June 3, 2025

Value pricing non-profits is good for everyone

Long-time list member Allen Shaw replied to “If you use hourly rates with non-profits you’re toast” to share his experience with value pricing and non-profits (shared with permission, bold mine):

people there hear $200 an hour and they think it’s outrageous, as they may only be making $50 an hour.

Wow, that’s a really great point! Frankly I’ve never thought of it, in my 16 years of serving only non-profits -- but it makes me all the more glad I’ve switched to value-based pricing.

Reader Joe makes another great point about organizational size. Orgs with larger budgets seem to have a better understanding of the entire concept of value, whereas very small orgs tend to be obsessed only with cost.

When you’re on a shoestring budget, barely able to keep afloat, it’s very hard to think about any expenditure as an investment, so everything boils down to “how much will this cost,” skipping almost completely the question of “what benefits will this get us?”

BTW, Jonathan, your three-option proposal template, focusing on benefits rather than tasks and deliverables, is a real game-changer in that regard. So is The Why Conversation. I can tell my potential clients -- who often are small non-profits -- that I don’t want to waste their precious resources by starting work without knowing what they actually want to achieve.

It gets their attention, shows that I actually care, and helps them see the mission benefit of the proposed work. Totally different from paying some high-priced drone to push buttons by the hour!

Thanks,

Allen

Yep, The Why Conversation and a three-option proposal, are fantastic tools for getting the client focused on what they want to achieve instead of what tasks they want you to do.

Thanks to Allen for sending this in!

Yours,

—J