TXT4CASH: Fundraising Comes to Your Phone

TXT4CASH: Fundraising Comes to Your Phone

BY Justin Oberman | Thursday, March 30 2006

After sitting through several "mobile web" dominated panels at SXSW, where the topic of text messaging and other interesting traits of the mobile medium never came to surface, it was a "Sweet Relief" to meet up with Scott Dudelson. The founder of Music For Charity Productions, the 26-year-old Dudelson was at the Austin music, arts and technology festival promoting an SMS fundraising effort for Sweet Relief, a non-for-profit organization that provides financial aid for artists who are older, unable to work and cannot pay for medical and or other needs. Dudelson was not there for the Interactive part of the SXSW festival, his badge was exclusively for Music. But his text messaging, fundraising and music mashup was right on the cusp of both worlds and was one of the most interesting and practical integration of the mobile medium into different media that I saw at SXSW.

Besides promoting the service during the Music panel discussions and exclusive interviews, Dudelson and his "foot-soldiers" hit the SXSW music scene handing out flyers (pictured above) and chatting up with music fans about the Sweet Relief charity and how to contribute to it from their mobile phones.

Dudelson comes to the geek world of mobile technology with the impressive experience of a self-starter music producer / promoter. With dreams of becoming the next Bill Graham, Scott starting promoting bands such as Air Supply, Foreigner, the Doobie Brothers at a local club and eventually hooked up with LAmusicscene.com and ended up running that with the founder creating various different concert events for independent musicians. With a plethora of contacts from music journalism, PR work and promoting concerts in clubs, Dudelson decided to combine his love for music and altruism to create Music For Charity Productions and help the world one note at a time.

After doing a few Sweet Relief charity concerts with the likes of John Meyer, Carolyn Dawn Johson as well as several other tribute events, Dudelson was already looking for more new and interesting ways to help raise money for charities via his passion for music when his father, a major film producer, encouraged him to attend an iHollywood forum in August 2005. Dudelson was deeply impressed by the world of digital convergences and began the path toward combining his outer rockstar with his inner geek.

Eventually, he found himself at a CTIA Wireless event in San Francisco where, it just so happened, several cellphone carriers were demonstrating Premium SMS (PSMS) technologies by holding live SMS "4CARE" and "2HELP" fundraisers for the victims of Katrina and the Tsunami. Customers of participating carriers could send a text message to the shortcode "2HELP" (24357) containing the keyword "Help" to make a tax deductible donation to the American Red Cross' relief efforts. Donations appeared on customers' monthly bills or were debited from prepaid account balances. The campaign closed in late October 2005.

When Dudelson saw this it immediately clicked. "It was one of the greatest fundraising means I have ever seen," Scott exclaimed. "It was intuitive and just made a whole lot of sense." After a brief study period in which he learned what the Europeans and Australians are doing with SMS, he began talking with Short Code providers here in the United States. A Short Code is a special telephone number, shorter than a full telephone number, that is specifically designed to address SMS and MMS messages from mobile phones.

It was through the Mobile Marketing Association that Dudelson teamed up with Mobile Accord, a mobile marketing solutions provider based out of Denver that specializes in SMS end-to-end billing platforms for non-profits and the political arena in general. "What we wanted to do," says Mobile Accord COO and co-founder Dan Weaver, "is take what is happening in other countries in terms of mobile technology outside of entertainment and bring it to the United States."

Weaver and his partner James Eberhard (the founder of the extremely successful American ring-tone company 9 Squared) saw that right now in the United States the only strong mobile options are entertainment-based applications. What Mobile Accord does is take those models and turn them into practical applications for people or organizations to use. Both Weaver and Eberhard conceptualized Mobile Accord around these principles in order to help nonprofits and political, schools, hospitals, raise funds by harnessing the power of the mobile medium. "The phone is not only a great communications tool," Weaver points out, "it can also be a great transactional vehicle."

The relationship has been nothing but fruitful. "What Mobile Accord is doing," Dudelson points out, "their back-end technology and all that they stand for, is exactly what I envisioned doing when I saw the Katrina SMS relief thing at CTIA... I was very lucky to hook up with them."

An intermediary like Mobile Accord provides instant connectivity to all major US wireless carriers. "We have built and maintain a robust messaging platform that gives organizations access to ready-to-launch applications, meaning that there is no technical engineering required by our clients," Weaver tells me. Otherwise, trying to access the carrier networks directly is extremely expensive both in deal making as well as technical back ends builds. "If one went directly to the carriers," Weaver points out, "they would have to build and maintain their own messaging platform and all of the applications that use the platform." The carriers do not offer the kind of ready-made systems made possible by a company such as Mobile Accord. All the carriers offer, is the pipe which, Weaver reminds me, is not cheap to begin with.

So simply put, intermediaries like Mobile Accord provide solutions that the carriers do not. They provide turnkey access to all the carriers pipes as well as the tools necessary to use those pipes effectively. They also act like a broker between you and the carrier (which is beneficial because of their already established relations) handling such issues as the carrier approval process for each campaign as well as short code registration , billing aggregation and basic reporting tools.

