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Fiscal Year Close a Good Donation Time for Free Software

Posted by ryuzaki0 on from the bargain-at-twice-the-price dept.

Matt writes "The close of the fiscal year is a great time to encourage your employer to donate to open source non-profit foundations." (Follow that link for more information and links to various foundations.) Lots of businesses that might shy away generally from software they haven't paid for are happily using Firefox at the very least, and plenty are running free software from the GNU project -- the FSF would be happy to supply some manuals.

24 comments

  1. I have a better idea... by Otter · · Score: 2, Interesting
    Instead of coming up with better ways to waste money at the end of the fiscal year (incidentally, everybody's fiscal year doesn't necessarily end in June):

    Does anyone's company have a practice that eliminates the incentive to waste money this way in the first place? The amount of money thrown away in this fashion is staggering and it happens in pretty much every organization, private or public. Surely some accountant, finance head or game theorist has come up with a solution, or at least an improvement, no?

    --
    What I'm listening to now on Pandora...
    1. Re:I have a better idea... by gEvil+(beta) · · Score: 3, Insightful

      While I agree that it's wasteful and, quite simply, foolish, the basis for it is the simple notion that if you didn't need the money in your budget for this year, then there's no rationale for needing it next year. If the money gets spent in some fashion this year (it really doesn't matter how), then it can be justified as "necessary" during budgeting time for the next year. As anyone who's had to follow a budget will tell you, it's far better to be in a position of excess than it is to find yourself overbudget and having to cut true necessities.

      --
      This guy's the limit!
    2. Re:I have a better idea... by evileyetmc · · Score: 1

      Well since it is a non-profit, the company may be able to reduce its tax liability by taking the write-off, so in essence, it is not just throwing money around, it is actually doing the company some good.

    3. Re:I have a better idea... by Tackhead · · Score: 3, Insightful
      > The amount of money thrown away in this fashion is staggering and it happens in pretty much every organization, private or public. Surely some accountant, finance head or game theorist has come up with a solution, or at least an improvement, no?

      If you spend your own money on yourself, you care how much you spend and how well you spend it.

      If you spend your own money on someone else, you care how much you spend, but you don't care how well it is spent.

      If you spend someone else's money on yourself, you don't care how much you spend, but you do care how well it is spent.

      And finally, if you spend someone else's money on someone else, you don't care how much you spend, and you don't care how well it is spent. That is government.

      - Milton Friedman, "Free To Choose"

      Replace "government" with "any large bureaucracy inside or outside of government", and Milt was spot on. Bureaucracy is a metastatic organizational cancer; in business, it's somewhat limited by the threat of bankruptcy, and in government, it's unlimited until the society collapses.

      Since we can't eliminate the problem, the only thing to do is to try and mitigate the collateral damage.

      Employer-determined donations, plus employee-directed contributions, strike a pretty good balance. Yes, you're spending someone else's (your employer's shareholders') money, and yes, you're spending it on someone else (your favorite charity), but by having thousands of individual employees making those decisions, you at least get the sort of efficiency gains that come from free markets -- and if you don't like econo-speak, you can rephrase that same sentence for "swarms of decentralized intelligent agents", or "social networking".

      $25000 thrown into the black hole of the government does more harm than good. $50000 thrown down the rathole of the United Way does no good, but does less harm than paying the taxes on that $50000.

      But 10 $500 donations to the FSF, 7 $500 donations to the EFF, 2 $500 donations to Mozilla, 3 to the Apache Foundation, 3 to the FreeBSD folks, and so on - and for the 75 nontechnical employees out of an imaginary company of 100, 75 $500 donations to 75 separate charities ranging from the local animal shelter to half a dozen parents who set up tutoring classes for kids who would otherwise be getting shot on the street...

      ...that's how you spend $50000 and get some good out of it.

      One guy with a $50000 budget isn't going to have the time to parcel out the cash like that, and even if he did, he's going to be sorely tempted to spend a day or two on the golf course (or on three-martini lunches) with the 501(c)3 equivalent of salesweasels who want to lobby him for a shot the whole $50000 prize.

      But if he just gives his 100 employees $500 apiece, and each of those employees spends just ten minutes making up their minds on what to do with their own slice of the pie, the process of apportioning the donations takes him neither time nor effort, affords nobody an opportunity to accept any kickback more interesting than a coffee mug, and actually does some good.

