A new mobile application called Carebacks addresses the recent boom of homelessness and panhandling in New Orleans with features that address the hindrances of text-to-give scenarios and outsmart Apple’s ban on donation apps.

Carebacks works by allowing needy individuals to collect and spend virtual gift cards at participating vendor locations. While some nonprofits are optimizing their Web sites to make it easier for mobile users to donate and others are experimenting with text-to-give programs, Carebacks offers direct participation that does not require an Internet connection or redirect to a clumsy mobile browser.

“Mobile giving is one of those perfect examples of where the attributes of mobile – the immediacy and the convenience of it – stand out,” said Ritesh Bhavnani, founder of Snipp Interactive.

“Additionally, the sums being donated through mobile giving aren’t large; at usually $10 or less, customers don’t have to think too much before donating as it won’t pinch their wallet.”

Mr. Bhavnani is not associated with Carebacks and commented based on his expertise.

Click to give
The secure digital platform helps those in need make purchases that are guaranteed to exclude vices, such as cigarettes and alcohol, through a unique system that automatically generates a pin for the recipient to use at registered retailers.

All the end-user will have to remember is a four-digit code to collect the donation. Donations start at $5 and max out at $50. Once the donation is made, a list of nearby locations will show up on a user’s smartphone where they can redeem the donation for a one-time use within the next 48 hours for food, clothing or shelter.

And while Apple does not allow consumers to pay a vendor by smartphone unless via iTunes, it does permit person-to-person transfers, though there are drawbacks such as convenience fees which cover the credit card transaction and preservation of the platform.

Participating retailers include The Salvation Army, Breaux Mart stores, Winn-Dixie stores, Believers Life Community Food Center, Magnolia Discount stores, Brown Derby stores, and Quicky’s Discount stores. Donations can be redeemed at The Salvation Army to pay for shelter during the night.

Challenges of in-app donation
The effect of Apple’s bar is that users who want to give from an iPhone are typically taken outside an app and forced to navigate through an organization’s Web site form or external portal such as PayPal.

These extra steps risk alienating or losing potential donors especially on the small screens of mobile devices. But the restrictions are not deterring all nonprofits from experimenting with mobile apps.

The Salvation Army headquarters for Bermuda and Canada deployed an app to take advantage of the familiarity of its Christmas red kettle fundraising campaign. Constituents downloaded an app, called iKettle, which let them create and share their own virtual “kettle” Web pages and invite others to donate in support of The Salvation Army’s work. Essentially, this scheme is P2P fundraising.

Other nonprofits using P2P fundraising have relied on mobile apps that leverage existing social networks popular with their constituents. For example, the American Cancer Society’s Relay for Life app integrates seamlessly with Twitter rather than creating a standalone social network.

Despite the increasing popularity of mobile devices and the growing choice of platforms, the landscape of fundraising apps available to nonprofits remains limited. While Apple’s restrictions create a notable obstacle, such apps have yet to be developed in large numbers for competing platforms like Android and Windows phone.

Until they are more plentiful, organizations keen to embrace mobile technology in fundraising efforts might want to begin by experimenting with mobile apps for fundraisers before making the more expensive and higher-risk leap into apps for end users.

“In addition to donations, mobile is a super effective way to crowdsource change and empower customers to take action on social causes,” Mr. Bhavnani said. “Companies have successfully used mobile to inform them of their CSR activities, but more importantly engage them with their CSR activities.”

“Everything from signing a petition to organizing customers for particular causes to asking customers to take photos and report in on particular issues that need to be changed.”

Final Take
Michelle is editorial assistant on Mobile Commerce Daily, New York