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Just Because It's Free Doesn't Make It Good

Published Friday Jul 25, 2014

Author GRETCHEN BARRY

The Appeal and Illusion of Free
When it comes to purchasing new software, many organizations do so to increase efficiency, save time, and reduce costs. This is particularly true of nonprofits, which often have limited staff and busy schedules.

Enter free software: on its surface, a simple, cost-effective solution. However, free software isn’t always free, and nonprofit executives often learn this the hard way: after incurring costs from implementation, consultants, ancillary features, support, and ongoing maintenance. These costs add up to more than a product with an upfront cost but long-term savings.

Below are pitfalls to avoid and tips to help you select something that will be a better fit for you, your nonprofit, and your budget over the long haul.

The Misleading Sales Pitch
Low purchase prices and robust communities of users tempt nonprofit executives to consider free solutions. However, the “free” program is typically a bare-bones solution, containing only limited functionality. The sales staff exalts the limitations as a selling point, telling potential clients that their software is highly customizable. While this is true, it’s this customization that contributes to the overall cost.

But consultant fees for implementing a system can quickly negate any initial cost savings. Transforming the basic software into a usable solution for your organization typically requires consultants as most nonprofits do not have IT personnel on staff. And that means they are completely dependent on these consultants to implement the software. More complex features increase implementation cost. Consultants work on an hourly basis, often charging up to $150 per hour. And once the system is up and running, the staff needs to learn how to use it. There is often limited documentation on these low-cost products, and the trainers to help also cost extra. What does this say about a system that is so difficult to understand that it requires consultants to manage? In the end, the nonprofit could have paid a higher up-front fee for an all-inclusive software solution and greatly lowered their costs.

Instead, non-profits should look for all-in-one software products that don’t require external consultants to set up or maintain. All-inclusive CRM solutions will provide many of the above costs in their total pricing and executives can calculate both up-front and ongoing costs.

Ask providers the following:
• How many of their clients require consultants or trainers during implementation.
• The price per hour for any consultants.
• The average cost of total implementation for most of their clients.
• A detailed price breakdown of:
 - purchase price for the software
 - installation and implementation costs
 - customization options
 - migration of your data from the old to new system
 - ongoing monthly fees
 - staff training
 - ongoing product support

Research Now, Save Later
While it can be tempting to “save now and pay later,” it is worth your time to do your homework, test drive software, and compare the full cost of “free” and paid software solutions.

Gretchen Barry is director of marketing for NonProfitEasy, a software provider whose mission is to change the status quo for the greater good. Her sources were: www.salesforcefoundation.org/get-started and www.idealware.org/articles/true-costs-free-and-low-cost-software.

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