I have been unable to focus today due to the incredibly horrific events in Haiti. It’s so tragic what is happening there. Unfortunately what’s happening with requests for donations is giving me some cause for concern. It turns out that money donated via text message may not get to the Red Cross for 60-120 days.
Until recently the easiest way for the average consumer to donate money to Unicef, the American Red Cross or International Committee of the Red Cross was via their web sites:ICRC web site
American Red Cross web site
Unicef Even more relief donation options are listed here:
http://www.google.com/relief/haitiearthquake
However the Twittersphere is also going crazy retweeting requests for donations using text messaging for payment: “You can text “HAITI” to 90999 to donate $10 to @RedCross relief efforts in #Haiti.” This process is referred to as “premium SMS” billing and uses your wireless carrier’s phone bill to make a purchase. This process is great and is totally legitimate. It’s the same process you may have used to buy a ringtone or game on older cell phones. I am really excited about the prospects for charitable giving and micro-loans via SMS and premium SMS. It’s quick, easy and gratifying. Seeing the line item on your phone bill can even be a great reminder of the good you’ve already done and remind you to do more when you can.
However, I did some checking with my carrier contacts and it appears that mGive, the organization that manages the transactions for these text based donation systems does not fund the transactions until they receive the money from the wireless carrier that is billing you for the money. The wireless carrier generally does not pay premium SMS billings out to partners until after the consumer has paid them. That process can take 60-120 days depending upon when in the billing cycle you make your donation.
This is corroborated via the mGive FAQ on their web site: “The distribution of funds is based on the quarterly carrier payout schedule. Every 90 days the carriers disburse the funds generated from your mobile donation campaign to The mGive Foundation which then passes those funds along to your organization along with a detailed remittance report for each donation campaign you have.” Based on my experience in dealing with premium SMS, which is extensive, mGive is not giving us the real “worst case scenario” which is closer to 120 days. What mGive should be doing is funding at least 50-75% of the donations in real-time in exchange for covering whatever interest they have to pay out of the remaining funds. This should more than cover any bank fees for pre-funding this float. The balance can be funded on collection (minus interest for pre-funding if necessary). In the meantime I encourage people to donate any way the can (via web or via text). But if you can I encourage you to donate via the web site links above as money will get to the source faster than via text message, at least until mGive or someone else fixes this problem. If mGive would like me to help them with this problem, please contact me and I’ll help you as I’m sure that there are many banks who would be willing to help. My prayers go out to all the victims of this tragedy in Haiti. Please donate now to help them.
