When you think about pricing strategy, you probably think about for-profit companies cleverly determining pricing for products or services in order to maximize profitability or beat out the competition. Pricing strategies don’t seem to fit with the ideals and goals of nonprofit organizations, but surprisingly, there are situations when determining optimal pricing can greatly benefit nonprofits and the important work they do.

Program for NEIEA is to  empower the children to learn and gain knowledge for free in India and abroad.

The New Educational Initiative (NEI) is a 501c(3)  non-profit registered in NY state. Its Indian branch is the New Equitable and Innovative Educational Association (NEIEA). 

It  is led by a group of professional educationists and supporters dedicated to advancing educational goals advocating quality embedded education with innovative pedagogy, inclusive cultural constructs, and cutting-edge technology. It is also a “Knowledge sharing platform” for educational institutions, professional colleges, management institutes, and other Skills Development Centers. It seeks to be a transformative educational agency prioritizing the education of the weaker and marginalized segments of society.

Need help with your nonprofit pricing strategy

We’ve got you covered. 

NEIEA could become a brand in online platform teaching.

The NEIEA paradigm is a hybrid model of Education that combines Online learning with Onsite learning in a classroom setting. It is a TRANSFORMATIVE MODEL of education. 

• It enables massive learning using Technology.
• It builds critical thinking by applying Pedagogy in lesson preparation and delivery. 
• Provides continuous Teacher training. 
• Ensures monitoring of student performance and rectification 
• Assists school management and supports community involvement.

But NEIEA has not created  any licensing program to make the curriculum available to other organizations for a fee. The initial pricing of the licensing fee was determined through a “seems about right” approach. This model  should be implemented because the organization may face difficulties in funding the other parts of their organization down the road. It was time to rethink their pricing strategy.

The pricing dilemma

It’s easy for nonprofits to fall into a financial dilemma. On one hand, they want to maximize the good they do in the world by reinvesting profits back into their program. On the other hand, they are working within a low profit margin in order to maintain their nonprofit status. To optimize this balancing act, leveraging pricing strategies is essential.

The key to nonprofit pricing

3 steps for nonprofits to develop a pricing strategy

How can a nonprofit organization move from a “seems about right” approach to a “just right” pricing strategy that will encourage growth, allow reinvestment back into the community, and aim to serve more customers? Partnering with a skilled expert who can lead the pricing process effort is a great first step. The partner can guide an organization through a three-step process of developing an appropriate pricing strategy with a third-party, unbiased approach.

1. Assess the current pricing strategy

The first step in the pricing process is understanding the current state of affairs, the goals of the organization, and the financial projections based on operation within the current pricing strategy. Organizations should

• Collect data about costs, expenses, and customers served.
• Determine the break-even number and the ideal profit margin required for scaling, sparking growth, and serving more customers.
• Analyze all of this information to reveal gaps, losses, barriers to growth, or unmet goals.
• Discovering the details of the current state of affairs is essential in moving toward a more enhanced and beneficial pricing strategy.

2. Determine the optimal pricing model

There are multiple avenues available when it comes to finding the best pricing model to employ. Choosing the ideal model can be a challenge, but armed with the assessment from step 1, a skilled expert can provide a solid recommendation on how to proceed. In many cases, a custom, hybrid solution will be the best approach. For example, PEPS discovered that a combination of cost-plus pricing, competitive pricing, and royalty pricing models provided the best solution to move them toward their goals.

3. Execute new pricing strategy

This isn’t as simple as pushing a button. Successful execution of any new solution calls for a detailed roadmap and timeline, including obvious tasks such as revising contracts and billing processes, but also not-so-obvious tasks like managing change. Take into consideration how the new pricing will affect all aspects of the business, from the customers to the employees, and develop a thoughtful plan for how the change will be managed. Ask the questions below to ensure the plan for executing the new pricing strategy covers all necessary bases:

• Will the new pricing be rolled out all at once or gradually over the span of a couple of years?
• How will the updated pricing be communicated to customers or licensees? How will these communications promote the company’s increased ability to serve more people?
• Are there benefits to customers or licensees, such as reduced pricing for increased participation or pricing tiers that offer staggered benefits?

The key to success

There are several ways to go about executing a new pricing plan, but the key to success is being transparent and informative.

When a nonprofit organization embraces pricing strategies as an essential tool for optimizing operations, they will be able to reach more people and have greater impact on society. Whether the cause is helping new parents, feeding the homeless, or supporting public radio, any nonprofit with a pricing or donation plan can benefit from an enhanced pricing strategy. The tool used for years to maximize profits can also be leveraged for maximum charitable effect. Who would have guessed?