8 ms·

Why non-profit pricing?

64 points by pchristensen 16y ago

patio11 16y ago
I have not enjoyed getting teachers who make $60k explain to me why I need to subsidize them (haven't hit $60k in my entire life).
- hdctambien 16y ago
  Where I was a teacher, $60k was the highest you could earn without a PhD. And it took 10 years to work your way up to that level. EDIT: This was 5 years ago. I doubt teachers are making thousands of dollars more these days. My point is, the argument "teachers make so much money! What are they complaining about" is at best misinformed. If you're hurting for money, try substitute teaching for 1 or 2 days and see what the difference is between a teacher's workday and your own. You'll probably take your less than $60k job over their most-likely-also-less-than-$60k-more-like-$30k-job
  - Kliment 16y ago
    Yes, teachers have an extremely stressful typical workday, particularly if they have a subject that involves grading papers or if they have to deal with parents. I don't think anyone is disputing that they should be making decent money. However, that gives them no right to automatic discounts just because they happen to work for an educational institution. Obviously patio11 would prefer his own job. What does that have to do with it?
  - andrewce 16y ago
    When I taught, I was working 10-12 hour days (some of this was due to my own inefficiency, and some of it was due to the massive inefficiency of the school in which I taught) and pulled in about $30k/year. Our salary schedule was such that the most I could earn without a doctorate was about $38k (after 20 years of experience). That said, there are plenty of grant programs within schools. At least two of the districts in the city in which I live now have foundations set aside for things like this.
  - tokenadult 16y ago
    I am a teacher in private practice. I agree that teaching well is hard work. I also agree with others here that many teaching positions offer good pay (without necessarily requiring good-quality work, I might add). The pay is adequate for paying list price for many useful software products, and it compares well with the pay from many other occupations.
- eli 16y ago
  http://www.payscale.com/research/US/All_K-12_Teachers/Salary http://www.payscale.com/research/US/All_K-12_Teachers/Salary (Neither have most teachers.)
  - JoelSutherland 16y ago
    Remember to multiply that by 4/3 to account for a 3 month vacation.
  - patio11 16y ago
    I am well acquainted with those numbers. I am also well acquainted with the salary schedule at her district (public record), and since her guild is religiously opposed to merit pay, I can tell you she was making $60k with a fair degree of certainty.
  - tokenadult 16y ago
    Total compensation of teachers usually is a higher percentage above their nominal salary than it is for most other workers. They tend to have better family medical benefits, MUCH better pensions (rather dubiously funded, but lavishly guaranteed with state constitutional protections in many states), and other fringe benefits not common in private enterprise. This varies from state to state (especially) and from bargaining unit to bargaining unit, of course. Most school districts do not bargain vigorously on behalf of students and taxpayers, but most teacher negotiators bargain vigorously indeed.
- rottencupcakes 16y ago
  In case you're really as bitter as you sound, this is because a large number of those teachers spend their personal income on classroom supplies and decorations to improve the lives of their students. They feel like they are doing a net good for society by basically donating their free time and their money to our public education system.
- eavc 16y ago
  I'm surprised at some of what's being said in this string of replies as well as what's being upvoted. Not you in particular, but I want this to be seen by people in multiple child-threads and am posting here. 1. $60k is pretty much a ceiling for earning potential for many if not most teachers. It can take a long, long time to get there with no hope of going beyond. 2. My teacher friends universally make under 40k. 3. They often have to spend their own money on supplies to subsidize the lack of funds in the system. 4. Many if not most teachers work more than 70 hours a week during the school year when factoring in grading, meetings, correspondence, athletics, extra-curriculars, and other events. 5. Many teachers clean up urine and vomit, are verbally assaulted by students as well as parents, are in a vacuum absent any meaningful feedback on the quality of their work, and deal with customers who almost never fully appreciate the service until ten or twenty years later. I could go on, but I'm not sure I understand how $60k as an typical top-end for a difficult and essentially important profession is inordinate and even less so how one can fail to see the need for supplemental funds in many cases to allow the teacher to fully do his or her job.
  - yummyfajitas 16y ago
