Pay What You Can Business Model

International Business models
1

After extensive exploration, feedback and understanding of the role of platform coops in this crazy ole’ world UK are exploring a ‘Pay What You Can’ business model.

We are very aware that we need to be financially viable so we need to implement this in a way that:

  1. Makes it very easy for enterprise users to set up a regular or one off contribution direct debit to instance.
  2. Tactfully reminds users to do this, at appropriate intervals, in ways that will be seen, noticed and acted on. As opposed to ways that irritate, annoy and encourage users to ignore.
  3. Learns how users behave and adjusts the ask accordingly!

Phase One

Implement simple ‘Donate’ functionality.

Initial questions:

  • Which payment gateway?
  • Where does this make sense within the admin interface?
  • Should donations be between user and instance OR enterprise and instance?
  • Should a user be asked for donations for all their enterprises?
  • Should managers and owners both be asked?
  • Should each manager be asked regarding the same enterprise.

It is super important that we don’t annoy people on the donations asking because that really makes people less likely to donate. So the above are important to think about from the start.

Ping @NickWeir @Sara @mags @MyriamBoure @pmackay @danielle If anyone knows of anyone with experience in these matters could you ping them too please?

1 Like
2

Oooh good questions!

I think targeted and timely asks are what we want, rather than a blanket ask to all users as this is more likely to get ignored as people assume someone else is dealing with it. So my inclination would be to say that;

  • donations are between an enterprise and instance, and that

  • only owners are asked to donate.

This will mean that organisations running more than one hub will get asked to donate twice, but currently this only applies to Tamar and I would imagine will only account for a relatively small proportion of enterprises in the future. And if you’re running two or more shop fronts on OFN, I don’t think it’s unreasonable to be asked for a donation twice. If we were using the 2% of turnover model they would have to pay 2% on each shop front anyway.

Some enterprises have a fairly long list of managers, including OFN staff who have been added for support or testing, so I don’t think it’s necessary to ask each one for the same enterprise and we’ll hopefully get a better response by going just for the owner. This will rely on people having the correct person in place as the owner of the enterprise however i.e. the person who is responsible for the overall management, and not the person who set up the enterprise in the first place, which is not always the same person. We could try this initially and perhaps include a message in the asking email along the lines of; ‘You are receiving this email as you are listed as the owner of xxx enterprise. If you are not the overall owner you can update this by doing xxx’. and pointing them to how to change this.

On a wider point, the wording and the positioning of these asks will be key - as you say it’s important we don’t annoy people, but we also need to make folk aware that we’re not a charity and we (will eventually) rely on these payments to keep the site going. So I’d be inclined to not call them donations at all - could we call them contributions or payments whilst still getting across the Pay What You Can ethos? Although these payments are voluntary, we want people to feel some sense of obligation to pay them if they can. It would be interesting to see what language other businesses are using that have a similar model.

And a couple of other questions about this model;

  • Are we still giving people a six month grace period before we start asking them for money? I think that’s quite appealing for new users who want to play about with it before making their minds up. But again, how do we word this in the context of the model - a ‘free trial’ doesn’t make much sense if you’re not going to have to pay anything at the end of it anyway

  • Have we abandoned the idea of an annual membership fee? Could we offer that as an alternative for those that want to contribute something but can’t manage a monthly payment?

3

I agree let’s not call it a donation, contribution would be better but people need to be clear as to what they are contributing to or for, we all like to know how our money is spent.

We could have a minimum as well as a suggested contribution? Even if it’s as little as £1 a month, this will give everyone a sense of ‘belonging’ to our OFN community. I think there is a fair amount of psychology in this approach, as one of our Directors said today ‘It’s very seductive’ So this is a way to draw people in as well as support those who are working on very tight margins or in areas of food poverty. The £1 could also represent a Membership Fee? Its also much easier to increase a regular bank payment rather than make the effort to set up a new one from scratch.

Could tactful reminders or suggestions for increases in contributions be triggered by turnover in their shopfront? I agree we also need to be asking the right people but I’m not sure how we identify them!

4

hey rushing to another thing but probably good to connect this to the collective income platform thing @myriamb was looking at?

5

i agree with all of Mags’ points above.

i like ‘contributions’ better than ‘donations’

i think we should offer hubs the option to have a free trial but not put a time limit on it. instead i think we should be clear about the platform co-op system up front and ask them to start contributing as soon as they are able. i like Sara’s idea of triggering reminders as their turnover goes up. maybe we could do this manually to start with if this is tricky technically.

in terms of a payment gateway could we give people various options including setting up a regular bank transfer?

6

@MyriamBoure please can you tell us how this could fit. thanks

7

maybe on the dashboard - maybe ultimately it could also pop up with how much they are paying and what their OFN turnover is

8

Hey @kirsten. Love to discuss this platform collective aspect further (upon your return I presume). I have included you in an offline discussion also.

Australia needs a platform aspect to investment, and opportunities that affect farms/businesses directly (ie Jonai and food waste).

