Optimizing the donation model for for-profit workshops/webinars

I thought that it might be interesting to share in more detail and document my attempt to optimize revenue for workshops:

First, a bit on my perspective regarding monetizing workshops:

Gary Veynerchuck has so much content that it’s hard for me to dig up the video where I once saw him talking about this. I paraphrase here:

“I’ve had it with people who offer a workshop or webinar, but don’t give you valuable information in it, and try to sell their course/program at the end”

I agree, both as a consumer/participant in many Meetup groups, and as a host/facilitator of many workshops/webinars.

I am not a fan of up-selling my attendees at the end of my sessions although I totally understand the business sense behind it. Why not?

I’m personally passionate about making education accessible. I don’t believe that knowledge should be gated behind a paywall.
- However, I’m fine with people justifying payment for customization/consultation. This requires critical thinking and isn’t just 1-size-fits-all, pre-recorded, high-level concepts.
I feel that I’m not in the right mindset to do my best and deliver good content if I’m trying to manipulate my audience.

That said, yes, there are ways to monetize at the end without coming across as a greasy salesperson. But this isn’t a post about that.

I’ve undertaken the experimentation to make all my workshops free to the public through a donation/tipping model and I wanted to share my lessons here with others who may try to do the same (also to help my audience understand why I’m doing what I’m doing).

Hopefully, this will end positively. I’d like to believe we’re all better human beings that we think we are.

Donation vs. Tipping

A quick comment here. Not a fan of organizers who use the word donation, if none of the money actually goes towards a cause. Instead, say tip.

I’ll use the word donation in the rest of this article though because it also applies to organizers who are asking for sincere donations.

The donation model doesn’t work

I’ve heard this from many other organizers – People are selfish/greedy/cheap/freeloaders.

More so if they’re consuming content online. It’s really hard to monetize a webinar because people can get the same content/advice almost anywhere else on the internet for free.

I don’t quite agree.

As someone who personally tries to get away with as much FREE as possible, I’m still very much willing to pay for things if I believe they’re worth it, or more importantly, if people ask me to pay the right way.

Many donation models don’t work because organizers don’t ask for money the right way.

Using guilt to increase donations?

If you simply ask for a donation, only 1 in 10 people will give (or even a lot less from my experience).

I was listening to a recent Startup podcast from Gimlet Media founder Alex Blumberg where he was interviewing Ira Glass, his former boss and the founder of This American Life. Jump to 18:52 to hear Ira talk about radio pledge drives and how he would reposition the ask in a way that would result in a lot more donations (you can stop around 20:20).

If you’re smart enough to listen between the lines, Ira isn’t trying to make his audience feel guilty. Instead, he utilizes humour and logic to highlight how absurd it is while soliciting a donation without making you feel guilty or bad about yourself.

Making people feel good about paying using donations

I remember attending a startup launch party once. Tickets were $75 but they included a meal and a portion of the proceeds were committed to Hurricane Katrina relief funds. It made me feel good about my purchase and I didn’t hesitate to spend.

So…what are my experiments?

I started by making all workshops/webinars free.

#1 Asking for donation as the end

My assumption was that asking for donations was typically done at the start of the event or at registration/when they were purchasing a ticket, I decided to put it off till the end of the event.

My theory was that people would be more willing to donate at the end because they’ve gotten value out of the session.

I would ask them to pay what they felt it was worth.

Result:

Negative, 7 workshops and 613 registrations later, donations are still far too minimal to cover costs.

Lessons:

When I started, I would over-explain myself and why I was doing it this way. It didn’t feel right, possibly because it made me feel like I didn’t have confidence in my ask and I was trying to justify myself. It made me seem desperate.
The original plan was for workshops to be in-person (but had to be moved online due to the COVID-19 situation). I was planning on passing around a donation bag (like how they do it at church congregations).
- Make sure you don’t forget to show them what the bag looks like and to actually start the passing of the bag while you have the attention of the audience (not after while they’re networking).
- If you assign someone to go from person-to-person to collect, make sure you introduce that volunteer during your event so that people won’t be surprised by a stranger approaching them asking for money.
In today’s cashless society, make sure you explain how people can donate if they didn’t bring cash. I learned very quickly to suggest bank e-transfers in my first event.
- e-transfers may still not be the best option. It’s familiar in Canada, but not every country has a banking system that has online e-transfers. Immigrants in my workshop may not be familiar therefore not end up donating, not because they don’t want to, but because I’m not making it easy for them to. Same applies to PayPal etc. Not everyone may be tech-savvy enough to use some of these platforms.

#2 OK fine, soliciting donations at the front

and reiterating it at the end to capture those who did not donate at the front.

Since #1 wasn’t working out, I moved to collecting optional donations during registrations, events are still free.

With a clear explanation that 50% of the amount donated will go towards Universal Outreach Foundation to help to provide quality educational opportunities to students of all ages.

My wife said: “But who’s to know you’ll actually donate what you get, you could easily pocket all that money”

Of course, but I’m sure that those of you who know me would know that I would never do that.

Test: I’ll start future webinar sessions by quickly screen sharing and donating the Universal Outreach Foundation with the amount collected from the previous session.

This should hopefully:

Build trust and show my audience that I’m actually doing it.
Help with the solicitation of donations in that current session because people will see that I’m serious about it.