    1. $60k is pretty much a ceiling for earning potential for many if not most teachers. It can take a long, long time to get there with no hope of going beyond. $60k may be a ceiling for wage potential in many areas. It's not remotely close to their compensation potential, since teachers get quite a bit of their comp in the form of gold plated pensions rather than pay. In NYC, the starting compensation of a teacher is $60k/9.5 months work ($45k pay, $15k worth of pension). I'll cite a previous discussion where I did the math: http://news.ycombinator.com/item?id=1673230 http://news.ycombinator.com/item?id=1673230 4. Many if not most teachers work more than 70 hours a week during the school year when factoring in grading, meetings, correspondence, athletics, extra-curriculars, and other events. No. The average is about 39 hours/week during the school year. http://www.bls.gov/opub/mlr/2008/03/art4full.pdf http://www.bls.gov/opub/mlr/2008/03/art4full.pdf Do you have evidence for point 3?
    - CWuestefeld 16y ago
      Even if #3 is correct, I'm not entirely sympathetic. In many trades, e.g., auto mechanic, it's standard practice for the worker to provide his own tools. That can easily come to a few thousand dollars. Even as a software engineer (where my main development environment is provided by my employer), I spend a not-inconsiderable sum on additional tools that allow me to work more efficiently. So if it's true that sometimes teachers need to kick in a bit, that's far from an aberration across the universe of employment. ADDED: 5. Many teachers ... are in a vacuum absent any meaningful feedback on the quality of their work Isn't this their own doing, at least as much as the teachers' unions are working to prevent any merit-based compensation system?
- atomical 16y ago
  This comment sounds so ignorant and cynical for someone who is described as bright.
timmorgan 16y ago
I know a few non-profits who get tens of thousands of dollars worth of Microsoft software and Cisco hardware for mere pennies on the dollar. Every year. What would they be using if these large companies weren't so "generous"? Probably lower-cost alternatives, free, and open source options. And then they'd tell their non-profit friends about it. Not a good idea for Microsoft's bottom line I bet. For companies like 37s and BingoCardCreator, on the other hand, a non-profit discount probably doesn't make a lot of sense.
- andrewce 16y ago
  I run a non-profit organization; we aren't yet in position to need much in the way of software, but when we get there, it's gonna be open-source all the way unless it's clear that doing otherwise is in the best interest of the organization. Non-profit pricing is nice, but my general approach is that if I'm not willing to pay full price, I'm probably also not willing to pay the non-profit price. Conversely, if I'm willing to pay the non-profit price, then I'm also usually willing to pay the full price. If not, I make do with free alternatives.
- furyg3 16y ago
  I work for a non-profit as an IT manager (35 paid employees, ~50 unpaid employees) for an organization that tries to reduce poverty in the world. I've worked as an IT manager at "for-profits" for a while now, and this job is by far the most challenging. This isn't true for all non-profits, but here there is nearly no budget. Our pay-scale is fixed, and we use interns in a big way. We rely heavily on 'sponsorship' from organizations who support our cause for nearly everything we do. Of course I take advantage of blanket donation programs (from Microsoft and Cisco, for example) and "non-profit discounts", but that's not what I really want. I don't want to pick SharePoint because it's free for us, I want to pick it because it is a good solution and fits our needs. Sadly (and by-design, surely) that price point affects my proposals to management, and I have to say "Microsoft gives it to us for free, 37signals offers no discounts". :( But these blanket discounts aren't what I push for with vendors. I want to build a special relationship with our sponsors. I want you to donate your software or services to us because you believe in our cause, just as I believe in our cause and have taken a serious pay cut to support it. I want that relationship to be sustainable: I don't want you to feel that the burden of supporting us is greater than the reward. And there can be a lot of rewards. We have an extensive for-profit network, and we work very close with them. We have a ton of young, highly-educated staff who come through our organization. We have a very large base of supporters who engage us, and who we engage, online (twitter, facebook, etc). The list goes on and on, it only requires a bit of creative thinking to replace dollar signs. So I'd re-phrase the question: What are you doing to leverage a group of people who need and are passionate about using your product for an important cause which you support, but don't have the resources to pay full price?
wnoise 16y ago
Or, you know, a standard case of price discrimination (http://en.wikipedia.org/wiki/Price_discrimination http://en.wikipedia.org/wiki/Price_discrimination). Non-profit vs. others isn't a perfect measure of willingness and ability to pay, but does have some correlation. Rebates and coupons aren't perfect at identifying those with higher elasticity either, but they are still in common use.
- webwright 16y ago
  ...In common use on 37Signal's signup pages, in fact. I don't blame 'em (because coupons work), but it certainly doesn't perfectly jibe with their "consistent pricing" mantra.
notahacker 16y ago
