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Derek Johnson from tatango.com explains how text message donations work, highlighting two main methods: through wireless carriers or via credit cards. In the first method, a donor texts a short code (e.g., "give" to 12345), and the donation amount is added to their mobile phone bill. This approach is convenient since it doesn't require credit card information, but it involves fees taken by carriers. Additionally, only 501(c)(3) organizations can utilize this method, and they must meet certain thresholds that may incur costs. The second method allows donations through a consumer's credit card. Johnson contrasts the two options, emphasizing ease of use with mobile billing for donors.