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

Posted by timothy on from the philip-j-fry-has-a-catchphrase-for-you dept.

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?

58 of 301 comments (clear)

  1. $20,000 hammer by optikos · · Score: 4, Funny

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

    1. Re:$20,000 hammer by serviscope_minor · · Score: 4, Informative

      From you:

      !" 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.

      From TFS:

      All somebody needed to do was invoice us for something (perhaps 'support' or whatever) and they'd have received $5000.

      So, I shall leave the last quote from you:

      It's depressing how Slashdot has rapidly descended...

      --
      SJW n. One who posts facts.
    2. Re:$20,000 hammer by TWiTfan · · Score: 5, Interesting

      It also sounds very suspicious and skeevy. I wouldn't have taken the money either. If someone called me up out of the blue and offered me thousands of $ on my OSS project, asking for some vague (and possibly fraudulent) invoice in return, and telling me they were on a strict deadline and needed it fast--my first inclination would be to ask them if they're a Nigerian prince. I would assume either:

      a) scam/fraud
      b) money-laundering scheme
      c) IRS sting

      And then I would have said "Thanks, but no thanks" and hung up the phone.

      --
      The cow says "Moo." The dog says "Woof." The Timothy says "Thanks, valued customer. We appreciate your input."
    3. Re:$20,000 hammer by jc42 · · Score: 5, Interesting

      Imagine if you receipt at the grocery store listed the total of all 20 things you bought, then divided them evenly between all 20 items so your milk is $2.94, your bread is $2.94, your lettuce is $2.94, your apples are $2.94, and so on, I'm sure that a lot of people wouldn't even look. A few might raise hell over the numbers.

      That's pretty close to what really happens. Some decades back, when the first stories started to appear about the $1000 hammer or $5000 power cord or whatever, there were also occasional stories from people familiar with the accounting practices who explained the bogosity of the calculations. Of course, people just ignored this, and repeated the stories as evidence of administrative (usually government) idiocy.

      The basis of it all generally turned out to be the fact that many organizations (especially government) explicitly list an "administrative fee" on their invoices when purchased through the usual purchasing department. This is typically a fixed percentage of the bottom-line price. People would simply divide this charge by the number of items, to get the per-item administrative fee, and add it to an item's price to get the item's "cost".

      Thus, it's common to have separate power cords, due to the different plugs needed in different parts of the world, So you might have an order for a computer (10,000), plus a cord that fits your wall outlets ($10), for a total of $10,010. If the administrative fee is 10%, the total charged your department is $11,011. You critics will then list the charge for each item as $1,001 / 2, or $500.50, so your price for the computer is $10,500.50, and the price of the cord is $510.50.

      That's a pretty expensive power cord, right?

      Not that we should expect any such accountant's explanation to have any effect on the situation. That would take all the fun out of reporting on bureaucratic idiocies (that our political opponents support, of course).

      And there might well be $500 power cords. They might include things like a transformer that adapts to a wide variety of line voltages, generate AC output of a different frequency than the input, or have a storage battery to get through short power fluctuations, etc. But that's a different explanation, with different ways of misleading your readers or listeners.

      --
      Those who do study history are doomed to stand helplessly by while everyone else repeats it.
    4. Re:$20,000 hammer by Garridan · · Score: 2

      But the REAL answer here is to tell the company trying to ditch $20,000 to suck it up and just pay their own damn taxes rather than illegally attempting to avoid it. (For the record, even attempting to avoid taxes is illegal...)

      This makes zero sense in the context of TFS,

      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.

      If they wanted to make donations to "dodge" taxes (it isn't a dodge if it's written into the tax code), they'd just make a $20k donation. This is most likely a department in a large company worried that if they don't spend their entire budget, they'll have a smaller budget next year.

    5. Re:$20,000 hammer by sjames · · Score: 3, Interesting

      Mod this up to 6! With a dozen scams appearing in people's inboxes every day, all with some sort of odd story about why things must be done in something other than the most natural way, this story about short deadlines (a classic element of a scam to keep the mark from thinking on it too long) and some bogus invoice for something (anything at all, really! Trust us it's fine!) sounds a lot like a scam.

      It's sad that all the scams out there make things this way.

    6. Re:$20,000 hammer by Anonymous Coward · · Score: 5, Informative

      All of the answers here seem to be coming from people who have never worked (or don't understand) how the commercial world works and are saying "scam" "fraud" and accusing you of all sorts of nonsense. They are full of it, ignore them.

      I get it - your department has a budget for software. Your budget is annual, and at the end of the year, you realized you hadn't spent your entire budget. Someone goes, "hey, let's support open source - we use it!". You then try to find open source to support, and pick four projects, and have zero success getting people to take the money. You have to get them to take it quickly, because if you don't spend the money by the end of your accounting year, it is gone. This is totally normal.