If one of the principal reasons for choosing your product is an opportunity to maximise profits, then an organisation that doesn't actually have that motivation arguably derives less value from it and logically ought to be less willing to pay market price. Same applies for discounts "for academic use" etc. Price discrimination isn't just about assuming a particular entity has less funds, period. Whilst nonprofit != charity it's also perfectly reasonable to make the value judgement that it's fair to implicitly subsidise social goals at the expense of other clients' shareholder returns. Provided no laws are being flaunted, I can offer discounts on a service I provide to people for virtually any whether its because I believe in their mission, like them on a personal level, respect their OAP or veteran status or just desperately want their money. One of my local curry houses gives discounts to Arsenal season ticket holders. Nobody should feel _obliged_ to make these concessions, but when many companies do makes sense for nonprofits to ask the question. I bet 37signals get plenty of emails from startups and small businesses asking for a dose of sympathy and lower prices too. Sometimes, where you have a high margin business and close competitors that will discount, it makes sense to give them what they ask for too.
- sokoloff 16y ago
  I think a lot of the academic discounts are an attempt to get lock-in and thus maximize profits over time. If a budding artist gets used to Creative Suite (because it's cheap for them), or a new coder gets a cheap Mac, or a mechanic student gets a discount on SnapOn tools, all of those have a likely impact on their future purchases.
  - tokenadult 16y ago
    The discounts on Westlaw for law students in the late 1980s were certainly meant to gain lock-in. The law librarian who taught my law school class how to do online searching told us, "The company wants you to think of their product as heroin."
- bluesnowmonkey 16y ago
  If a non-profit is limited in the amount of good it does by its budget, then saving money will allow it to do more good, and the motivations are aligned.
credo 16y ago
>>We don’t want to be one of those companies that has a "who you are determines how much we can charge you" pricing model. We find those models unfair, dishonest, and flat out unappealing. Using moralistic language like this to describe non-profit pricing is a bit too harsh. Would it be dishonest to donate their product or offer a discount to a single non-profit ? If not, why would it be dishonest to offer the same deal to 10 non-profits or all non-profits ? I wonder what the blogger would say about freemium plans and tiered pricing. Freemium pricing always means that the paid customers subsidize free customers (many of whom will never become paid customers).OTH the absence of freemium may reduce the number of paid customers making the product un-viable. Is it unfair and dishonest to do freemium pricing ? [disclosure: All of our iPhone apps are registered in Apple's "education pricing" discount program for students and faculty. I see nothing dishonest about this.]
- Yzupnick 16y ago
  The difference being that freemium pricing is a loss leader that does not "discriminate" based on who the user is. Rather, it "discriminates" based on amount of the product being used, a perfectly acceptable and unbiased reason to charge a user more. Charging less to NPOs would be "discriminating" based on who the user is, which is not acceptable. I'm not sure I agree with the OP, just trying to explain his position.
- jasonfried 16y ago
  "Would it be dishonest to donate their product or offer a discount to a single non-profit ? If not, why would it be dishonest to offer the same deal to 10 non-profits or all non-profits?" At our discretion, no. Just like you may choose to support a specific charity or cause without supporting all charities or causes, we may choose to put our support behind a specific charity or cause. As I mentioned in post, we've done exactly that. But to say we should support every single non-profit by offering them a lower price simply because they are a non-profit doesn't make sense to me.
  - JoelSutherland 16y ago
    This is exactly his point. You choose causes to support based on some criteria. Others choose causes based on the US Tax definition of 'non-profit'. Given that both are a matter of choice, it is harsh to call a set of criteria different than your own dishonest and unfair. Or to strike more directly at the heart of the matter: when we behave charitably it is almost always suboptimal. A dollar given to the Gates Foundation is a dollar not given to Habitat for Humanity, and vice versa. To criticize a system of generosity for being suboptimal is certainly reasonable, but now how most would probably want to spend their time.
terra_t 16y ago
my experience is that non-profits are just as niggardly as ordinary businesses are, if not more so, but there's no incentive for the organization or its employees to do any better... nothing ever has an upside.
- maukdaddy 16y ago
  While your command of vocabulary is impressive, you should be careful with 'niggardly'. The word, while not technically racist, is obviously very close to some very bad parts of US history. I'd suggest: stingy, greedy, or others - http://www.answers.com/topic/niggardly http://www.answers.com/topic/niggardly
  - stratomorph 16y ago
    The resemblance is entirely coincidental. The two words have unrelated etymologies. We might as well advise people to avoid words like "luck" and "truck," which are not technically profane, but obviously sound very close to a very bad word.
    - tjr 16y ago
