Demystifying the Price for Fundraising Software: A Complete Guide for Nonprofits

There are a lot of fundraising solutions available today, but just like any other service or resource, there’s a cost associated to using them. And even though you might be running a nonprofit, that doesn’t mean these platforms aren’t going to charge for their use. After all, creating a software solution and maintaining them takes time, people and money. And of course, that gets passed along to you, the customer.

So it’s important to understand just how varied the costs are when it comes to different solutions, they can range anywhere from free to thousands of dollars each month. So it’s super important to know exactly what your charity needs in a solution, what’s just wasteful extras, and what the best recommendations are for your budget. Plus a whole slew of additional factors to consider.

Just remember, it’s not just about finding the cheapest option, but about finding the one that will give you the highest return on investment (ROI) with the least amount of hassles. A solid fundraising platform should offer features that help you meet your goals without breaking the bank. Plus it needs to be easy to use, give you room to grow and allow you to integrate your existing third party software solutions seamlessly. And although this all might sound like a lot, we’ll break each section down so you can recognize their importance and better make a decision on what solution is best for your needs.

Key Factors Influencing the Price of Fundraising Software

Just like any other business, you’re charity is going to incur costs in order to run its daily operations. And having a solid software program to run your business is one more of those costs that are inevitable. So it’s important to understand what you need versus what you can afford, especially since most nonprofits operate on limited budgets. Plus whatever you spend is going towards something other than your programs and solutions. So it’s really important to compare pricing models to make sure you're getting the best value for your money.

The main influencers in price are the solution’s features, scalability, integrations, and customer support provided by the platform. For example, if you need tools for advanced reporting, event management and donor analytics you can expect to pay more than a more basic software. The more features the software offers, the higher the cost. This is why you need a clear understanding of which tools and features your nonprofit really needs before deciding.

The next influencer is scalability. If your nonprofit is planning to grow or expand its fundraising efforts you’ll likely need software that can handle more users or larger volumes of data. Luckily many platforms have options that charge you less in the beginning when you’re still small, and allow you to grow with bigger and more expensive plans. Just remember to budget in the increases in costs as you lay out your financial plans or prepare your nonprofit operating budget.

Third party integrations can also add to the price of your software solution. Some platforms like Paybee allow you to connect with tools like email marketing software, CRM systems, and payment processors such as Stripe and Paypal. The only problem is some platforms charge extra for these as add-ons, or make you choose a higher tier in order to gain access to allow integrations. So look at the fine print!

One of the most important and often completely overlooked expenses is customer service. While all companies offer some sort of customer service as a service, be careful on what types of service they include. Often it is email only options that can take days to get a reply from. Other companies offer a dedicated specialist on call twenty four hours a day, training resources, and priority assistance through instant chats. But no all options are included in the basic plan or whichever you choose. So be sure to look at their customer service options and be sure the option you need isn’t costing you even more money.

And while it's tempting to choose the cheapest option, always consider the long term value, the features you’ll actually use, and how the software aligns with your nonprofit's growth plans. Look for affordable fundraising software prices that fit your current needs and leave room for future growth without breaking your budget.

Common Pricing Models in Fundraising Software

You’d be surprised at all the ways companies have come up to charge you more. And while having different options can be beneficial, it’s important to clearly understand each model, its pros and cons and how effective it would be to choose an option for your charity.

Subscription-Based Pricing

This is the most common type model you’ll run into and involves recurring fees that are typically paid monthly or annually. Subscription plans often include basic functionality, updates, and support depending on which package you choose. For instance, a small nonprofit might pay $30 per month for core features like donation tracking and reporting while larger organizations may choose a premium plan at $100 per month that adds features like donor segmentation and event registration. The positive is you know your upfront costs and can cancel if you don’t like the platform, the negative is these recurring fees can really add up over time.

• Pro: Predictable, recurring costs simplify budgeting.

• Con: Costs can add up over time, especially with additional features or more options.

Tiered Pricing

Tiered pricing offers levels of service tailored to different needs and is the second most used pricing option. A basic tier may include standard features like payment processing, while higher tiers unlock advanced tools like campaign automation or detailed analytics. For example, a nonprofit running small campaigns might use a $50 monthly plan, while a large nonprofit hosting frequent events might upgrade to a $200 tier to access tools for event planning and volunteer management. This model allows flexibility as needs evolve.

• Pro: Flexibility to choose a plan that matches current needs and scale as you grow.

• Con: Higher tiers can become expensive, even if only a few features are needed.