      I think the issue is, (a) the people who work on open source sometimes don't understand how businesses work and (b) they are (like everyone should be) tuned into the fact that there are scams out there and things that sound too good to be true sometimes are. But at the end of the day, all you want is a receipt from them saying "we took your money", because otherwise your company will think you created a shell company and paid yourself. You don't care if it is a donation - you don't want the tax credit - you just need a receipt to satisfy your corporate anti-fraud processes. There is no fraud in paying someone for having done something in the past, i.e. having written open source software.

      My suggestions, having never done this - you need actual human contacts set up in advance who believe your story. They need to understand how businesses work (it sounds stupid to people outside of large companies that budgets go away if you don't spend them, but unfortunately the world does work that way regardless of whether it sounds stupid). Maybe posting to a mailing list / support forum, instead of trying to email individuals, would get your more traction. You literally just need one prominent developer on the project to take the money - it doesn't have to be the "project", which may not even exist as a traditional legal entity. They will have to pay taxes on the money as income, which isn't a scam, but it also isn't your problem if you are paying them, it's theirs (legally).

    7. Re:$20,000 hammer by HornWumpus · · Score: 3, Interesting

      Totally off topic. If you could find a 'Black Mamba' audiophile (idiot) power cord for $500 it would be a screaming bargain.

      But they would sell less of them. People that pay $2K for a power cord want to pay more, so it's better.

      --
      John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
    8. Re:$20,000 hammer by Anonymous Coward · · Score: 2, Insightful

      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.

    9. Re:$20,000 hammer by budgenator · · Score: 2, Informative

      It's not about illegally avoiding taxes, it's about spending earmarked money for an unauthorived purpose and doing it so that accounting is unaware of the transaction that is probably embesselment.

      --
      Apocalypse Cancelled, Sorry, No Ticket Refunds
    10. Re:$20,000 hammer by im_thatoneguy · · Score: 2

      Actually in the case of the toilet seat and hammer examples they were both engineered one-off pieces that had to be carefully designed to meet specific weight and size requirements. Which is to say if you ever make one or two of anything the per-unit cost is astronomical.

    11. Re:$20,000 hammer by Obfuscant · · Score: 4, Informative

      My suggestions, having never done this - you need actual human contacts set up in advance who believe your story.

      No, more important is being honest. Asking for a receipt that isn't honest is trying to push your corporate shady ethics off on an OS developer. It's not much different than going to bar for a "business meeting" and buying rounds until everyone is sloshed, and then asking the bar for a receipt that says you bought dinner because your corporate policy won't reimburse for liquor.

      If they'd asked for a receipt that said "donation" instead of "services rendered: support", the chances are better the offer wouldn't have been viewed as a scam. As it was, it was a scam -- scamming the company auditors into thinking an expense was a valid expense and not a voluntary handout. From the description of the issue ("an underspend") it sounds like there was a contract from an outside party that still had money left over, and instead of saying "it didn't cost us the full amount to do the work for you, you don't have to pay it all", they decided to pad the expenses with a few donations. We don't know for sure, but that's the impression I get.

      They need to understand how businesses work (it sounds stupid to people outside of large companies that budgets go away if you don't spend them,

      I think most of them understand how business works, know that asking for a phony receipt is unethical, and know that accepting a large cash donation from a corporate vendor will create tax implications that they may not want to deal with. Every year I have to deal with a self-employment schedule C (IIRC) that I'd rather not have to deal with, all because some money I make comes in as royalties instead of in my normal paycheck. It makes my taxes much more complicated than I'd like them to be. Especially if you're talking about a group of developers and expecting one of them to accept the money (and tax liability) for money that they'll all benefit from. I mean, you only need to be paying a 10% tax rate and have ten developers to share the donation for it to be a loss for whoever accepts the money.

  2. Try actually donating? by Anonymous Coward · · Score: 5, Insightful

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

    1. Re:Try actually donating? by Nutria · · Score: 2

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

      --
      "I don't know, therefore Aliens" Wafflebox1
    2. Re:Try actually donating? by optikos · · Score: 4, Insightful

      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.

    3. Re:Try actually donating? by Anonymous Coward · · Score: 2, Informative

      The problem is that being setup to do what the company was asking can take a lot of work. A group of developers working together to push out a project is a simple thing to organize. As soon as you start turning it into a business, you need to incorporate or form some other legal entity and that usually involves lawyers and such. Going through all that hassle for a 1-off contribution is probably not worth it.

      When contacting the organization failed, the company should have contacted the individual developers and offered to pay them as a 1099. There's money lost to taxes that way, but it's a much easier setup for part-time developers to deal with.

    4. Re:Try actually donating? by gstoddart · · Score: 5, Insightful

      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".

