I was wondering about placing a tip or donation box on my site. I'd rather not as I'm a minimalist, but still, it may be worth it. How successful have you been in using one, and what system do you use?
The only person I've ever heard of really hit the ball out of the park with donations is Rick Brewster (Paint.NET). He has some interesting blog articles about the subject which Google will bring up.
More typical is SyntaxHighlighter, which is the JS syntax highlighting thing that everyone and their dog uses on their blog. The author has raised about $100 in donations so far (number pulled off site). I'm one quarter of that, because his software saved me so much work I donated the USD equivalent of one sale of my software to him. Since he started accepting donations his software has been, conservatively, downloaded several hundred thousand times by people who use it to increase their commercial and professional opportunities.
Compare that to commercial software for a moment: I sell about a hundred dollars worth of licenses to my bingo thingee a day, on rather substantially less than several hundred thousand installs.
Which is a long way to say "Charge money for value".
(Relatedly, I am reminded of a good line I heard from a developmental economist once: Only one country ever got rich from foreign aid, and the Vatican is not a great model for Africa.)
You could say "if you're offering a lot to a lot of people" then donations might work. At the same time you could be charging as well, and even though this adds complexity, it also adds a business. Charging does reduce popularity in the short term and chances of going viral.
I suppose it's generally the most altruistic that give a to a website. It's not like you're curing diseases or saving lives, generally.
Stormpulse.com received a few $k in donations in September '08 (during Gustav, Ike, and co). We slapped up a "Donate Now" PayPal button in the top-right-hand corner and it worked. The benefit of PayPal over others is the fact that PayPal is an actual payment, not just a pledge to pay (which can be the case with other donation widgets).
Word to the wise: be smart about minimums and maximums. If you ask for a dollar, you get a dollar. Ask for $20, or make it completely open, and you might get more. There's obviously a psychology to it worth studying.
That said, donations are not our revenue model, so we've taken the button down. :-)
Bay12 Games (Tarn Adams) has been somewhat successful with donations, I think he works now full-time on his own stuff. (http://www.bay12games.com/)
From their forums:
March Donations: $2997.46 and 50 billion dollars in expired bank notes from Zimbabwe
February Donations: $1428.62
January Donations: $2099.48
December Donations: $5279.49
November Donations: $1305.10
In its first few years, my webgame had donations flowing in at the rate of about 50 cent per active player-year. By that I mean, a population of 100 active players (active means using the website at least once per week) would result in some 50 dollars per year. It's a lot less now due to less activity on my part. This is in the same order of magnitude as adsense, except that adsense depends less on "fresh" users.
This is all small numbers though, since my game inherently doesn't scale.
Steve Pavlina (www.stevepavlina.com) and Leo Babauta (www.zenhabits.net) are the 2 who come to mind when talking about making money from donations. Leo actually makes enough to have quit his day job (last I heard).
According to them, you need 2 things to make this work -
1) steady regular audience
2) they have to really like you or at least what you have to say
Tipjoy has been mentioned a few times. Let me just say that we're most excited about our API, because it can give a site a really custom donation form integration. Broadcasting over twitter is really hot too.
Donations are no substitute for charging for products. If you have a commercial product and you make it free and ask for donations instead, your income will drop by 10X or 100X. Really!
Where donations work is when there is an obvious good cause attached to the donation. People will donate when it feels right. But getting a product is not a cause for donation.
tipjoy of course is the rolls royce of donations for your web site. Can't get any simpler than that, and simplicity is key.
Donations won't work until we have a workable micropayment system. And I don't understand why we don't have it yet. The software is something to write in a weekend: deposit at most $50 in your account, pay by clicking a link and confirm by email. 1 cent per transaction should cover operating costs. Transfers from your account could cost a bit more, to cover bank fees and profit.
Why we don't have it yet? I'd guess regulations. The moment you write this software you're more or less a bank. If someone found a way to circumvent this would make the internet a huge favor.
I don't understand your argument at all. I've made donations of thousands of dollars, tax deductible and not, online. Lowering the bar for payment can only go so far. It doesn't solve the issue that getting people to open their wallets (virtual or otherwise) is a pain in the ass. It's a psychological problem, one that most people solve by requiring payment upfront, instead of passively hinting to have money thrown their way.
Personally, I hate the idea of "donations" in this sense. I would rather support your work/ideas/project by purchasing a product you profit from, than just hand you cash.
Exactly, it's a psychological problem. When opening your wallet means searching for your credit card number, you probably won't. When it means 2 clicks and 2 key presses, then maybe it's different.
Wow, thousands online, that's impressive. Did you feel it cheapened the site or software by asking for them? In waking life buskers, beggars, waiters and charities are the only entities that come straight to mind with regards to tips and donations.
http://blog.getpaint.net/2007/07/13/making-money-with-freewa...
More typical is SyntaxHighlighter, which is the JS syntax highlighting thing that everyone and their dog uses on their blog. The author has raised about $100 in donations so far (number pulled off site). I'm one quarter of that, because his software saved me so much work I donated the USD equivalent of one sale of my software to him. Since he started accepting donations his software has been, conservatively, downloaded several hundred thousand times by people who use it to increase their commercial and professional opportunities.
Compare that to commercial software for a moment: I sell about a hundred dollars worth of licenses to my bingo thingee a day, on rather substantially less than several hundred thousand installs.
Which is a long way to say "Charge money for value".
(Relatedly, I am reminded of a good line I heard from a developmental economist once: Only one country ever got rich from foreign aid, and the Vatican is not a great model for Africa.)