Revenue Without Compromise: How to Design a Mission-Aligned Fee Strategy

Pricing Pointers, Issue #51 🍎

As a nonprofit, you might feel torn between generating fee revenue and ensuring accessibility to your services. That’s only natural. After all, your organization exists to do good. However, the right fee strategy doesn’t just help fund your work. It also expands your reach.

In this issue of Pricing Pointers, I’ve curated a selection of my past LinkedIn posts (similar to Substack notes) written especially for my nonprofit readers. Let’s start by tackling the mindset shift required to make this work.

1️⃣ The biggest misconception about fees in the non-profit sector?

Maybe it’s that they automatically compromise your mission. Charging users or clients a fee is not a betrayal of your purpose; it is a tool. Fees should function as a strategic resource that helps you fulfill your mission more effectively.

Yes, ill-considered fees do create barriers to access. But when thoughtfully designed, they increase your financial resources, expand your reach, and ultimately, deepen your impact. Always evaluate a fee’s total effect on your ability to serve your community.

2️⃣ What’s the best fee strategy for your nonprofit?

Here are four questions to help you decide. Consider a particular service or product you provide. Answer these questions in order. Stop when the answer is “No.”

Question 1: Can we charge a fee for this? Can you prevent people who are not willing to pay from using your service or product?

Question 2: Should we charge a fee for this? Will charging a fee advance your organization’s mission?

Question 3: Can we charge different people different fees for this? Can you identify who’s willing to pay more if they had to? Can you prevent them from paying less?

Question 4: Should we charge different people different fees for this? Will charging different users different fees for the same (or nearly the same) thing advance your organization’s mission?

How many yeses do you have?

• 0-1: Do not charge anyone a fee for this service or product.

• 2-3: You can and should charge everyone the same fee for this.

• 4: You can and should charge different people different fees for this.

3️⃣ Five flexible fee strategies to make your organization more sustainable (without limiting access)

Charging your users or clients a fee for one of your services or products can help your organization’s work become more financially sustainable. It’s not an all-or-nothing choice between charging everyone the same fee or charging no one at all.

Here are five approaches you might consider:

1. Pay-what-you-want, including nothing – Users choose the amount, even if it’s zero.

2. Pay-what-you-want, including nothing, but with a “suggested” amount – Users are given a benchmark but retain the choice to pay less.

3. Sliding-scale fee based on a self-reported criterion (e.g., income) – Fees are adjusted based on user-reported data.

4. Sliding-scale fee based on a verified criterion – Similar to above, but with verification.

5. Tiered fee menu – Different levels of service are offered, with one tier potentially being free.

4️⃣ The Only Fee Question Your Nonprofit Should Ask

Stop asking, “What fee should we charge?” It’s the wrong question. It assumes there’s one single, perfect number.

A better question is: “What range of fees should we charge?” Why? It allows you to serve a diverse group of users, ensuring accessibility for those with limited means. At the same time, it generates revenue needed to sustain and grow your programs. The best outcome is a balanced fee structure that’s fair to your users and keeps your organization strong.

5️⃣ Is your pricing strategy fair? (It has nothing to do with your costs.)

Fairness in pricing isn’t about setting the same price for everyone. It’s about giving everyone the same opportunity to choose a lower price.

When you use tactics like quantity discounts or versioning, every customer can pay less if they choose a larger package or a lower quality version. If one customer pays more than another, it’s because they made a choice that fits their needs better, not because of a policy that favors specific groups.

The Bottom Line

Stop viewing fees as a necessary evil and start seeing them as a tool for doing more good. Move past the search for that “one perfect fee.” Instead, define the range of fees that allows you to serve the most people.

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