
Ask HN: Should SaaS charge a non-profit? - michaeloblak
What are good examples of companies helping non-profits?<p>What non-profits thinks about companies helping them and about those which are charging them (no free service for non-profits)?<p>How to make such help good for both sides?<p>How to check if someone is really using my service for non-profit purposes?
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giaour
If you're going to have a policy, I would caution against having one that
requires a case-by-case evaluation. That will not scale well and can lead some
to allege bias.

As an example of a reasonble, scalable policy: Salesforce used to (and still
might) offer _any_ 501(c)3 non-profit organization 10 free licenses. The IRS
makes a judgment call when issuing or renewing 501(c)3 status, and you can
save yourself some time by relying on their evaluation. If an organization is
big enough to require more than a small number of licenses, then they're big
enough to pay for them.

~~~
bruce_one
There's a number of SaaS offerings I've considered suggesting for non-profit
organisations (technically charities), however being Australian based, rules
like this can be tricky/off-putting because it's explicitly a US requirement.

(With hindsight, I feel like maybe I should've emailed with a "hey we're not
US based, but we have the Australian equivalent, see: ..."; but the explicit-
ness of the wording made me feel like it wouldn't work... (I assumed there was
a reason for needing the official status...))

I do agree with the suggestion that case-by-case may not scale; although I'm
not sure I've ever considered the bias side, but don't know how I would ever
"notice" the bias as a consumer.

Back to the question itself:

I've been on the consumer side of non-profits/charities using SaaS offerings
before (both through probono project at work, and side projects) and think
it's awesome for the non-profit/charity (and have been incredibly thankful for
the services we've received), but also think it can be good for the SaaS too
(there are at least 3 SaaS offerings I now actively advocate to use in future
projects because I used them first in a non-profit/charity context, and I can
do it with hands on experience too). Doing probono or side-projects in this
context allows for far more flexibility (IME) and hence I'm much more likely
to investigate and consider a SaaS than I am in a normal project for a
customer (working at consulting/SI shop).

It's also meant that a lot of the other people involved in the non-
profit/charity now know about XYZ now too, and can suggest it in other
contexts. (It's not a direct example (but it comes to mind): we used Mailchimp
for a Scout thing, and now about 4 (that I know of) of my friends have started
using Mailchimp at their workplaces because they now know that it exists; what
it is; and how to use it (and they're unlikely to consider competitors because
they already know Mailchimp and use it).

~~~
giaour
You can always say "501c3 (or the equivalent in the country where you are
located)." Most jurisdictions have an official tax designation for
charitable/non-profit organizations (Salesforce has a list of them at
[http://www.salesforce.org/nonprofit/power-of-
us/eligibility-...](http://www.salesforce.org/nonprofit/power-of-
us/eligibility-guidelines/)), so you don't have to restrict the program to US-
based organizations.

I know what you mean about these programs being good for the SaaS. If it
weren't for Salesforce's pro-bono license program, I never would have used it,
programmed against it, or advocated adopting it at work.

------
matthewowen
I used to work for a digital agency that specialized in working with non-
profits.

It's perfectly acceptable to charge non-profits for services, and non-profits
expect to be charged. Getting free services and products is often a great way
to get crap. Non-profits have budgets, and they're willing to spend them to
achieve their goals.

