisation will need to be generating 1,100 leads a month to acquire just 2,000 regular givers a year. That’s a lot of leads for many charities. While the conversion rates sound great, fundraising decision makers need to carefully monitor the cost of generating the PSMS leads as well as the cost of the calls.
“Regular giving conversion of PSMS donors needs to be looked at in the same way as any other acquisition – it is not going to make you money straight away and there is an investment needed,” explains Chisholm. “But I want to explore every channel that is convenient to the lifestyle of all potential donors. Text to donate as an acquisition source is a great idea, although the money isn’t made there – it is all in the follow-up.”
Making a financial gift is a great filter or propensity indicator of donors. The difference between someone putting their hand up to say ‘I care’ and someone actually giving a financial gift is huge – the donor is much more likely to become a monthly regular giver than the carer.
Potential in regular giving by SMS
An exciting new development in this space is the approval of regular giving by PSMS in the United Kingdom. The British regulator and local telecommunications companies are allowing regular charitable donations to be billed through a donor’s telephone account.
“This allows people to make an ongoing commitment without having to hand over their credit card details,” explains Chisholm, who is encouraged by the move. “It is all processed via the account holding telco.”
This should allow for shorter conversion calls and fewer errors when writing down details. It does, however, raise some yet-to-be-answered questions on subsequent activity, according to Pareto Phone Chief Executive Officer, Bruce Cotton.
“Of course, the fact that the regular gifts can be made through the bill sounds great, but we don’t know how it will pan out with retention, prompted upgrades and auto upgrades,” he explains. “It will be a while before the Australian regulators and telcos all end up agreeing on a system similar to that in the UK, but I hope Australian charities will ask and push to make it happen instead of waiting for the telecommunications providers to do it.”
Paul De Gregorio of UK-based agency Open Fundraising reckons SMS could be the next big thing. “SMS is breathing life back into channels that were starting to tire,” he says. “SMS is a brilliant tool for fundraisers as we all keep our mobile phones close, so when we are moved to act we can donate in seconds.
“What follows should be good fundraising and retention,” he adds. “Of course we are going to ask for a regular gift, but the really smart charities are starting to bring mobile into their retention activities too.”
So, what can fundraisers do to change the situation? Here’s some ways to take action:
- Lobby both telecommunications companies and regulators – individually and maybe collectively through the Association for Data-driven Marketing and Advertising and the Fundraising Institute Australia.
- Vodafone is a company active in both the United Kingdom and here, and appear to be proud of the service it offers in the UK. Do you know anyone high up there? What do they think? Are they even aware it is a problem?
- A few companies who could benefit are already working behind the scenes, but most of these are from overseas. More Aussie companies and charities need to join the chorus.
- When a board member next tells you they don’t like face-to-face, ask them to contact a telco Chief Executive Officer to express their desire for fee-free PSMS donations to be prioritised in Australia.
SMS technology that goes around Telcos
With so many challenges in replicating the UK model for SMS donations via Telcos, Pareto decided to partner with a local Australian company that specialises in SMS technology, who already work with many big commercial brands. We are now able to offer charities a viable SMS donation function that by-passes Telco’s in the set-up using some clever software. The real benefit of this software lies in its ability to be adapted to suit a charities particular marketing campaign without requiring support from Telco’s or The Telecommunications Regulator. Uses can include campaigns which follow up appeals, generate cash donations via text to call, simple low cost “hand raising/lead generation” campaigns all the way through to complex advocacy campaigns which link supporters with their local politician.
How does this work in detail
A charity can send a broadcast text to all current and lapsed supporters who have a mobile phone number. This broadcast SMS will have a simple key message/call to action that asks the receiver to reply E.G. “Donate now to help researchers find a cure”.
The charity could also incorporate a SMS call to action across all media channels that ask potential supporters to text “Donate now” to a specific number E.G. Billboards, Press, Radio, TV and Events.
Once an existing or new supporter texts “Donate now”, they will then receive an automated text reply from the unique “Donate now” number. This reply will ask the supporter for some further information such as name, email, postcode etc….
A charity also has the ability to follow up Option 1 with an automated phone call. Once an SMS is sent by a supporter; an instant automated call back is triggered. This automated call can be tailored to the requirements of the campaign i.e. it may feature a celebrity, CEO or an advocate delivering a short recorded message followed by several options for the supporter –
a) A survey whereby the supporter can register support based on specific questions using their keypad
b) Leave a short recording of a supporter voicing their support which can then be sent to an MP’s email, based on the supporters postcode
c) A secure automated payment transaction which facilitates the supporter making a donation via their Credit Card using their mobile keypad. Practically all income generated via this means goes direct to the charity less a small percentage fee for processing.
Option (C) can be included in conjunction with either option (A) or (B).
The real benefit of adapting this technology is its low cost of implementation coupled with its ability to generate engaged supporter leads for charities to convert via a Regular Giving phone conversion.
For more information on Vodafone UK’s Just Text Giving program, including how it sends nonprofits free information packs on how to leverage the free service, visit: http://goo.gl/Kjyfn
Sean Triner, Nicola Long and Keith Elliott Sean Triner is the Founder and Nicola Long is the Head of Client Services at Pareto Fundraising. Keith Elliott is Client Development Director at Pareto Phone.
This article was first published in issue 42 of Fundraising & Philanthropy Magazine in February 2013.