      --
      Lost at C:>. Found at C.
    5. Re:Try actually donating? by alexander_686 · · Score: 3, Informative

      Well, the invoice part is not that odd – non-profits do it all of the time. When they buy something they get a invoice. When they sell something they generate a invoice. And it is not odd for non-profits to sell stuff. For example my local botanical garden, which is non-profit, will send invoice you if you hold a wedding on the grounds.

      When you make a donation you should get a receipt – proof for the IRS.

      When you donate you might be able to specify a very specific project. Real life example – “Richard Johnson Memorial Urinal. “ (I hope he had a sense of humor)

      You might be able to demand a review of the accounting for a project. This is generally done for people who have made large donations and will likely make more donations if they know they money is well spent. Heck, sometimes they hire outside auditors.

      However, I have never heard of a donator asking for a specific invoice. In my example, the plumber’s bill.

    6. Re:Try actually donating? by wiredlogic · · Score: 3, Insightful

      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.

      --
      I am becoming gerund, destroyer of verbs.
    7. Re: Try actually donating? by IrquiM · · Score: 2

      It is still cooking the books.

      --
      This is blinging
  3. Seems legit by stewsters · · Score: 5, Funny

    Deer project owner,

    Our corporation has too much money. Please send details of how give you $500 Dollars US$ without donating.

    -Prince of Nigeria

  4. Spam bin... by Arkh89 · · Score: 2

    Win a chance to win 20,000$ Send us 500$ by Western Union now!

  5. Try a pitch that looks less like a 419 scam. by Narcocide · · Score: 4, Insightful

    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.

  6. If you want to donate, just donate by dirk · · Score: 4, Insightful

    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.

    --

    "Information wants to be expensive" - Stewart Brand, the same guy who said "Information wants to be free"
    1. Re:If you want to donate, just donate by Qwertie · · Score: 2

      Wouldn't it be legit if you ask the open-source projects to do something for you? Select some feature(s) or bug fix(es) you'd like in a future version, and pay the lead developers to do it for you. Or, some open source projects have lousy manuals--pay them to improve their documentation.

      It's not illegal to pay in advance, is it? Just write the contract in advance.

  7. You asked for something sketchy, and nobody bit? by jandrese · · Score: 4, Insightful

    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.

    --

    I read the internet for the articles.
  8. Non Profits by Anonymous Coward · · Score: 2, Insightful

    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.

    1. Re:Non Profits by omnichad · · Score: 3, Informative

      The Girl Scout Cookies I bought disagree with you. Yes, I know those are goods and not services, but a car wash fundraiser would fit. The question of whether you are non-profit has everything to do with what happens to surplus proceeds.

  9. Wrong way of doing it by guruevi · · Score: 4, Insightful

    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...

    --
    Custom electronics and digital signage for your business: www.evcircuits.com
    1. Re:Wrong way of doing it by Kjella · · Score: 2

      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...

      Well yes but it'd be silly to make it just random windfall for one developer (unless there is only one main developer, but I'm assuming it's a bit bigger than that), but if they have some sort of organization set up and it can't be a donation (corporate policy, whatever) then I'd suggest that with a twist, basically pick a small feature or one that was going to be in the next release anyway, work is "donated" to the organization and the organization bills them $5000 for custom development. As long as it is declared somewhere and the IRS gets their cut, it's probably fine.

      --
      Live today, because you never know what tomorrow brings
  10. IRS by Anonymous Coward · · Score: 2, Informative

    "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?"

    Why? Because IRS, that's why.

  11. tax fraud by duckintheface · · Score: 4, Informative

    These projects were most likely tax exempt 501(c)3 entities. They are set up to receive donations and not to provide for-profit services. In asking them to invoice you for serivces that were not rendered, you were asking them to commit tax fraud. Your management knows this but they wanted to write off the donation as a business expense. Just make the donation and stop trying to game the system. This is how tax exempt organizations lose their tax exempt status. This is also how people go to jail.

    --
    "He took a duck in the face at 250 knots." -- William Gibson, Pattern Recognition
    1. Re:tax fraud by PatHMV · · Score: 4, Informative

      There is an amazing lack of understanding of what being a 501(c)(3) non-profit means. Non-profits most certainly can (and regularly do) invoice for services rendered. They are not "non-revenue" corporations, simply non-profit.

      There is no fraud involved if a non-profit performs services in return for an agreed fee, or contracts to perform those services in the future in return for a fee either paid up front or after the services have been rendered.

      The only thing the non-profit cannot do is take the surplus funds over and above their expenses at the end of the year and distribute those as dividends or ownership distributions to its "shareholders" or board members.

      Now, if the non-profit has what's called "unrelated business income," that is income generated from activities it conducts that are not really connected, other than financially, with its mission, then it may have to pay taxes on those (for example, if a non-profit devoted to supporting a university buys commercial property as an investment, and leases that property out to businesses, that rental income may be "unrelated business income"). But that does not destroy their non-profit status for the rest of the funds they receive.

