Questions about TechSoup

Jul 4, 2019

—

My largest block of clients are charitable organizations. In that nonprofit field the company TechSoup is a popular vendor of technology services. A few recent events cause me to ask more questions.

I’ve made a few purchases for clients through them. TechSoup markets “donated and specially discounted technology offers”. But lately I’ve noticed that specific deals are better directly from the product creator. For example, one nonprofit client pays $15/month for access to Adobe Acrobat through TechSoup. Adobe made a direct offer by email for $10/month. I know that’s not Techsoup’s fault but it does make me question the underlying value of this discout purchase service.

Some recent articles about TechSoup were not so flattering. Earlier this year The Nonprofit Times wrote “TechSoup is looking more and more like a Silicon Valley player” in discussing more than $15 million new venture capital financing.

Then today I received an email from TechSoup, directed to one of my clients from “Bob, Account Management Specialist”. I questioned its authenticity and whether the true intent was data mining. In the spirit of “trust but verify” I offered this exchange:

TECHSOUP: “TechSoup is unable to confirm your organization’s 501(c)(3) tax-exempt status. To qualify your organization, we require: – A copy of your 501(c)(3) determination letter from the IRS”.

MY RESPONSE: This is Tony Novak, CPA, controller for xxxxxxxxxxxx.

Please confirm the authenticity of this request that is apparently sent by “Bob, Account Management Specialist” and clarify what seems like an odd request. The request indicates that “TechSoup is unable to confirm your organization’s 501(c)(3) tax-exempt status.” Why does TechSoup want to confirm Baysave’s tax-exempt status? What business does TechSoup have with Baysave that requires this?

Typically an organization’s tax-exempt status is posted online at IRS.gov and services like GuideStar. Both of these sites verify xxxxxxxxx’s 501(c)(3) status. Why does TechSoup not use these online services to verify tax-exempt status?

The message says “..we require: – A copy of your 501(c)(3) determination letter from the IRS”. Since this determination letter is already available online at the organization’s web site, why is this online copy of the determination letter not sufficient?

I would be interested in hearing other accountants’ experiences with @TechSoup.

Comments

One response to “Questions about TechSoup”

Marnie Webb

July 5, 2019

Hi Tony,

Marnie Webb here. I’m the Chief Community Impact Office at TechSoup. Thank you for posting these questions. We always appreciate a chance to give more clarity about our organization and the work that we do.

As you may know, TechSoup is a 501(c)(3) nonprofit organization, founded in 1987, to help other NGOs, charities, and nonprofits benefit from technology. As you might imagine, over that time our services have evolved and changed. The services you describe above are to facilitate nonprofit access of discounted and donated technology. We do two major things in this area:
1. We help nonprofits make sense of technology so that they can decide, implement, and manage technology in ways that meet their goals, including saving money whenever possible.
2. We help corporations donate, at scale, to nonprofits in ways that meet their philanthropic goals and have the impact they desire.

How that happens, changes with technology advances. So, when technology was installed via CDs, we mailed CDs to nonprofits. When it began to be downloaded, we shared download keys. Now that software is increasingly available by subscription, we make those connection sand organizations may pay their fees to the software corporation as a part of that subscription process.

A huge part of our work is validating that nonprofits are, in fact, nonprofits. To do this, we use the kinds of resources you mention — and many others — to help verify the status of nonprofit organizations. In some instances, we may ask for documentation from the organization to be sure that the person placing the order really does represent the organization. In other instances, we may ask for additional documentation because there is some conflict with the publicly available records. Finally, we may see an error or inconsistency in the record (a mistake in the EIN number for example) that means we need to do more checking.

Finally, the growth capital campaign you refer to includes an innovate way to raise our funds, a Direct Public Offering. It was important to us that we give our community members a variety of ways to participate in this campaign — from traditional donations to more cutting-edge impact investing opportunities. You can read about why we made that decision (along with a different take on impact investing) here: https://www.devex.com/news/this-nonprofit-has-a-fundraising-strategy-that-turns-stakeholders-into-investors-93969

I hope this gets at some of your comments. And I’m happy to follow up with more specificity for the organization you represent.

best,
:mw

PS — Bob is, in fact, a real person. Our Account Management Group takes great pride in responding to and supporting organizations around the world. Bob is no exception.

Questions about TechSoup

Comments

One response to “Questions about TechSoup”

Leave a Reply