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I help run an organization, radicaldesigns.org. We work exclusively with groups (mostly nonprofits) that have a mission we believe in. We've been around for 8

by tedsuo 15y ago

I help run an organization, radicaldesigns.org. We work exclusively with groups (mostly nonprofits) that have a mission we believe in. We've been around for 8 years now. Some advice, from my experience: 1. Long term support is what organizations need. It's a rare software project that doesn't need some kind of support. If there's no one to call when it breaks, or needs to scale, or when a new staffer shows up and the previous one didn't train them (happens all the time), then they will stop using it. It's possible for a well meaning developer to hang an albatross around the neck of an organization by building something they depend on, but not have any support plan worked out. This can be mitigated by hosting the applications for the clients, in exchange for a hosting fee. If you don't host it yourself, then you have to deal with sysadmining unfamiliar boxes in a crisis situation, where the problem could be a change anywhere on the system. No fun! Along with hosting, offer a help desk at an hourly rate. Nonprofits really benefit from this because they have a lot of turnover, and you end up becoming the institutional memory for the organization's tech. Even if you have turn over too, chances are there's a better understanding at your tech shop of what is going on. 2. Cheap is better than free. Pro Bono sounds noble, but I've found it leads to... bad things. There's something that changes in people's mindset when something is free. Client expectations can become extremely unreasonable, and it's hard to polish something when you're not getting paid. Where "done" is becomes extremely vague, and you would be surprised at how doing someone a favor can end up making everyone unhappy. So charge money. Be cheaper than industry standard, much cheaper if you can, but make it a real project with a real budget. This helps everyone to prioritize. 3. Nonprofit might not be the best business model. The main disadvantage on being a nonprofit (at least in the US) is that you cannot work on political campaigns. We're a workers co-op instead. It's been working out pretty well for us. However, we've never tried to be donation driven, so I'm not sure how that would factor in. I think you should look at a balance of donations and charging for labor, and find the business model that supports both. Or have two organizations, a nonprofit and a co-op, to handle the two different revenue flows. It think getting direct donations and grants will be hard. At any rate, that money will come with a mandate of some kind. So I would encourage you to cast a wide net, have a look at co-ops and other business types as well, and make sure you pick a model that can support all the revenue streams you want. Cheers, Ted

atroche 15y ago
Thanks for the insights, Ted. It makes me so glad to see that someone else has struggled through some of these problems and done as well you as you guys clearly have. Do you really provide support for most of the clients featured in your portfolio? There are so many! How much less do you charge than a typical IT company? Do you include the cost of support in the initial fee? I totally agree with you that surviving on donations and grants alone would be too hard. For the first projects that Radical Designs did, were you able to charge? How did you convince organisations to go with you? And how long was it before you established your current business model? Sorry for asking so many questions!
- clojurerocks 15y ago
  Im dealing with a few social enterprises myself and the funding is definitely one of the biggest challenges. Grants are certainly one way however relying on them can be problematic because they are hard ot get initially but at the same time its easier to get them once you get them the first time. Also usually they dont cover the total costs involved. Donations can be tricky because you have to get people to know about the product and to want to give money. Some are trying other ways such as developing mobile apps and selling them. My thoughts also is to talk to foundations and very wealthy people who might be open to investing in high technology products that will help people.
- tedsuo 15y ago
  Don't mind the questions at all. So, to be clear we don't offer general IT services, we only do individual projects for clients (usually websites and custom applications). Most clients don't need too much support, just an occasional training. We offer a standard support package as part of the host fee ($50/month, free 1/2 hour of support via the help desk). Usually the support contract is separate from the initial project. For projects, we used to do a flat rate bid, but that sucked because it was hard to define "done" or account for changing requirements once the project was under way. So we now give an estimate with a number of line items, and bill by the hour. This works out well because you let the client decide when to stop. We are cheaper because we don't pay ourselves industry standard wages (shitty, but that's the main cost), and we don't bilk the client for non-productive hours. In contracting, that's where the real money is: you charge by the week or month, not by the hour. We charge by the hour and are transparent about costs. Small nonprofits have very tight budgets so this is attractive to them. RD got started really as an extension of the activism people were doing at the time. David Taylor, who started it, was working on a number of campaigns and eventually needed help, so he brought some friends in. Projects got big enough that they needed real support, so money got involved. David didn't charge much at first, and the projects were small, but as we were around longer things started to gel up and eventually we started working with larger clients. It took us a while to sort out our business model, there were a lot of bumps along the way. Also, we never did any advertising, it's all been referrals so far. I don't recommend that! If you want to jump start the process, the best thing to do is talk at nonprofit tech conferences and get out in front of potential clients. You can also find potential clients who look like they may need your services, and email them. If you get in enough rolodexes, have a reassuring web presence, and do good work, you will start getting a steady stream of calls.

by tedsuo 15y ago

atroche 15y ago

Thanks for the insights, Ted. It makes me so glad to see that someone else has struggled through some of these problems and done as well you as you guys clearly have. Do you really provide support for most of the clients featured in your portfolio? There are so many! How much less do you charge than a typical IT company? Do you include the cost of support in the initial fee? I totally agree with you that surviving on donations and grants alone would be too hard. For the first projects that Radical Designs did, were you able to charge? How did you convince organisations to go with you? And how long was it before you established your current business model? Sorry for asking so many questions!

clojurerocks 15y ago
Im dealing with a few social enterprises myself and the funding is definitely one of the biggest challenges. Grants are certainly one way however relying on them can be problematic because they are hard ot get initially but at the same time its easier to get them once you get them the first time. Also usually they dont cover the total costs involved. Donations can be tricky because you have to get people to know about the product and to want to give money. Some are trying other ways such as developing mobile apps and selling them. My thoughts also is to talk to foundations and very wealthy people who might be open to investing in high technology products that will help people.
tedsuo 15y ago
Don't mind the questions at all. So, to be clear we don't offer general IT services, we only do individual projects for clients (usually websites and custom applications). Most clients don't need too much support, just an occasional training. We offer a standard support package as part of the host fee ($50/month, free 1/2 hour of support via the help desk). Usually the support contract is separate from the initial project. For projects, we used to do a flat rate bid, but that sucked because it was hard to define "done" or account for changing requirements once the project was under way. So we now give an estimate with a number of line items, and bill by the hour. This works out well because you let the client decide when to stop. We are cheaper because we don't pay ourselves industry standard wages (shitty, but that's the main cost), and we don't bilk the client for non-productive hours. In contracting, that's where the real money is: you charge by the week or month, not by the hour. We charge by the hour and are transparent about costs. Small nonprofits have very tight budgets so this is attractive to them. RD got started really as an extension of the activism people were doing at the time. David Taylor, who started it, was working on a number of campaigns and eventually needed help, so he brought some friends in. Projects got big enough that they needed real support, so money got involved. David didn't charge much at first, and the projects were small, but as we were around longer things started to gel up and eventually we started working with larger clients. It took us a while to sort out our business model, there were a lot of bumps along the way. Also, we never did any advertising, it's all been referrals so far. I don't recommend that! If you want to jump start the process, the best thing to do is talk at nonprofit tech conferences and get out in front of potential clients. You can also find potential clients who look like they may need your services, and email them. If you get in enough rolodexes, have a reassuring web presence, and do good work, you will start getting a steady stream of calls.