      "Niggardly" is a rather uncommonly used word, though. One of our city officials used "niggardly" in a public event a few months ago, and a bunch of people got in an uproar. Were those people ignorant about this word? Yes. Would it have been better for the city official to have avoided it? I think so. Not every instance of language use is necessarily an opportune moment to enhance the vocabulary of others. That said, I would like to think that on this particular forum such concerns ought to be minimal, at best.
  - run4yourlives 16y ago
    One should never give in to the opinion of ignorance. Ever. If there is some fool out there that doesn't understand the difference between the word "niggardly" and the "N-word", they should be educated, not placated.
bonaldi 16y ago
>Some might say that non-profits do good, while for-profits do business, but I don’t believe that 1. matters, or 2. suggests that for-profits don’t do good. It's pretty easy to say "non-profits should pay the same as for-profits" when you exclude the entire foundation of the difference. Non-profits get treated differently to incentivise their work. Instead of working to increase shareholder value, they work for some ulterior goal -- generally a beneficial goal that couldn't be brought around as a side-effect of some profit-making enterprise. This difference isn't just a "some other difference", it's the crux. It's why they get special tax status while for-profit businesses -- yes, even those that "do good" -- don't. Society wants to encourage the work of non-profits. Companies should consider offering special pricing to non-profits because it helps to encourage organisations that exist purely to do good, not organisations that are legally mandated to make money and may do good as a side-effect.
- patio11 16y ago
  That assumes you believe non-profits actually do good. I do not feel this is remotely accurate about nonprofits as a class. Some aim to do good but are hideously ineffective, and some do "charitable" things that I find full-stop evil. (Some do good well, and I choose to donate to them.) That is true for just about anyone, since nonprofits are so diverse. Why assume a-priority they are better than other organizations?
  - ahi 16y ago
    e.g. International Tobacco Growers Association is a non-profit. They do good? btw: I think you're looking for 'a priori'
    - patio11 16y ago
      Steve Jobs needs to bring trademarked benign fascism to Japanese iPad spelling corrections. They get me all the time.
  - bonaldi 16y ago
    The actual implementation of non-profit status in the US is a different issue. Consider patents. I agree with the idea of patents, but totally disagree with the US implementation. Likewise, I agree with giving discounts to non-profit organisations, but the more I dig the less I agree with the US system for awarding the status. But that wasn't the argument made in the post. It wasn't "we would discount to non-profits if only there weren't so many lame orgs with that status" it was "why would we ever do this?".
antidaily 16y ago
Non-profits take forever to make decisions. Don't waste your time with them.
lsc 16y ago
eh, it seems to me like more for-profit companies should put more of their marketing budget into charity. Now, I mean, not just any charity, but a charity related to their field, something that their customers care about. I mean, I know I've donated prizes to a few programming contests to good effect... and I pretty regularly see my competitors names as mirrors when I go to download open-source products. And really, how many banner ads would it take to gain the credibility of getting on the EFF "thanks" page? (I'm not there just yet... but I do have, for example, a LOPSA member discount.) The other advantage of taking it out of your advertising budget is that the legal status of the entity you are giving to doesn't matter. From the for-profit corp's perspective, they are buying advertising. I mean, when I do it, at least, I don't write off the retail "value" of the thing I gave away as some sort of charitable donation; I think that's scummy, 'cause it cost me some fraction of that to provide. I give away the service, then whatever it costs to provide that service, obviously, is part of the cost of running prgmr.com and is written off against any income, just like what it costs to run the for-pay domains; except these don't have any money coming in. I'm getting good (and usually pretty cheap) advertising; I don't need to run some tax scam, too.
msabalau 16y ago
I imagine the reason the reason why many non profits ask about a discount is because it's common to grant one. It seems likely that the firms offering those discounts are doing so not "out of the goodness of their heart" because their experience is different than 37signals--that their "for profit" customers can and will pay a much higher price for their product or service. Offering a non-profit discount is a way to capture what money the the non-profits are willing to pay. Why leave money on the table? It's not clear to me why market segmentation would be described as "unfair or dishonest". Does Jason go through life gritting his teeth at the immorality of senior citizen's discounts at the movie theatre? Does adding a few minor differences to a product, business class seating for example, transmute an "unfair and dishonest" practice into an acceptable one? To be clear, I can imagine cases where having "a clear price that we stick to" is an effective policy. Saturn seemed to do well with that policy for quite a while.

