Ask Slashdot: How To Get Open Source Projects To Take Our Money?

New submitter wkaan writes "Last financial year, we had an underspend at work, and it was suggested and agreed that we should give some cash away — $20k to be exact — to open source projects. Four projects were selected. A management catch was that it could not appear to be a donation and it had to be for something we had notionally received in the current financial year. At that time it was early June, our financial year finishes at the end of June. The four projects were emailed using the most relevant looking contact address on their website. Often this was 'Finance' or 'Donations' contact. What do you know, none of the projects that were contacted could work out a way to accept our money. We were unable to give a cent of the twenty grand away, not even a cent. All somebody needed to do was invoice us for something (perhaps 'support' or whatever) and they'd have received $5000. Of the projects contacted, two never replied to our mail — perhaps they thought it a scam? The other two contacted couldn't work out what to invoice and just went away. Is open source too rich to need the money? Have you got a funny donation story? Better still, do you have a way this can be streamlined when we have our next underspend? The goal was not to have a funny (sad) story, but to support the projects that support our business." For those of you with open source projects for which would you would like to take donations but sometimes cannot, what complications get in the way?

Comments

Try actually donating?

[Anonymous Coward]

Your company seems to have a problem understanding what 'donate' means.

Re:Try actually donating?

[optikos]

No, this company probably budgeted that $20,000 for expenditure for purchasing 'X', whereas the accounting department would not permit reallocating 1) monies dedicated for purchasing 'X' into 2) an entirely different bucket of monies for donations to section-503 nonprofits. Here X is likely right-to-use software. Perhaps X might be hardware. Either way, acquisition of a durable good gets amortized over multiple years, whereas the entire donation to section-503 nonprofits hits the books immediately.

Re:Try actually donating?

[gstoddart]

Why was it important to management that the money be earmark for a specific invoiceâableâ item?

Likely because of how companies do their accounting.

You've got your capital budget, your operating budget, approved projects, and who knows what else (not an accountant).

The company trying to make the 'donation' needed to keep it within the same bucket and needed the potential recipients to give them an invoice.

In this case, it was "we'd like to 'give' you money, but it needs to look like on your side like you billed us for something". And generally when someone needs you to account for something in a special way, you might need to ask if you can (or should) actually do that without causing yourself problems.

And if I'm a charity and someone says "we'd like to donate, but can you make it look like you sold us a car instead" -- my first impulse is going to be a little wary of that deal. Because, it's no longer a donation, it's money being disguised as something else, and the recipient potentially gets themselves into legal trouble by trying to do that.

So, you try calling the Red Cross and say you'd like to donate $1 million, but they need to make it look like they sold you an island you could get the same problem. They didn't sell you an island, and as much as that $1 million might be shiny, needing to stay strictly within the rules means you might just have to say "if you want to donate $1 million, awesome, but we can't do magic accounting to make it look like something else".

Re:Try actually donating?

[wiredlogic]

Basically they don't want their departmental budget slashed by $20K next year so they have to spend all of this years money.

Management 101: You look bad if you spend less than you planned.

Try a pitch that looks less like a 419 scam.

[Narcocide]

Seriously though, the requirement that it can't look like a donation is pretty limiting. Most open source projects are ONLY prepared to accept donations under the exact same US tax laws your company is trying to dodge, and the ones left over (especially the ones that haven't yet attained actual status as a scientific non-profit) are almost certain to look at your proposal for exactly as long as it takes to drag&drop it into the spam/phishing/blacklisted folder.

If you want to donate, just donate

[dirk]

Part of the issue was you requesting an invoice for something they never provided for you. If they issue you an invoice for $5000 for something, there are legal ramification that go along with that. You could then claim that you never received the item/services and sue. They may have to set up a separate business entity to handle this business and pay a whole different set of taxes on it because they currently are not set up as a business that provides services/items. If you want to donate, just donate. It is silly to try and get them to jump through these hoops for your "donation" so your company can claim it isn't a donation.

You asked for something sketchy, and nobody bit?

[jandrese]

So you wanted to give money away, fine. But you then asked the project to lie about it and potentially put themselves at risk for fraud by asking them to make up some sort of invoice for a service that they weren't prepared to provide, like "support".

