pay what you can, gift economy, sliding scale and barter

My colleague Aumatma has run a ‘gift economy’ style naturopathic clinic for two and a half years. For years, I’ve run most of my workshops on a pay what you can basis.

After all, imagine having your clients not only rave about what you do but also how you charge for it.

What if you never had to feel even a little bit uncomfortable about your pricing ever again?

What if you could balance your desire to stay accessible (helping those who need you most), stay true to your politics and your need to be financially sustainable (making sure your needs are met to).

We’d love to get your help with two things . . .

THING #1 – Examples of businesses and projects that work on a pay what you can, gift economy, sliding scale and barter basis (in part or entirely). If you’ve tried to work with these models, what have you found? What have you learned?

THING #2 – What are your biggest questions or wonderings around these kinds of alternative pricing models?

About Tad

  • Love that you’re doing this workshop, Tad!  And, Aumatma, can’t wait to meet ya in person!

    My big question around the Pay What You Can model is this: How do you find the balance where you feel your goals are being met and that your people are being honored? 

    It feels like a tricky balance point for people who’d love to give it all away at the same time as living an ideal lifestyle….

    Rock on, you two!

  • So many questions :-) What are the best ways to share the details of an alternative pricing model with clients/potential clients? What do those marketing conversations look and feel like? What kinds of infrastructure – policies, processes, agreements – need to be in place to support it? Do you ever share a price for an offering if using a pay-what-you-can model?

    Wish I could be there on the 10th!

  • Sue

    Please say you’ll bring this to Toronto! PLEASE! Or record it ! Or bring it to Toronto and record it!

  • Tanya Pillay

    After getting spare change for a meditative massage session that I laboured heart and soul over, I now always either ask “how much would you like to invest” (with the intention that I give in proportion to what I get” or I say “pay what you can, suggested minimum is $10”, for example (at least half of my workshop participants will usually give more than the suggested minimum). I’ve also had some success with varying reward scales like “anyone who offers $20 or more gets a CD” or “anyone who offers $10 or more gets $10 off a private session” (this latter approach is more effective at getting the workshop payment than bringing in a new private client). 

    The only problem I perceive with my pwyc workshops is some uphill movement in charging more for the more substantial workshops. I’ve tried discounting with advance payment, offering lots of added values, etc. but attendance is always much better at the pwyc’s. It can also be more challenging for me to commit to paying for rental space since I never know if I’ll have enough money to cover the cost of the rental.  

  • Misssatyadanu

      In a yoga setting this could take 3 forms  1) a pay what you can class or classes
    2) karma opportunities (trade yoga classes for time around the studio, cleaning admin etc)
    3) a scholarship fund allow the students who can afford Yoga to contribute to a Fund (scholarship) for those who cannot afford to pay full price

    My questions and concerns would be:
    1) how to put aside worry that the fixed costs of the business would be covered month to month (rent lights staff etc)
    2) how do you ensure that you are helping those who need it and not just inviting folks who can afford it to “cheap out” and “get a deal”

  • Misssatyadanu

    Oh and please pretty please with Dr.Who on top do this is Calgary or Video it and make it available to watch (pay what you can of course) lol

  • Sondra Amon

    I like the idea of exchanging services. But I added a couple of stipulations to the arrangement after I had some clients start unconsciously avoiding me. I eventually figured out that what they had offered to do for me, wasn’t something they liked doing or, in one case, they felt that what they were offering wasn’t as valuable as what they were getting. 

    Recently, I decided that I would only barter service if what was being offered was something the person loved to do, or make and it was something valuable to me and my life. Sometimes I will ask them to tell me what they would charge another for that product or service and we agree to track the services “on credit”. People often feel the value more in something they really enjoy doing or creating, rather than just something they CAN do. 

    Its worked beautifully so far, and I received something that I’ve really enjoyed, but that I don’t think I would bought for myself. I’m looking forward to seeing what comes into my life next :)

  • Sabp

    Friend of mine did a b and b – uniquely  no rates. Sometimes she got more- sometimes less. She figured it ended up a little more than the standard baseline rate. Got ripped off a few times, found one ethnic group really didn’t like it- wanted a definate price. The b and b association didn’t like it either.