It might be effective to offer discounts or limited free functionality to non-
profits, but you should probably view this as a marketing strategy more than
as a moral pursuit.

~~~
brudgers
I agree that nonprofits are legitimate customers. One way to subsidize goods
and services for nonprofits is by normal donations to their fundraisers.
Essentially, it becomes supporting the business of a customer. That way
there's no excuse for shortcuts.

At scale, an established policy of charitable donations or a foundation makes
sense.

------
davismwfl
Set up a policy and not a case by case evaluation as giaour pointed out.

Personally, differentiate between charity and non-profit. All charities are
nonprofits but not all nonprofits are charities. I'd give a significant
discount to charities upon proof of status, say 50% off, but not necessarily
for non-profits. Think of it this way, your Home/Condo Owners Association is
likely a non-profit, so are a number of exclusive country clubs etc, but they
are not charities and shouldn't be seen as equal.

Also, having been an exec at a Charity, make sure you also talk to your own
accountant as if you follow a set policy like this, and validate proof of
status (annually) I believe you are entitled to some tax benefits as well.

------
codegeek
They may be Non-Profit but you are probably not. If you really like their
cause, you can offer them a small discount. I don't usually know if my
subscriber is non-profit but when they do mention it, i happily say that we
offer a <insert random> percent discount and give it to them.

Don't bother checking if they really use your service for non-profit. Check if
they are abiding by your TOS and that's it.

------
herbst
I dont see why non profits should be free. Isnt even FIFA a non profit on
paper? If it fits your company i would just mention somewhere that you offer
discounts for non profits and decide from case to case.

------
Mz
First, educate yourself about the NPO sector, example:

[https://www.councilofnonprofits.org/myths-about-
nonprofits](https://www.councilofnonprofits.org/myths-about-nonprofits)

Second, look for articles like this:

[http://thirdsectortoday.com/2014/08/19/10-benefits-only-
nonp...](http://thirdsectortoday.com/2014/08/19/10-benefits-only-nonprofits-
can-offer-for-profits-in-a-partnership/)

Not for profit organizations are not inherently more moral than for profit
entities. They aren't inherently better run. They aren't inherently doing a
better job of serving the greater good.

Some sorts of services work better under certain organization models than
others, eg it is best to have a government run or volunteer or not for profit
fire department that automatically responds to all fires, regardless of
ability to pay. That simply works better than a for pay model because if you
do not put out your neighbor's fire because they are poor and cannot pay, the
fire can soon become your problem and, at that point, it can be a bigger
problem that is harder to solve.

But that does not mean that a non profit model is inherently superior in all
cases. Business done right is a force for good. It is a civilizing, peace
promoting force. And, sometimes, NPOs are all kinds of fucked up and were
created for all the wrong reasons.

------
jasonkester
Only if it makes business sense to do so.

For a long time, I used to give out free Twiddla licenses to students and
teachers. It generated a ton of good word of mouth referrals and established
it as something that people use in the classroom. Now that I'm charging again
for those licenses, I sell quite a bit more because of that positioning.

I occasionally get non-profits asking for free licenses too, and I always say
no. There is no upside like there was with .edu, so it just amounts to giving
things away for free.

A non-profit is an organization with a budget that they can spend on things
like software. Your software has a price, so they get to pay it. Tell them as
much and they will understand.

------
sjs382
I don't get enough people asking for discounts to matter, but I usually give a
discount to anyone who asks.

I do this a bit as a pay-it-forward thing. When I was in college, Github was
offering their lowest plan (which included a few private repos) for free for
educational use, if you emailed them. Well, I reached out to them, they gave
me the free account without any verification. I had the account well past my
time in school, though I lost it sometime in the last few years.

I'm happy to pay the same sort of thing forward to anyone who asks.

------
saluki
I would offer them a discount and think about donating to them once a year a
portion or all of their subscription if you like the cause.

Free accounts could become a burden over time and could lead to people just
trying to sign up for a free ride.

Add a link to your pricing page that says Are you a 501(c)3 non-profit contact
us for discounted pricing.

See how much interest you get. You can decide on the discount when the first
email rolls in. (Setup a new contact page/form that indicates to you they are
interested in non-profit pricing).

Make a difference.

------
wallflower
Slack has a great policy. It is not a blanket policy - they have exclusions.

[https://get.slack.help/hc/en-us/articles/204368833-Slack-
for...](https://get.slack.help/hc/en-us/articles/204368833-Slack-for-
Nonprofits)

Domo 'gives back' by helping non-profits use their BI platform (Hadoop with a
pretty front-end).
[https://www.domo.com/customers/goodwil](https://www.domo.com/customers/goodwil)

------
nparsons08
Do you have overhead? If so, yes. A non-profit still generates a significant
amount of revenue... especially since they don't have to pay the same tax as a
normal company does.

------
gus_massa
Do you like the activity that they do? Would you donate $5 to them?

------
partisan
Check the pay for the top executives at non-profits. Then decide whether you
should forgo your profit for theirs.

------
3eto
>How to make such help good for both sides?

Convert the value of your service and reinvest it back into the nonprofit as
unrestricted funds. Nonprofits are usually in need of unrestricted funds.

------
mankash666
Unfortunately, most non-profits are notorious for money-laundering and illegal
activity. I believe you should consider waving fees on a case-by-case basis,
if you can spend money to evaluate, but if you can't, I'd err on the side of
caution and not waive fees.

~~~
mankash666
I understand that this is an unpopular thing to say, but I say it From
research I did on building a "transparent accounting" software for non
profits. I found out during the course that most of them didn't want to be
transparent.

If you don't believe me, check transparency international's research on the
same.

