Mobile Giving: The Next Revolution

The next revolution in fundraising will not be transformational. It will be transactional. And it’s arriving sooner that you think.

Last week, I paid a 65-year-old cab driver and, as usual, handed him my credit card. What happened next was unusual. The cabbie swiped my card though a Square payment device attached to his iPad, texted the receipt to my cell phone and updated the payment instantly in the taxi co-op’s financial systems. The entire transaction lasted about 10 seconds.

This took place not in Midtown Manhattan, but in America’s heartland — Madison, Wis.

The ease of making transactions with mobile devices in the service and retail sectors will soon become commonplace in our arena, the philanthropic sector. As a result, the last major hurdles facing fundraisers wanting to raise small dollar amounts from thousands of donors — return on investment and the cost of transactions — will be shattered.

And fundraising will never be the same. Imagine:

  • A 15-year-old girl who jumps rope for five hours to raise money for the American Heart Association no longer needs to cajole her friends’ parents for their donation checks. She attaches her Square card reader to the audio jack of her iPhone and — instantly — the donations are registered at the association’s headquarters in Dallas and receipts are sent to the donors electronically.
  • A development officer with an international NGO plays a round of golf with a corporate executive interested in helping bring clean water to a poor community in Tanzania. Over lunch in the clubhouse, the executive agrees to a five-year commitment of $50,000 and hands his golf partner a credit card. Barely 20 seconds later, the first $10,000 donation is recorded on a handheld device, and dates are set for the remaining four payments.
  • A Red Cross volunteer working the aisles during intermission at a benefit rock concert meets an individual who has Square Register, an app on his mobile device. In the time it takes to type “Red Cross” and a few other key pieces of information, the charity receives a one-time $100 donation.

The financial burdens all nonprofits face — overhead and fundraising costs — could soon diminish significantly. Rather than spending 25 cents to 50 cents or more to raise one dollar, many charities, especially those engaging volunteers effectively, will spend 3 cents to 5 cents.

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  • z2systems

    Thanks for the article Atul. The face of mobile payment technology certainly is moving fast and as an industry leading nonprofit cloud CRM (NeonCRM) we hear people asking about Square, Rome and the like often and increasingly more. Surely many a well-seasoned fundraiser have gone from seeing their card swiped to thinking how it can be used for onsite fundraising, right?

    There are a few issues though that I find crucial to point out when applying this technology to fundraising. Some of the big hurdles reside in government agencies with acronyms we know well and others have to do with the limitations of great technology being able to bridge the gap into the nonprofit world.

    One of the major parts is that a donor’s info is not captured during the transaction and the receipt automatically sent will not be a valid format acceptable with the IRS. This is one of the huge limits to these mobile payment readers in relation to them being effective in the nonprofit world. We just want to be cautious so as not to falsely lead nonprofits to swiping donations through Square, Rome and the like without capturing the necessary donor information. So, the girl jumping rope that receives a $300 donation will still need to capture that donor’s info, right?

    In the instance of your eye-opening taxi ride, all that was recorded was the $$ amount and transaction date, really. If you had Square Wallet, they could have captured your name, but that is not an established method for the industry yet. The receipt was sent via email, but in no real sense did it connect YOU, Atul Tandon, to that purchase. In reality, the money for the service is all that the Taxi Co really cares about (like many retailers). But in the world of Fundraising (and even effective retail), it is so vital to capture name, address, city, state, email, etc. so you can turn that hard earned donor/customer into a repeat contributor. Without this information, there is not an easy way for the nonprofit to follow up, re-solicit, and more importantly begin the stewardship process of creating a relationship so vital to establishing ongoing contributions from such individuals. We all know the energy and money spent getting someone to donate becomes a better return on investment if we can re-engage that donor again — monthly with updates, annually with campaign solicitations, etc.

    For the time being, FCC/FTC Laws restrict these devices from capturing too much information so there is no way to re-engage the purchaser or donor effectively and the nonprofit will not be sure whether they are dealing with a major donor or simply a neighborhood friend of the jump roper’s.

    But, your story certainly does shed light on what might be possible in the future, and companies like ours are keeping a close eye on how one day we hope to have sufficient information about the donor securely fed into a CRM database like NeonCRM so organizations can more effectively understand how these donations relate to donor and donor relations. It is our hope that companies like Square can devise a way to capture more information at Point of Donation/Sale and look into better ways of pushing information securely to CRM databases that handle donations, membership dues, event registrations, store purchases and more.

    It is a fast-evolving world, and consumers who see devices like Square in use more and more will soon expect nonprofits to take payments/donations/dues as quickly and easily as Badger Taxi Cab Co. We just have to hope that the FCC, FTC, IRS and companies like Square realize the potential of these devices as well in the world of Fundraising. That will be up to all of us to make sure this is understood on Capitol Hill and in Palo Alto.

    Here is a link concerning info captured and more on Square Reporting:

  • barry Dennis

    Giving, buying, donating, subscribing, all require a stimulus to get started. Perhaps the ease of Mobile will stimulate giving, but I doubt it, without some motivational factor, which doesn’t include an unwanted mass marketing call. The "pie" is still the same size relatively speaking, and changing the venues for donating probably won’t increase the size of the pie. Like facebbook and Twitter and a thousand venues still to come, Mobile will get it’s "share" of face time, of engagement, but to assume that Mobiule will create a new venue that takes the entire share, or even a significant portion, away from others would, in my opinion, be a mistake.

  • MBr

    Square has simply adapted the current POS model to mobile. Still passing personal and financial information to an aggregator. What if a mobile transaction could be made without having to show your financial information and simultaneously make a donation to your favorite cause?

  • Brian Tucker

    Totally agree that mobile is becoming a true game changer in fundraising! The key to getting "big dollars" via mobile is most likely going to happen as mobile wallet technology becomes more widely adopted. Once an style "one click" donation is available we’ll probably see a large jump in giving as it solves the issue of getting donor information as well as money changing hands. In the meantime, nonprofits still need to work on developing mobile and tablet optimized websites with true responsive design. Are you listening Blackbaud?!?