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Donations are a way to give people money if you’ve gotten value from them or you believe in what they do.
It’s an alternative to general commerce, where you buy goods or services and you exchange money in return for something.
A donation might just be based on a feeling. Maybe someone did something good for you or you’re enjoying a show and they accept donations.
A donation is a way to pay them back and to let them know that you appreciate something they did.
Am I Leaving Money on the Table?
Who wouldn’t want to take donations? It’s great to get money for what you do. Maybe you run a show, whether it’s an audio show, video show, or possibly a blog, and if someone wants to donate money to you, why wouldn’t you take their money?
Well, I think I have a reason why you might not want to take donations and to explain that, I have a story for you.
For my store, on my WordPress website, I use a plugin called WooCommerce. Within Woo Commerce I’m able to sell physical products, subscription memberships, and online courses.
One of my online courses, Learn Lettering, has a free tier—a starter class that’s available for $0. For someone to get access, they go through the checkout, effectively “pay” $0, and the checkout system grants their account access to watch the videos.
Now, when I look at my order list I see all of my subscription orders and physical product orders, but I also see these $0 orders.
The problem is so many people sign up for this free class that my orders list ends up getting bogged down. I want to be able to see just my paid orders and none of the $0 orders.
He’s specializing and curating himself as the WooCommerce specialist. He’s a talented developer who does many things and he could develop on many platforms, but he specializes as a WooCommerce consultant or a WooCommerce expert.
He immediately came to mind, I reached out to him, and I told him my problem. He said, “You can’t solve that natively, but I could develop a custom plugin for you. In fact, I’ll do that for you on my next show and I’ll release it publicly.”
Fast forward a few days and sure enough, true to his word, Daniel made a custom plugin for me that filtered out all of the $0 orders and he released it publicly on his show. I installed and it did the trick perfectly. He solved my problem and he did it for free.
Of course, I was excited that it solved my problem, so I reached out to him and asked, “Where’s your tip jar?” because I wanted to donate to him. I wanted to give back for the value I had received, and he said, “No tip jar.”
Now, you might be thinking, “He just left money on the table.” That’s the first thing that came to my mind.
Immediately, I thought, “If he had a tip jar, I would give him money right now,” but I think that’s the short-sighted way of thinking about it.
Donations Are Short-Sighted
Here’s the “why you might not want to accept donations.” Look at what happened: Daniel didn’t have a tip jar, but let’s assume that he did. What would happen? Maybe, best case scenario, I give him $50. He has $50 and now the reciprocity has been fulfilled.
He gave me value for free, I paid him back for that value by donating, and now everything is good. The reciprocity is fulfilled. The debt has been paid. This is what most people are satisfied with. They make a show, they write a blog, they accept donations, and the reciprocity is fulfilled.
The person has paid you back for the value and most people are willing to accept this.
Most people are willing to take the short-term money of a donation and call it good, but I think they’re missing out on a longer-term play here.
They’re missing out on the big picture. Daniel did not have a tip jar, but what did he get?
I am now talking about him on my show. I also talked about him on my podcast. I’m giving him exposure. His website is ShopPlugins.com. I’m now giving him a plug.
I am giving him a plug because I feel indebted to him.
According to the Rule of Reciprocity, when we receive value from someone, we want to pay back that value—it’s just intrinsic human nature.
The important point is that we not only feel indebted to repay someone, we also want to out-give them. We’re motivated to out-give them because we want to wipe away any trace of indebtedness.
What this means is by not accepting donations, you can build up reciprocity that in the long term can come back in a much greater form than a small donation.
For instance, the fact that I don’t accept donations from people, even though I’m leaving money on the table, may mean that a small percentage of those people eventually buy something from me. They could eventually buy something high end like a course, a membership, or a ticket to seanwes conference.
What is the value of that? How many times would it take someone donating $5 or $10 to add up to the price of a course that costs many hundreds of dollars?
When you allow people to donate, you allow them to satiate the reciprocity.
They can make a $5 donation, a $10 donation, or even a $20 donation and they will feel like they’ve paid you back.
Make Products & Services Available
If you don’t allow them to donate and you only make products and services available, that’s the only way to pay you back.
You may find that, not only will they buy your products and service, but even if they don’t, they will be inclined to spread the word about you because you have built up so much goodwill with them.
You have given them so much free value that they want to repay you in any way possible. In fact, that’s my theory with this show. It costs a lot of money to produce this show. It costs time, effort, energy, and paying Cory’s salary to do this show, but I want to give to you.
No, there’s no way to donate and I don’t have a Patreon. The only way is to buy from me. I have products, services, and courses available. You can sign up for the Community.
I make ways for people to compensate me for the value I provide. Now, maybe none of those things are for you and that’s totally fine. I still don’t want you to donate to me.
I have products and services available that you can buy if you feel like you’ve received value, but my hope here is that I’m building up goodwill and reciprocity such that you are inclined to spread the word about me.
Hopefully, you get a lot of value out of this show and you tell someone else about it. That means we all win! You’re getting value, I’m getting value, and someone else is getting value because you told them about this show.
As I provide this show for free, as I give you value, my goal is to enrich your life and help you be successful, and I don’t ask for anything in return. I don’t want you to donate to me.
You know I have products and services available. You know you could join the Community, but I am just giving this to you, no strings attached.
As a result of that, do you feel the goodwill building up inside of you? Do you feel compelled to share it with someone else? Have you shared with someone else?