The inconvenient truth about mobile giving

Mobile technology has opened up opportunities in the nonprofit sector, from data collection to busting the global problem of human trafficking. But as with any technological innovations, caveats apply. And this extends to the use of mobile phones for charity fundraising. Numerous apps provide organizations opportunities to raise money, but they don’t appear to be translating to significant funds for nonprofits. Take, for example, this statistic from Blackbaud, a tech solutions provider for the nonprofit sector: Of the $14.5 billion raised by 3,983 charities in the United States in 2015, only 7.1 percent came from online giving — and only 14 percent of that was made through mobile, according to the company’s latest charitable giving report. If people are truly living through their smartphones — using them for fitness, entertainment and work — then what could be preventing them from using the same device to give to charities? Jonathan Ben-Dor, CEO of new mobile application PocketCause, cited two main reasons: security woes and inconvenience. Public polls in the U.S. and U.K. identified factors that would deter people from engaging in mobile commerce — shedding light on mobile giving behavior as well, Ben-Dor explained. Two factors emerged: security concerns and ease of transaction. People can feel paranoid sharing information online for fear of identity theft or even spying, which appears to have become more rampant in today’s digital age. But they can also easily lose interest in filling out long forms in a device not conducive for such activity. This, Ben-Dor said, has an impact on the world of e-commerce, but more so on the nonprofit sector, which relies on immediate outpouring of emotions. He said people who receive emails about discounts from stores like Amazon, for example, tend to remember the message hours later and make a purchase through their computers. “[But] when it comes to the nonprofit world, it isn't like that,” he explained. “We get an emotional appeal generally through email and social media, and that's overwhelmingly something that we're going to get on our cellphones, and we either react right now or we don't react.” The executive, who has sat on the board of numerous nonprofits, argued donors are unlikely to open the same email received on mobile in another platform, like their personal computer, to complete a donation transaction “hours later.” Only 1 to 2 percent of those who read a donation appeal on their email via a mobile device are likely to reopen it on another platform and follow through, he said. “So my opinion is it's a real killer,” he said. “And I don't think we fully appreciate how much we're losing as a result of the fact that nonprofit technology hasn't kept up with the way that people increasingly are communicating and expecting to have an ease of payment.” Most fundraising tools that nonprofits adopt today — emails and social media platforms such as Facebook and Twitter — are not exactly created for that function, Ben-Dor said adding that nonprofits have little capacity when it comes to adopting and adapting new technology, especially when compared with their for-profit counterparts. Nonprofits in fact have forgotten an integral part of their fundraising efforts when using mobile apps: donor engagement. There’s no shortage of applications incorporating charity fundraising. But apps that provide donors with updates on where their donations went as well as a constant flow of information about a charity’s work are lacking. Most of the time, the information available in apps are sparse, and users wishing to know more about a cause or organization are left to click through to the charity’s website. When creating an app, Ben-Dor said nonprofits must not only think about what benefits the organization, but also accommodate the donors. “I've worked with nonprofits who said ‘OK, the solution to mobile giving is we'll build our own app and ask all of our supporters to download our app and they'll make a gift to us through that app.’ And then I asked them, ‘Why would your supporters want an app that basically allows them just to connect to one organization?’” he said. Ben-Dor’s organization developed PocketCause partly in response to these weaknesses, as he referred to it in the nonprofit industry. The app works as a social network like Facebook or Twitter. It has a feed that can be populated by a user’s supported charities. For newbies, the app scans the causes and pages one has liked on Facebook. The users can then get updates on these causes. Unlike Facebook, PocketCause only pulls nonprofit content, ensuring that users get updates from their favorite charities and causes — nonprofits get the exposure they need, without needing to pay for advertising space. It also features share and donate buttons that are integrated with each customized charity page, which makes it easier for users to donate within the app. Users only need to save their payment options once (ie, credit card or PayPal), frequency of donation, and amount. Users get extra incentives: When content they shared moves another user to donate to that cause — the app uses tracking code for this — they get 1 percent of the value of that person’s donation in the form of a virtual currency called CauseCash, which they can gift to their own chosen causes or to a friend looking to donate to his or her favorite charity. “We need to be aware not just of the potential of digital giving, but even more importantly we need to understand how mobile isn't the future, how mobile is the present and how we need to catch up to make sure that we don't lose so much in lost donations.” --— PocketCause CEO Jonathan Ben-Dor The app is currently populated with over 2 million charities, most of it come from the U.S., U.K., Canada and Israel, where the app has set up partner national foundations that help process the payments and where donors can get full tax deductions. Charities from these countries need only go to the app’s website, register and wait for approval. Those outside meanwhile can still participate although it will take a little longer process, and the team needs to verify your nonprofit status in-country. Like other fundraising apps, PocketCause also takes out a small percentage of transaction free, and additional fee is taken out of a user’s payment option, which is dependent on country of residence. Ben-Dor said charities get about 96 percent of the donation minus these transaction fees, which he argued is better than nonprofits losing donations entirely. “From a nonprofit’s perspective, any dollar taken off the top is a dollar that they can't spend on their activities. But our perspective is very different. It's the fact that most people who get asked to give through a mobile device, which is the majority of people these days, it's not that they're giving 100 percent of a donation and we're losing 4 percent. It's they're not giving at all. We're losing 100 percent of their donations,” he said. The jury is still out on whether the social networking app for the nonprofit sector will get buy-in from both charities and their potential donors. Devex Professional Membership means access to the latest buzz, innovations, and lifestyle tips for development, health, sustainability and humanitarian professionals like you. Our mission is to do more good for more people. If you think the right information can make a difference, we invite you to join us by making a small investment in Professional Membership. *Correction, March 2, 2016: This story has been updated to clarify that the PocketCause app is populated by over 2 million charities and not 200 million as earlier indicated.