Normally in my position I’d advocate the use of text messaging to anyone that contacts us. But there are occasions when I believe it’s not the right tool.
In this case I’m warning charities away from Premium Rate (reversed billed) text messaging to collect donations. For clarity this isn’t about normal every day, free to the recipient messaging.
A changing market
There have been some ground-breaking changes to the premium rate market in the last year in regard to how much of the money charged to a mobile user the network operators will share with the charities.
More revenue
We have seen 100% of the revenue passed to the charities in massive high profile campaigns such as red nose day.
We have also seen increased amounts of revenue passed down to charities if they use specific “charity” short codes. But the use of these codes is currently limited by very expensive setup costs. But let’s not get too excited about additional percentage revenue. Some of the networks still retain nearly 25% of the donation. Don’t forget, this is the donation the consumer made to your charity.
Tighter regulation
Then there’s the regulation, Phonepayplus are tightening up their rules, you ought to be getting prior approval for premium rate services to ensure you comply with the regulations. Even if an SMS supplier will do this for free don’t underestimate the time you’ll spend on this part alone. The last thing you want as a charity is a regulatory fine and being named and shamed on their publicly available list of adjudications. If you want to avoid this then you’d better be involved.
Will it be successful?
So let’s say you paid the setup fees for a specialist charity code to get a higher share of the revenue. Or perhaps even you chose not to pay for the additional revenue and you’re receiving what can be as little as 35% of the donation. Then is it really going to be worth it or are you better diverting your fund raising energies to other areas?
Clearly you need to work on a case by case basis and calculate the likelihood of success, but I can’t help but feel it’s a massive risk.
Please, prove me wrong
I’d love to hear of some really successful campaigns that are not by one of the big national/ international charities, and if you know then send it through and prove me wrong.
But for now, I’m not convinced.
I agree, there don’t seem to be smaller campaigns using billed shortcodes successfully. Though the larger ones must find them invaluable, especially agencies like DEC (Disaster Emergency Committee). Their latest one on shortcode 70707 receives the full £5 for anyone donating to the Pakistan flood appeal up to Jan 2011.
However, If a smaller charity uses standard text as a call to action it can be a lot more cost effective than a postal campaign.
What are your thoughts on charities taking donations by SMS, but making charges to debit/credit card rather than the phone bill?
@Simon that certainly sounds like a better option. At least the charity will get 100% of the donation.