Let's deal with SaaS first. A good example in fundraising software terms is eTapestry whose home page even features a link to Software as a Service. It works like this: the client signs up, enters details about their charity and the services they require, and within moments has access to an online database where they can store donor details. In etap's case, its free up to 500 records and then you pay according to service usage. Its not surprising to me then that the Wikipedia definition of SaaS says "From the software vendor’s standpoint, SaaS has the attraction of providing stronger protection of its intellectual property and establishing an ongoing revenue stream". True, there are some SaaS services which are free at the point of use, and some which are Open Source, but most will start charging at some point, and as such will very much not be Open Source for the reasons stated by the Wikipedia article.
Would it be a perfect world in which SaaS was open? The trouble is, how do you finance Open Source software? You can't charge license fees for something which changes all the time and which you don't own. As a client, how do you hold your software service provider accountable? Sure we just expect Google to work, but if you are going to run your charity on a database, you are going to want someone to fix it when the emailing doesn't work or when the reports are all wrong.
The thing is, the phrase which really jars with me is 'basic software freedoms'. It reminds me of the debate we had back in the miner's strike about the 'right to work'. We all want to work, and we all want software to be available and bug-free, but we cannot expect this to be available as a 'right' - you have to earn it, whether by writing it, or paying for it, but it won't just turn up on your plate, not now, not ever.