A charity with a $200,000 budget is quoted $134 a month for a donor database, then told the reporting module is on the next tier, then told onboarding is $2,500. The board asks whether this is normal. It is normal. It is also not driven by what the software costs to run.
Per-seat pricing
The most common pattern, and the most damaging for this sector specifically.
A five-person team on a $44-per-user CRM pays $220 a month. The same team on a flat $50 plan pays $50. The difference is not the vendor’s cost — serving five logins costs almost exactly what serving one costs.
What per-seat pricing does in a not-for-profit is worse than expensive. It creates a financial reason not to give access to the volunteer who does the newsletter, or the treasurer who needs to see the numbers, or the second staff member covering during leave. Organizations end up sharing a login, which is a security problem created by a pricing decision.
Feature gating
The second pattern: the base tier does not include something the buyer will discover they need.
Reporting is the classic. So is any form of automation, bulk email above a low limit, and increasingly, anything described as “advanced”. The buyer cannot evaluate what they are missing at purchase time, because they have not used the product yet. By the time they find out, they have migrated their data.
This produces what you might call the demo-to-disappointment gap, and in a small sector where everyone talks to each other, it is a slow way to destroy a reputation.
The implementation industry
The third pattern is the one nobody puts on the pricing page: setup fees, onboarding packages, data migration services and certified partners.
Some of this is real work. Much of it exists because the software requires configuration before it functions, which is a product decision rather than an inevitability. Software that assumes an administrator will configure it before it works is the wrong software for an organization with no administrator.
What is actually driving the price
Not infrastructure. A well-built multi-tenant application costs a few dollars per account per month to run, including hosting and payment processing.
The costs that matter are sales and support: enterprise vendors carry a sales team, a partner channel and a customer success organization. Those are real, and they are the cost of a go-to-market model rather than the cost of the software. A vendor that publishes its pricing, sells without a sales team and supports a product that does not need configuring has a different cost base — and can charge accordingly.
What to ask a vendor
- What is the total monthly cost for our whole team, including everyone who needs a login?
- Which features are not included at this tier?
- What are the one-time costs before we can use it?
- What happens to our data if we leave, and what does an export contain?
- Is the price per year the same in year two?
If any of those takes more than one sentence to answer, that is the answer.
The honest counterpoint
Cheap software is not automatically good software, and free is not free. CiviCRM costs nothing and requires a technician. A spreadsheet costs nothing and costs you every hour you spend maintaining it.
The argument here is not that price is the only thing that matters. It is that the pricing patterns above are not explained by cost, and the organizations paying most for them are the ones least equipped to evaluate them.