Building Nonprofit Sustainability Through Digital Apps
June 07, 2016
Product-based income strategies are challenging for nonprofits because of the costs associated with inventory. Either your organization has to shell out significant capital to keep the products you hope to sell in stock, or you have to partner with a company that will manage the inventory for you. In most cases, the company will take a portion of your sales to cover their costs and turn a profit before turning over the remainder of the proceeds (if any) to you – in effect, turning your carefully cultivated army of volunteers into a second sales team working to boost its own P&L statement.
With a digital product like an app, on the other hand, a nonprofit bears the one-time cost of product development and then is able to sell the product in perpetuity – or what passes for perpetuity in the digital age -- without having to worry about costs associated with building and maintaining inventory. In the digital marketplace, once an app has been created, selling a hundred thousand copies doesn't cost you any more than selling ten thousand copies.
What's more, having an app on a supporter's mobile device creates a new channel through which you can communicate with that supporter as conveniently as you can with email but without the "noise" created by the hundreds of emails most of us receive on a daily basis. Push notifications that directly target users of an app can quickly mobilize your user base, alerting them to new petitions, challenge grant opportunities, and other kinds of events designed to deepen donor engagement. (Note: while nonprofits are allowed to make money from the sale of digital apps, they cannot collect donations through an app. If you want to use the app to generate donations, you need to get potential supporters to click a "Donate" button that sends them to a mobile-friendly Web page where the transaction can be completed.)
So how much does it cost to develop an app? In 2014, when the team at RedRover first hit on the idea of building a digital version of our RedRover Readers program, we didn't have a clue. And asking a developer how much it costs is like asking an architect how much a new house will cost – the answer can range anywhere from hundreds of dollars to hundreds of thousands of dollars, depending on what you want the app to do. The more complex the functionality, the more it's going to cost.
Next, to help reduce some of the risk involved in making an investment in the app’s development, we reached out to our community of supporters in the form of a Kickstarter campaign. In fact, had we not reached our Kickstarter goal, we would not have continued with the project. But, fortunately, our supporters believed in the project as much as we did, and we exceeded our $18,500 funding goal with three days to spare.
The development process itself was long and, at times, stressful, with any number of false starts and bumps along the way – indeed, enough of them so that by the time we arrived at the end of the journey, we knew that the strategy we had pursued might not be the best strategy for every nonprofit. Again, an ability to clearly articulate the vision for the product and how it could advance our mission was essential, as was creative staff who were willing to take risks and an organizational culture that embraced innovation and flexibility. Still, for a brief moment, even that looked like it might not be enough. Our final hurdle came as we were getting ready to launch the product and learned that Apple had rejected the app for its store because the screen orientation of the app's game component was different than the screen orientation of the book component. Sticky Brain was on the case in a flash, however, and on May 19 The Restricted Adventures of Raja made its debut in all the major app stores.
With the help of Appency, a mobile app marketing and PR firm, our efforts have now turned to marketing, and we are working diligently to leverage the power of our supporters' and partners' social media channels to spread the word. At $2.99 per download, it remains to be seen how much revenue the app will generate. But we're confident it will boost the reach of our RedRover Readers program and be a tool in our earned-income tool kit for years to come. In fact, we've even started to plan for the next book in the series.
Intrigued? If you’re a nonprofit and want to learn more about our experience with the mobile app development process, I'd be happy to answer any questions you may have. Shoot me an email at the address below, and I'll get back to you with a response as quickly as I can.
Nicole Forsyth is president and CEO for RedRover, a national nonprofit organization that helps animals and people in crisis and enhances the relationships people have with animals as a means to prevent animal suffering and neglect. Forsyth initiated RedRover Readers in 2007 and is the author of The Restricted Adventures of Raja.