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A Step Forward for Political SMS Donations

BY Sarah Lai Stirland | Friday, August 17 2012

Efforts to make text-messaging donations to political campaigns a reality took a significant step forward this week when the Federal Election Commission clarified its view on some of the key questions wireless carriers wanted to clarify before doing business in politics.

Both campaigns and the carriers have been hesitating to roll out donations by text message even though the commission gave the green light in June because the initial opinion had not delineated responsibility for staying compliant with regulations as clearly as the wireless carriers would have liked.

The commission's clarifications, along with a proposal from digital agency Revolution Messaging that it suggests could outline a more efficient method of collecting donations via SMS, could clear the way for these kinds of donations in upcoming months. Revolution Messaging's proposal is awaiting an advisory opinion from the FEC.

On Tuesday, the Commission expressly made clear that it is the responsibility of political campaigns themselves, not the telecommunications carriers, to ensure that donations are compliant with regulations.

Carriers reportedly charge other types of pay-by-text services upwards of 50 percent of each transaction in some cases, and the previous opinion had held that carriers could not give campaigns special treatment. The commission clarified Tuesday that any rate "discounts" that might be obtained by political campaigns would not be considered in-kind donations from the carriers if the discounts are made available for all political campaigns, and not to one campaign exclusively.

The telecom carriers also won a partial victory in that the FEC said that carriers can pick and choose with whom they do business based on "objective business criteria." Through its industry trade association CTIA, they had previously sought the right to refuse the business of any entities that carriers might deem harmful to their brands. The commission's opinion did not include any language that addressed that, and focused instead on the "objective business criteria."

A call to CTIA for comment wasn't returned at the time of this post.

Though it's not clear whether any political campaign will be able to hack together a viable solution in time for this election cycle, at least one campaign has already reserved a short code in preparation for potentially moving ahead with the concept of enabling texting donations. That's the campaign of Rep. Jim Cooper (D-Tenn.), which was one of the petitioners to which the FEC was responding on Tuesday.

"For us, we want to make sure that everyone has plenty of options," said Robin Alberts-Marigza, Cooper’s finance director, in an interview. "Right now, we have a system where corporations and billionaires that can make unlimited anonymous contributions, and we see text messaging as a way to start leveling the playing field with small dollar individual donors."

Alberts-Marigza said that they're not sure when they might move forward with a program, but they've already reserved a short code through mQube, which had filed the petition along with the Congressman and Armour Media, a political advertising firm based in Los Angeles.

Scott Goodstein, founder and CEO of the political messaging firm Revolution Messaging, was tremendously upbeat about the FEC's pair of advisory opinions this week despite other industry professionals' skepticism about the viability of the channel as an efficient method of fundraising. He hopes that his alternative proposal will allow his firm to provide text messaging donation capabilities to both campaigns and political action committees.

"We are excited by yesterday's Federal Election Commission (FEC) opinions that gives us the opportunity to provide mobile giving to our clients in the days ahead," he said.

"We are glad the carriers will be moving these programs forward in the days ahead and that the FEC did not allow them to simply reject political action committees' mobile donation programs under a generic excuse that these programs would hurt their 'branding,'" he told techPresident. "The carriers were not allowed to strengthen their language and prevent PACs based on branding. The carriers know that it's legal to charge less than 40 percent. And have not set price points for these programs yet."

As techPresident has previously explained, under the current regime approved by the FEC in June, donations through texting are limited to $10 a text and no more than $50 a month.

Goodstein is proposing a system that would eliminate these restrictions. He says that his company is able to set up a system that would identify and obtain the permission of cellphone donors to identify and bill them without having to make any changes on the telecom carrier end.

"Let’s be honest, in the days of data integration and APIs, I don’t need to worry about getting any more information off of the carrier," Goodstein said in an interview.

Donors wanting to give money could check off a box on the certification form that says: "Yes, I want text message alerts,” he says.

"They sign a check at a fundraiser, the information gets entered into the NGP database, and there’s a checkbox on there that says, 'yes, I want text message alerts,' and it’s on the same card that has the information about employer occupation, home address, home phone number, and certifying that they’re over 18 years of age, and they're not a foreign entity," he said. "It's all signed off on the offline form, well now I full-well know that they’ve authorized me to send them a text message, and I have all this data … now it’s not an anonymous donation."

As a mobile application provider, Goodstein said that his firm could plug into the customer relationship management systems of all of the major vendors to match phone numbers with the needed donor information. His company also plans to obtain the necessary donor information by asking them to fill out a web form after they initially sign up through texting for text donations. That information will then be kept on file.

An existing mobile workaround in use by the Obama campaign and on offer from Blue State Digital works a similar way. Under that system, a donor who's given once online can give the campaign permission to re-bill by sending a text message or replying to an email.

Industry professionals have been skeptical about the cost effectiveness of text donations for political campaigns, given that some carriers reportedly charge some other types of services upwards of 50 percent of each transaction. Revolution Messaging addresses that point in its filing with the FEC by pointing out that simply obtaining and setting up a dedicated short code can cost between $6,000 to $10,000.

The company proposes to lower those costs by having campaigns share short codes, and assigning key words to each committee sharing the code for record-keeping purposes.

"For instance, a wireless user may text GIVESHOE to 675309 to contribute $10 to the Shoemakers' Union federal PAC and DONATEWHALES to 675309 to contribute $20 to the Save the Whales federal PAC," the company's lawyers explain in its filing.

Goodstein argues that text-messaging is still an attractive option for political campaigns and PACs when supporters want to donate on the spur-of-the-moment at rallies, or if they head into local campaign offices. The point is that by texting the donation, all the record-keeping would be taken care of because the system would be hooked up to the campaign's CRM system, and managers wouldn't have to worry about staffers not recording all the correct information as sometimes might happen with cash donations.

As for the steep cut the carriers want to charge, he says:

"I am still fighting to lower the rates, but I’ve sold a lot of $10 T-shirts in my life to get a $4 endorsement, and the opportunity to sell you more.”