    Theatres do a pay what you can for a preview – so the actors can get used to the audience- or a traditionally slow day — sometimes they get nutbars – but it is also a good day for actors and other artists who don’t have much money to see it and spread the word. Good pr and also builds theatre fans who later have money and will come tto more shows.

  • Anarreshealth

    First of all, I am 100% YES! about PWYC, PWY Want, sliding scale, and gift economies.

    In practice, I am working my way up to, Pay-Me-What-I-Just-Gave-You-Is-Worth-And-Don’t-Devalue-Me-Because-I Have-A-Hang-Up-About-Being-Exploited-And-You-Can’t-Afford-The-Therapy-Bill-For-That. I find that people need a suggested amount to hang onto, and a range. I’ve been underpaid quite a bit, sadly. I’m working on projecting a grander sense of entitlement.

    I offer sliding scale and deals for services and workshops always. My experience with PWYC Workshops is that my capacity is small – 6 participants – so if they pay $10 instead of $70, I’m really out a lot of money  where I expect to take in @facebook-755915923:disqus 
    bout $50pp and costs are $15pp. My PWYC ventures in workshops have been discouraging. Once, even after telling participants that the cost was $15pp, I still had an average collection of $12 for one workshop. Boo. Not okay.

    The majority of people I offer services to have low incomes. I am gathering closer to 50% people with means, who can afford to pay retail-ish prices for things. I think I could operate effectively based on sliding scale and PWYC if I had 50% clients with adequate incomes. I have posted prices for services that in fact I never charge.

    I think it matters that I am in Toronto, and there are SO many “wholistic healers” here offering everything at every price. If I publicly offered services for a gift, I believe I’d get a lot of pocket change. But when a client has sought me out, I offer them health consultations free and by gift, and I am treated fairly.

    Someday I hope to operate by gift. That’s something I need to grow into. I am a single mother of 2 kids, so I am running each experiment on behalf of the family!

  • Vidda

    Hi Tad. I am a Spiritual Life Coach and Archetypal Consultant. I’ve actually been on sabattical for a few years, burnt out on clients who were more interested in quick fixes, “do me” attitudes, wanting to commiserate and have their hand held but not do the work or just plain curious about my metaphysical approach. But since taking your course a year ago, my sales pitch (which does more to scare these kinds of folks away) has been getting a few bites. That said, my fee approach is based on “Value (how they value themselves and the work and results they receive through me), Budget (what they can afford), and Integrity (I tell them the going market range of fees as a base to go from, then bring it back to Value and their Budget). I also tell them this is their first lesson in their work with me…. as it causes them to look at themselves on these levels. They either get intimidated and disappear or they are intrigued and stick around. But it’s very interesting to see how uncomfortable they are with it. I’d like your feedback on this approach.

  • Chris Shirley

    Hi Tad,

    My first experience with foot reflexology the session was offered on a “donation” basis. Well, I had never had any massage or anything else like it (this was the 1970’s) – so, I had absolutely no idea as to what might be reasonable as a donation. My income was low, so I didn’t want to give too much, but on the other hand I didn’t want to insult the practitioner. It was a hellish thing to wrestle with. Eventually, I asked the person ahead of me what the going rate was and offered that. It was received O.K., so, I could then relax.   But now, I tell my students to never do that to their clients! I feel that it is up to the practitioner to determine what they believe their service is worth and ask for it. However, I am certainly interested in what you are doing. I would probably appreciate making my services available to a wider group, and, I am not so attached to the amount that I am paid. Like everyone else, I have to deal with the reality of the world around me and pay my overheads before any goes into my pocket. I have a family, and so, I am responsible for taking care of them financially in expensive Vancouver. I’d love to hear what you develop in your workshop. Have fun with it!