64 points by pchristensen 16y ago

I have not enjoyed getting teachers who make $60k explain to me why I need to subsidize them (haven't hit $60k in my entire life).

hdctambien 16y ago
Where I was a teacher, $60k was the highest you could earn without a PhD. And it took 10 years to work your way up to that level. EDIT: This was 5 years ago. I doubt teachers are making thousands of dollars more these days. My point is, the argument "teachers make so much money! What are they complaining about" is at best misinformed. If you're hurting for money, try substitute teaching for 1 or 2 days and see what the difference is between a teacher's workday and your own. You'll probably take your less than $60k job over their most-likely-also-less-than-$60k-more-like-$30k-job
- Kliment 16y ago
  Yes, teachers have an extremely stressful typical workday, particularly if they have a subject that involves grading papers or if they have to deal with parents. I don't think anyone is disputing that they should be making decent money. However, that gives them no right to automatic discounts just because they happen to work for an educational institution. Obviously patio11 would prefer his own job. What does that have to do with it?
- andrewce 16y ago
  When I taught, I was working 10-12 hour days (some of this was due to my own inefficiency, and some of it was due to the massive inefficiency of the school in which I taught) and pulled in about $30k/year. Our salary schedule was such that the most I could earn without a doctorate was about $38k (after 20 years of experience). That said, there are plenty of grant programs within schools. At least two of the districts in the city in which I live now have foundations set aside for things like this.
- tokenadult 16y ago
  I am a teacher in private practice. I agree that teaching well is hard work. I also agree with others here that many teaching positions offer good pay (without necessarily requiring good-quality work, I might add). The pay is adequate for paying list price for many useful software products, and it compares well with the pay from many other occupations.
eli 16y ago
http://www.payscale.com/research/US/All_K-12_Teachers/Salary http://www.payscale.com/research/US/All_K-12_Teachers/Salary (Neither have most teachers.)
- JoelSutherland 16y ago
  Remember to multiply that by 4/3 to account for a 3 month vacation.
- patio11 16y ago
  I am well acquainted with those numbers. I am also well acquainted with the salary schedule at her district (public record), and since her guild is religiously opposed to merit pay, I can tell you she was making $60k with a fair degree of certainty.
- tokenadult 16y ago
  Total compensation of teachers usually is a higher percentage above their nominal salary than it is for most other workers. They tend to have better family medical benefits, MUCH better pensions (rather dubiously funded, but lavishly guaranteed with state constitutional protections in many states), and other fringe benefits not common in private enterprise. This varies from state to state (especially) and from bargaining unit to bargaining unit, of course. Most school districts do not bargain vigorously on behalf of students and taxpayers, but most teacher negotiators bargain vigorously indeed.
rottencupcakes 16y ago
In case you're really as bitter as you sound, this is because a large number of those teachers spend their personal income on classroom supplies and decorations to improve the lives of their students. They feel like they are doing a net good for society by basically donating their free time and their money to our public education system.
eavc 16y ago
I'm surprised at some of what's being said in this string of replies as well as what's being upvoted. Not you in particular, but I want this to be seen by people in multiple child-threads and am posting here. 1. $60k is pretty much a ceiling for earning potential for many if not most teachers. It can take a long, long time to get there with no hope of going beyond. 2. My teacher friends universally make under 40k. 3. They often have to spend their own money on supplies to subsidize the lack of funds in the system. 4. Many if not most teachers work more than 70 hours a week during the school year when factoring in grading, meetings, correspondence, athletics, extra-curriculars, and other events. 5. Many teachers clean up urine and vomit, are verbally assaulted by students as well as parents, are in a vacuum absent any meaningful feedback on the quality of their work, and deal with customers who almost never fully appreciate the service until ten or twenty years later. I could go on, but I'm not sure I understand how $60k as an typical top-end for a difficult and essentially important profession is inordinate and even less so how one can fail to see the need for supplemental funds in many cases to allow the teacher to fully do his or her job.
- yummyfajitas 16y ago
  1. $60k is pretty much a ceiling for earning potential for many if not most teachers. It can take a long, long time to get there with no hope of going beyond. $60k may be a ceiling for wage potential in many areas. It's not remotely close to their compensation potential, since teachers get quite a bit of their comp in the form of gold plated pensions rather than pay. In NYC, the starting compensation of a teacher is $60k/9.5 months work ($45k pay, $15k worth of pension). I'll cite a previous discussion where I did the math: http://news.ycombinator.com/item?id=1673230 http://news.ycombinator.com/item?id=1673230 4. Many if not most teachers work more than 70 hours a week during the school year when factoring in grading, meetings, correspondence, athletics, extra-curriculars, and other events. No. The average is about 39 hours/week during the school year. http://www.bls.gov/opub/mlr/2008/03/art4full.pdf http://www.bls.gov/opub/mlr/2008/03/art4full.pdf Do you have evidence for point 3?
  - CWuestefeld 16y ago
    Even if #3 is correct, I'm not entirely sympathetic. In many trades, e.g., auto mechanic, it's standard practice for the worker to provide his own tools. That can easily come to a few thousand dollars. Even as a software engineer (where my main development environment is provided by my employer), I spend a not-inconsiderable sum on additional tools that allow me to work more efficiently. So if it's true that sometimes teachers need to kick in a bit, that's far from an aberration across the universe of employment. ADDED: 5. Many teachers ... are in a vacuum absent any meaningful feedback on the quality of their work Isn't this their own doing, at least as much as the teachers' unions are working to prevent any merit-based compensation system?
atomical 16y ago
This comment sounds so ignorant and cynical for someone who is described as bright.

