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Text Message Donations Might Become a Viable Option for More Campaigns

BY Sarah Lai Stirland | Friday, September 7 2012

In 2008, campaigns turned to SMS to ask for votes. In 2012, will they ask for money? Photo: Cazimiro / Flickr

Recent action at the Federal Election Commission could make collecting donations via text message a more realistic proposition for campaigns.

The two presidential campaigns are already able to collect donations from clients of several cellphone carriers by having donors send text messages to a given shortcode. But FEC rules seemed to indicate that the carriers would have to charge roughly the same for processing a political donation as they charge for other services they handle by adding the cost to users' cellphone bills. Carriers take 30 to 50 percent of the price of those products, by some estimates.

That's pretty steep when you're talking about campaigns smaller than the presidentials, especially given that donations are limited to $50 per person per month in order to avoid triggering additional disclosure requirements. But the rules are slowly being clarified, and so far, the results indicate that text message donations may become less expensive for other campaigns.

In previous advisory opinions, the commissioners seemed to clarify that carriers must charge at the same rate to all campaigns and don't need to charge campaigns the same rate as, for example, ringtone vendors or senders of horoscopes. But that apparently was not enough for AT&T, which requested additional clarification in mid-August about whether lower charges for campaigns would constitute in-kind donations. The FEC has yet to respond.

From the request for an opinion:

... it is AT&T customers, not AT&T, who are making the voluntary political contributions here. Hence, the model must be constructed to fully an fairly account for the interests of our customers, who reasonably expect that when making a voluntary contribution, most of their contribution is going to the political candidate or committee of their choice.

The idea here is that with something like a ringtone, the customer wants an end product, and isn't concerned with who gets what proportion of the price paid for that product. A donation to a political campaign is a different matter entirely, so it should have a different fee structure.

FEC filings do not say what that structure would be, exactly, or where the price point would fall. But in a filing, signed by AT&T general counsel Wayne Watts, the company explains that campaigns would be charged "substantially less than the rate we charge for access to our text-messaging platform for purely commercial purposes."

All campaigns would be charged based on the same fee structure and rates.

AT&T would charge its fees to the aggregators, intermediaries who in effect front money to each campaign as donations are pledged. In exchange, they get the donations themselves as the donors pay their cellphone bills and the money is released by the carriers. In the process, both carriers and aggregators take fees for their trouble. The fiscal jiujitsu is necessary because there are FEC rules limiting the amount of time between when a donation is pledged and when money reaches the campaign.

Between the size of the fees taken from the donations, the low limit on what donors can give, and the greatly reduced amount of information collected on each donor, online politics pros told techPresident weeks ago, the effort didn't seem worth the return. But another request for advice from the FEC might clear the way to change that.

Earlier this summer, mobile messaging firm Revolution Messaging asked the FEC for guidance on a scheme through which they would collect the additional information about donors that campaigns are required to have for people who give more than a certain amount. Donors could opt in to a text-messaging donation program managed by Revolution Messaging under this setup, through which Revolution would facilitate collecting all the required information for the campaigns it works with. The company's proposal would also have clients share shortcodes, with the content of the message dictating which campaign would receive a donation triggered by text.

Earlier this week, the FEC gave Revolution Messaging the go-ahead.

Revolution Messaging's founder, Scott Goodstein, said that if carriers lower their rates, text message donations could become a seriously viable proposition for a larger number of campaigns.

"This is now no longer as cost inhibitive as it was last week, and it's a faster time to market," he said. "We're still going to have several weeks to go ahead and set that campaign infrastructure up. We're actively in the process of doing it."

Goodstein promised that there were campaigns interested in going ahead with the idea.

"But," he said, "I can't publicly state who they are at this point."