  • Kelly Bowers

    I am a massage therapist in Washington DC. I have been in practice since 2000. In 2008 I began offering once-a-month PWYC Saturdays because of the clients I knew who needed MT much more often but couldn’t afford it. I knew enough about their situations to know they were speaking from a place of integrity. I offered 3 sessions — timed to my convenience — and it was well received. Given that it was once a month, it didn’t affect my bottom line.

    In 2009 my practice when through some turmoil but the core of my client base stuck with me. As an act of thanksgiving I offered *all* my sessions as PWYC for the last 10 weeks of the year. A few took advantage of it; most continued to pay full price but they felt my appreciation.

    I so enjoyed being able to offer that consideration, I made PWYC my full-time policy beginning in 2010. It works well. 80-90% of my clients (including new clients) pay full price. A few clients who have been laid off or are struggling to get out of debt pay anywhere from 60-75% of my posted rates (having posted rates is *very* important. Lots of people don’t have any idea what “normal” is and need something to calculate against).

    I had one client — a 20-something working retail — who had a mysterious excruciating back ailment. Her regular doc was stumped and she was on the verge of losing her mind from pain. She could only afford to pay $20 – $30 for an hour of massage so she hadn’t gotten any. She heard of my PWYC policy and had 5 sessions in 2 weeks. It didn’t alleviate her pain (and it really should have) so I told her to go back to her doc, explain about the sessions, and ask him to look her over again. She did, he looked deeper, and he discovered a rare kidney infection. That wouldn’t have happened without PWYC massages and I get teary-eyed thinking about that.

    Based on your interview with Mark Silver I made some modifications to my website to help people understand PWYC better and help them figure out their own price.

    What makes it work for me:

    * I’m in a well-defined profession and people have a sense of how much a massage is going for in DC.
    * I already had an established client base that was paying full time (and who were employed in good-paying jobs).
    * I do NOT market myself as the “PWYC massage therapist”. It’s not wise to market yourself as the “cheap” MT unless you want to attract clients with a “cheap” attitude.
    * I always say thank-you no matter how much they pay me.

    My gut (and I guess my experience) says that most people cannot receive the kind of intimate work that massage is and look their MT in the eye and cheat them week after week. In other words, I’m just not worried that I’m going to get ripped off. And if my gut tells me someone is ripping me off, it’s not going to ruin my practice. It’s going to do more damage to that other person than to me. And, quite simply, most people have no desire to take advantage of someone else.

    I’ve written about my PWYC experience in my professional society newsletter and in my business blog (yes, I have one too).  :)  Here are the links:

    PWYC As A Boundary Issue?  http://www.amtadc.org/resources/SenseFall2011%20v3.pdf
    Introducing PWYC: http://www.amtadc.org/resources/AMTADC%20Winter2010%20Single-page%20v3.pdf
    An example of it working:  http://havehandswilltravel.blogspot.com/2011/11/extra-happy-check.html
    Then there’s this crazy Tad Hargrave guy:  http://havehandswilltravel.blogspot.com/2012/02/looking-at-pay-what-you-can-like-hippie.html
    The changes I made to my website because of your advice:  http://www.bowershours.com/index_files/Page399.htm

    Kelly Bowers (who, yeah, has some opinions about this)

  • I have what I call a “pay-what-you-can program” for all my parenting classes and women’s wellness circles. I just say “contact me for details”.  I have had several people call or email to ask, and have always been able to work them in at low or no cost to all my programs, or to work out a payment plan on a schedule that works for them.  I share about it verbally in groups and one-on-one when the intuition moves me, through my newsletter, and on my website, in just a few sentences here and there.  I also regularly offer to support people who have financial concerns by suggesting they email me any questions, so I can answer them in my newsletter, or send them a link to an audio or old blog post that might be a fit. 