Cheers,
Carolyn

9

This all sounds very sensible to me. I’d think at this stage we don’t need to spend dev time on a fancy feature in admin but OFN UK (Nick I assume) can keep in touch with enterprise owners and when it feels like they are committed fully and have a turnover they can be asked to start contributing.

You can also consider taking Direct Debit payments via GoCardless and if at any stage Sara decides to move to Quickbooks Online, it will even link automatically into your bookkeeping.

10

Hi everyone!

We are experimenting a different model in France as we have chosen to ONLY go for volunteer contributions (for the moment) so we don’t have any trial period, and we never say either that the platform is free, we say that it’s accessible on a volunteer contribution base and we explain how we work to people.
The first experiment we are running on this “gift economy business model” are super positive, I need to write a post on the French feedback as it can be interesting also for the community.
But basically, we have decided to avoid having commercial activities (and employees if we manage) in the non-profit and “Commons” area, and build a network of “providers of the Commons” that can invoice clients directly (and give back to the Commons).It makes the “non-profit” mission super clear and enable us to get tax reduction of 60% for people giving us money. we probably will create a commercial entity at the end that will be owned by the non-profit.
So we are experimenting various models now:

  • User A (a volunteer run buying group of 40 members) is asking the final buyer to “give a tip for Open Food France”, and they give us that as a donation (probably 30-40€ I think after 4-5 small sales, which is pretty good actually given the amount of sales!)
  • User B (a non-profit buying group of 150 families taking a commission to pay the hub manager): after a few moth of use they will give us 150€ but he also is paying for a first development (1000€) and he is involved in the governance of the project and has asked for us 20K€ in a call for proposal… waiting for the answer.
  • User C (an independant food hub manager based in Spain selling fruits he picked up himself directly to buying groups in France) I have spent 2 days working with him in setting up his hub, he is going to pay me for my job (as a provider of the Commons) and will make a donation to the OFFrance non-profit (maybe 500€, not yet done but that’s what he said) + he will finance two other dev that he needs + he said he would give the non-profit at the end of the year something like 0,1 to 0,5% of their turnover (which is pretty big, so should be a reasonable amount of money…)
    We just need to open a bank account now :slight_smile:

In all those three cases, I just have spent time explaining the whole project, the values we defend, how our Common is governed, and both for my work in supporting them and for their contribution to the cost of running the platform (servers, admin system maintenance, contribution to the global mutualized tasks, etc.) I explain the work done and let them the choice of how they want to contribute.

So, sharing that experience, I’ll answer your question above @lin_d_hop

Which payment gateway?
From my investigation, the best option I have found for France is called HelloAsso (which is a zero commission platform with both one shot and regular contributions, and a design encouraging people to “give a tip to the platform”) not sure there is an equivalent in UK but worth investigating!
On international level, the best option for me remains Donorbox. I had (with @Kirsten also) discussed with OpenCollective but I’m not convinced by their model to be honest, it’s very expensive, there are so many options now with super low commission…

Where does this make sense within the admin interface?
Should donations be between user and instance OR enterprise and instance?
Should a user be asked for donations for all their enterprises?
Should managers and owners both be asked?
Sould each manager be asked regarding the same enterprise.
I would suggest to have a button somewhere on the main page, but I’m not sure any money will come from there, as people don’t ususally enter the site by the main page, but by a shop.
Maybe a model like the Loomio one could be interesting. in Loomio, you can use it for free and then Loomio can ask your users to give money. Or you can choose to pay a monthly subscription (they have two offers) and then no message is sent to the members of the Loomio group.
In our Case A, there is a design issue today: to ask the members to give to Open Food France, the hub manager created a product called “donation to Open Food France”. But why HelloAsso, which has a similar model, works? Because they have designed the “tips” process. So ideally if a hub choose that model, we should have a step at checkout where we add a given amount or pourcentage to the global amount of the order and let the user change this “tip” if he wants. See the 9,60€ on the right, that’s the tip for HelloAsso that you can change. So we can design a default tip but let the final buyer free to change this amount.

Screenshot from 2017-01-03 22-59-45.png1330×793 109 KB

This model is really super efficient, people are free to give nothing, so they are happy to give something!!! HelloAsso ONLY work on that business model.

If a hub doesn’t want that we ask his members/buyers a tip, then he can pay a monthly fee (see instance business model)

So for me:

  • either the owner of an enterprise pay a monthly fee ad/or is asked for a free contribution (maybe after the closing of a sale?) I’m not sure when and how the donation should be asked in that case… for me it’s more a one to one discussion. But in my experience, the Case C, the owner manages 11 enterprises (one per buying group that he delivers) and case B manages already 4 enterprises, so it’s very commons that an owner manages a lot of enterprises… And my intuition is that the human connection and discussion works much more better than an automatic email or button :wink: But if at some point we need to automate I would say after a sale (so linked to an OC where you manage all your enterprises shopfront) having a donate button in a pop up maybe, and maybe twice a year an email explaining the project and inviting to contribute.
  • either his buyers are asked to give a tip at checkout.

Here are my thoughts :slight_smile: Hope that helps!