April 1, 2010 Kate Rogers
The year was 1999 and email was on the brink of becoming a mainstream fundraising tool, embraced by the masses as a way to connect and give to charity. Major charitable organizations had email lists of fewer than 5,000 addresses, as compared to now, with several organizations having email files of more than 5 million records. Today, mobile giving stands where email was 10 years ago, gaining momentum in the wake of Haiti’s earthquake. But, it’s also showing some vulnerability via a lack of response to the earthquake in Chile.
According to a national survey of U.S. charitable donors, mobile giving amongst younger generations is quickly growing. An estimated 6.5 million people used cell phones to donate in the days following the Haiti earthquake, raising more than $50 million. The research, released last month by Austin, Texas-based Convio, Edge Research in Arlington, Va., and Sea Change Strategies in Tacoma Park, Md., was based on a national survey conducted one week after the earthquake and during times of intense fundraising efforts for emergency relief. The respondents were from a national online survey of 1,526 donors, drawn from a sample of 2 million households controlled to be U.S. Census representative and screened to be current charitable donors.
Before Haiti, less than $1 million had been raised through mobile fundraising for a single event, according to Vinay Bhagat, founder and CEO of Convio. That might be changing permanently, as public awareness of mobile giving continues to expand. Nonprofits currently engaging in mobile campaigns have lists of such donors no greater than 2,500, he said. “Mobile will need to evolve holistically to support things like making credit card donations through short message service (SMS), or having mobile-optimized Web sites,” Bhagat said. “This media response allows more episodic donors to join the mix, and marketers have to figure out how to convert them into sustainable donors and spur their interest in future events.”
Jill Ward, senior marketing manager at Convio, said mobile fundraising is becoming more innovative due to the levels of engagement seen in the aftermath of Haiti. “Haiti really is the tipping point with this,” Ward said. “Mobile is a viable and effective channel because of its convenience and immediacy, and perhaps because its reaching donors that you might not have been able to reach otherwise.”
The research found 77 percent of respondents were aware of the Haiti text-to-donate efforts, and 17 percent of Generation Y respondents, 14 percent of Generation X respondents, and 3 percent of Boomer and mature respondents made a donation to Haiti via text message. The research also found:
28 percent of respondents with mobile Facebook texted a gift to Haiti; 36 percent of all respondents were willing to donate via text; and, 31 percent were willing to donate via text message if a friend was raising money.
Peer-to-peer marketing will become a main fundraising avenue, Bhagat said, because the public tends to place more trust in peers and the actions they take. This type of marketing will be fundamental in the future, he said, because while text messages are certainly attention grabbing, they can also be invasive. “We have to figure out how appropriate each solicitation channel is, if the donor has a pre-existing relationship with the charity,” Bhagat said. “The most appropriate is receiving information through a friend. It’s a way to passively market yourself to a small universe of people you might not be reaching. People trust their friends and family more than any brand.”
The growing popularity of mobile fundraising will also force nonprofit marketers to re-evaluate stayed tactics, many of which target the mature age group and rely heavily on more traditional direct marketing, he said. Bhagat predicted that within the next five years online marketing in all forms will account for 40 to 50 percent of donor solicitation and communication, as the matures cohort shrinks. Today, online marketing accounts for nearly 10 percent of communication, Bhagat said. Charities will need to concentrate on creating smart phone-optimized donation forms and Web sites to remain competitive in the future.
“Boomers are clearly multi-channel in behavior,” Bhagat said, “and Gen X shifts the mix even further. Hopefully nonprofits are realizing the problems of (using for younger donors) the marketing model for seniors. It has to be less mail-centric and it needs to be highly integrated.” Current marketing tactics are siloed and little emphasis is placed on moving direct mail donors to the Web, he said. Charitable organizations will also need to adapt their donor data systems to support multi-channel marketing as social media and mobile fundraising continue to grow in popularity.
John Butler, Jr., director of marketing for the African Wildlife Foundation in Washington, D.C., said the research proves younger generations are often overlooked, even though they are the future of fundraising and need to be cultivated. Means of communication should be adapted accordingly to reach out to Gen X and Y to create a lasting relationship, he said. The foundation does not currently use mobile fundraising, but is considering mobile optimization for its Web site. “Younger people, many of them, don’t even know what direct mail is,” Butler said, “especially in a nonprofit environment. The immediacy of mobile fundraising is its crown jewel — it’s timely. With direct mail, it might take weeks for someone to open and act on that piece.”
The Brooklyn Public Library launched its first mobile campaign last month as a part of its Support Our Shelves initiative, with a goal of raising $500,000 by May 31. To appeal to new donors, Jason Carey, director of marketing and communications for the library, said a multi-channel approach was taken. “We wanted a way to get people involved and make donations that wouldn’t break the bank,” Carey said. “The more we can get first-time donors involved, the better we will be in cultivating them into long-term supporters.”
Using text messaging and email marketing has been cost saving for the library and more efficient as far as tracking return on investment as opposed to direct mail, he said. For Boomers and younger generations, according to the report, the Internet surpassed mail as a core fundraising channel.
“The data presented not only shows the growing acceptance of mobile charity appeals, but also provides some interesting statistics on the contrasting habits of different generations,” said Pam Loeb, principal at Edge Research. “Mobile technology presents a huge opportunity for nonprofits that want to reach specific groups of people — likely to be younger — and provide them with information in a convenient and immediate format.” David Glass, director of online marketing at the Washington, D.C.-based World Wildlife Fund, said the research proved relationships with donors must be initiated and developed from the time they are young, so they hopefully will continue to grow with an organization. The charity uses mobile fundraising and also allows supporters to sign up to receive text message alerts from the foundation.
“We have to look at a much longer-term life cycle with any fundraising efforts,” Glass said. “For current donors, we need to think about a multi-channel approach. What are we doing to create a relationship with someone who is in their 20s, so that when they have greater means, he or she can become more involved?” Of all respondents, 3 percent said they received a text message from their top charities this year, and of that group, 71 percent said they feel text messaging is an important way to stay in touch with the charities they care about. Respondents were most likely to use mobile donations in catastrophic events, during peer-to-peer events, during charity gala events and during sporting events.
“We are living in this multi-channel world,” Ward said. “The more nonprofits can provide constant fundraising options, whether its through email, mobile technology or social media, the more effective these organizations will be.”