Some Charities Find Text-Pledging Events Can Bring Large Donations

Instead of asking guests to silence their phones, organizers of big fundraising galas this year may prod attendees to whip them out. The reason? So they’ll be able to pledge hundreds—or thousands—of dollars through text messages.

At its annual awards dinner in November, International Medical Corps solicited text gifts with the goal of matching a $25,000 donation from a company it was honoring: Research in Motion, the BlackBerry smartphone maker.

“The $25,000 challenge was met within seven minutes,” says Rebecca Milner, vice president for institutional advancement. The aid group raised $55,000 more that night from guests texting pledges of as much as $5,000 from their cellphones.

In recent years, text donations of $5 to $10 made through cellphones haven’t raised as much money as charities have hoped, so many groups are changing how they ask people to give through text messages. In typical cellphone appeals, carriers place a limit of $30 or less on how much users can charge to their bill. So charities now are asking people to send a text with a pledge amount and charge the gift through their credit or debit card. As a result, some charities have now seen pledges as high as $50,000. (And no, that’s not a rounding error.)

Today a growing number of charities are trying the approach at fundraising events, such as dinners or galas, where gatherings are small but attract a captive—and wealthy—audience.

Small Sums at First

Many nonprofits jumped on the mobile-giving bandwagon in the wake of events like Hurricane Katrina, the Haiti earthquake, and the disasters in Japan. But they soon found out that it takes a while to get the money, and the amount they receive from such drives isn’t much compared with other fundraising efforts.

A recent survey, for example, found that the surge in text giving that nonprofits expected didn’t materialize after the Haiti earthquake two years ago, according to the Pew Internet & American Life Project. Though the Haiti drive took in $43-million, subsequent efforts were less robust. Just two in five donors said they had given by text to relief efforts for the Japanese disasters. More than eight out of 10 haven’t given to Haiti since; only one-third of those who donated to Haiti efforts used a cellphone to donate again.

Blend of Old and New

By seeking pledges on mobile phones, charities have found a more lucrative way to spur giving that is low cost and easy to use. The appeals also offer a neat way to bring a sense of theatricality into what could be another staid affair, mobile-giving experts and fundraisers say.

Here’s how it works: Instead of writing a check at the table, gala attendees can make a pledge by texting a keyword followed by a dollar amount to a shortcode. (For example, “JUSTICE 500” to “27138.”) In many cases, these pledges then show up in real time on a giant screen at the event, along with a thermometer graphic that moves as more people donate. Guests at the event can also see who at their table has donated and how much (but this happens only if the donor opts to type in his or her name along with the pledge).

After pledging by cellphone, donors receive a text message confirming their gifts, thanking them, and alerting them that the charity will call soon for payment information. Since charities don’t get the pledged money through a donor’s cellphone bill, there are no restrictions on the amount.

The follow-up call also serves as a way for the organization to introduce itself to the donor, obtain more information about the donor, or get a loyal contributor to give more. The collection rate has been high, as much as 85 percent to 98 percent, says Doug Plank, chief executive of MobileCause, a company that started its service a year and a half ago. It charges charities about 7.5 percent of the total raised at the event and helps them track down the money pledged.

“We’ve had some great success with it,” Mr. Plank says. “This is a blending of great technology and traditional fundraising.”

The Right Audience

Some groups are fine-tuning their text-pledging efforts to make them work even better.

For example, say experts, fundraising events need to attract the right crowd, such as lawyers and business leaders.

Bet Tzedek Legal Services knew that the 1,300 people who attend its fundraising dinner made a decent living as lawyers. The charity’s vice president for development, David Bubis, asked himself, “Gee, how can I take advantage of hundreds of people in the room when they haven’t given us a dime personally but could conceivably give us something?”

So the Los Angeles group turned to text pledging last year, which produced $22,500 after expenses in just half an hour over dinner.

In the past, the group, which helps low-income clients with legal issues, placed pledge cards and pens at the gala’s tables. “It hasn’t been particularly effective,” Mr. Bubis says.

But since everyone had a smartphone at the event, it was easy for them to make a text pledge. The organization used an 11-minute video about its work to get people to connect emotionally and kept track on screen of how much money was being donated in real time.

What the charity’s leaders suspected was true. “They were prepared to support us,” Mr. Bubis says. “We just needed to provide them with the educational opportunity to expose our cause to them and the opportunity to act on the pitch in a very easy and effective manner.”

At last month’s dinner, Bet Tzedek incorporated a bold tactic to boost giving during its second turn at text pledging by getting a family foundation to agree to pay $2 for every $1 pledged if the attendees raised $50,000 by the end of the night. The matching incentive worked. Text-pledging has “proven itself to be a successful strategy in raising additional funds,” Mr. Bubis says.

Seeking New Donors

Experts also suggest that guests need to be instructed well by the event’s host, repeatedly and in many ways, from how-to messages on the table to graphic images on screens. At the International Medical Corps dinner, for example, the group had staff members walk around the ballroom to answer attendees’ questions about pledging. (Mishaps can occur, says Ms. Milner: “Somebody accidentally put in $5,000 but meant $500. It’s not very common.”)

Before International Medical Corps started seeking text gifts at the dinner two years ago, people filled out cards on the table, writing down their credit-card information themselves. “The text-to-pledge is so simple, and we did the fulfillment ourselves,” Ms. Milner says.

The text-pledging environment is also conducive to identifying new prospects. “Year after year, there’s an entirely new group of people, of potential donors” who attend the galas, says Reed Baker, the founder of Sophist Productions, a New York company that works with charities to put on text-to-pledge fundraisers. Sometimes 50 to 60 percent of attendees are new participants, he says. Since 2007, Mr. Baker’s company has helped raise about $12-million for more than 125 nonprofit clients. In 2011 alone, Sophist raised $4.5-million from 4,453 donors.

The potential for new supporters attracted Equal Justice Works, in Washington, which raised $38,000 in November using text-pledging.

The nonprofit, which provides legal fellowships to recent law-school graduates, was short of its goal of the night, which was $45,000. But it received pledges from 241 people, of which 160 were new donors. At the end of the evening, another donor said he would close the gap.

“I went into the night with some questions about how effective this would be,” says David Simmons, director of development. “I was thrilled with the results.”

Another strategy is delaying gifts from high-level donors until the event to help prime the pump.Ronald McDonald House New York told one of its biggest donors to save the gift she planned to make so she could text the $50,000 pledge at the gala instead. Organizers correctly predicted that gala attendees would be inspired to give after seeing pledges of $10,000, $30,000, and $50,000 on the screen, says Rick Martin, director of development.

“It’s become a very important part of our fundraising,” Mr. Martin says. With mobile pledging, the charity raised $180,000 in 2011, up from $130,000 the previous year.

At the end of those nights, the charity typically picked up 100 new donors, Mr. Martin says. Some have given annually since and others are receiving periodic mailings from the group with invitations to specific events.

“The important part of the gala is to have the right people in the room,” Mr. Martin says. “That’s where we’ve been concentrating. That will reflect on the quality of pledges that go up on the board.”