Carriers Delay Paying Japan's Texting Donations

Julie188 writes "As the fallout from the Japanese earthquake/tsunami/nuclear meltdown tragedy continues to unfold, Americans want to help. We learned from the Haiti disaster that the easiest thing to do is to text a donation to our favorite relief organization. But, unlike Haiti, Japan's text-to-give donations will take as long as three months to get to the relief agency. And the company handling these donations, mGive.com, has not waived the transaction fees it charges relief agencies."

Comments

Surprised?

[Nimloth]

And the company handling these donations, mGive.com, has not waived the transaction fees it charges relief agencies.

These companies profit from situations like this. This is their business case. What did you expect?

Re:Surprised?

[ProppaT]

This is one of the reasons all the news outlets told people to wait until the smoke settled to donate to the relief effort. Profiteers sit around waiting for these types of disasters. Even if this isn't necessarily profiteer related, you should always know where your money is going when you donate and you never will with these "txt xxxxx to donate $10" numbers, unless they're spearheaded by someone like the Red Cross or another charity that has a plan outlined.

Re:Surprised?

[Intron]

There are three parties involved here:

charity like RedCross, etc - have not requested expedited funds according to mGive.

mGive - is just the conduit from the wireless company to the charity. They are non-profit but supported by a transaction fee. Its unlikely they have enough cash sitting around to give expedited payments.

Wireless company - Verizon, etc. They don't send the payment to mGive until you pay your wireless bill. Otherwise they are making a loan to the charity with no collateral. They DO have the cash, tho.

With the money having to take 3 steps to get from you to the charity, 30-90 days is still quick.

Re:Surprised?

[characterZer0]

With the money having to take 3 steps to get from you to the charity, 30-90 days is still quick.

90 days was quick in the days of the Pony Express.

In the days of 500ms ping times around the world, 90 days in incredibly slow. I understand that the money is not there until you pay your wireless bill, but that is 45 days or less, so anything over 50 days is very slow.

Re:Surprised?

[GooberToo]

Exactly.

People are also suffering from massive ignorance about how things work here too. Firstly, texting DOES NOT donate money. Period. End of discussion. Texting actually PLEDGES to donate. Your carrier will never release uncollected funds based on a pledge, to which they legally could hope to recover transaction fees (which is far less than the pledge).

So, once you pledge, via texting, that's all you've done. You've not actually donated any money. When you pay your billing, at the end of the billing cycle in which you pledged money, you actually have the option to fulfill your pledge. After the money is collected, your carrier will likely pay their collections at the end of their billing cycle. So right there, you're very reasonably out 30-60-days out.

Once your carrier releases their funds, you're now looking at roughly another thirty days before that party actually gets organized, commits, and releases the funds to the cause.

Also, what appears to be part of the confusion is traditionally, when you donate to a cause, you are not actually donating to a cause. Traditionally, you are donating to an organization in the name of a cause; whereby, the organization is free to do what it likes with the money it receives. So long as they donate something to the cause, they have fulfilled their legal obligation. This is true even with major non-profits like Red Cross.

What also seems like a likely source of confusion is non-profit does not mean what most people believe it means. For whatever reason people tend to associate non-profit as being the preferred form of company for these types of things because all of their money goes toward the underlying cause. Realistically, nothing could be father from the truth. A non-profit only requires their profits to be re-invested into the corporation. That doesn't mean employees work cheaply or even for fair market prices. That doesn't mean executives are not paid huge salaries and receive massive bonuses and benefits. In fact, many non-profits donate exceptionally little to their causes, frequently as little as 10%-20% of their income. IIRC, with Red Cross, as much as 60-70% (I'm pretty fuzzy on that number but the point is, a good chunk does help others) of what is donated actually helps people outside of the Red Cross organization.

Really this article should be called, "Damn you Net-30!"

As someone who works in mobile payments...

[Itesh]

I wish there would be greater disclosure about this and many other things. It can take up to 3 months for the US, but some other countries such as Latin America and Asian countries not called China and Japan it can take up to 6 months. In the EU, some people don't have to pay their bill monthly, there are quarterly and bi-annual billing cycles. It's a shame, because if there was full disclosure many people would have donated via another method. Hopefully all this exposure will get them to declare this a "crisis" and get the funds moving immediately.

P.S. Please be careful when giving your child a cell phone, it's as easy to buy virtual goods with it as a credit card and companies like mine have no way of knowing that you have given it to your child. If you would like to block these types of purchases, contact your local wireless company and have them remove "Premium SMS" from your child's phone. I wish all wireless carriers were forced to disclose this whenever anyone purchases a "Family Plan".

Not only the carriers, also the NGO's

[elrous0]

I've had a problem in the past with the Red Cross because they do not segregate donations to specific causes (or, at least, they haven't in the past). That means that if you make a donation to the Red Cross for the Japanese disaster, that doesn't mean that your money necessarily even goes to Japanese relief. And if there is any left over after their (often very limited) efforts, it goes back into their coffers--irrespective of how it was supposed to be earmarked.

My grandfather always used to tell me that he would die before he ever gave to the Red Cross. When he was in Korea, the Red Cross used to show up and sell soldiers coffee and donuts (at a profit, no less). No money meant no coffee and donuts for you, G.I.

I'm not disparaging their work (I don't know enough to comment on that). I'm just saying that they need to be much more upfront with people about where their money is actually going.

Re:Not only the carriers, also the NGO's

[joelsherrill]

My grandfather always used to tell me that he would die before he ever gave to the Red Cross. When he was in Korea, the Red Cross used to show up and sell soldiers coffee and donuts (at a profit, no less). No money meant no coffee and donuts for you, G.I.

