Mobile phone charges drain text donations to charities
By Speedway
on
Tuesday, March 29, 2011
with
Mobile-phone companies have been criticised for charging fees to process charitable donations made via text message, an increasingly popular way of giving. Many people who give money using their mobile phones are unaware that some of the cash may end up going to the operators, with smaller charities complaining they can lose as much as 20% of a donation via text message.
Although only a maximum of £10 can be donated via text message, the new form of charitable giving is a fast becoming a substantial income stream for many of the UK's 150,000 charities.
Comic Relief made more than £7m from text message donations last month. All mobile-phone operators waived their fees for the appeal, as they have done for all large one-off pleas such as those launched by the Disasters Emergency Committee and several big name charities. But many charities are not exempt from the charges.
"We appreciate that they have to cover costs, but the perception is that the costs are excessive," said Orin Lewis, head of ACLT, a charity helping people with leukaemia which receives about 15% of its funding through text donations.
As the top 6% of good causes receive 88% of all charitable giving, smaller charities complain the current situation hits them unfairly.
In a sign that the mobile-phone operators are anticipating a backlash from consumers, 02 and Vodafone have scrapped all charges.
"We're seeing a lot more charities use text donations and our customers keep telling us it's an easy and simple way of supporting charitable causes," said Vodafone UK chief executive Guy Laurence.
"It would be great if other mobile-phone companies followed O2 and Vodafone's lead," said Hannah Terrey, head of policy and public affairs at the Charities Aid Foundation. "If they can waive the fees for all charities we think the others could lower their charges, though we are realistic that it costs to transfer money and it's important that mobile phone companies sustain whatever they commit to."
Mobile-phone operator Three currently charges smaller charities 5% commission,which it insists is to cover its costs, while T-Mobile and Orange, which both give 100% to major charitable campaigns, charge 10% for donations above £2 and 20% below. T-Mobile said it was reviewing its charges while Orange stressed it had simplified its fees.
A spokeswoman for Virgin, which charges 11% for donations to smaller charities, said: "Work is under way to ensure all registered charities benefit from the full amount donated to them."
Charity text donation campaigns have been increasing in popularity since 2009 when they were exempted from VAT and network providers agreed to reduce their charges. Previously, as much as 40% of a donation made via a text message could be lost to tax and network handling costs.
Roger Craven, director of Vir2, a company specialising in text giving campaigns, said mobile-phone donations would be a common form of donating in the future: "Around 44% of donations are under £10, so if we can increase the efficiency with which charities process these payments it will have a huge effect on the sector."
Separately, pressure has been mounting on Apple to allow donations via iPhone apps. Apple's guidelines stipulate donations must be collected through a website or in a text message, not via an app. An online petition urging Apple to change its guidelines has attracted almost 40,000 signatures from around the world.
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