Also, the fact that many open source projects are basically volunteer efforts means that they aren't really setup to pay people for their work. They would have to work out the taxes and it could end up being a relatively huge amount of effort for a fairly small payoff ($5,000 covers a developer for maybe a month).

That said, there are some big projects that should have been able to figure out something. Apache for instance has their own foundation. So does X (although they apparently aren't very good at doing taxes), Mozilla, and some others. However, none of them are likely to want to talk to you once you start prattling on about fake invoices. If you want to donate, just donate. That way you can write it off of your taxes as well. If management doesn't like that, then that's their problem. You shouldn't have to do something shady and possibly illegal to support open source.

Non Profits

[Anonymous Coward]

You can give a non-profit a donation but I don't think you can pay them for services, because then they aren't a non-profit. If there is an umbrella org, ie Apache, become a corporate member instead.

Wrong way of doing it

[guruevi]

Open Source projects are often leader-less, don't have a corporation attached or anyone really working for them and (also) often not-for-profits.

Especially in the US you can't just accept $5k from someone without major tax hurdles. There has to be a service delivered (which is apparently what your company wants) and you can't just give money from your company without getting something of equal value in return (that would be too easy a way to syphon out money) and at the end of the year you have to indicate this on your taxes as well (which costs easy another $300 at the tax-preparer especially if it is out-of-state -- I used to do independent contract work in three states, at the end of the year I spent $1000 at HR-Block to figure out all the paperwork for local/state/federal taxes and the permutations of deductions between the 7 governments)

Now, you could've gone to one of your favorite open source projects and said: I want feature x - here is $5k for whatever freelance developer wants to take it on, that would've worked. I am always available to work on certain projects...

Varnish Moral Licence

[beebware]

Did you consider buying a Varnish Moral Licence ?

nt

[shentino]

Not surprised.

If you have to do something underhanded like "A management catch was that it could not appear to be a donation and it had to be for something we had notionally received in the current financial year" then you're going to run into trouble.

My guess? Your company wanted some good publicity but couldn't figure out a way to satisfy its own beancounters.

The fault lies with your company, not the open source projects who refuse to fudge things to make the numbers easier for your beancounters to digest.

Budgets, not tax. Jeez.

[damacus]

"Dodging" tax laws has a negative connotation. Tax laws related to donations *benefit* companies generally as write-offs. I think your post was unfair and presumptuous as to the original poster's intentions.

I don't think the original poster's intentions / considerations had anything to do with tax laws and instead are directly relevant to financial budgets, hinted at by the "underspend" part. Budgets are different from a wallet or general corporate account. You don't want to get into dealings with the administration on misappropriation of budgeted funds.

As far as misappropriations are concerned: if your underspend is on a 'services' or 'software' category, and you use a lot of open source software, it isn't necessarily a misappropriation of funds (and the spirit of the account) to help ensure the projects on which your company depends stay in good health. The groups could've sold a $5,000 consultation or Support Meeting and just talked about how the org. used the software in question and had a chance to present ideas to them. And then at the end of the call or meeting, the project is $5K richer.

TL;DR large organizations that may have money to spend sometimes need some flexibility.

I was in a similar situation once

[aflyingcat]

A few years back, I was in a similar situation; our group wanted to give some money to a couple open source projects that we used and wanted to thank. Donation was the first thing that came to my mind, too. Unfortunately, that could not be justified at the company level. The financial types who ran the company at that point would not accept the company doing a donation for no direct return. They also insisted it be buying "something". That part wouldn't have been too bad, I could come up with something that was pretty close (but not exactly) what the open source projects already had (something like a 'golden master' CDROM including the source control archives) that they could charge us for; it seemed like a good solution; they'd get some money, we'd (hopefully) encourage them to keep improving the project. The sticking point turned out to be that our company management (either legal, finance, or both, I don't remember at this point) insisted on doing up a full contract. Based on our standard contract. That eventually killed the deal. The open source project didn't have a staff lawyer to review and revise the contract, our company lawyers really didn't want to spend the time modifying the contract into something that made sense for this situation; so they made a couple half-assed attempts on modifying the contract, but never got something that anyone on the open source projects would (or should) sign. So the donation really went nowhere. (I did what I could on the department level to thank the open source projects; but it was a lot less than it would have been if the company had gotten behind the effort)

Re:$20,000 hammer

[girlintraining]

Couldn't you just do it the Department of Defense way and buy a $20,000 hammer from an open-source project?

