>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.
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?
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?".
>The actual implementation of non-profit status in the US is a different issue.
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.
I believe that non-profits on the whole are more likely to work to directly "do good" than for-profits.
Whilst it might mean I end up "supporting" a cause that I personally would not subscribe to, as a broad definition it seems suitable to distinguish pricing policies based on this if I want, on the whole, to support organisations that "do good".
Do you have strong opinions about abortion? Whatever they are, there's a non-profit actively working to the contrary.
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.
I won't disagree with any of that, nor on the face of it do I disagree with Patrick.
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.
Seems easier to simply donate to them, instead of lowering prices universally. I wouldn't donate to every non-profit, not all of them are aligned with my opinions. So why give a flat effective donation to all of them?
You don't offer non-profits discounts because you necessarily agree with everything they do. Rather, you offer the discount because you agree with the entire concept of "non-profits".
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.
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.
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?
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.
>>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.]
"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.
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.
I'm not sure why my parent post is getting downvoted.However, I think you're throwing a red herring here
>>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) ?
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.
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.
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
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.
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.
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?
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.
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.
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.
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:
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.
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?
Mechanics have to buy their own oil? They have to pay for customers' washer fluid?
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.
1. Future pensions aren't relevant to a discussion of present income vs expenses. At issue here is whether or not a teacher might reasonably be cash-strapped.
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.
Future pensions are completely relevant. A person earning $60k/year needs to save at least $10k of that for retirement. A teacher earning $45k/year does not. Besides, if a teacher really feels cash strapped, he or she has 2-3 months in which to earn more money.
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.
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.
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.
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."
> 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.
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.
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.
Or, you know, a standard case of 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.
...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.
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.
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.
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.
"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.
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.
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.
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.
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.