Sunday, August 23, 2009

Free: The Future of Radical Price, Non-profit Edition

Similar to my notes on the fantastic "What Would Google Do," I'm excited to post some thoughts on Chris Anderson's amazing book "Free" and apply the concepts once again to the non-profit world.

At first, I struggled to see how to apply the concepts in the book to non-profit fundraising but after finishing and having spent quite a few hours at the beach considering things, I'm really excited to outline what I think are pretty cool and in hindsight, fairly obvious ways for non-profits to utilize these concepts.

 

 



If you haven’t yet read it, “Free” is all about abundance. The internet, in particular (the world of “bits”) is pushing us from a world driven by supply and demand and scarcity into a uncharted and uncomfortable world of abundance and access. Digital goods and services can now be reproduced for free and distributed for free instantaneously across the globe. This is radically changing traditional markets and forcing traditional companies to compete against new business models that wreck havoc on pricing and distribution by forcing them to compete against free goods and services. Whether you agree or disagree with Anderson’s premise, this book is an eye-opening look at what is happening in just about every industry on the planet.

 



As I read the book, idea after idea kept popping into my head. I’ve categorized some of the more strategic concepts as a way to get you (and me) thinking more about how to best utilize “free” to accomplish our fundraising, awareness and mission goals.

At the end of this post, I’ve noted a few specific examples of how these concepts could be put into play by any non-profit with the will to experiment.

 

 

 

 



Redefine (and clarify) What Business We’re In


Might as well start in the deep end… what business is your non-profit in? I think that most non-profits, especially from a fundraising perspective are in the “hope” business. The business of hope is a rich business to be in of course – it’s loaded with emotion, passion, life, death and more. Given that I think we’re in the hope business, I’ll rip a page out of “Free” and model Ryanair, a European airline that redefined their market. Instead of being in the airlines business, Ryanair says they are in the travel business. 

Stop for a moment and consider that your non-profit, instead of being in the research, event, services or whatever business was really in the “hope” business. What would you do differently? For one, we’d quickly expand how we think about our constituents more broadly even beyond their disease, disability or lot in life. In some cases, some non-profits actually do this pretty well, but there is much room for growth.

The translation on this one is tough in terms of “Free”, since most non-profits already provide most services and information for free, but the point still stands – broaden the definition of what business you are in and look to provide even more goods and services around that idea (for free!).

In return, I think we can find new sources of revenues/donations that will dwarf what we see today through direct mail, online giving and major gifts. 

Open Source Everything

I think that non-profits and open source go together like Peanut Butter and Jelly… or like Cheese and Burgers… they go together great. Let’s start with using open source for infrastructure. It’s time to embrace open source in a big way but not the way you might think. Non-profits should be collaborating with each other (some already are!) on using emerging platforms like Drupal, Joomla and others on building common components to help everyone do a better job in building their relationships with constituents. As an industry, let’s get the “Free” bug and start to create re-usable components that everyone has access to (for Free!) for fundraising, spreading the word about our mission, or whatever it is we can think of. Years ago, I suggested that using YouTube to host all our videos was a good idea primarily because it was free… I was right! We can do more and more with this today – consider using free platforms for distributing all your content including the obvious (Flickr) and the emerging (Tumblr).

Next comes the open sourcing AND syndication of our content in a big way. Anderson talks in the book about using a “max strategy” across digital platforms to drive maximum reach (according to Anderson, a Max strategy is the best way to reach the biggest possible market and achieve mass adoption). Non-profits should not only be using this sort of max strategy but should go further. Open content means allowing others to mix, re-mix and mash it all up. Let everyone/anyone take our content and create new things – iPhone apps, widgets, Facebook connectors, Wikis or whatever. It makes sense to me.

Manage for Abundance 

In everything we do, we must start to apply abundance thinking. Part of this is opening up and “open sourcing” our content, tools and applications. But go further and push the culture to fail fast… construct simple experiments that push the boundaries of what is acceptable in a world of scarcity and push into abundance. Put ALL your images online (on Flickr!). Load ALL your videos onto ALL the video sharing sites for max reach. Allow donors to create micro-campaigns using whatever tool they are comfortable with and let them do it on their terms, not yours.


So what’s next? Anderson thoughtfully included a “Freemium Tactics” section at the back of the book. This section is like fertile soil for ideas…

 


Ideas, Ideas, Ideas
How about re-branding online games or iPhone games and giving them away for 30 days for free. After that, charge a subscription donation or a small fee to keep the games. Note: the games could be mission related or hell, just games for games sake!

Corporate partnerships seem likely here as well as I think about it… find a corporate partner who gets “Free” and co-brand something/anything with them. Push beyond traditional sponsorship models and dig into how “Free” can help both organizations grow, and grow quickly.

 



There are plenty of good examples of innovative non-profits using “Free” models everywhere. Look on Facebook for examples of badges, non-profit gifts and more. I think “Free” is a great business model for non-profits and I’m looking forward to exploring it more in the near future.

 

 



As a thought exercise, here are some more radical ideas I had while reading, and then writing this post…

A virtual world for patients, disabled folks or whomever (Kids with Cancer, Aspergers etc) where most of everything is free, but donors can pay for users upgrades via donations. Think WoW meets Club Penguin meets Kiva.org.



Service listings – give mission related service providers free listings in a resource database, but charge them a small donation to upgrade their listings with additional info, RSS, a blog and video streaming (via Youtube for Free of course).


 


Continue to give away free online content but charge for well produced (and on demand) printed versions of your content and resource guides. All donors to subsidize printing/shipping costs via micro-donations.



Give away free blogs on your own platform (branded of course) and charge for additional/special features.

Here’s a radical concept… sell ads along side your non-profit content (gasp!).

 



As I mentioned above, open source all your content… but add a API to it and charge companies a fee to access your data so they can build additional services on top of your content. Let them do that for free and I think you’ll be on the right track!

What do you think – share your thoughts!