Why non-profit pricing?
37signals.com
37signals.com
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.
btw: I think you're looking for 'a priori'
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?".
And how would you change that? I mean, you can't actually have the government decide what is "the greater good" and what is not- the whole point of charities is that they are non-governmental entities; they work on problems the government is either not addressing or addressing ineffectively.
Also, I think you mean a priori.
Do you have strong opinions about what is a bad way to help poor people, perhaps even harming them? There's a non-profit doing that.
Do you have strong political opinions? There's a non-profit, probably a very well-funded non-profit, promoting the opposite with things you consider lies.
That's before we even get into corruption or just plain administrative competence. Specific examples would just set the thread aflame; it's pretty obvious "hideously ineffective" and "[what] I find full-stop evil" non-profits exist. Your list may be different than my list, but we could both come up with one. Unless you have no strong opinions, in which case we could probably still find something in the political category to get you worked up if we tried.
My only issue with his comment is that he's challenged an argument on the basis of a faulty assumption (that charities do good) by introducing a new assumption (that charities might do good, but often do evil) without defending it. So from the standpoint of defensible logic it isn't much better.
I see another commentor made a point about the International Tobacco Growers Association. That's all I was looking for... something we can sink our teeth into that allows the skeptics among us to reject Conclusion A for Conclusion B.
Your opinion of a particular non-profit doesn't come in to play. And by being a way of donating without having to take sides it can actually be a benefit to you -- some businesses have been hurt by who they choose to support.
By offering a blanket discount to charities, you offer support to organisations trying to do good (even if you disagree with their definition) in a non-partisan way. Some of your customers will support some of them, others will support others.
Nearly all of your customers will support one cause or another. How could you choose? Non-profit discounts allow you to support good works without having to.
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.
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.
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?
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.]
I'm not sure I agree with the OP, just trying to explain his position.
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.
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.
>>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
I'm not asking you to do anything about your prices. Whether you offer a lower price or a higher price or the same price doesn't really matter to me.
My point is that it is not "unfair, dishonest" to offer discounts to non-profits.
You yourself concede that you choose to support "a specific charity or cause". Why is it "unfair, dishonest" for others to support a specific cause - (in this case, all non-profits) ?
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
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.
(Neither have most teachers.)
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.
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.
$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
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
Do you have evidence for point 3?
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?
Do you pay for the stapler you use at work?
As for the vacuum comment, you are speaking to the collective. I'm talking about individual teachers, many of the best of which are harmed by the teachers' unions.
4. Many teachers work over 70 hours a week. Your data includes preschool and middle school teachers. It includes P.E. teachers. It includes awful teachers.
I can promise you that there are many excellent teachers easily passing that number on a regular basis. My two closest teacher friends arrive at school before 7:30am and often don't leave until 6pm. They work through lunch. They often have days where they don't get home until 10pm due to athletics or arts activities they are involved in. They each make less than 40k a year.
I have seen it first hand. It's common knowledge among those who are close to teachers.
For every teacher working 70 hours/week, there must be 7.75 teachers working only 35 hours/week (or 15.5 teachers working 37 hours/week, or some similar combination). To see this, observe that the BLS data I cited is capped below at 35 [1] and do some basic arithmetic. So at best, for every teacher working 70 hours/week, there are 7.75 teachers working 35 hour weeks.
This may be a regional thing, but here in NJ that's not even close to true.
For example: The [Tea Neck] district's Median Teacher Salary of $66,900 is ranked 92nd in the state in its grouping https://secure.wikimedia.org/wikipedia/en/wiki/Teaneck%2C_Ne...
Also: (http://teacherportal.com/salary/New-Jersey-teacher-salary )
How do salaries grow in New Jersey?
Starting Salary: $38,408
Average Salary: $58,156
This chart (http://www.payscale.com/research/US/Job=High_School_Teacher/... ) Shows that nationally, a high school teacher with 20 years' experience is probably making $50K-$70K
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.
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.
An NPO doesn't work that much differently than FPO in this regard. NPO does not mean they can just waste money, if they have an opportunity to be more productive and save save money, they are going to take it. While their salary is not directly tied the amount of money brought in, NPOs have boards that hire,fire, and set wages for employees just like any other business, and they do this based on performance.
I'd suggest: stingy, greedy, or others - http://www.answers.com/topic/niggardly
That said, I would like to think that on this particular forum such concerns ought to be minimal, at best.
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.
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.
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.