My grandfather was in WWII and had the same feelings for the Red Cross for the reason. Never heard anyone else mention it.

Re:Not only the carriers, also the NGO's

[similar_name]

My grandfather complains about everything.

Re:Not only the carriers, also the NGO's

[mr_jrt]

Good 'ol Snopes. http://www.snopes.com/medical/emergent/redcross.asp

"There is truth to one of the rumors, however. During WWII the American Red Cross did indeed charge American servicemen for coffee, doughnuts, and lodging. However, it did so because the U.S. Army asked it to, not because it was determined to make a profit off homesick dogfaces.

The request was made in a March 1942 letter from Secretary of War Henry L. Stimson to Norman H. Davis, chairman of the American Red Cross. Because American soldiers were fighting as part of the Allied Forces, matters had to be considered on a Force-wide rather than solely American basis. The Red Cross was asked to establish club facilities for U.S. servicemen overseas where Allied troops would be welcome. Because English and Australian soldiers were being charged for the use of such facilities, it was deemed unfair that Americans were to get similar benefits for free, especially in light of their pay already being higher than that of their Allied counterparts. For the good of the alliance, the American Red Cross was persuaded to exact nominal charges from American GIs for off-base food and lodging."

...so they don't seem to deserve the bad rap.

My favorite part...

[Overzeetop]

"Note, too, that when you typically text a donation, the organization receiving it has to pay a transaction fee which may or may not be passed along to you on your bill. The mGive Foundation is a non-profit, that charges nothing to certify a charity to the carriers. The carriers forward 100% of the donation amount to the charitable organization. But both the carrier and the similarly named "mGive.com" may still charge a transaction fee. mGive.com is a for-profit arm of the company Mobile Accord. It runs the technology involved in taking text donations (and performing other mobile fundraising campaigns for non-profits). In addition to setup fees and monthly fees it charges a per transaction fee of $0.35 + 3.5 %."

So mGive Foundation - the one you'll probably find if you do an internet search, is a non-profit who will certify the charity and tell you that 100% of the donation goes to the cause, but mGive.com - a separate entity - is for profit and takes their cut off of the top, then forwarding the remaining "donation" to be sent along. Nice. I wonder which MBA thought that one up. Whoever he is, he's probably sitting on a beach somewhere safe, sipping a Mai Tai right now.

Re:My favorite part...

[arf_barf]

> Whoever he is, he's probably sitting on a beach somewhere safe, sipping a Mai Tai right now.

Where is a Tsunami when you need one ;-) ?

Could be worse, could be eBay Giving

[ackthpt]

The day the Tsunami hit I scampered out the door to give a pint of blood. Later that day I thought of putting a item on an eBay auction to raise some fundage for American Red Cross. Ebay listing page allowed me to pick a charity and a percentage to go there. Wonderful. The listing was published and had a big banner about the Red Cross added to it.

After the auction ended the trouble began. The buyer paid and I found the money sitting in my PayPal account, with their customary cut removed from it. WTF?!? I drop a note to PayPal that this must be some sort of error, the money should have gone straight to American Red Cross. No reply, typical.

Then I get on the online support with someone and tell them about it and ask them to send the answer to my email (the one I provided) and again I get nothing. Bother.

Finally over the weekend I spend 2.5 hours waiting through the queue for help by apparently the only on-line customer support person they had working (this smells like the business model: we have few complaints to our customer support so satisfaction must be nearly 100%, but I digress) It is finally explained to me that I had to set up a Mission Fish account first so the payment would have been routed to them. Excuse me? You let me list an item where 100% was to go to a registered charity, but didn't establish a precondition of publishing the listing that the Mission Fish account be set up first, while the charity logo and mission are splashed all over a listing - yet the payment for it can completely bypass the charity? Hello, this looks like enabling Donor Fraud.

I finally have had enough of their stupidity and go over to American Red Cross website and donate directly, including the sum I received for the auctioned item. I'm beside myself with the stupidity of corporations, but with eBay this is nothing new. Since 1999 they've gone from good to bad to worse.

Be wary of donating via eBay. No guarantee the funds you pay do go where you think.

Coffee and Donuts

[StikyPad]

The Red Cross sold coffee and donuts instead of giving them away to military personnel during World War II.
This unfortunate policy came into being because service agencies in Britain helping British military personnel were less well-financed than the American Red Cross. Thus, these agencies were forced to charge British military members for the same items that American service members were getting free from the American Red Cross.

To avoid further embarrassment to the British, who were playing host to thousands of U.S. troops, the U.S. Secretary of War requested that the American Red Cross begin charging American service members for such items as coffee and donuts in its canteens. The Red Cross interpreted this request as a wartime demand and complied so that it could continue aiding U.S. troops. However, the Red Cross sold items at or below cost and never profited a penny from these sales.

Since the end of World War II, the American Red Cross has not charged military personnel -- not in the Korean, Vietnam, or Persian Gulf conflicts, for example.
-- http://www.redcross.org

Re:So ...

[ginbot462]

My advice:

Charity Navigator or something similar. Reward efficiency (i.e. high % of dollar goes to actual cause). Sometimes though if you're trying to support a certain cause, it's hard to find a charity that ranks high.

Really quickly I see:
AmeriCares
International Relief Teams
Direct Relief International

Re:This is why I never donate

[mcmonkey]

That's rather unfair. I'm a volunteer myself and often give. I usually do it directly, which is the best way to see it gets where it's needed.

Whenever I donate to the local single mothers and young women working their way through college, I always do so directly. I usually place the dollar right in her g-string, which is the best way to see it gets where it's needed.