timmorgan 16y ago

I know a few non-profits who get tens of thousands of dollars worth of Microsoft software and Cisco hardware for mere pennies on the dollar. Every year. What would they be using if these large companies weren't so "generous"? Probably lower-cost alternatives, free, and open source options. And then they'd tell their non-profit friends about it. Not a good idea for Microsoft's bottom line I bet. For companies like 37s and BingoCardCreator, on the other hand, a non-profit discount probably doesn't make a lot of sense.

andrewce 16y ago
I run a non-profit organization; we aren't yet in position to need much in the way of software, but when we get there, it's gonna be open-source all the way unless it's clear that doing otherwise is in the best interest of the organization. Non-profit pricing is nice, but my general approach is that if I'm not willing to pay full price, I'm probably also not willing to pay the non-profit price. Conversely, if I'm willing to pay the non-profit price, then I'm also usually willing to pay the full price. If not, I make do with free alternatives.
furyg3 16y ago
I work for a non-profit as an IT manager (35 paid employees, ~50 unpaid employees) for an organization that tries to reduce poverty in the world. I've worked as an IT manager at "for-profits" for a while now, and this job is by far the most challenging. This isn't true for all non-profits, but here there is nearly no budget. Our pay-scale is fixed, and we use interns in a big way. We rely heavily on 'sponsorship' from organizations who support our cause for nearly everything we do. Of course I take advantage of blanket donation programs (from Microsoft and Cisco, for example) and "non-profit discounts", but that's not what I really want. I don't want to pick SharePoint because it's free for us, I want to pick it because it is a good solution and fits our needs. Sadly (and by-design, surely) that price point affects my proposals to management, and I have to say "Microsoft gives it to us for free, 37signals offers no discounts". :( But these blanket discounts aren't what I push for with vendors. I want to build a special relationship with our sponsors. I want you to donate your software or services to us because you believe in our cause, just as I believe in our cause and have taken a serious pay cut to support it. I want that relationship to be sustainable: I don't want you to feel that the burden of supporting us is greater than the reward. And there can be a lot of rewards. We have an extensive for-profit network, and we work very close with them. We have a ton of young, highly-educated staff who come through our organization. We have a very large base of supporters who engage us, and who we engage, online (twitter, facebook, etc). The list goes on and on, it only requires a bit of creative thinking to replace dollar signs. So I'd re-phrase the question: What are you doing to leverage a group of people who need and are passionate about using your product for an important cause which you support, but don't have the resources to pay full price?

wnoise 16y ago

Or, you know, a standard case of price discrimination (http://en.wikipedia.org/wiki/Price_discrimination http://en.wikipedia.org/wiki/Price_discrimination). Non-profit vs. others isn't a perfect measure of willingness and ability to pay, but does have some correlation. Rebates and coupons aren't perfect at identifying those with higher elasticity either, but they are still in common use.

webwright 16y ago
...In common use on 37Signal's signup pages, in fact. I don't blame 'em (because coupons work), but it certainly doesn't perfectly jibe with their "consistent pricing" mantra.

