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How mGive Used Texting to Raise $40 Million for Haiti

On Jan. 13 at 4:30 a.m., James Eberhard was awakened by a phone call from the U.S. State Department. A huge earthquake had hit Haiti and the government wanted Eberhard to put together a donation program as fast as possible.

Two hours later, his 25-person mobile software company, mGive,
launched a national campaign that let people donate $10 to a number of
charities via cell phone. All contributors had to do was text the word HAITI to
the number 90999; the pledge would show up on their cell phone bill. Four months later, the campaign has raised more than $40 million, and the money is still coming in.

To date, mGive has powered the majority of the mobile giving
campaigns in the U.S. Just a few years ago, that wouldn't have been
possible. mGive was still an unknown startup in Denver with no nonprofit
clients to speak of and zero leverage with the mobile carriers. The company
wanted the carriers to work with it for free. Not surprisingly, they said "no" —
until they saw the potential of a campaign in action. Below Eberhard explains in
his own words how the company succeeded after a rough start.

 

James Eberhard Founder mGive

mGive Founder James Eberhard

Eberhard:

I first saw text donations in action when I attended a Live Aid event in London in 2005. The campaign raised 2.2 million pounds in six days. It was incredible. I founded mGive later that year because I was convinced that if nonprofits could tap the country's 290 million cell phones for donations, it would revolutionize their organizations. I knew they'd jump on the opportunity.

The only problem was, they didn't jump. No one did. A lot of nonprofits thought the idea was "interesting" but they weren't convinced it would work. Others doubted whether people would really ever want to give money through their cell phones.

BNET:

 

Randy Punley, the United Way's director of corporate and media partnerships, explains that at that time mobile giving simply wasn't proven. Nonprofits didn't really know how to use the technology effectively in a donation campaign. To make it pay off, they would have had to broadcast the text number repeatedly to as many people as possible — a huge and expensive advertising proposition, Punley says. Plus, big nonprofits like the United Way are inundated with new tech ideas all the time. "I get hundreds of pitches from companies each month," he says.

Eberhard:

 

Without a big nonprofit behind us, mobile carriers didn't take our pitch seriously. It didn't help that we wanted them to pass on 100 percent of the charitable donations to nonprofits. (Usually cell phone companies take a percentage of each transaction conducted on their networks.) And until we got a big nonprofit on board, the networks weren't about to change their practices.

We did everything we could to lobby the nonprofit world. We spoke at their conferences. We wrote articles in nonprofit magazines. We booked every meeting we could with nonprofit executives to tout the benefits of mobile giving. For the next two and a half years, I invested upwards of $4 million of my own money to help us survive.

Finally, in late 2007, we sold the United Way on the idea. The NFL agreed to donate a spot during the 2008 Super Bowl to plug the campaign. With those two organizations on board, we finally convinced the wireless carriers to waive their fees.

BNET:

 

Ultimately, the cell phone companies realized that waiving their fees would be a powerful PR story, says David Diggs, a vice president at CTIA, the wireless industry's trade group. Even so, they required a fair amount of convincing to partner with mGive, an outside intermediary company that would be working on behalf of nonprofits, both well-known and unknown.

Verizon Wireless wouldn't participate unless other big-name organizations got involved. The company did not want to put forth the effort and cost to acquire the donation code and to collect pledges unless a large nonprofit put the firepower behind getting the message out and agreed to use the code in future campaigns and branding, says Jeffrey Nelson, Verizon's spokesman. Verizon, along with other carriers, also feared that their customers wouldn't honor their pledges and pay for their donations when their cell phone bill came due — leaving the companies in the lurch. That fear was unwarranted, says Nelson. "More people run away from a ring tone they don't like than from a commitment to a nonprofit," he says.

Eberhard:

 

The United Way promo was on the screen for a couple of seconds. In fact, if you blinked, you missed it. But the campaign raised more than $10,000 — just enough to convince other nonprofits that mobile giving worked.

But the real decisive moment came last year, when singer Alicia Keys promoted her charity Keep a Child Alive on American Idol.

We had outlined the campaign launch procedures in advance: Even though the whole team was scattered in different places that day, we stayed connected via instant messaging and conference calls, and everyone shared screen views of the data and transactions flowing in. I sat in the audience during the show (with my cell phone off — that was the producers' rule). We had a few executives watching from the TV studio and our Denver staff sat ready with laptops open and headsets on.

The response was huge — $450,000 in just three minutes. But when we analyzed our performance after the show, we knew immediately that we were going to need a better network. We couldn't process the donations fast enough. It didn't take down the system or frustrate donors (as far as we know), but we could only handle 2,000 donations per minute. We needed to get up to thousands of donations per second — fast.

To do it, we invested millions of dollars to upgrade our infrastructure and double our processing power. Our technical staff ran all kinds of stress tests to make sure that our software and systems would work as expected.

In a lot of ways, we've had to scale our business on the fly. Without these real-time tests and the years of preparation and relationship building that made them possible, we never would have been ready for the Haiti campaign. In January, there were times when we processed more than $1 million an hour; sometimes even 1,000 text messages every second — that's $10,000 a second.

That's not to say that the campaign was completely flawless. Some people, albeit a small number, had trouble figuring out exactly what to do to make a donation. Our COO Brad Blanken personally returned phone calls placed to the Red Cross from befuddled donors who didn't understand the process. He even talked to one college student who inadvertently received hundreds of text messages and phone calls because her phone number was one digit off the 90999 number for the campaign. Yet even she personally called back people to tell them how to send their dollars to the cause.

We didn't profit from the Haiti campaign. (We waved our fees because it was simply the right thing to do.) But being prepared for that middle of the night call was hugely important to the earthquake victims in Haiti and it validated the future of mobile giving.

We've had hundreds of nonprofits reaching out to us after seeing what we did for the Red Cross. The sheer number of people who donated opened their eyes to the potential of America's 290 million mobile phones: You can put a Salvation Army bucket outside a grocery store and hope to collect some spare change, but what if you put that bucket in front of everybody in the United States?

-As told to Jennifer Alsever

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