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Nonprofits find profits in mobile

Posted by Mort Greenberg on April 14, 2008



By Colin Gibbs
Story posted: April 12, 2008 – 5:59 am EDT

Attendees heard plenty at the recent CTIA Wireless 2008 event about all the sexy things in the mobile space including music, video and, of course, mobile advertising. But the quiet world of wireless donations may be about to make some noise.

Nonprofit agencies have long rejected text-to-donate campaigns as too expensive. Traditional revenue-share models forced them to sacrifice 50% or more of contributions, and nickel-and-dime fees for short codes and other mobile must-haves left them with precious little to show for their efforts.

That’s changing, though, as a handful of wireless players are working to help charities and other nonprofits target potential donors or constituents through their mobile phones —and network operators are helping.

Carrier efforts

U.S. carriers supported a recent television campaign for the United Way that asked viewers to send a message to a short code to donate $5 to the agency’s youth fitness program. The animated spot was broadcast during the Super Bowl and featured the voice of New England Patriots quarterback Tom Brady, and the network operators allowed a 100% pass-through rate on the proceeds — foregoing a taste of the cash.

The effort marked the first time U.S. carriers had waived their fees for a text-donation campaign aside from specific disaster relief efforts.

“I think what you’re starting to see is that the carriers are looking for ways to give back,” said James Eberhard, co-founder and chairman of Denver’s Mobile Accord Inc. “It’s something that’s going to drive usage across networks; it’s going to be exposing mobile services to a big base of people out there.”

Eberhard became a 26-year-old multimillionaire in 2004 after selling 9 Squared Inc., a ringtone provider, to the U.K.’s Monstermob Group for $40 million. (Monstermob has since been swallowed by Zed Group, a Spanish content behemoth.)

“Coming out of the ringtone space, I was looking at, ‘How can I give something back? How can I help out in terms other than the competitive landscape?’” Eberhard said. “It’s something I feel great about every day: working with nonprofits, being able to help them continue the effort to grab and connect to donors in a new way.”

Ad a success

The Mobile Giving Foundation, a Seattle-area nonprofit, brokered the deal that allowed the United Way to keep the lion’s share of revenues from the Super Bowl campaign. The clip was easy to overlook amid the ocean of big-budget Super Bowl ads: it was only 10 seconds long and, unlike many of the other commercials, eschewed special effects in favor of a simple voice-over. But the ad generated enough interest for its backers to call it an unqualified success.

“This wasn’t designed to drive volume, but rather prove the medium,” said Jim Manis, chairman and CEO of the foundation. “It worked splendidly, and the United Way viewed this as phenomenally successful.”

The United Way effort was only the most visible of a growing number of mobile campaigns by nonprofit groups. Mobile Accord has deployed mobile campaigns with partners such as the International Fund for Animal Welfare and ONE: The Campaign to Make Poverty History, and the Nonprofit Federation of the Direct Marketing Association recently partnered with MobileCause to launch a mobile marketing pilot program for several charitable agencies including Food for the Hungry and Big Brothers/Big Sisters of Greater Kansas City.

Power of mobile

Like some other verticals — the music industry, for instance, and traditional news media — nonprofit agencies were slow to leverage the opportunities of the Internet. But charitable groups, which are typically smaller and more nimble than for-profit companies, have been relatively quick to realize the power of mobile, said Mobile Accord co-founder and COO Dan Weaver. And as the United Way agreement shows, carriers are showing some flexibility in adjusting their traditional businesses to accommodate cause-oriented groups — even if it means forgoing some potential revenues.

Nonprofits have been eager to use this,” Weaver said. “They’re actually, despite a finite pool of resources, very savvy marketers, they know how to reach donors and constituents. The only barrier that was in place is that the business models were set up for for-profit types of businesses. Once the framework was put into place to treat nonprofits as a different activity and to understand what it is, it’s really opened up. These groups understand the power of that.”

U.S. carriers supported a recent United Way TV campaign that asked viewers to send a message to a short code to donate $5 to the agency’s youth fitness program. The animated spot featured the voice of New England Patriots quarterback Tom Brady.

Photo credit: SPCHROMEPIX

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