Usage-Based Pricing

While usage based pricing can sound like a great option for your nonprofit, it can sometimes end up costing you more in the long run if you’re not carefully watching the numbers. With usage based pricing you can pay according to how much you use the software. Costs might be tied to the number of transactions, donors, or users. A platform could charge $0.10 per transaction, meaning nonprofits with more activity pay more which is completely fair and can particularly suit start up nonprofit organizations with low or fluctuating fundraising volumes. But if you’re doing larger volumes or you have many supporters using the platform, it can often become more expensive than just using any of the options above.

• Pro: Costs align with actual usage regardless of the size of your organization.

• Con: The varied usage makes it difficult to predict expenses and can lead to potential budget overruns.

One-Time Purchase

Some software companies offer a lifetime license for a single payment. For example, a nonprofit could invest $5,000 upfront for software that includes updates and support for a fixed period, such as five years. This model eliminates ongoing fees, making it ideal for organizations with upfront funding. The drawback is the need for the often significant initial investment, something many smaller charities just can’t pull off. Plus sooner or later the company is going to need to turn a profit and may charge heavy fees for further updates or support.

• Pro: If you can afford the initial investment, it eliminates ongoing fees.

• Con: Requires significant initial funding and eventual updates may cost quite a bit.

Which Model Fits Your Nonprofit?

Seeing there are millions of nonprofits, each with their own needs and requirements, it’s really difficult to say which option is the best. This all really depends on your charity's size, its fundraising activities and the size of its budget. Smaller nonprofits with basic needs might benefit from subscription plans or lower tiers that still allow them to grow over time. Larger or rapidly growing nonprofits may find tiered pricing or even usage based models more practical in some situations. One time purchases are usually suited to well financed organizations that can afford the substantial initial funding it requires.

Watch Out for Hidden Fees

Hidden fees in fundraising software are common and it’s something you really need to be aware of. These fees often stem from complex pricing structures or fine print that’s easy to overlook, so it’s super important to read everything the company gives you in rearguard to their pricing structure. And even wiser would be to keep a copy so if they make any changes, you can look back to your initial agreement. Here is our list of the most common ways companies try to charge you more than what you thought.

Common Hidden Fees

1. Transaction Fees
   • What it is: Many providers charge a percentage of each donation that’s processed, sometimes on top of other payment processor fees like those from PayPal or Stripe.
   • How they justify it: They claim it covers maintenance of the platform or additional charges or features tied to the transaction.
   • How to spot it: Ask directly about transaction fees and whether they’re included in the quoted price. Look for terms like "processing fees" or "platform fees" in contracts.
2. Integration Fees
   • What it is: Costs for connecting the software with third-party tools like CRMs or email marketing platforms.
   • How they justify it: They argue that custom integrations or compatibility with specific tools require extra coding and maintenance resources.
   • How to spot it: Check whether integrations are included or listed as “premium” features in their pricing documents and quotes.
3. Customization Fees
   • What it is: While this is sometime fair practice, charges for modifying the software to meet your nonprofit’s unique needs is often not necessary with the availability of integrations.
   • How they justify it: Changes are often outside the scope of their standard service offerings and require additional work outside the companies usual business model.
   • How to spot it: If a feature or function isn’t explicitly mentioned in the plan or there are no integrations for your fundraising solution, expect it might cost extra.
4. Support Fees
   • What it is: Companies may have a standard of service they provide all of their customers while more labor intensive support like one on one or instant assistance may cost extra.
   • How they justify it: This type of upsell is often positioned as ‘premium support’ and added as a service to “power users” for an increased cost of course for the process.
   • How to spot it: Confirm what level of support is included and if there are charges for faster response times or on demand technical assistance.
5. Overage Fees
   • What it is: When plans have specific usage limits like the number of users, emails sent, or number of donations processed and you go over that limit, they will charge you.
   • How they justify it: They claim it encourages nonprofits to stay within their tier or upgrade to a higher plan.
   • How to spot it: Review usage limits in detail and understand what happens if you exceed them and what the financial liabilities are if you do.
6. Renewal and Upgrade Fees
   • What it is: Paying higher costs for contract renewal or when upgrading plans.
   • How they justify it: Companies argue that these increases reflect software updates and new features added to the platform that weren't available previously.
   • How to spot it: Read renewal terms carefully and inquire about rate increases over time.
7. Training and Onboarding Fees
   • What it is: Charges for initial setup or staff training.
   • How they justify it: They claim onboarding requires additional resources such as staff time or custom materials so they charge a fee.
   • How to spot it: Ask about onboarding and training costs upfront and see if they offer a training library or resources especially if the software is complex.