Update: Slightly higher revenue (but since I’m giving 50% away, it’s significantly less income), noticeably less registrations.

#3 Donations built into pricing

This is my next experiment.

Basically doing what I said above regarding making people feel good about donating.

Have a fixed price – e.g. $50, and comment that 50% would be put towards Universal Outreach Foundation.

Other random lessons:

Make sure you take the time to explain what the donation contributes towards. Many organizers skim over this too quickly because they are uncomfortable when it comes to asking for money. I’ve made this mistake myself.
- Talk about the organization you’re giving a portion of your proceeds to, why it matters to you, what they do with the money.
- Talk about how you will use the money yourself to improve future sessions or justify your work.
Still haven’t quite figured out how to use humour & logic like the example that Ira gave to solicit donations in a way that’s comfortable for me. I’m worried that if done incorrectly, it will create a sense of guilt and make my attendees feel like they are obligated to.

If you’re curious, and to be transparent, here’s what goes into organizing my webinars/workshops every week.

What are my costs?

For each 1.5 hour workshop, on average:

2 hours: Creating & promoting the event (Meetup, Eventbrite, Newsletter, Social Media).
3 hours: Preparing content & slides.
2 hours: Preparation + actual facilitation of the workshop
Total hours: 7

In other words, I’m currently running 1 webinar a week and spending a full day each week on it. If I pay myself a living wage on those hours ($20) = $140. Although I know my time is worth a lot more than that, my current going rate for startup consultation work starts at $150/hour.

Additional cost:

$20/mo: Zoom
$40-50/mo: Zapier
$40-50/mo: Mailchimp
$13/mo: Google
$24/mo: Meetup
$4/mo: Website
Total: $150/mo

At an average of 4 workshops per month, that’s about $40/workshop. Including time, that brings total monetary expenses for each workshop to about $200.

And that’s for just for online workshops. For in-person:

5 hours: Preparation + facilitation of the event
- Instead of 2 hours for online – in-person events are typically 3 hours long to include networking time.
- The other 2 hours includes time to purchase F&B/prepare registration equipment/set-up/clean-up.
2 hours: Time spent securing a free venue
- Or average rental rate for a paid venue = $500
- At $100/hr for 4-5 hours.
$100: Event materials (name tags, post-it notes, pens, markers, snacks)

How much am I currently making?

#1 Asking for donation as the end
- Mar 4: Networking Mastery
  - $50
  - 219 registered, 125 attended
  - In-person (the rest are all virtual)
- Mar 18: The Art of Negotiation
  - $15
  - 78 registered, 37 attended
- Mar 23: Accessing The Hidden Job Market
  - $0
  - 41 registered, 17 attended
- Apr 2: Purpose & Value Discovery
  - $20
  - 57 registered, 37 attended
- Apr 8: Startup Ideation & Innovation
  - $70
  - 76 registered, 51 attended
- Apr 15: Entrepreneurship as a Career Option
  - $30
  - 52 registered, 27 attended
#2 OK fine, donations at the front (all revenue numbers below are before donating 50% to UOF – hence revenue is actually half)
- Apr 22: How to Persuade & Influence People with Words
  - $60
  - 90 registered, 41 attended
- Apr 29: How to Find Your Ideal Co-founder
  - $0 (free, in collaboration with Startup Grind Richmond)
  - 67 registered, 46 attended
- May 5: Using Mindfulness to Optimize Your Energy Levels
  - $5
  - 13 registered, 6 attended
- May 6: Time Management & Productivity
  - $31
  - 128 registered, 36 attended
- May 13: Startup Basics: Common Mistakes to Avoid, How To…
  - $40 (free, in collaboration with Startup Grind Richmond)
  - 76 registered, 49 attended
- May 20: How to Write Emails That People Will Respond To
  - $5
  - 54 registered, 28 attended
- May 27: How to be a Better Storyteller
  - $75
  - 87 registered, 48 attended
- Jun 3: Building Confidence & Overcoming The Imposter Syndrome
  - $40
  - 35 registered, 17 attended
- June 9: Pitching for Hackathons
  - $0
  - 49 registered, 20 attended
- June 11: How to Find Your Ideal Co-founder
  - $0
  - 19 registered, 7 attended
#3 Donations built into pricing
- June 17: How to stand out through SEO in an increasingly competitive online market
  - $20 (but cancelled)
  - 1 registered, cancelled.

Total revenue: $313

Total cost (for these past 7 events): $3,410

Net: -$3,097

Why am I sharing? Not to gain sympathy and solicit more donations, but as a learning tool both for myself and for other organizers out there.

Yes, I’ve made a lot of mistakes, and may not have been the best as soliciting payment. But I’ve also learned a lot and am getting better at it.
I’ve grown my audience by 1142. If I view this as a marketing expense, my effective CAC (customer acquisition cost) = $2.71 not too shabby at all.
- Of course, these aren’t technically customers, and LTV is near $0 right now.
I’ll revisit this post with results in a few months after I’ve had a chance to test #3 mentioned above. Fingers-crossed that people are as generous as I believe they are.

Disclaimer: I know it’s not the most controlled experiment since I’m not doing:

Cohort testing to control for seasonality/timing.
A/B testing to control for variances between topics/speakers.