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Free text donation scheme catches up in UK

About 184,000 registered charities in UK

4th July, 2011: The UK has to its credit the introduction of first, free text donation service, underscoring strong support for new technology, that facilitates people to donate on the spot
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Médecins Sans Frontières, whose clinic in the Dadaab camp has been helping famine-struck Somali refugees is among some 10,000 registered charities that have signed up to the UK’s free text donation service.

The scheme was started in May by the mobile phone operator Vodafone and the online donation service JustGiving. This permitted UK’s 50 million mobile phone users to give money to charity, free of charge, by text message.

The so-called "third sector" sees fundraising by mobile phone as key to get going, a new era of giving, and – crucially – appealing to young people.

The new scheme comes as charities face, a double whammy of funding cuts and a grip on donations, because of a reduction in householders’ disposable income.

Nearly three-quarters, 72 percent, of charities admitted the cost of setting up the service was a key barrier. There are 184,000 registered charities in the UK.

Vodafone’s chief executive, Guy Laurence, is expected to reveal the details in a conference in Birmingham today, organised by the Institute of Fundraising. He will come out with details such as more than 1,000 charities a week have been joining since the launch – a total of 9,200.

 That figure is further expected to increase as individual fundraisers can now personalise their unique six-digit codes to start receiving donations of up to £10 for their chosen charities. It is also being publicised with a national ad campaign on TV and print.

 As per Laurence the vision was simple and allowed all charities, big or small, to raise money by text donations from all mobile users in the UK. It also included a simple mechanism to collect gift aid.

The scheme has a number of benefits  over cash collection. It appeals to the younger generation of donors, half of which do not donate to charity at all. Hundred  percent of the donation goes to the charity’s bank account and it allows for the collection of gift aid.

Donations go automatically to the selected charity and the money is either added to the donor’s mobile bill or subtracted from their credit balance. The service works with any mobile network. There are no costs for charities and no network charges for donors, so every penny raised goes to charity.

A rival service – BT’s MyDonate scheme, which began in April using online donations but not text messaging – announced last week that it had signed up more than 500 charities. The thinktank ResPublica calculate approximately that text donations could be worth as much as £96m annually by 2014.

On the other hand, substantial set-up costs have beforehand meant that only the very largest charities – through major exercises such as the BBC’s Comic Relief – have been able to use text fundraising.

Despite the growth of online giving, donating by cash remains the most popular method. About 50 percent of donors use cash, yet cash donations tend to be lesser and more uneven than methods such as direct debit.

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