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Many communities begin as small projects and hobbies. They start as a passion and the creators pour their time and money into the project. As a community grows, though, the need for new hosting, different hardware, new servers, or other things that cost money grows. This hobby is now suckling on the creator's wallet.

There are methods to relieve this financial burden though. Ads can be displayed, donations/contributions can be solicited, or "cover charges" can be applied. All of this introduces friction in the community though, because a once free product now has a financial component to it.

How can I, as a community leader, introduce these monetizing options without enraging the community? To be clear, I am not asking what my options are to monetize the site. What is the best way to explain to the community why I need to monetize the site?

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    Just a note, since this site is so new, I'm asking the question on Meta - is this really on-topic for this site? It doesn't seem so much like a moderation issue, but more like a business model decision, BUT I'm not 100% clear on the scope of this site. No offense, I just wanted to know if this is the type of question that is appropriate here. – David Stratton Jul 31 '14 at 3:58
  • @DavidStratton Fair enough. TO META! – Andy Jul 31 '14 at 3:59
  • I might add that a portion of the surplus of money after the bills are paid goes to a charity/to improving the site. You might want to be transparent so users can see that a server, in some extreme cases, can cost you hundreds of dollars a month. – Anonymous Penguin Aug 8 '14 at 1:01
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The other two answers provide different methods of how to monetize your site, but reading through your question it feels more like you've already decided you are going to monetize and you want to know how to introduce these new changes to the community.

Your best way to handle this is always going to be publicly stating the changes in a way that everyone can easily find and understand what is going on. You'll want to write out all your plans before actually making the changes, so they know what's coming and aren't surprised. Monetizing the site is a huge change and users are going to want to know a few things:

  1. How will this affect me, as a user?

    The biggest thing that deters users from a site after monetization is a loss of features that they already had beforehand, and they're definitely going to want to know every change. If you're using some sort of subscription method, you'll want to clearly indicate all new features provided with it. If something that was previously available is now only available through a subscription, explain your reasoning why you had to do it that way. For example, users will understand more if you tell them that a feature was too resource-intensive and that restricting it to only those who are willing to support the community is a positive change.

  2. What, exactly, will the money be used for?

    Users don't like seeing sites that start cramming in advertisements and adding a bunch of paid features just so the site owners can line their pockets. If you want to maintain the trust of your community, you should outline in as much detail as possible exactly where those funds will be going. Tell them your plans for upgrading servers, maintaining security, etc. Maybe you need to hire some staff to help you out. Not saying you need to provide a full-out expense report, but don't go into it just saying "we need money."

  3. What happens with the excess funds?

    After monetization, you might end up with a bit of extra cash that you didn't have plans for. It's a great idea to indicate where the excess funds will go in that event. Will it be used to run contests for the community to give back for giving? Will awesome and highly contributing members of your community get some swag? Even if all you do is throw it into a savings account for future plans or even emergency funds, it's best not to leave your community guessing.

If you can clearly lay out a financial plan for your users that they can support, you certainly won't have any problems with them becoming enraged. The fact that you spent time figuring out exactly what you need to do in order to keep this community afloat will only contribute to their trust in you as a leader of their community.

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There's several ways you can help cover the costs of running the community. Some are dependent on the type of the community, I've tried to keep them as general as possible and they may need tweaking slightly depending on your community but you should get the general idea:

  • The obvious one first, Advertising. If you have a larger user base with many hits to the website then you can generate a large amount of revenue from adverts placed on the website. This will cause some annoyance to your community though.
  • Subscriptions. These can come in many forms, such as combining it with adverts above to pay to turn them off, or offering additional content / features for paying members. This isn't going to be applicable to every community but some thrive of subscription models.
  • Donations. Having a donation button on the website can help, adding in bars showing monthly goals and how far you have to go can often help your community realise how much the community costs to sustain. Recognising those who donate in some small way also can help.
  • Sponsorships. Rare for most communities but possible for larger ones and similar to advertising in that you'll have to display your sponsors information prominently on the website. However unlike advertising the community will probably find sponsorship less offensive and may even be proud that the community is big enough to warrant the interest of corporate sponsorship.
  • Sell merchandise. There are plenty of websites out there that will allow you to set up your own mini-eshop, design and sell your own products. You can stick your communities logo on t-shirts, mugs, mouse mats and other assorted items and sell them back to your community.

In the end you'll need to find an option that works for your community. Talk to them, tell them that things are starting to cost too much for one person to cover and I'm sure you'll be surprised at the reaction. In my experience most members of a community are happy to chip in to help keep a community running that they're passionate about.

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    I think you misunderstood my question. I'm not looking for ways to monetize, I'm looking for ways to explain the need to monetize – Andy Jul 31 '14 at 4:35
  • I think you should clarify that in your question better then. I thought you were asking for ways to monetize. – Styphon Jul 31 '14 at 9:11
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I think the biggest thing to bring community acceptance to the need for finances is to explain exactly what the needs are. If you are comfortable, publish the exact amount of costs and the exact amount you have towards those costs. If people want to be given credit for their contributions, let them have it. If people can see why the community costs money, they are far more likely to be willing to donate resources towards keeping it going.

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As Styphon mentioned, there are alternative ways to monetize that don't degrade the user experience (or require explaining). Merchandise is a great way to get your community excited while also earning an income.

Probably the easiest way to start selling is with Merchoo. It's free to sell and is very easy to integrate into your site without any design changes.

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    Are you affiliated with them? If so please edit to disclose that fact. – Monica Cellio Dec 11 '14 at 16:02

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