Sliding Fees (why I don't have them)

People sometimes ask me why, as I'm a non-profit practitioner, I don't offer clients a sliding fee scale. That is, why I don't adjust what I charge on the basis of the client's ability to pay? Most people believe such scales are fair and should be used widely by helping professionals.

   

Actually, I used to offer such a scale back when my practice was part of an association of practices called "Counseling Ministries, Inc." The sliding scale was an utter disaster and I had to abandon it. There were two reasons.

   

First, sliding fee scales ultimately don't work unless you have some other source of revenue in your practice (such as corporate grants, community chest funds, etc.). With a sliding scale you basically plan to overcharge some people (who have a good income) so that you can undercharge others (who have low incomes). The theory is you should be satisfied with the balance.

   

The problem is that this doesn't work over time. Eventually, the people you are overcharging figure out they are being overcharged, and they go elsewhere to a practitioner who doesn't have a sliding scale and isn't going to over-charge them. 

   

The result is that after a few years you end up with a practice full of poor clients you are undercharging. Unless you've got some other source of money coming in to balance this, you go bankrupt.

   

Second, for some people it's just their nature to cheat. Once these people hear you offer a sliding fee scale they automatically assume that means they should be paying you the bottom fee on that scale. They will assume that even if their annual income is greater than your entire net worth. 

   

I've actually had clients who told me they had limited financial means to get the bottom fee subsequently tell me all about their European vacations, Caribbean cruises and fancy cars. You'd think they'd be ashamed, but they're not. They think they've been clever.  

  

I tried to fix this problem by asking for proof-of-income. That is, I asked to see a copy of their latest tax return and set the fee based on the Adjusted Income number. That was also a disaster. People unhesitatingly presented copies of tax returns that had obviously been altered. You could see the Liquid Paper marks where they'd re-written numbers, and typically the altered forms ended up containing numbers that didn't add up to the number at the bottom of the form when you did the math yourself. Again, they justified this by thinking they were clever and had gotten themselves "a deal."

   

Colleagues who run for-profit programs can just be tough-minded. They charge every penny the traffic will bear and make no bones about it. They are within their rights, and it does seem to work for them. But i'm a non-profit practitioner whose practice is also a ministry.

   

The solution I worked out was to set a fair price for my services as a flat fee. Then, I maintain an extensive charitable program where I see people for free in groups. I never have to turn anyone away. If you can't afford individual work, I've got a group session on the calendar that you can go to for free. If you want the convenience and individualized attention that you get in private sessions, you pay for that, but the fee is fair and everyone pays the same. 

   

This is actually the model Google Corporation uses for its services such a GMail and Google Docs. Google charges a small number of customers a premium fee for a premium service, and that allows them to offer other services to many people without charge. True, Google also puts advertising on its free services, but the idea is basically the same.

 

That's my solution to this conundrum. There are probably others but I've not seen many that work as well.