The easiest way to raise money over the mobile phone is by means of Premium SMS (PSMS). About 18 months ago the carriers launched a service that allowed 3rd party vendors to sell mobile services and charge consumers through their phone bill. Essentially this allows you to buy a service via SMS and have it charged to your phone bill. Now, the carriers launched this service mainly to facilitate entertainment-based programming. But the gentlemen over at Mobile Accord and Music for Charity Productions saw an even more powerful tool for PSMS in its ability to get people who are more and more mobile to interact with a cause. Its simple. You don't have to get people to right a check, receive annoying phone calls or sign up on a website. Just have them send a keyword like "PDF" via text message to a short code like, for example, DONATE (366283) and your donation for whatever amount will be on your next phone bill. All that is needed is a call to action and perhaps a mass gathering of people and you got your self a mobile fundraising campaign.

Just look at U2'S "One" campaign. During concerts, Bono told fans to take out their cell phones and text their support for OXFAM to a short code which then got flashed up on a big screen above the stage. Thousands did as Bono told. Now imagine if Bono told his fans to do the same thing only this time he also told them that they would be donating 99 cents or $4.99 to this or that charity. This is Dudelson's dream usage. SXSW Txt for Sweet Relief fundraisers was Dudelson's first mobile campaign, but it's his first of many as he wants to mashup musicians with nonprofits via the mobile medium. "Everyone needs a Short Code," he points out.

It's been a week now since sending the the keyword "Heal" to 50555 has been activated. Sending the keyword to the Short Code gives $4.99 in net proceeds to the Sweet Relief Musicians Fund. The turnout thus far has been pretty modest but it still has a long way to go. The point of this particular campaign (which will also extend into CTIA) is more to bring the musical as well as the wireless space up to speed on the huge benefits this kind of usage the mobile medium can have.

From April 28th till July 28th Music For Charity Productions is throwing Real Tones into the mix. Real Tones, also known as "True Tones," are essentially the industry term for ring-tones that are "original recordings" of songs. By making an SMS donation to the Sweet Relief short code you will receive exclusive Real Tones by artists such as Tegan and Sara, Jars of Clay, Pearl Jam. A new band called OK Go is even releasing a new single as a charity ringtone. All sent directly to your phone via SMS. OK Go also played at SXSW and its lead singer was on a panel called "10 Things You Can Do To Change The World" in which he spoke about the Sweet Relief SMS Campaign. The Sweet Relief campaign will also be hitting up myspace, where they will be streaming some of the Real Tones on the relevant bands' myspace pages.

With his first mobile campaign Dudelson has also come to realize how hard it is to enter the mobile marketing space at the present moment, especially on a charity and nonprofit level. For one thing, maintaining a short code is very expensive with CTIA (the Wireless Governing Body) charging 500 dollars a month for a basic Short Code and an average of $1000 for a vanity Short Code like Google's "GOOGL" (46675).

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. There is also a one to two month waiting period before an organization using PSMS ever sees any of the money it raised. This is, again, because the carriers want to make sure their subscriber pays their bill before they transfer the donated funds.

And while Dudelson was not allowed to tell me how much of a cut the carriers take from the overall contribution, he does point out that the deals with carriers for nonprofit fundraising has to change and become more streamlined to make it more viable. On average the carriers take anywhere from 40-50 percent of the proceeds. This, again is mainly because the service was set up for retail purposes. But companies like Mobile Accord are actively working 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.

Once it's more viable, Dudelson points out, he sees no reason why tens of millions of dollars should not be raised through SMS. "It's one of the easiest and most ubiquitous ways of fundraising I have ever seen," Dudelson points out, "especially in a place where you have a captive audience and a star like Avril Lavigne telling people to take out their phones and text the word "donate" to a short code or having signage all over the place telling people about this new, cool mobile way to support X institution."

And it's not like the carriers lose money on this either. "Lets say the carriers drop their cut to 15 percent," Dudelson tells me. "Why wouldn't a nonprofit or fundraiser want to be involved?" Fundraising by SMS would also get people used to text messaging if they are not already, he notes, adding that the carriers can only make more money by lowering their cut to these types of organizations. "Its a fair balance," Dudelson points out, "everyone makes there money and everyone does good for the world."

Sweet Relief is establishing their mobile brand early during a period in which "cause marketing" in the mobile / SMS space is just beginning to explode. With possible regulations coming into effect that make it more affordable for non-profits and campaigns to enter the arena this is just the beginning. Combine a mass gathering of people, a celebrity and fundraising and there may just be a real golden opportunity hidden in the relationship between music, politics and technology that can be unlocked via the mobile medium.

Civic Hall
Personal Democracy Media presents Civic Hall, a one-of-a-kind community center for the world’s civic innovators. Located in the heart of New York City, Civic Hall is your home for civic tech.


Sign up for email updates from Personal Democracy Media and Civic Hall.