      Even if your only motivation is to get the tax deduction and/or burn through the rest of the budget, employee-directed contributions are a win. You get the same deduction, and spend the same dollars, for much less work, and you do vastly less harm (and even some good) in the process.

    4. Re:I have a better idea... by Otter · · Score: 2, Interesting

      Sure, I understand the rationale for it. The question is whether there's an alternate budgeting system that doesn't create an incentive to hold an end-of-year blowout. I can't believe no economist has ever taken a shot at this problem.

      --
      What I'm listening to now on Pandora...
    5. Re:I have a better idea... by Otter · · Score: 1

      I'm not sure you're right anyway. (Remember that this isn't personal income tax -- you reduce your taxable income just as effectively by wasting a million dollars on a useless project as you do by giving it to a non-profit.) But in any case, paying taxes on money beats the hell out of throwing it out the window.

      --
      What I'm listening to now on Pandora...
    6. Re:I have a better idea... by linlu · · Score: 1
      Now lets assume you requested a budget increase for the following year - then this approach will also ensure that (lots of circularity going on here):

      • sales must go up to cover the increased budget
      • features must go up to get those sales
      • revenues must go up because you had more sales (else your stock price may drop...)
      • labor spent must go up to cover the added features and added workforce (assuming you throw developers at the problem...)
      • customers must increase because not all your existing customers will buy again (unless you happen to have them in a automatically renewing subscription until cancelled in writing 30 days in advance...)
      • prices must go up to cover the increased feature set/labor/etc...
      And I don't think it's too much of stretch to also note that the bigger your budget the more power you have...

      Sounds like the model used by so many companies, until the customers get fed up and jump to the something cheaper and "good enough for me" - then it's downsizing time for you...

    7. Re:I have a better idea... by gEvil+(beta) · · Score: 1

      I'm sure quite a few have. However, their theories probably go right over the heads of the BoD or whoever approves the organization's budget. It seems that a reasonable solution might be to have "rollover" surpluses. Of course, that still doesn't do anything to prevent the "hoarding" nature of many humans.

      --
      This guy's the limit!
    8. Re:I have a better idea... by daigu · · Score: 2, Informative

      Here's a counter-example. Pick any organization you think this principle applies to and then open up the books - particularly pay. Most people do care if the organization they work for is paying an excessive salary to someone that does not contribute to the organization enough to warrant that salary.

      So, what is missing from Milton's examples? Oversight and the fact that decision making is singular. This issue is transparent in the first example because everyone that cares about the transaction (being the singular you) is involved. The minute you have to involve other people (buying something for someone else or using someone else's money) you also have to involve them in the decision making process - which is exactly what Milton's set-up does not do and which not surprisingly leads to the problems that are set-up in his framing of the discussion.

      So, let's return to opening up the books. Let's assume we are dealing with a public company, if stockholders had access to every aspect of the books, they would have one perspective on how much is being spent. Other employees would have a sense for how well this money was spent. The central problem is that the decision-makers (management in this case) generally do not have incentives to make this efficient and frequently do not have accurate assessments of value, and inviting dialogue with shareholders and employees that could improve these efficiencies is viewed as having a net negative effect because it involves giving up some of their decision making authority.

      It seems to me that the problem is concentrated authority with no oversight. Since Milton assumes this scenario (which I will grant freqently occurs in the world), he looks to be spot on - as you put it. However, if you look at some of the underlying issues in his argument, it starts looking real flimsy, real fast. The real issue is about creating mechanisms for distributing authority (such as the traditional checks and balances of our own government) and providing for oversight and accountability. Simply saying Government or big organizations, don't work - says more about his model than about government.

    9. Re:I have a better idea... by sfjoe · · Score: 1

      ...and in government, it's unlimited until the society collapses.

      Not at all. An informed, involved citizenry can limit government waste if they so desire. Waste will grow only to the point that citizens tolerate it.

      --
      It's simple: I demand prosecution for torture.
    10. Re:I have a better idea... by Otter · · Score: 1
      And finally, if you spend someone else's money on someone else, you don't care how much you spend, and you don't care how well it is spent.

