Monday, 29 October 2012

To Charge, or not to Charge?

‘Should NGOs charge fees for its programs?’ – This is a question which has been mooted not just within our program, but also in many others within and outside of Pratham. Since the program is fully funded by our donor, we do not need to charge fees. Yet, this is an important consideration which is often mooted in the course of program implementation.

Like with many choices made during implementation, this too has a valid set of advantages and disadvantages which have to be taken into consideration and a decision must be taken based on what best suites the program’s goals as well as the realities of the situation on the ground.

Advantages of Charging Fees
  • Sustainability: The first advantage is that charging fees, even nominally, means additional funds coming into the program. This can then be put to a variety of uses – either in covering basic implementation costs, to fund other existent programs or to create new avenues of operation. 
  • Commitment: Often during implementation, free of cost programs are welcomed by partners and end beneficiaries. However, because the program is free, there is a “nothing to lose” attitude which can develop towards the program. That is to say, since the beneficiary will not lose anything by failing to adequately participate; it is solely dependent on their own drive to do so. Charging a nominal fee leads to beneficiaries being invested in the program and they will then work to get the maximum out of what they have paid for.
  • Seriousness: Unfortunately, providing programs free of cost occasionally leads to them being viewed in a flippant manner or as a sub-standard product. Attaching a monetary cost increases the perceived value of the program and can lead to it being viewed in a more serious light.
  • No Motive-Related Apprehension:  In our program we provide a 32” LCD TV and the WebBox. Some schools found it hard to believe we would give them free hardware at no cost. They were convinced that there was, or would be, some hidden cost and thus looked at the program in a distrustful light. Thus some programs may encounter similar problems, where some beneficiaries feel like there is a hidden agenda or motive behind the program.

Disadvantages of Charging Fees
  • No Requirement: In the case of programs which have funding for implementation, charging fees are not required and unrelated to the program. Thus begging the question as to the reasons for the need to charge for the program in the first place.
  • Hesitance at Participation: A free of cost program invariably means that, since there is no cost for the school, it will be far easier to bring them on board with the program. A fee will automatically be an impediment to the school participation, both in terms of budget constraints as well as for obtaining the required authorization for the same.
  • Negative Perception: As an NGO, charging a fee for a program may seem to be commercial by beneficiaries. The perception towards the NGO may also differ. With a program which is free of cost, the impact-driven motive is more prominent. In the case of a program which charges, the motive may be misconstrued as being profit driven. This may lead to the relationship going from an NGO – beneficiary to that of an NGO – client, reducing the trust between stakeholders. 
  • Fee Recovery: The introduction of a fee, especially a recurring fee model, would add to the workload of staff members. They would have to spend time following up to ensure schools have paid the fee, as well as dealing with issues of failure of payment and deciding what the consequences of that failure would be. 
  • Disconnect between Aim and Implementation: Our program is targeted towards those schools which do not otherwise have financial access to commercial Educational Technology. The idea being, to provide them with an alternative which can benefit children without causing an additional financial burden on the school. If a fee was introduced, it would also be unfair to charge some schools and not charge others, which all fall in the same target segment – this becomes problematic when a school is not able to or is not willing to pay the fee despite being in our target segment. The effective message being – if you can’t pay the fee you cannot participate. This would create a conflict between the logistical implementation of the program and the ethos on which it is driven.

There are definitely various issues which exist on both sides of the debate which have to be taken into consideration before a decision is made. Also, many of these issues are not inevitable, but can be worked around.

For this particular project, we will be watching closely to understand if a fee-based model in Delhi and potentially Jaipur, versus a non-fee based model in the remaining locations has any impact on the usage of the WebBox among other things.