Today we’ll focus on the the complexities of end user revenue–a topic that is often debated, and with great passion.

For some, building a product that end users strongly value and are able to pay for represents an avenue to sustainability. Generating funding directly from users can give non-profits greater autonomy and reduce dependence on unpredictable philanthropic or government funding.

However for others–especially those serving people living under the hardest conditions and faced with poverty–charging end users poses significant risks. It can exclude the very people who need the solution the most, as they are often unable to pay.

With those two arguments in mind: Should we charge end users? And if the answer is yes, how can we do it effectively ensuring we are not excluding anyone?

In our study, six non-profits operating at scale were able to charge end users. However, just two of those generate above 50% of their revenue in this way, with the average across the six generating around 35%.

So what can we learn from those organisations who are successfully charging end users?

• Offering high-quality solutions to pressing needs at below-market rates is the key to charging end users successfully.
• Charging fees to end users becomes more feasible when your solution enables them to generate income, such as offering micro or small-business loans paired with high-quality business training.
• Fee-based models suit non-profits filling service gaps left by government and private sectors.

When deciding whether to charge end users, consider these trade-offs:

Read the report to learn how One Acre Fund, World Bicycle Relief and 1001fontaines are successfully charging end users whilst improving the lives of those who need their solutions the most.