What is “reasonably priced” for a not for profit?

What is a “reasonable price” for a NFP to pay for a software or service? Should they pay market rate as if they were a profit making venture? Should they get a discount? Of should businesses, especially lower marginal cost businesses like software companies make a habit of donating licenses to not for profits?

A hard working not for profit (NFP) has something in common with a successful for profit company – they both aggressively look at every item of the budget to make sure they stay in the black. Of course, after that things diverge. Regular companies invest in tools to increase the bottom line and NFPs seeks to save as much of their capital as possible so they have enough left for the expenses that directly impact the community they are trying to serve.

One of the things I do to attack the bottom line is to politely ask the companies whose software products we use if they would be willing to donate a license to, or at least offer a discount on a license to Samasource. Some of these products are really expensive and some of them are really reasonably priced. But what does “reasonably priced” mean to a NFP? You see we think about things slightly differently. For me $20 is a wire transfer of payment to Cameroon or a sliver of a training program for 10 new potential Samasource workers trying to make a dignified digital living.

Of course, that’s what I care about. Other companies have different priorities. I get it. It’s just that when you ask everyone whose products you use you get a wide variety of responses. Some people are really coo, like Dropbox (http://www.getdropbox.com). They have a file syncing program that works through a web app and desktop clients for Windows and Mac. The free version is 2 GB and that was fine till we started making a video ad for Hulu (also donated, thanks Hulu.com!). I wrote, they got right back to me and bumped us to 10 GB of shared storage.

Some of the other tools we use we were able to purchase at a large discount thanks to Techsoup. Their NFP version of Adobe Creative Suite was something we could justify as it is a great tool for illustrating the stories of our service partners on the website and in print materials. Also it was a LARGE discount on a very expensive piece of software. Thanks Techsoup and Adobe! It would have been better if it was free. Did I mention we don’t use this tool to make a profit but rather to help people who live in extreme poverty work their way to a livelihood?

Of course some people say no. That’s cool, they have other things going on, maybe they don’t care about our mission or don’t even have a charitable giving program. Not every for profit business has the time, the budget, the desire or the motivation to donate. More power to them and I hope they rock their bottom line.

And then there are just jerks. A great example is 37 Signals. They make money building amazing tools for other people to make money with – project management, CRM, and other software products largely used by businesses. And what did they say when I asked if they had a donation or discount program?

“We… believe everyone is entitled to the best price we can offer, from the small businessperson who’s barely squeaking by to the non-profit to the big corporation. That’s why the published prices are the only prices we offer.”

Wow. I respect a good honest no, but to suggest that the reason they don’t offer a NFP discount is that they sell Basecamp, et al for best price they can offer to anyone, anywhere and anytime? I have no knowledge of their marginal costs or balance sheets, I am just going out on a limb to suggest that they just don’t want to donate. I would even respect a “No, and you are a big bozo for even asking.” I get that sometimes. Maybe I am a bozo. I thought it doesn’t hurt to ask.

But it does hurt. The Grand Prize Winner in full on jerk responses to a polite request for a donated license has to be Panic. I’ve used Transmit for years but if anyone wants a license, mine is for sale. I asked very nicely if they would be so kind as to donate or offer a discount on their amazing program Coda so that Samasource has a time saving tool to update our website. And what was the response?

“Thanks for writing. We don’t have special pricing for educational users or non-profit organizations, unfortunately. We tried to price Coda reasonably for all users, and we hope you will be able to purchase it in the future, because we’d love to have you as a user!”

You know what is unfortunate? That you can’t just say no, you have to simultaneously suggest we are just too cheap to pay you for your amazing software and then, on top of that, you try to SELL us in the the same sentence. Is this a real response to a request for a donation – “No, we won’t give this to your organization but you can buy it.” I’m not buying it, if you know what I mean.

What is “reasonably priced” to a NFP? Coda costs 5 wire transfers to any of the 49 poorest countries in the world. Money we would much rather spend getting wages to the workers we support. Panic doesn’t need to care about these people or about us. I just request they fail to care in a way that is polite and honest.

Our amazing mentors have told us again and again you have to ask. And we will continue to do so. Feel free to say no. But I’d appreciate it if you said yes.