    I just invite, invite, invite, and I let people know that I do this because people have done it for me, and because I do what I do to make the world a better place, and to do that better, I want to share my information with whoever needs it.  I believe that because I have taken the time to think it through, and to really feel good about my pricing and my services and my mission in the world, pay-what-you-can works for me.  I have NEVER felt taken advantage of, NEVER thought differently of those attending/participating at no cost, and NEVER doubted that what comes around goes around.  Those who attend at low/no cost are often big fans and very committed parents, telling friends and sharing my work, and I’m honored to have them around.  I find that having a standard rate gives people an idea of what makes sense, and that when you feel really good about offering, they often overcome shyness or fear and end up feeling really good about accepting. 

    Thank you, Tad, for promoting this concept!  Can’t wait to see you next time I get to:)  <3

  • Timea

    I love the idea of PWYC. My only concern is I cannot figure out how to set it up or apply it to my business where return, repeat clients are almost none existent. As a Lactation consultant I see mothers one to three times and that’s it. In a couple of years I do get a call from these clients. My issue is that my clientele is not like a massage therapist or a counsellor or a chiropractor that they see the practitioner on a regular basis. I also travel up to 2 hrs (each way) to see clients and it is said to say I have been burnt many times and my bills are not getting paid and we are suffering so I ditched this idea until I can figure it out how to do it effectively for my business, for my clientele. Thank you Tad. I am looking forward to hear more about this. 

  • Petró

    There is an amazing cafe in St Kilda, Melbourne, Australia that functions entirely on this system. You pay what you think your food was worth. Even the staff meet weekly to distribute the money to whoever worked. They get paid what they think they are worth. I think its called Soul Mama’s. All vegan also.

  • Jackie

    Direct barters and barters through barter networks as a solo professional seem to work fine.  However, I’ve been having challenges trying to figure out how to make 1/6th of all of my workshop spots available for those in financial need, while still feeling like people are valuing what I offer.  It’s also not just me, as I’m working with a partner in launching a workshop series.  So my questions have to do with mechanisms for allowing people to pay in actions or in part payment.  How can this be made explicit without leaving my (very reasonable) fees negotiable by everyone?

  • Lin-lang

    Great topic!  And rather controversial… 
    I personally do lots of barter & pro bono work (about 1/3 of my work)…  but you have to pay the bills too.  In my area, fees range for $50-150/hour. I charge $100 per session, usually lasting anywhere from 60-120 mintues. I always provide great value in my sessions, and my clients even tip me at times.   I am also available for questions between sessions. When a low income client comes to me, I often give them a second session free, or offer a discount for a package of 3 sessions (and they don’t have to pay up front). I find if they are willing to come once & pay full price, I know they are committed to their healing. Some people tell me up front they can’t afford it, some ask for senior’s or student’s discounts or try to haggle and yet smoke, buy new computers, dine out alot, take vacations, etc. I have more clients that are more committed at this fee than I had when I charged $50/session.

  • Michelle Victor

    I know how you feel. For me, it’s a little difficult to do the pay as much as you can method because of the cost of materials, securing the artists and renting the location. But I sincerely hope one day I’ll be in a situation where I do not have to worry so much about the materials or location and hope that people will want to support me. This is a great method though for workshops that don’t have high production costs :)

  • Faithlotus

    Aloha Tad!

    I run a PWYC kid care out of my home in Colorado, as a part time gig.  It’s amazing to watch it work. 

    The theory it’s based on is Energy Exchange.  There is no “free”… always an exchange of some sort.  I’ve received cash, post-dated checks, the use of a friends car, massage sessions for my kids and myself, groceries, cat food, cat litter… and the list goes on!

    The convenience is that I’m home most of the time (writing social media blasts for only the awesomest companies). 

    This coming Spring break, I’m hosting the 2nd Annual Warrior Kids PWYC Kids Camp.  Yep, that’s a mouthful!  It’s always an amazing time… other parents come down and volunteer their time to teach the kids cool stuff… this year we have a guest coming down to teach the kids the Message In Schools Program method… kids starting their day by giving and receiving should massage.  It’s an incredible tool that connects the kids to eachother.  Additionally, there’s daily Calming kids yoga, which combines NVC (Non-Violent Communication) with yoga asana’s as an anti-bullying method.

