So we've developed a version of 'pay what you feel is right' that we think makes sense for building projects. Here's what we do:
We still use an estimate
We toyed with getting rid of estimates altogether, but we've stuck with this familiar process for some very solid reasons.
- It gives people an accurate picture of materials costs
- It gives people some sense of how much time will be involved
- It gives people some sense of what might be reasonable to pay, and therefore a chance to assess their ability to afford it.
- It provides an excellent opportunity to build in transparency and accountability to the project.
So, once we have a design in mind, we generate a detailed spreadsheet aimed at capturing all materials costs and indicative time estimates.
The estimate then becomes an interactive, 'live document'
We upload the estimate spreadsheet to the cloud so that the client can view it online at any time, see the frequent updates that we make, and follow the project hours and costs as the project progresses. The client can enter comments and questions to the document and we will respond quickly. We call this document a Project Tracker.
We do this because:
Despite any builder's best efforts at estimating materials accurately, there will be changes to materials purchases as the project unfolds—that's the nature of building, and an indicator of a responsive, thoughtful builder at work.
Estimating actual time-on-tools accurately is notoriously difficult, in fact, impossible. The builder is best placed to make these highly educated guesses, but cannot be expected to make a bulls-eye on an as-yet-unseen target. (Where a project involves volunteered labour, such as friends and family in the S-Start Program, this is even more the case.)
To build trust around those last two facts, we we want to offer complete transparency. The live document allows you to see changes as they happen, in monetary terms, and to clarify with us what's happening. Of course, we'll also be chatting directly with you as we go along, but the Project Tracker spreadsheet puts the figures on the table for the entire time of the project.
The estimate (Project Tracker) does not use a set hourly rate
In many ways, an hourly rate is not important to either you, or us. We simply hope to make a decent living from our work, and you hope to get good value for the service provided. An hourly rate isn't necessary for that. And a set hourly rate would remove the opportunity for a 'gift economy' exchange.
You will need to pay for all materials as the baseline minimum. But what you pay us for our time, skills and energy is up to you. We believe this decision should be made as a judgement, not a contract, based on our relationship to each other as members of a community.
There are many valid reasons to pay less than industry standard, and many to pay more. For example, if disaster struck your family in the midst of a project, and your available funds were swallowed by unforeseen misfortune, we would not want to hold you to an unpayable debt. We would want to support you.
In another scenario, if you genuinely felt our work was not well done, our sense of honour would compel us to accept a lesser payment. That's hard for us to imagine, as we do great work! But the scenario is valid.
On the other hand, you might look across our social enterprise and see that what we do is important, feel able to afford more than industry standard, and pay us an amount that reflects your generosity and inspires our gratitude.
Or, as one of the best reasons to pay above the call of duty, you might wish for someone else who is unable to afford our work to receive it nonetheless. If that's the case, please say so. We have a special account that reserves funds for this purpose. If just a few clients do this generously, we can provide our work to struggling people in the community for free.
And that makes us incredibly happy.
But the Project Tracker does give you a guide to industry-standard payments
What you pay is open, but in our experience, people often need some indication as to how to judge a payment amount in relation to the industry standard. The last page on the Project Tracker is called the Payment Guide. It uses the data collected over the life of the project to calculate a range of suggested payments, all the way from minimum wage to very generous, with the industry standard somewhere mid-way.
These calculations are based on hourly rates. This is how the industry works, so its how we make our comparisons.
Feel free to talk to us about this process
If there is anything that needs clarifying about the gift economy model that we are using, please get in touch and ask questions. We're always refining and improving the process. And it's always an ongoing conversation with our community.
Or read an example of one of our building projects, completed in the gift economy
For an example of how the process has worked in the past, you can read more here.