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How is Inter-Contact financed? Where is the catch?


Description of a Proposed Information System to Facilitate Contact between Organizations (Part #6)


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Initial Finance

During the initial stages a number of methods have been used to reduce the cost of the system. Extensive use has been made of skilled volunteers. The design of the computer programme has been undertaken with the aid of a university research institure. Loans have been obtained from commercial organizations which form a category of founder/subscriber. These loans will either be paid off during the early years of operation or alternatively will give the right to a reduced rate use of the computer system. These loans do not give any control of the use of the system.

Day-today Operations

We are very aware of the fact that many non-profit organisations would feel happier if it were possible to avoid financing the system from commercial sources. Inter-Contact uses a computer however, and computers are expensive. Non-profit organizations alone could never make the system economically viable. It is difficult to obtain general subsidies for this sort of enterprise be- cause no specialized organization can justify the support of a general in- formation system on a continuing basis.

The systemworks as follows. We mail material for commercial enterprises (e.g. professional congress organizers, travel agents, journal publishers, airlines, book publishers, hotels, etc.) to categories of addressees selected by them. This is done for a fee equivalent to the direct mail advertising rate under commercial conditions. The profit we make on this operation is then used to finance either the collection of new addresses or free data processing for non-profit organizations. All profits are used to improve the information system directly or indirectly.

THE CATCH: For the system to survive it is clear that the amount of adver- tising material sent to associations will increase. It is the willingness of associations to be exposed to this advertising matter which is the source of finance for the system. It is however in the interest of both adver- tisers and associations to ensure that there is a good chance that what is sent is in fact of interest to associations. We have therefore devised a system of codes to ensure that your association only receives material which is likely to be of direct interest to you (see section P).

We believe that the nuisance value to associations can be justified by the advantages of the system to them, namely:

  • the existence of an effective information system covering all over-lapping fields of interes. (If commercial interests are prevented from making use of such a system, they will be forced to create a parallel profit-biased system, thus jeopardizing the existence and concrete advantages to associations of the non-profit system.)
  • accurate knowledge of the services available to associations through commercial organizations. Much important information is only avail- able through such bodies.
  • low cost data processing to facilitate the following contacts and interactions: association-foundation, association-government, association-business, national-international, national-national.

The other types of paying users are mentioned in the next section.

Subsidies

As the utility of the system becomes more widely understood, subsidies will prove an increasingly important source of finance. Subsidies are solicited from interested bodies or foundations to finance: the collection of infor- mation in areas in which Inter-Contact is weak; reduction in the cost of use of the system by associations in general or with reference to one particular speciality It is this possibility which will be most important for asso- ciations and fund-allocating bodies. It will represent a unique opportunity to build up contacts in areas which they have not been able to develop be- cause of the effort involved due to the present lack of organized information.


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