    All in all, it’s primarily a community service, but enough gets donated and enough people pay that it works out amazingly.

    Mahalo’s for all that you’re doing Tad!  It was great to hear your call on Sage Levine’s series.

    Faith

  • Gord Oaks

    I have run my Shiatsu Acupressure practice as a sliding scale for 10 years. Most people give the direct middle of the scale amount, and I think appreciate the options to slide. Some do appreciate choosing the lower price when they are short, or a mix of cash and trade, or full trade. I set my sliding scale to be within $20 lower or higher than the industry standard. it has felt good to me and worked well.
     There are the occasional clients who just want to be told what to give, they don’t want to make the decision.

    One of my musical bands has tried the pay what you can model for a series of 8 concert events we gave. We found that we hardly made $30 per musician each night in general. It was not worth continuing. The energy in-energy out balance was way off. We had hoped to bring in $100 per night for each musician.

    My biggest question around the totally pay what you can model is whether the income really does hit the mark of appropriate, or whether there is a tendency to fall on the low side for the practitioner.

  • Sounds like an interesting way of charging people. Will try it out. :)

  • Jackie

    Hi Tad, 
    I’ve been doing a lot of thinking around this one.  Right now I’m doing not-very-$-sustainable workshops for 12 (about the group size I can handle, and a group size I want to encourage, for them to develop trust & possible mutual-support connections), with two places reserved for people on limited incomes.  Between hand-outs, location rentals, and transportation costs, I can’t keep doing it as is.What I’m thinking about doing is making the series available as a product.  If someone wanted to do the series on their own, they’d pay the price of 12 people – and I’d have funds to translate it for people in developing countries for PWYC availability, which I’d report.  I’d maybe even name that translation for the funder, if they wanted!  If a group of 4 people wanted to sign up (as a group), they’d each pay 1/3 of the total price, and I’d be able to fund a few less translations and services, which I’d also report. And so on, right down to if 10 people signed up, they’d each pay 1/10 of the total… with the proviso that if they found two local people with limited finances to join their group, do the series, and get the Q&As with me after each workshop, all of the paying members of that group would have their fees drop by a further 1/6.  Their time and willingness to build local community around dealing effectively with autism has real value to me.
    I’d explain my reasoning, that I want this information to be financially accessible on a global basis, and that I want people to get to know others in their locality who are also dealing with autism for potential mutual support.  I’d make it clear that it was available as PWYC to groups of 12 of limited income if organized by a social worker or health practitioner.  And I’d also be clear that if people want the convenience of a private course and Q&A with me, their convenience would help me serve others affordably.  
    Do you think I’m delusional, or do you think people might find some appeal in this, from both ends of the scale?
    Looking forward to hearing from you, 
    Cheers, Jackie

  • Anonymous

    Interesting, I tried your approach about 8 years ago when practicing medicine (no insurance taken though) and also found patients unable to come up with anything… they just wanted to know how much they owed….  Since I was doing Integrative Medicine, with long sessions, intuitively guided, the interactive approach to charging, especially for people needing more frequent sessions or with financial constraints makes the most sense, however.  But I think it just seemed strange to folks back then…

  • Camarell

    I am running my midwifery business on a “pay what you can” basis, but I’m just starting out. Because I’m a Christian and feel that my work and the method of billing is tied to my faith I’m presenting myself as a Missionary worker expressing to my clients that I work off of donations. Because of the type of work I spend a good deal of time with my clients and most will pay little by little over the course of time, the question is what do I do with the client who never brings up the topic of payment?

  •  Camarell – my big question to you would be – are you collapsing here? I invite you to read this post and see if it resonates – http://marketingforhippies.com/collapse-posturing-and-composure/  and also this http://www.heartofbusiness.com/2008/the-wackiness-of-resonant-pricing/

  • Arjenna Strong

    I just started up a directory for businesses using these alternative pricing models! …www.paywhatonlineguide.weebly.com