One of my favorite stories growing up was a delightful and whimsical tale “The Emperor’s New Clothes” from the famous Danish writer Hans Christian Andersen. The original story was named “Keiserens nye Klæder.” You can read a superb translation of the story by Jean Hersholt here or, if you prefer, watch a marvelous reading of the story.

The Emperor's New ClothesThe Emperor’s New Clothes

In the story, a vain Emperor who cares about nothing except wearing and displaying clothes hires two swindlers who promise him the finest clothes from a fabric invisible to anyone who is unfit for his position or “hopelessly stupid.” The Emperor’s ministers cannot see the clothing themselves, but pretend that they can for fear of appearing unfit for their positions, while the Emperor does the same. Finally, the swindlers report that the suit is finished. They mime dressing him and the Emperor marches in procession before his subjects. The townsfolk play along with the pretense not wanting to appear unfit for their positions or stupid. Then a child in the crowd, too young to understand the desirability of keeping up the pretense, blurts out that the Emperor is wearing nothing at all and the cry is taken up by others. The Emperor cringes, suspecting the assertion is true, but continues the procession.

Why am I bringing forth this lovely tale today? Because every single time I hear an unsuspecting nonprofit executive say they are looking at a Foundation-related database solution because it is free, I literally cringe, then I always think of the story above. My mother read it to me several times as a little boy. Little did I know how closely related the two could be.

A Foundation-Related Solution is Seldom Free

There are plenty of nonprofits and NPO executives who know the full story of Foundation-related solutions and their actual costs.

However, just like the story above, the real truth about those costs often does not come out until near the end of the installation of the solution. On way too many occasions, the NPO finds out after they have made their commitment that their costs in making it work are escalating faster than they had any concept or idea of. The difficulty is finding the decision-makers who have already lived through and know just what the real costs are to bring such a solution to life and maintain it. For some reason, just like all of the trusted ministers to the Emperor who communicated an illusion, the illusion of “free” in regard to these solutions seems to be passed on time and time again in our sector. is a powerful and proven solution for the commercial world. I have used the system with the businesses I have been involved with over the last decade. In a couple of those businesses, the investment in this solution beyond the actual software license fee ran well above six figures. This includes the following items below:

  1. Pre-Installation Consulting
  2. Pre-Installation Training (so we could answer questions during the consulting)
  3. Application Configuration
  4. Data Conversion
  5. Application Customization
  6. Application Install
  7. Integration to Existing Systems
  8. Post Installation Training
  9. Post Installation Configuration and Fine Tuning
  10. On-going Support
  11. On-going storage fees
  12. Hiring of a Database Administrator (In some cases)
  13. Annual or Some Time Period Afterwards Configuration or Customization
  14. Purchase and Configuration of Plug In Products

The above related items can range from a few thousand dollars to upwards of $100,000 for larger installations! It is not to be taken lightly. NPOs can expect to encounter virtually all of these items as well.

There are hundreds, if not thousands of successful NPO Foundation-related installations of their application for nonprofits around North America and the world. I am not saying in any manner that it is not a solution that should be considered. I’m simply saying that it’s not free.

Suggestions for Evaluating All Nonprofit Database Solutions

NPO decision-makers should be fully cognizant of the 14 items listed above. Every one of the 14 items represents real costs, both in the short term and long term.

Time and time again, NPO decision-makers, who have purchased a Foundation-related solution, state to me, they had no idea of the extent costs they were forced to pay in order to being the solution to life. Several had to unplug the solution rather than continuing down the road with the initial and/or ongoing costs. Mind you, this is not often the case with most of the vertical solution-related vendors who have built their solution on the platform. They are usually quite upfront with, not only the annual cost for their solution, but also the various other costs listed in the 14 items above. Thankfully, they have brought some sense and normalcy to the unsuspecting NPO tech buying market. Thanks folks!

Unfortunately, the unsuspecting NPO decision-makers who experienced spiraling costs were often the ones thinking they were obtaining a “free” solution.

In order to avoid this dilemma, here are a few suggestions for evaluating all NPO-related database and technology solutions:

  1. Identify and contact at least 3 or more customers of the same exact solution you are considering and verify every single cost they have had to date and plan to have over the next several years
  2. Ask those same customers what they would have done differently
  3. During the exploration of any solution, ask specifically the current and future costs of these:
    • Pre-installation consulting
    • Pre-installation training
    • Application configuration
    • Application customization
    • Data conversion
    • Application installation
    • user and storage fees
    • Post implementation training
    • Post installation application tuning
    • On-going support
    • Annual maintenance and updates
    • Fees as you add users
    • Add-on products and services (especially regarding interfacing with the following)
      • Your website
      • Your accounting solution
      • Your email and word processing
      • Other internal systems and applications
  4. If you are using a local consultant, ask who you can use if they no longer do such work in the future
  5. Ask the number of users of your particular solution so you can verify the commitment to this particular vertical
  6. Ask how many team members of the solution provider have nonprofit experience
  7. If possible, ask how long the free seats or heavily discounted license fees will be guaranteed
  8. Verify experience with converting your specific type of data

As you might surmise, the eight items above look quite similar to the previous list of 14 possible cost categories. This is not surprising because they are for the most part required for any successful nonprofit database installation.

Any and all NPO executives, managers and fundraisers would be well served to keep the above two lists of items handy when exploring any nonprofit database solutions. This is especially true anytime you hear the word “free.” Further keep in mind what several mentors of mine have stated to me: “the idea of what is truly free is perhaps the most misunderstood concept in any goods or services transaction!”

Jay Love

Jay Love

Co-Founder & Chief Relationship Officer at Bloomerang
A 30+ veteran of the nonprofit software industry, Jay Love co-founded Bloomerang in 2012. Prior to Bloomerang, he was the CEO and Co-Founder of eTapestry for 11 years, which at the time was the leading SaaS technology company serving the charity sector. Jay and his team grew the company to more than 10,000 nonprofit clients, charting a decade of record growth. Prior to starting eTapestry, Jay served 14 years as President and CEO of Master Software Corporation. MSC provided a widely used family of database products for the non-profit sector called Fund-Master. He currently serves on the board of the Center on Philanthropy at Indiana University and is the past AFP Ethics Committee Chairman. Jay is also the author of Stay Together: How to Encourage a Lifetime of Donor Loyalty.