notahacker 16y ago

If one of the principal reasons for choosing your product is an opportunity to maximise profits, then an organisation that doesn't actually have that motivation arguably derives less value from it and logically ought to be less willing to pay market price. Same applies for discounts "for academic use" etc. Price discrimination isn't just about assuming a particular entity has less funds, period. Whilst nonprofit != charity it's also perfectly reasonable to make the value judgement that it's fair to implicitly subsidise social goals at the expense of other clients' shareholder returns. Provided no laws are being flaunted, I can offer discounts on a service I provide to people for virtually any whether its because I believe in their mission, like them on a personal level, respect their OAP or veteran status or just desperately want their money. One of my local curry houses gives discounts to Arsenal season ticket holders. Nobody should feel _obliged_ to make these concessions, but when many companies do makes sense for nonprofits to ask the question. I bet 37signals get plenty of emails from startups and small businesses asking for a dose of sympathy and lower prices too. Sometimes, where you have a high margin business and close competitors that will discount, it makes sense to give them what they ask for too.

sokoloff 16y ago
I think a lot of the academic discounts are an attempt to get lock-in and thus maximize profits over time. If a budding artist gets used to Creative Suite (because it's cheap for them), or a new coder gets a cheap Mac, or a mechanic student gets a discount on SnapOn tools, all of those have a likely impact on their future purchases.
- tokenadult 16y ago
  The discounts on Westlaw for law students in the late 1980s were certainly meant to gain lock-in. The law librarian who taught my law school class how to do online searching told us, "The company wants you to think of their product as heroin."
bluesnowmonkey 16y ago
If a non-profit is limited in the amount of good it does by its budget, then saving money will allow it to do more good, and the motivations are aligned.

credo 16y ago

>>We don’t want to be one of those companies that has a "who you are determines how much we can charge you" pricing model. We find those models unfair, dishonest, and flat out unappealing. Using moralistic language like this to describe non-profit pricing is a bit too harsh. Would it be dishonest to donate their product or offer a discount to a single non-profit ? If not, why would it be dishonest to offer the same deal to 10 non-profits or all non-profits ? I wonder what the blogger would say about freemium plans and tiered pricing. Freemium pricing always means that the paid customers subsidize free customers (many of whom will never become paid customers).OTH the absence of freemium may reduce the number of paid customers making the product un-viable. Is it unfair and dishonest to do freemium pricing ? [disclosure: All of our iPhone apps are registered in Apple's "education pricing" discount program for students and faculty. I see nothing dishonest about this.]

Yzupnick 16y ago
The difference being that freemium pricing is a loss leader that does not "discriminate" based on who the user is. Rather, it "discriminates" based on amount of the product being used, a perfectly acceptable and unbiased reason to charge a user more. Charging less to NPOs would be "discriminating" based on who the user is, which is not acceptable. I'm not sure I agree with the OP, just trying to explain his position.
jasonfried 16y ago
"Would it be dishonest to donate their product or offer a discount to a single non-profit ? If not, why would it be dishonest to offer the same deal to 10 non-profits or all non-profits?" At our discretion, no. Just like you may choose to support a specific charity or cause without supporting all charities or causes, we may choose to put our support behind a specific charity or cause. As I mentioned in post, we've done exactly that. But to say we should support every single non-profit by offering them a lower price simply because they are a non-profit doesn't make sense to me.
- JoelSutherland 16y ago
  This is exactly his point. You choose causes to support based on some criteria. Others choose causes based on the US Tax definition of 'non-profit'. Given that both are a matter of choice, it is harsh to call a set of criteria different than your own dishonest and unfair. Or to strike more directly at the heart of the matter: when we behave charitably it is almost always suboptimal. A dollar given to the Gates Foundation is a dollar not given to Habitat for Humanity, and vice versa. To criticize a system of generosity for being suboptimal is certainly reasonable, but now how most would probably want to spend their time.

terra_t 16y ago

my experience is that non-profits are just as niggardly as ordinary businesses are, if not more so, but there's no incentive for the organization or its employees to do any better... nothing ever has an upside.

