Back in May 2010 Atlassian, a large innovative software company, revealed that its alternative business model causium had allowed it to donate $500,000 to international literacy improvement charity Room to Read. Now the firm says it has surpassed $2.5 million in donations, and is holding a special event with the charity on May 14th to celebrate.
Causium is an alternative to the freemium business model that many companies–from the Wall Street Journal to Babbel–follow. Under freemium thinking, Atlassian would give away some of its enterprise-grade code for free in order to attract business for its paid services. But instead, the company charges a nominal $10 fee, which it then donates to charity. The fee works in two ways–as a boost to charitable causes, and also to demonstrate to the software’s end-users that the code itself has value.
Atlassian’s President Jay Simons spoke to Fast Company, explaining that the plan has worked better than they expected: “We didn’t appreciate at the time that we were effectively building this annuity stream. Customers that buy the 10-user license will buy it again the following year.” The first year of the plan resulted in some $300,000 in charity donations, and the growth of the company’s reputation since means they donated the same amount in the first quarter of 2013. The donations are important to Room to Read, Simons says, because “they have a reliable funding source” on a regular basis.
The company also operates a different charitable system apart from causium, and lets its employees donate 1% of their time to a cause. Simons says this deepens the charitable partnerships of his company because “we’ve got people who are really good at graphic design, building a website for them. They’re not a software company, and when they needed to build a website for a new children’s book they were launching, we had a bunch of staff that wanted to do that for them.”
This may remind you of Google’s inspirational , which is used both for innovative and charitable actions by its staff. Simons noted that Atlassian has been approached about the causium model by other companies. “There’s been a handful” that have followed Atlassian’s example, he noted, pointing to a similar system at ZenDesk called “Starter licenses” which sees the $20 annual fee given to local charity.