RAY SUAREZ: Next: the Haiti earthquake and a big rise in donations.
“The Chronicle of Philanthropy” reported today that donors have contributed more than $150 million to U.S. relief groups in the first four days. That’s a record.
One new phenomenon playing a role this time: giving by texting.
“NewsHour” correspondent Tom Bearden has our report.
TOM BEARDEN: There’s a big new player in charitable giving: the cell phone. And even first lady Michelle Obama is promoting it.
FIRST LADY MICHELLE OBAMA: But we can all do something. Donate $10 by texting “Haiti” to 90999.
TOM BEARDEN: Using text messaging to raise money for nonprofit organizations is relatively new in this country, but it seems to have taken hold as a quick and easy way to respond to the Haiti disaster. In just six days, over $21 million was raised for the American Red Cross from text messages alone.
TONY AIELLO, cofounder, mGive: It’s been humbling. And it’s been overwhelming, a million-plus Americans responding with a $10 — $10 donations.
TOM BEARDEN: Tony Aiello is the co-founder of Denver-based mGive, the country’s largest mobile fund-raising company. After seeing cellular technologies used for charities in Europe, the founders of mGive began working with organizations here as a way to reach new, younger donors and to spur more spontaneous giving.
Then, last week, just hours after the Haiti quake happened, the U.S. State Department contacted mGive, asking if it would coordinate a text donation campaign for the American Red Cross. Aiello explained how the donation process works.
TONY AIELLO: In this case, it’s text the word “Haiti” to the number 90999. So, “Haiti” is the body of the text message, and 90999 is the number you’re sending it to. The mobile user gets a response message, text message, asking them to reply yes to confirm their donation. Once they do, that triggers a billing event, and their mobile phone bill is tagged with a $10 donation. So, they actually pay that donation to their wireless carrier the next time they pay their bill.
TOM BEARDEN: The cell phone companies then pay that money to mGive, which distributes it to the appropriate charity. Neither the carriers nor mGive receive any portion of the donation — mGive normally charges charities a monthly fee, but it’s waived that for the Haiti campaign.
Other companies providing texting support for Haiti relief efforts include Mobile Commons, Wireless Factory, and the Mobile Giving Foundation, among others. Nonprofit organizations which use the technology say it makes giving extremely easy.
Denver businessman Jon Meredith said he made a donation while walking his dog.
JON MEREDITH: I got a text message that said, please donate $10 to the Haiti relief fund. And all’s I had to do is respond to the text, which I did. And it was very simple. And it took me less than five seconds to do that.
TOM BEARDEN: Lyndsay Taylor said she responded to a message from a friend on Facebook.
LYNDSAY TAYLOR: I like that it was easy to spread, too. A lot of people are texting these days. It’s kind of a new fad that’s catching on and probably will be around for a while.
TOM BEARDEN: Unfortunately, the whole payment process isn’t quite as quick as punching a few buttons on a cell phone. Charities don’t usually receive any money until people pay their cell phone bills. Sometimes, that can be as long as three months.
TONY AIELLO: In this case, we’re facing a disaster of epic proportions. And I think everybody within the mobile giving ecosystem, including the carriers, recognizes the need to get dollars down there as quickly as possible.
TOM BEARDEN: Some of the carriers have said they will now advance the money before the bills are paid. As for questions of accountability, mGive says it only handles reputable charities, which must also be approved by the phone companies that process the transactions. Plus, texting doesn’t involve giving out credit card information.
TONY AIELLO: Think about it. You’re sending the word “Haiti” to 90999. That’s much different than communicating critical financial information over the digital network.
TOM BEARDEN: While the majority of organizations collecting money for Haiti are legitimate, the FBI has warned donors to watch out for bogus online and telemarketing campaigns.
RAY SUAREZ: And for more about this and related issues, we are joined by Stacy Palmer, the editor of “The Chronicle of Philanthropy.”
And, Stacy, there have been natural disasters, there have been humanitarian crises in the age of the cell phone. Why the different response this time?
