Will Text-Raising Become the Next Big Thing?

About a decade ago, the Internet revolutionized political fundraising. Could text messages be poised to repeat the feat?

The Federal Election Commission’s decision last week to allow fundraising solicitations via text is a critical money-raising permutation for candidate scrambling for cash. And the newly legal pitch opens a new front in the battle between Mitt Romney and President Obama.

Which candidate best succeeds at incorporating the new fundraising tool will gain a possibly critical edge in a neck-and-neck presidential contest where every dollar raised and supporter mobilized is potentially crucial. Text-message solicitations have the potential to not only tap into a deep pool of small donors, political consultant from both parties say, but also cultivate a community of supporters who otherwise wouldn’t be involved in the race.

“It’s a sea change in campaign finance; at least it could be,” said Mark Armour, a Democratic strategist whose political consulting firm proposed the change to the FEC. “The challenge is to operationalize it.”

Raising money with text messages isn’t a new phenomenon outside of politics: After the devastating 2010 earthquake in Haiti, donors contributed tens of millions of dollars using the phone service. Everyday consumers use the technology to buy services on their smartphones: It amounts to about $2 billion in transactions annually, according to Alan Sege, vice president of m-Qube, a company that serves as a messaging and billing gateway for phone carriers.

The Obama campaign, for its part, used text messages in 2008 as a political organizing tool. With the FEC's ruling, the campaign now can ask thousands of supporters attending a rally to send money as well as help get out the vote.

The FEC had previously declined to allow campaigns to raise money with text messages, but reversed itself – at the behest of a coalition of political groups and the Romney and Obama campaigns -- after determining that the contributions can be verified as legal. Donors, who will remain anonymous, can contribute up to $50 per campaign using the phone service.

Through April, 44 percent of Obama’s contributions came from small donors giving around $200 or less, according to the Center for Competitive Politics. That’s compared to just 12 percent for Romney – although the presumed GOP presidential nominee did report that 93 percent of his contributors in May were small donors.

The advantage of text messaging, as opposed to other techniques like e-mail, is its ease of use. Campaign can ask people to send an amount they would wish to donate to five or six-digit code, and after receiving a text message back seeking confirmation, the donation can be processed and sent to the campaign. That’s easier, for example, than inputting credit card information on a website, and it explains why political operatives think it can attract a new class of donors.

“The bigger picture is, it’s an entirely new fundraising stream of millions of small, easy donations,” Armour said. “This is relatively frictionless, it’s quick, it’s easy, it’s also responsive.”

Carriers will subtract a fee for each donation, but the money could still add up quickly and substantially for each presidential campaign. How much money they receive, however, could hinge on how well either campaign deploys the new technique.

They won’t lack for ways to use it, according to GOP political strategist Vincent Harris.

“Obama will, in theory, be able to text his 1 million plus people and say, ‘Romney outraised us. Let's fight back. Text back a donation amount and you'll be billed,’” Harris said. “Or he'll be able to add a ‘short code’ number to text a donation amount into on the last 5 to 7 seconds of his TV ads.”

Weaving the text message solicitation into existing advertisements like TV ads highlights the core strength of the new technology, Armour argued.

“The beauty of the fundraising stream is that it uses existing marketing materials.” He said. “So every TV ad, every web ad, ever web page, every email, the national conventions, signage -- it’s almost an unlimited number of uses.”

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