      I think you're illustrating your own point! It's easy for you to look at hundreds of millions of dollars flying out of my bonus pool and shrug and say "Who is John Galt?" But *I* care!!!!

      --
      What I'm listening to now on Pandora...
  2. 2cents... by Manip · · Score: 2, Insightful

    I donate anyway... But would have ordered some t-shirts, but they are ALL so ugly... Sorry, but I just can't stand the GNU mascot... I love Tux and the BSD Devil, and would happily wear them on me... But the cow, the cow! ...

    Seriously that thing needs to be replaced by something cute...

    The only nice t-shirt they sell is the "Happy Hacking" / generic one. Why don't they do a design competition and bring in some money?

    1. Re:2cents... by chundo · · Score: 1

      Yeah, they should adopt the stylized Gnu on the back of that one as their official logo.

    2. Re:2cents... by krishy · · Score: 1

      The firefox ones are not bad. Cow? Which one has the cow?!

      -n00b

  3. anonymous by Anonymous Coward · · Score: 0

    I donated $20 anonymously with a postal money order.

    Any tin-foil hatters can do so to. I did it because I feel that donations don't need to be tax deductions and that I don't need credit for it. Do good for its own sake, the same as donating to the creation of code through GPL.
    jtud ksmf = md5sum 671e61ee16e368020c2ed57d1c41999d

  4. Shameless plug for the software I like to use by Noksagt · · Score: 2, Informative

    I make modest donations to many F/OSS projects. While many of the sourceforge hosted projects have obvious donation links, some others don't. So, I've made a list of donation URLs for projects I have supported.

  5. And there's also RubyCentral by tcopeland · · Score: 1

    Thanks to RubyCentral, RubyForge is getting new hardware and a nicer hosting location. Donations are appreciated and are tax deductible!

    --
    The Army reading list
  6. Why the fword-ing hell . . . by ThiagoHP · · Score: 1

    . . . does the USA fiscal year end in June??? Would it make more sense if the fiscal year was the same as the calendar year, as it is here in Brazil???

    1. Re:Why the fword-ing hell . . . by LMacG · · Score: 1

      Actually, the US Government fiscal year ends on 30 September. Any company is free to choose its own fiscal year.

      And hey, let's hear it for yet another barely parsable /. headline!

      --
      Slightly disreputable, albeit gregarious
    2. Re:Why the fword-ing hell . . . by Anonymous Coward · · Score: 0

      It's a kindness to employees to not have to do year end work over the holidays.

  7. Question by firewrought · · Score: 1
    What's the deal with non-profits not providing receipts? Wikimedia didn't receipt me. Neither did Software in the Public Interest, despite including a SASE per their website. :( It's a small thing, but this has soured my plan to give heavily to open source this year, and for $100 donations it doesn't seem unreasonable. At least Red Cross sent me an email... and keeps sending me emails to my chagrin :(

    Of course, I'm sure that running a charity is complex and there may be good reasons for this trend.

    --
    -1, Too Many Layers Of Abstraction
  8. Savings Sharing by bill_mcgonigle · · Score: 1

    Does anyone's company have a practice that eliminates the incentive to waste money this way in the first place?

    Yeah, a local company around here has such a plan. If an employee comes up with an idea to save money (there must be some level of approval) they measure the actual savings achieved by the plan. The employee and the company split the first year's savings 50/50. The company doesn't save any money the first year but it does every year after. I know of a lady making $40K who took home a $30K check for one idea.

    Win-win-win.

    On a related note I once tried to get $50K worth of hardware donated to one of the BSD projects, which had a 501(c)(3) but nobody there could manage to get me the promise of a tax letter within the three month window I had to get these machines to the recycler. The $ from the recycler was lower than the tax write off would have been, so that was loose-loose-loose.

    --
    My God, it's Full of Source!
    OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
    1. Re:Savings Sharing by Bassman59 · · Score: 1
      "The $ from the recycler was lower than the tax write off would have been, so that was loose-loose-loose."

      You mean "lose-lose-lose."

    2. Re:Savings Sharing by bill_mcgonigle · · Score: 1

      Thanks. Dock my pay accordingly.

      --
      My God, it's Full of Source!
      OUTSIDE_IP=$(dig +short my.ip @outsideip.net)