Buyer Beware: The Hidden Costs of Free Software for Nonprofits

Buyer Beware: The Hidden Costs of Free Software for Nonprofits

When it comes to purchasing new software, many organizations do so to boost their efficiency, save time, and reduce costs. This is particularly true of nonprofits, which often have limited staff, modest budgets, and over-full schedules.

Enter "free" software: on its surface, a simple, cost-effective solution. However, "free" isn't always free, and nonprofit executives often learn this the hard way after their organizations have incurred significant additional costs for implementation, consultants, ancillary features, and ongoing support and maintenance. Such costs frequently add up to more than they would pay for a solution with higher upfront costs but the potential to deliver savings over the long term.

Below are some of the pitfalls to avoid when opting for "free" software and a few tips to help you select something that will be a good fit, over the long haul, for you, your nonprofit, and your budget.

The Misleading Sales Pitch

A low initial purchase price and "robust user community" often are excuse enough for nonprofit executives to invest in a free software solution. However, free software typically means a bare-bones solution offering limited functionality. While the sales staff may tout such limitations as a selling point, telling potential clients that their software is highly customizable, it's the additional customization down the road that contributes to the product's overall cost.

If You Can't Implement the Software, It's Going to Cost You in the Long Run

Fees for implementing a product suite or system that you and your team are unable to implement yourself will negate most if not all of your initial cost savings. Why? Turning the basic software into a usable solution for your organization typically requires consultants who are familiar with the product. Most nonprofits do not have IT personnel on staff, which means they are completely dependent on these consultants to implement the solution. Consultants work on an hourly basis, often charging up to $150 per hour, and the more complex the solution, the higher the implementation cost. Once the system is up and running, staff will need to learn how to use it. Documentation on low-cost products often is limited, and trainers cost additional money. And besides, what does it say about a system that is so difficult to implement and understand that it requires consultants to manage the process? In the end, many nonprofits will discover that they could have paid a higher up-front fee for an all-inclusive software solution and greatly lowered their costs.

How to Find a Comprehensive and Cost-Effective Solution

Organizations looking for an all-in-one software solution that doesn't require a team of consultants to set up or maintain have lots of options. All-inclusive CRM solutions will cover many of the hidden costs of a free solution in their pricing. And that means nonprofit executives are much more likely to know what their up-front and ongoing costs will be. Before you opt for an all-inclusive solution, however, be sure to ask providers of the software the following:

  • How many of their nonprofit clients require consultants or trainers during implementation.
  • The cost per hour for those consultants.
  • The average cost of implementation for their typical nonprofit client.
  • A detailed price breakdown of:
    • the purchase price of the software;
    • installation and implementation costs;
    • customization options;
    • the cost of migrating your data from the old to the new system;
    • ongoing monthly maintenance fees;
    • the cost of staff training; and
    • the cost of ongoing product support.

Research Now, Save Later

While it can be tempting to "save now and pay later," it is well worth your time to do your homework up front, test-drive any solution before you "buy," and calculate the full cost of the "free" and paid software solutions available to you. Remember: "Free" often comes at a higher cost in the long run.

Gretchen Barry is director of marketing for NonProfitEasy, an all-in-one software solution provider whose mission is to change the status quo for the greater good. Her passion is to ensure that every nonprofit has the technology it needs to deliver services to their communities as efficiently and cost-effectively as possible.

The sustainable nonprofit

February 5, 2020