That $20,000 hammer is made to very exacting specifications!

But I digress...

It really annoys me to see articles like this about money. We've been over this so often here it's Slashdot's version of "Summer is coming! What are the latest dieting fads? Find out more on our regurgitated-from-last-year news segment at nine!" I won't even bother digging back through years and years of older postings; the answer is always the same ... SUPPORT. They pay you to support your program. You know, with technicians, and bug fixes, and the expertise to solve break/fix issues. Redhat, the first open source project to have an IPO, still lives... it doesn't sell linux, it sells support for Linux.

It's depressing how Slashdot has rapidly descended into the Huffington Post of tech news sites... it's repost after repost, no real editorial control (or even understanding of content). Somewhere in the old offices where Malda lived is now a giant spinning turbine connected to fiber optic lines... and data spews out the top and into this mulching machine, compressing and distorting news from all other sites and then aggregating it into hipster-approved bite-sized pieces of 'content'. Earlier this year one of the maintenance engineers fell in. They didn't stop the machine... they just had to deal with a few weeks of obsessing about the latest gadgets posted to ThinkGeek... until the gunk that was that engineer worked its way out of the system... -_-

--
Go ahead now, mod me overrated... we all know there are dozens of paid shills now on Slashdot, and they hate me because I bring down their advertising revenue. Commencing -1 land in 5...4...3... (post)

also

[shentino]

The complications are from your own company.

Don't blame the open source project for your own beancounters and managers making things difficult to donate.

You are the one making them jump through hoops, not the other way around.

Income Tax

[Roger W Moore]

Look beyond the obvious. It's hard, I know, but you'll learn how the world really works.

Sound advice because in the real world there is something called "income tax" and if you submit an invoice saying that you provided support and in return someone gives you money for that "support" something called the government may want to have some cut of it. Of course there are ways around this, for example you might set yourself up as a non-profit organization...err or perhaps not. One thing is for certain though that invoice is likely to cause a huge pile of paperwork and require the project to spend time reading and understanding obfuscated tax laws at which point they will probably question whether they would rather skip the money and spend the time reading and understanding obfuscated code instead.

Re:Income Tax

[Chelloveck]

I posed this question to my wife, who actually worked as the bookkeeper for a non-profit for a number of years. Her answer was, "There are laws against that." So yeah, I don't blame the OSS projects for not taking the money. Besides, it just sounds dodgy. Even if I was convinced it's not a scam, at best it's dishonest. At worst it's criminal fraud that will end up costing a lot more than $20k in lawyer fees.

Hire a programming intern to help supply code.

[geoskd]

Your best bet for how to support a FOSS project like that is to hire an intern for 6 months to write code / debug / whatever for the project. Take your favorite OSS project, and think of what features would be useful for it to have, and take on an intern to implement it for you. The resulting patches could then be submitted for mainline inclusion, and thereby benefit everyone. Everyone wins. You get even better software tools, the project gets badly needed programmer resources, and you have managed to spend your budget in a way that doesn't set off every alarm bell from your CFO to the IRS. Plus you have helped to employ one more American in need of work.

Bureaucratic idiocies are real.

[GPS Pilot]

Last financial year, we had an underspend at work, and it was suggested...

Let me guess: this person works for the federal government.

Bureaucratic idiocies are real. When I worked for the federal government, our unit's financial controller sent out an annual email soliciting ideas for how to spend the underspend.

"Sent it back to Washington, so the Treasury can borrow marginally less money from China et.al." was never an option, because doing so would cause the unit's budget in the next fiscal year to be cut.

A better strategy, that might actually result in sub-trillion-dollar deficits, would be to reward government entities that don't spend their entire budget. Tell the financial controllers to send 99% of the "underspend" back to Washington, and personally pocket the other 1%. Suddenly you will see massive underspends appearing all over the place!

Re:$20,000 hammer

[Anonymous Coward]

I've worked in the commercial world all my adult life, and it sounds like a scam to me. Is also sounds like it's YOU that doesn't understand business. If they has invoiced that business like it wanted them to, they would themselves now be considered a commercial entity. They would lose any nonprofit status they may have or want to have in the future. Plus, they would be on the hook to pay taxes for all that money. All because the company wanted an invoice and not simply make a donation.