How They Get Away With It

1. Opaque Pricing Models: Providers may advertise low base rates while hiding additional costs in terms and conditions or in long winded contracts. If it seems to good to be true, it probably is.
2. Lack of Transparency: Critical details about fees are buried in dense contracts or glossed over during sales pitches or not pointed out at all.
3. “Industry Standard” Claims: Hidden fees are framed as normal making nonprofits less likely to question them or ask about their relevance to their own organization.

How to Spot and Avoid a Hidden Fee

1. Ask Direct Questions: Be specific and up front about asking for all fees not covered in your pricing model. Ask about fees for transactions, integrations, and overages even if everything seems clear.
2. Request an Itemized Breakdown: Insist on a detailed list of costs for every feature and service so you have a record of their fees.
3. Read the Fine Print: Comb through contracts paying attention to sections on billing, renewals, and limits. If need be, have a lawyer or accountant take a look as well to give you the best option of getting the best deal.
4. Check Reviews: Research experiences from other nonprofits to see if hidden fees are a common complaint. You can check places like YELP or others that review these services to get a better overall picture of how the company does business.
5. Trial Periods: Use free trials to test the software and clarify any extra charges before committing. This has the added bonus of seeing how easy to use the platform is and if it is intuitive enough to get people using without hours of additional training.
6. Negotiate: Ask for fee waivers or better deals. Things like support or onboarding costs can often be waived if you just ask.

Understanding these hidden fees and learning how to spot them can save your nonprofit significant money and you and your team a lot of time and frustration. Always do your homework, ask questions, and compare options before making any decisions.

Cost vs. Value: Evaluating ROI for Fundraising Software

Since most charities are often cash strapped, deciding just how cost effective your fundraising software is and what the total ROI you expect from it can make choosing the right solution much easier and a whole lot less scary. The whole point in investing in a software solution is to give your organization the tools it needs to generate more funds and make everyone’s lives easier. So if it doesn’t accomplish that, then what's the point?

One way to calculate ROI is by comparing the total cost of the software, any subscription fees, transaction fees on donations processed, and any setup or integration costs to actual measurable gains. For example, will the platform help increase donation amounts or expand your donor base by now having certain abilities for fundraising you didn’t have previously? Does it have the ability to increase donor retention and event participation? And by how much?

Let’s say your nonprofit invests in a platform that costs $1,000 annually. Over the year, donations increase by $10,000 due to features like automated virtual events and smoother payment processing. Subtract the software cost from your total and you’re looking at $9,000 in net gains, a clear sign of positive ROI!

But ROI isn’t everything. Your solution should also make everyone’s job easier and free up staff time to let them do more important task like calling donors or saving the world. Does the software simplify donor management and make it easier to track contributions and follow up with supporters? Does it allow you to assign tasks and monitor staff and volunteer hours behind the scenes like an online platform like Paybee does?

Another thing to be aware of are donor retention tools like like personalized email campaigns or donation history data. These KPIs can be tracked with the right solution and help re-engage one time donors while building stronger relationships with all your supporters. If your donor retention rate climbs it’s likely due to the improved relationship building of your chosen software. And since charities rely so heavily on their supporters, these are almost must have tools for any competitive software

Event management is another big one. Not only should your choice help you run the daily activities of your organization, it should help make it more profitable as well. This includes having fundraising options like in-person events, virtual raffles and hybrid auction solutions. Features like ticketing integration, volunteer coordination, and post event reporting are just a few more options to plan and create highly profitable fundraisers. And don't forget tools that make giving easier and even a tip. These can all help raise your fundraising without an additional fee.

While all of this information can seem a bit daunting, it isn’t as bad as choosing the wrong platform and needing to change over in the near future because you didn't understand the capabilities of the software or your organization’s true needs. Taking a little time to list down what are necessities and what you can afford will make it much easier to make an informed choice for a platform you can use for many years to come.

Wrapping Up

Selecting the right fundraising software is about knowing which tools you really need and what you can actually afford. While cost is always an important factor, it’s equally important to assess how well the platform aligns with your nonprofit's specific short term needs as well as its growth goals well into the future. Whether you’re drawn to subscription based models, tiered pricing, or even one-time purchases, the key is to choose a solution that delivers value and supports your mission effectively.

Don’t forget to dig into the fine print, identify hidden fees, and ensure transparency in pricing. A clear understanding of features, scalability, and support services can prevent unwelcome surprises and help you make a confident decision. Investing in the right platform not only enhances your fundraising efforts but also optimizes your nonprofit’s resources, allowing you to focus on what truly matters, making a difference.

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