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Obama’s Campaign Quick to Capitalize on Text-to-Donate Option

President Barack Obama appears to have wildly outraised his Republican opponent among text message donors, capitalizing on the newly approved digital fundraising option.

Last month, Obama’s campaign reported paying $84,655 in fees to m-Qube Group’s payvia mobile payment service, which manages text-to-donate programs for both presidential campaigns. Mitt Romney’s campaign paid just $1,152, Federal Election Commission records show. The fees — a percentage of the total amount raised via text — suggest that Obama outdid the former Massachusetts governor by a more than 500-to-1 ratio among texting donors.

Both candidates launched text-to-donate programs in late August, heralding the newly approved technology as a way to empower small-dollar donors in the post-Citizens United era. A spokesman for the Obama campaign declined to release the total amount raised via text message. The Romney campaign did not return repeated requests for comment.

Under FEC rules approved this summer, text contributions from individuals are limited to $50 per month and $200 total per candidate, but campaigns do not have to publicly identify donors who give less than $200. So far this cycle, small donors have given Obama about $196 million, or 35 percent of his total haul. About 17 percent, or about $59 million, of Romney’s campaign funds have come from small donors, according to the Center for Responsive Politics.

Obama and Romney appear to be the only candidates taking advantage of the new fundraising option so far.

Because contracts between mobile carriers, m-Qube and the campaigns are confidential and could vary, it’s impossible to know precisely how much each candidate has raised through text message contributions. Campaigns & Elections magazine estimated in August that donation aggregators such as payvia would charge 5 percent to 15 percent of the total raised. It costs “less than $1,000” to launch a text-to-donate program with m-Qube, the company said. Assuming the campaigns paid about $1,000 in startup costs and the fee is 10 percent, the Obama campaign raised about $836,550 and the Romney campaign raised about $1,520 from text-message donations.

Even if the text contributions don’t add up to much compared with the multimillion-dollar donations flowing into super PACs and politically active nonprofits, the technology allows campaigns to collect grass-roots supporters’ cellphone numbers that can be used in subsequent voter mobilization efforts.

“The real impact is through increasing engagement with the campaign,” said Aaron Scherb, a Congressional liaison for campaign finance reform group Public Campaign. “Campaigns can increase the percent of small donors that they have in the short term and build lists for this and future campaigns.”

Democrats have promoted the program more aggressively, highlighting their five-digit text-message code in speeches and on the arena Jumbotron during the Democratic National Convention in Charlotte, N.C., as well as in television and online advertisements since then.

“That’s why it is so attractive because you’re spending money on marketing anyway,” said Alan Sege, payvia’s executive vice president. “This turns all your persuasion into fundraising.”

When the Romney campaign streamed the first presidential debate on, it included a banner ad soliciting donations with a text message short code.

“You are there to watch the debate, and because this is such a seamless and simple transaction, you could do it in just a few seconds,” said Darcy Wedd, president and founder of payvia. “If there was a donate button on the page, it would take you a matter of minutes to enter all your information.”

Americans donated about $43 million via text message in the aftermath of the 2010 Haiti earthquake, according to a January report by the Pew Research Center’s Internet & American Life Project. “These contributions were often spur-of-the-moment decisions that spread virally through friend networks,” the report said.

“It’s an impulse and I think campaigns rely on that as well,” Scherb said.

Congressional candidates tend to lag behind White House contenders in adopting untried technology. Wedd said the company is in talks with almost a dozen incumbents and party committees who are interested in rolling out text-to-donate programs in the next election cycle.

Some strategists, however, are wary, concerned that the fees charged by aggregators and carriers ultimately divert money from campaign coffers.

AT&T Wireless, for example, pledged in September that it would charge a “percentage of the contribution amount, as a flat per-text message charge, or as some combination of a percentage and a flat fee.” These rates would be “substantially less” than the 50 percent to 70 percent AT&T charges for commercial content providers. The company doesn’t charge to text charitable donations. AT&T also said the political contribution rate would be the same for all aggregators, political committees and candidates.

Rep. Jim Cooper (D-Tenn.), an early advocate of text contributions, has a short code but does not expect to use it to solicit text-message donations this cycle. He is almost guaranteed to win re-election for his sixth consecutive term.

“You never know when your race could be changed by a super PAC or an anonymous contributor,” said Robin Alberts-Marigza, Cooper’s campaign manager. “If someone else could press a button, we want to be able to press a button, too.”

Correction, Oct. 24

An earlier version of this story incorrectly estimated the approximate amount of money the Romney campaign raised via text donations and the ratio by which it was outraised by the Obama campaign.

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