Pay-What-You-Can for Non-Profits
July 27, 2013 12:13 PM   Subscribe

I work with a local non-profit advocacy organization that is working on changing behaviors (promoting walking & biking in town). We charge for membership, but recently someone suggested we expand our membership by making it a pay-what-you-can (or want) sort of system and possibly we would have more cash and volunteers to work with. Can someone point me to articles/books/anything about how has worked for other non-profits or businesses?
posted by katinka-katinka to Work & Money (7 answers total) 3 users marked this as a favorite
I googled "pay what you want" and "pay what you want nonprofit." There are some scholarly hits for the first phrase but they aren't playing nicely with my Android. Below are links to articles about Panera Bread Company's experiment. You could google for more info. They did a pay what you want chili at all stores for fifteen weeks then pulled it. They apparently also have five pay what you want non profit locations where the entire menu is pay what you want. The couple of articles I read indicate those locations are still alive, it was just the nationwide chili that got pulled.

I am wondering what your thinking is with considering offering pay what you want for a non profit that promotes walking and biking. I have lived without a car for years. I happen to currently be homeless. Most homeless people seem to walk or bike. I do not think you really need to promote walking and biking among the poor. They do that anyway because they cannot afford a car.

When I worked for BigCo, I got lots of rides to work and initially participated in a couple of programs intended to promote walking and biking and carpooling, etc. I dropped out after an incident that made me feel that car people do not understand my life and I worried I would be accused of fraud or something. These programs were clearly dreamed up by car people and the options available were very out of touch with my reality. So promoting walking and biking seems to me to be not only a "first world problem" but a middle to upper class problem. No one needs to encourage me to walk. I walk three or more hours daily just to get basic needs met.

I also did volunteer work for many years when I was a middle class housewife and had more "first world problems." You are welcome to memail me.
posted by Michele in California at 1:42 PM on July 27, 2013 [1 favorite]

Just as a data point: I know that the local non-profit borrow-a-bike service has a hard time with the pay-what-you-can donation system. Let's assume renting a bike would be $10/day, people borrow a bike from them for 5 days but donate only $20 total or somesuch.
posted by travelwithcats at 2:09 PM on July 27, 2013

I know times are tough re the economy, but I think Michele in CA nailed the issue with I do not think you really need to promote walking and biking among the poor. They do that anyway because they cannot afford a car.

Assuming that membership is not extraordinarily expensive and that one can volunteer without joining, I doubt that the cost of membership is a major hurdle in promoting your mission.
posted by she's not there at 2:18 PM on July 27, 2013

Response by poster: I'm still sort of interested in this concept, so if anyone has links to research or more articles, that would be really helpful.
posted by katinka-katinka at 3:34 PM on July 27, 2013

"Pay what you can" usually refers to various fee-for-service businesses/non-profits. Along with the Panera example and other restaurants that do this, the $25 admission fee at the Metropolitan Museum of Art is "Recommended." If you want to pay $5, they will still admit you.

For the most part, any non-profit/charitable organization with a membership fee is generally considered negotiable. Perhaps you could make it explicit that your organization's membership fee is "Recommended" and see if that attracts more members. Generally, though, my guess is that the money itself is not a stumbling block to membership, and you would get more money not by having a "pay what you want" membership fee but simply by both attracting more members by soliciting more memberships directly or by soliciting for larger donations from your more prosperous members.
posted by deanc at 3:50 PM on July 27, 2013 [1 favorite]

I posted this FPP on a pay-what-you-can for online video content by YouTubers. Similar idea, but it's super new (like, in the last week) so there's no short-term, let alone long-term, data yet.
posted by guster4lovers at 12:44 AM on July 28, 2013 [1 favorite]

On Paying With Your Heart - some interesting observations from a small business perspective.

In talking to other nonprofits over the years, there are a couple "rules" that are generally accepted:
  1. Do PWYC for events and other one-offs. If you're going to do it for membership, make it a limited-time membership.
  2. Always have a suggested donation level. This increases the likelihood that people will donate at all, and they will pay more than they would have otherwise. People don't like to look cheap.
I would echo some commenters above in questioning whether this is the right solution for you, not because I think PWYC is a bad idea per sé, but because I am having difficulty imagining a walk/bike advocacy organization where the cost of membership is the largest barrier to entry for members. Some questions:
  • Do you have evidence that people would become members but aren't because they can't afford the fee? Is that what is holding people back? Could this be solved with membership levels? Is there a way to open the door to poorer members while still getting a larger fee from richer members?
  • If you had a bunch of members who paid $2/year, would that be sustainable for you? If so, why charge at all?
  • If you are trying to increase volunteerism, why not offer free memberships to people who volunteer 5+ hours for the organization? Are you offering satisfying volunteer opportunities?
  • Is membership satisfying? What incentives are you offering people? What's in it for them?
Here are some membership models from local walk/bike organizations in Toronto:
  • Cycle Toronto has various membership levels, from $20/year for students and seniors up to $150/year for a 'Patron' who wants to propel the organization. They also leave room for an "additional donation" on their membership form. Members receive discounts from local bike shops and other supporting organizations.
  • Community Bicycle Network - $20/year membership. Members have voting rights.
  • TTC Riders (public transit) - 3 membership fee levels which are based on your income. PWYC option for students and those making less than $23K/year — if you can't afford the $10 fee for this level, you're welcome to pay nothing at all. Members have voting rights and can speak on behalf of the organization to City Council.
  • Heritage Toronto has no membership, but does PWYC for their walking tours.
  • Jane's Walk, Toronto Centre for Active Transportation, and many others - no memberships, funding comes largely from foundations. This is by far the most common model in Toronto.

posted by heatherann at 8:28 AM on July 28, 2013 [2 favorites]

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