UPDATE - Increasing Your SMS Donation Revenue?

Justin Oberman | June 1, 2006 - 7:10pm | 1 comment | | Email This!

One of the biggest barriers to creating an SMS text messaging based donation drive is that the carriers (who handle the billing) take 50% of the cut. This has prevented a lot of organizations from taking advantage of the extremely useful way of raising money. This, again is mainly because the service was set up for retail purposes. But companies like Mobile Accord (the premier company for handling your SMS donation campaigns) are actively working with organizations and governing bodies in the wireless industry to get the carriers to significantly cut their revenue share on charitable donations. Industry insiders have told me that regulations are being worked on to make it more affordable for these types of organizations to take advantage of the mobile space.

There is also a limit as to how much the carriers will let a group raise via Premium SMS (PSMS) which is currently capped at $10 per donor. This is simply because the usual price for purchasing mobile content over a phone never tops more than $10 and the carriers do not want to get involved with managing the risks involved in collecting large sums of money.

Well, I just read this article that explains how a mobile marketing company in the UK called Incentivated found a way of extending the amount of money people are able to donate to a Cancer charity called Macmillan via text.

Here is the lowdown. I user can donate to the charity by sending the text message "support" to the short code 85222 (this is a UK short code by the way and wont work here in the US). The 3 pound donation will then be added to your next monthly phone bill. All that is pretty standard. Usually this will prompt a text message response thanking you for your donation and providing you with details on how to get more information.

Here, however, is the juicy part. In the returned "thank you" text message is embedded a link to a Macmillan-branded Mobile Internet Gift Aid form (this is called a WAP Push Message). The form simply allows you to confirm whether or not you are a tax payer, thus allowing Macmillan to claim an additional 28% from HM Revenue & Customs.

Update - Dan Weaver from Mobile Accord just filled me in on this: UK charities are entitled to 28% tax reclaim from the Inland Revenue on every £1 donated by UK taxpayers. Unfortunately, charities often miss out on this extra income because it is too expensive to process the paperwork on small donations.

Now, here is the rub. I am not a tax donation expert so I have no idea if this is just some crazy UK tax thing that wont work here in the States or if something similar can be done here. I spoke with the gentlemen at Mobile Accord think that it is a VAT related issue. As one of MobileAccords founders James Eberhard (who has worked with carriers in the UK)explained to me "In the UK, VAT is 18%. I’m not sure where the other 10% comes from but most carriers fees in the UK are 35%-40% which includes VAT. So in this case," Eberhard explains, "carriers may be crediting back for NPO donations."

Anyone have any thoughts?

Nevertheless, this is a first for the charity industry and I hope to see more ideas like it come around.

More on SMS Donation#039s can be read here: TXT4CASH: Fundraising Comes To Your Phone

[via SMSTextNews]

Technorati Tags: cancer, donation, macmillian, mobileaccord, SMS, uk, wap

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