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It has been suggested that Donateware be merged into this article or section. (Discuss)

Donationware is a licensing model that supplies fully operational software to the user and requests a donation be paid to the programmer. It generally falls into two categories and the programmer should specify which of these meanings they intend.

Category 1: Given away with a suggestion that anyone using the software makes a donation to offset the costs of creating this software.

Category 2: A reasonably satisfied user is suggested to compensate the programmer if real value or use is achieved from the program. The compensation amount is left up to the discretion of the user. This amount is based on a value the user estimates they derived from the program.

Since donationware comes fully operational (i.e. not crippleware) and payment is optional, it is technically a type of freeware. However, donationware is also similar to shareware in that a reasonable payment (in this case donation) is expected, but (unlike shareware) with no specific value assigned. It is important to note that the donation itself does not "purchase" the software like in shareware or retail models; there is no ownership assigned. The donation is strictly to compensate the programmer for her or his time and effort.

Red Ryder was the name of a well known communications and terminal emulation software program created for the Apple Macintosh in the 1980s. It was one of the first donationware programs to be distributed on the internet. It was written by Scott Watson, who founded The FreeSoft Company of Beaver Falls, Pennsylvania. By spending no money on advertising, but simply offering Red Ryder on Bulletin Board Systems(BBSs), allowed Watson to market and distribute what became the number-one communications program for the Mac. He did not sell it in any store. All he asked of those who downloaded the program into their computer was that they might send him $40. He later said, "I took advantage of a problem: piracy. Many program-users copied them free. I assumed that, if I offered something free and asked people who liked it to pay, that some people would; that maybe I'd get a bigger percentage than people who sell software." This new kind of "on approval" selling worked well and there was no necessity for follow-up. The cost was a fraction of available competitive software. Often people who found the software useful sent in checks. Each BBS sent the program online free to anyone. Anyone who liked Red Ryder could copy it for friends and passed the word to others, who then got Red Ryder from their bulletin board systems. Macintosh magazines rated Red Ryder highly. Scott rejected orders from both computer stores and distributors and concentrated on development. Many new bulletin boards ran his offer. Red Ryder was ultimately replaced by a commercial package called "White Knight."[1]

• Gift economy
• Participatory organization

• Jesse Reichler (2006) Donationware experience - An article describing experiments with Donationware: Ethical Software, Work Equalization, Temporary Licenses, Collective Bargaining, and Microdonations at Donationcoder.

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