maukdaddy 16y ago
While your command of vocabulary is impressive, you should be careful with 'niggardly'. The word, while not technically racist, is obviously very close to some very bad parts of US history. I'd suggest: stingy, greedy, or others - http://www.answers.com/topic/niggardly http://www.answers.com/topic/niggardly
- stratomorph 16y ago
  The resemblance is entirely coincidental. The two words have unrelated etymologies. We might as well advise people to avoid words like "luck" and "truck," which are not technically profane, but obviously sound very close to a very bad word.
  - tjr 16y ago
    "Niggardly" is a rather uncommonly used word, though. One of our city officials used "niggardly" in a public event a few months ago, and a bunch of people got in an uproar. Were those people ignorant about this word? Yes. Would it have been better for the city official to have avoided it? I think so. Not every instance of language use is necessarily an opportune moment to enhance the vocabulary of others. That said, I would like to think that on this particular forum such concerns ought to be minimal, at best.
- run4yourlives 16y ago
  One should never give in to the opinion of ignorance. Ever. If there is some fool out there that doesn't understand the difference between the word "niggardly" and the "N-word", they should be educated, not placated.

bonaldi 16y ago

>Some might say that non-profits do good, while for-profits do business, but I don’t believe that 1. matters, or 2. suggests that for-profits don’t do good. It's pretty easy to say "non-profits should pay the same as for-profits" when you exclude the entire foundation of the difference. Non-profits get treated differently to incentivise their work. Instead of working to increase shareholder value, they work for some ulterior goal -- generally a beneficial goal that couldn't be brought around as a side-effect of some profit-making enterprise. This difference isn't just a "some other difference", it's the crux. It's why they get special tax status while for-profit businesses -- yes, even those that "do good" -- don't. Society wants to encourage the work of non-profits. Companies should consider offering special pricing to non-profits because it helps to encourage organisations that exist purely to do good, not organisations that are legally mandated to make money and may do good as a side-effect.

patio11 16y ago
That assumes you believe non-profits actually do good. I do not feel this is remotely accurate about nonprofits as a class. Some aim to do good but are hideously ineffective, and some do "charitable" things that I find full-stop evil. (Some do good well, and I choose to donate to them.) That is true for just about anyone, since nonprofits are so diverse. Why assume a-priority they are better than other organizations?
- ahi 16y ago
  e.g. International Tobacco Growers Association is a non-profit. They do good? btw: I think you're looking for 'a priori'
  - patio11 16y ago
    Steve Jobs needs to bring trademarked benign fascism to Japanese iPad spelling corrections. They get me all the time.
- bonaldi 16y ago
  The actual implementation of non-profit status in the US is a different issue. Consider patents. I agree with the idea of patents, but totally disagree with the US implementation. Likewise, I agree with giving discounts to non-profit organisations, but the more I dig the less I agree with the US system for awarding the status. But that wasn't the argument made in the post. It wasn't "we would discount to non-profits if only there weren't so many lame orgs with that status" it was "why would we ever do this?".

antidaily 16y ago

Non-profits take forever to make decisions. Don't waste your time with them.

lsc 16y ago

eh, it seems to me like more for-profit companies should put more of their marketing budget into charity. Now, I mean, not just any charity, but a charity related to their field, something that their customers care about. I mean, I know I've donated prizes to a few programming contests to good effect... and I pretty regularly see my competitors names as mirrors when I go to download open-source products. And really, how many banner ads would it take to gain the credibility of getting on the EFF "thanks" page? (I'm not there just yet... but I do have, for example, a LOPSA member discount.) The other advantage of taking it out of your advertising budget is that the legal status of the entity you are giving to doesn't matter. From the for-profit corp's perspective, they are buying advertising. I mean, when I do it, at least, I don't write off the retail "value" of the thing I gave away as some sort of charitable donation; I think that's scummy, 'cause it cost me some fraction of that to provide. I give away the service, then whatever it costs to provide that service, obviously, is part of the cost of running prgmr.com and is written off against any income, just like what it costs to run the for-pay domains; except these don't have any money coming in. I'm getting good (and usually pretty cheap) advertising; I don't need to run some tax scam, too.

msabalau 16y ago

I imagine the reason the reason why many non profits ask about a discount is because it's common to grant one. It seems likely that the firms offering those discounts are doing so not "out of the goodness of their heart" because their experience is different than 37signals--that their "for profit" customers can and will pay a much higher price for their product or service. Offering a non-profit discount is a way to capture what money the the non-profits are willing to pay. Why leave money on the table? It's not clear to me why market segmentation would be described as "unfair or dishonest". Does Jason go through life gritting his teeth at the immorality of senior citizen's discounts at the movie theatre? Does adding a few minor differences to a product, business class seating for example, transmute an "unfair and dishonest" practice into an acceptable one? To be clear, I can imagine cases where having "a clear price that we stick to" is an effective policy. Saturn seemed to do well with that policy for quite a while.