STACY PALMER, editor, The Chronicle of Philanthropy: One reason is that people are really comfortable doing text messages. And they haven’t been for a while. It’s been popular in Europe, but not so popular here. And the charities have gotten good at doing it. And the cost has gone down. So, the charity is getting a lot more money when you give by cell phone than it used to get.
So, that’s one reason that everybody is expecting texting to take off. And I think one of the things we’re going to see now is that every charity is going to be raising money this way.
RAY SUAREZ: Is there a good ballpark figure on how much has been given by text and what portion that represents of the entire donation so far?
STACY PALMER: It’s still a relatively small amount. So far, we’re seeing that the Red Cross said today they had $21 million. And now we’re up to $200 million that has been donated to Haiti. So, it’s huge in terms of anything we have ever seen before, but it’s still a relatively small percentage of all donations.
RAY SUAREZ: Now, I don’t want to do a wallet biopsy on the people we profiled, but what if they were really capable of giving $25, $50, or might have otherwise given more? Does the ease with which — with which this $10 goes out perhaps pick your own pocket down the road when you’re trying to raise money? A lot of people may feel, hey, I already did my thing for Haiti.
STACY PALMER: That’s exactly the question. All these donations have been small donations, $10 or so. And Haiti is going to need a lot more. So, people are going to be asked to give again. So, hopefully, people will say, I need to give again in other ways. And, so, the charities are going to come back and solicit in lots of different ways and try to encourage people to give.
But it is a downside, that people might think, well, I have already done my part.
RAY SUAREZ: Is there shrinkage on the gift? Just to further what we heard in Tom’s report, does the whole $10 make it to the end recipient and in all cases?
STACY PALMER: It depends on what arrangement the charity has made with the person who is processing the donation. But it usually does take a little bit of money to get the money where it’s intended. So, everybody should expect a little bit of overhead.
But, in the Haiti situation, almost everybody is waiving things. Credit card companies, for example, if you give to certain charities, they’re waiving their fees entirely. So, I think everybody is doing their part to pitch in, in this horrible disaster.
RAY SUAREZ: There’s been a lot of attention paid in the past few days to the charity of the Haitian-born musician Wyclef Jean Yele Haiti. What are the questions? Do his books pass the tests that you use when you’re assessing the works of charities?
STACY PALMER: One of the things that people have been doing is looking very carefully at how he’s done his accounting and how he’s filed some of his tax forms.
And a lot of experts who were interviewed today say that they think that, really, they just were a little bit tardy and they were not necessarily so careful with their books, but no maliciousness, no wrongdoing, none of those kinds of things.
And it’s hard to the get to the bottom of this. But it looks like what happens when a charity is a young charity and not too experienced and hasn’t necessarily done all of the right things. But I don’t think there’s any serious wrongdoing. And, today, he very much said that, defiantly, in a press conference, that there was no wrongdoing. He didn’t personally benefit from the charity, which is one of the charges that was made against him.
RAY SUAREZ: What questions should you ask about a charity when considering where your gift should go? What are some of the metrics that your organization uses to figure out whether a donation is really being used properly or not?
STACY PALMER: One of the most important things to look at is, does the charity have experience working in a place like Haiti? And that’s the most important research thing you can do. Have they already done things? Do they have a track record?
And you can look at things, too. There are plenty of Web sites that say, how much overhead cost does the charity provide? But, really, you want to look at results. What is it that the charity has accomplished? Have they been there before?
This is not a tragedy where people can just come in and parachute in and do good, no matter how experienced they are. They have to have relationships with the community. And that’s probably the most important thing that experienced aid workers say to look at.
RAY SUAREZ: And, quickly, and conversely, what should raise your suspicions? What kind of pitches should you be wary of?
STACY PALMER: Some of those pitches that say 100 percent of your donation goes to charity. Sometimes, that is too good to be true.
And links in e-mail, people you don’t know, go to the Web site, Google it yourself. A lot of people try to do copycat kinds of things. They will play on the name of the charity. So, be very careful about that. Do your research. And if you’re being pressured into giving, don’t give. That’s a sign, again, of a charity that’s not doing the right thing.
RAY SUAREZ: Stacy Palmer, thanks a lot.