Revisiting Technology Discounts for Nonprofits: A Call for Equity and Support

Good morning! Today, I’m exploring a controversial topic in the nonprofit community.

And that’s software/technology discounts. 💰

Recently, I posted in a nonprofit Facebook group for communication professionals about Grammarly getting rid of a nonprofit discount they started a few years back.

I wanted to give people a heads-up, as I know many nonprofit professionals rely on Grammarly to clarify their writing and amplify their missions.

Many people were upset as their discount helped many nonprofit professionals perform their jobs better.

On the contrary, one person left the following comment underneath my Facebook post:

I responded to his comment and thought I’d share some more thoughts here on why this is such a bad take.

I’ll start by saying it’s an opinion shared by many of those who own/lead software-as-a-service (SaaS) businesses like Basecamp.

Jason Fried, the Founder of Basecamp, has discussed this idea a few times: on LinkedIn, and his company’s blog.

To simplify, Jason believes that nonprofits are very similar to businesses and thinks because of that fact, they shouldn’t get discounts.

His rationale is that nonprofits have expenses: electricity, water, rent, — just like for-profits do.

The debate over whether nonprofits should receive discounts on software products often overlooks fundamental differences between nonprofit and for-profit organizations.

As someone who has founded a nonprofit and also owns a business serving nonprofits, I find it crucial to address these distinctions clearly and respectfully.

Firstly, it's important to recognize that while both nonprofits and for-profits operate as businesses, their funding structures and objectives are markedly different.

Profits generated by a nonprofit organization are reinvested to further its exempt purpose, not distributed to owners for personal enrichment.

This is a critical distinction, as the ultimate goal of a nonprofit is not wealth accumulation but advancing a social, educational, or charitable mission.

Moreover, nonprofits are legally obligated to adhere to their missions and are subject to rigorous external audits and monitoring to ensure compliance.

This level of scrutiny is generally not applied to for-profit businesses, even if they claim to pursue “social good.”

Essentially, the core purpose of a for-profit business is to generate profit for its owners or shareholders, whereas a nonprofit exists to serve the public interest.

It's also worth noting that many software-as-a-service (SaaS) companies already recognize the importance of supporting early-stage companies by offering discounts to startups, which are inherently for-profit.

Given that nonprofits not only operate under tighter budget constraints but also aim to address societal challenges, extending similar discounts to them seems both fair and beneficial.

Just as startups are encouraged through reduced rates to innovate and grow, nonprofits should be supported in their efforts to create positive social change.

Providing software discounts to nonprofits is not just a matter of charity; it's a strategic investment in the betterment of society.

By equipping nonprofits with the necessary tools at reduced costs, we enable them to operate more efficiently and effectively toward their noble goals.

We'll never democratize technology and advance the nonprofit sector with opinions like these — just saying!

I'll follow up by saying businesses can do as they please...I'm not saying we should require it by any means, lol.

I just don't think this take is healthy for many nonprofits and it's quite misleading.

We should be good humans and have a propensity to give as much as possible.

Inversely, I think it's funny when companies, like Grammarly, commit to "helping nonprofits" so they have a great story to tell shareholders — but ONLY when it's convenient for them.

They're very quick to capitalize on corporate social responsibility but the second the economic landscape changes slightly, they're the first to throw it out.

Just like AmazonSmile. But, I'll spare that talk for now.

On the bright side, herein lies an opportunity for tech businesses to support charities in advancing their important missions and driving society forward.

I’m not asking you to give so much you go out of business but consider nonprofits as a viable customer base that CAN (and should) grow with you.

Perhaps the sweet spot is offering free or significantly discounted technology for smaller charities (e.g., organizations with less than $250,000 in revenue), and lowering discounts for larger organizations.

This can be a win-win, promoting both technological accessibility for nonprofits and fostering a philanthropic spirit within the tech industry.