Donation Commerce

Many of the financial modeling products on Foresight are priced at fixed prices ranging from $74 to over $400 USD, I also offer a number of products for free with the option for people to donate what they want (also called"pay-what-you-want" products).

My goal in starting Foresight was to make it easier and cheaper for people to build better financial models to help them make better business decisions. To accomplish that, I’ve always offered a number of products for free, out of a belief that it’s difficult for evaluate and decide on whether a model template will help them without:

Already knowing how to build a model (addressing the challenge of demonstrating the value of a model to those without the ability to build a model)
Seeing that a particular model template can help them accomplish their goals (a basic black box problem in selling knowledge economy work without being able to identify the value of the work before the sale or engagement)

One way I’ve chosen to address that is to offer free products with the option for people to donate what they want. “Pay-what-you-want” is one way to tease out a user’s willingness to pay (in the economic sense) and allow people to compensate me for the time I spend to create free tools (which is a lot) based on their perceived value of the tool and their ability to pay.

In October 2022 I changed the product download flow from suggesting a donation after a user clicks on the download/access button to before. Here’s an example of what it looks like now:

What happened? Over the first couple months post-UX change, the percentage of donations for free products went from 1.5% to 4.2% of downloads, and the donation amount stayed roughly the same, increasing from $10 to $11. That may not seem like a large change, and it’s still a small %, but >2x more revenue from donations from a small UX change.

But let’s look back at the results, 22 months post-UX change. From October 2022 to August 2024,

Donations went from 5.35% of free product downloads (2022) to 6.14% (2023) to 7.11% (2024)
The average donation amount increased from $17.59 (2022) and $17.32 (2023) to $19.71 (2024)
Overall, revenue per download of a free product is $1.17
Donations generate ~ $1,100 in revenue per month

What has caused the changes over time?

The product mix has changed over time, combining for an overall increase in the amount of products available for free, and the value of those free products
The default suggested donation has increased over time from the mix of free products available and the increase in the suggested donation amount for a couple products
The presentation of the free products and the value inside the “black box” has generally improved over time with more explainers, social proof, and personalization of the donation appeal.

What’s most important to me is the demonstration that offering free products can be a valuable way to improve distribution, demonstrate quality of all products, start conversations with potential users and clients, give a valuable offering to people that may not be able to pay or have the same ability to pay, and really refine my thinking of what is valuable and not valuable for users.

It takes a lot of work to make products available for free, but thankfully it’s also proved to be a valuable way to build a business.

(Donations always appreciated :)