Here’s a great powerpoint presentation by Forrester Research on the pros and cons of “Software as a Service.” Download it to your computer and view outside of your browser since IE inexplicably and frequently still craps out when opening Office documents. http://www.forrester.com/Events/Content/0,5180,-1096,00.ppt
Subscribing to software vs. managed hosting or purchasing software has a ton of advantages for nonprofits, especially smaller npo’s. No upfront cost, no hardware, no annoying IT guy in the office (I used to be that guy), seamless updates, etc..
The obvious disadvantage is that in the long run (within 3 years), subscribing to software is more expensive than purchasing it. Roughly translated, more donor money goes to software. Wonderful.
An even BIGGER problem is when vendors like Convio and Kintera charge contingency based service fees. Meaning they will charge you $.50 for a $10 donation and $50 for a$ 1000 donation even though the software does the same thing for both donations. This should alarm nonprofits. Not only does it speed up the time it takes to make the subscription more expensive than buying the software but, to tell you the truth, it really doesn’t make any sense.
Imagine if the cable company charged you more if you watched a 2-hour movie instead of a 30-minute sitcom. 12 round boxing matches would cost more than 5 rounders. No one would get Titanic on pay-per-view. In the end, you would want to use the service in smaller increments.
If you use Kintera or Convio you’re better off getting smaller donations than large ones. <–Like I said, doesn’t make any sense.
If you’re going to subscribe to a service, pay the same fee every month. Better yet, find software that is actually good and buy it. Then you can use your donors’ money for your mission. Imagine that.