      This is not, of course, definitive tax advice, but your post is about the 10th in this thread I've seen that has the very, very, very wrong idea that being a 501(c)(3) means you can't charge for services provided. They can, and they do all the time.

  12. Hire a developer. by Anonymous Coward · · Score: 5, Interesting

    Spend the 20k to hire a developer which you pay to contribute code to these projects.

  13. Varnish Moral Licence by beebware · · Score: 5, Insightful

    Did you consider buying a Varnish Moral Licence ?

  14. nt by shentino · · Score: 4, Insightful

    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.

  15. Hmmmm ... by gstoddart · · Score: 2

    All somebody needed to do was invoice us for something (perhaps 'support' or whatever) and they'd have received $5000

    You mean, commit fraud?

    Part of the problem sounds like your company needed it to look a certain way for accounting, and if the projects you contacted found themselves "how do we do that and keep it above board", maybe that was your problem.

    But if someone giving out free software invoiced you for $5k for something they didn't ever actually sell you, that might put them into a questionable situation.

    On the surface, it sounds like your "management catch" might have been worded in such a way as it would require very creative accounting on their end to satisfy your requirements for your gift. And that might have scared them off -- because when someone says "hey, we want to make a donation, but all you need to do it make it look like we bought something" can definitely make people worry if they're not going to get screwed in this deal.

    --
    Lost at C:>. Found at C.
  16. Mmmm Kkaayyy! by tiberus · · Score: 2

    Problem #1: Placebo Corp has funds that you would like to nominally give away but, for some strange reason (e.g. FSO is addicted to counting the wrong kind of beans, CEO thinks donating is a bad word. etc, etc, etc.) you are not able to actually give money away.

    Problem #2: Open Source projects accept actual donations. Sending you an invoice would very likely change their financial and/or legal status, especially, when said invoice is for services they didn't provide or for a product they don't sell.

    While I can't comprehend why Placebo Corp wants to but can't give away money, I do have a vague grasp of why an Open Source project won't invoice you. The Project is unlikely to have anyone who can easily deal with invoicing etc. especially in the time frame you are taking about. The simplest solution would be to solve the problem on your end and figure out a way for you company to actually make a donation.

    Corporate giving, it's been know to happen!

  17. Budgets, not tax. Jeez. by damacus · · Score: 5, Insightful

    "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.

  18. Sue them ... by Anonymous Coward · · Score: 5, Funny

    ... for being bearded hippies, and then settle out of court

  19. I was in a similar situation once by aflyingcat · · Score: 4, Insightful

    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)

  20. 501(c)(3)'s CAN CHARGE FOR SERVICES!!!!! by Anonymous Coward · · Score: 4, Informative

    Where is this BS that a 501(c)(3) cannot bill or send invoices? They are not donation only entities.

    As long as the billed service is for volunteered work/services and the 'profit' goes to furthering the 'cause' its COMPLETELY ACCEPTABLE to send an invoice.

  21. Re:You asked for something sketchy, and nobody bit by mwvdlee · · Score: 2

    Why couldn't they just give the projects the money in exchange for actual future services?
    It's not uncommon for open source projects to recieve money in order to be able to implement a particular feature, write documentation, provide support, etc.

    Perhaps this company could have done a small "{your-company-name-here} Summer Of Code", where summer interns would built code for the open source projects you wanted to support. $20k ought to pay for quite some code. The Open Source project would probably be happier than accepting the money as is (money isn't always the best thing to happen to a group of volunteers).

    --
    Slashdot social media options: AIM, ICQ, Yahoo, Jabber and Mobile Text. Why no MySpace?
  22. Sounds Like Money Laundering by Anonymous Coward · · Score: 2, Funny

    What a bunch of nerds we are, we're looking up "money laundering" in a dictionary.

  23. Gittips FAQ say "talk to lawyer" about taxes by peter303 · · Score: 2

    Its only a matter of time before the IRS starts nosing around about crowdsourcing money. After about a decade it was decided that aution sites like Ebay and Amazon has to issue 1099-Ks for more than 200 transactions or 20K cash flow during the year. Then it is up to the recipeint to minimize the net income this represents on a tax return. I predict they'll do this for crowdsourcing too.

    Better Gittip should have said "talk to tax accountant".

  24. also by shentino · · Score: 4, Insightful

    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.

  25. sounds like you were the problem by Joining+Yet+Again · · Score: 2

    So, some stranger calls you up and tells you that they're happy to give you money, but you must accept it in a very peculiar way. Specifically, you must accept it in a somewhat dishonest way, contrived merely so the money can be passed to you.

    Scam scam scam scam scam. Worse, it sounds like you're being asked to involve yourself in fraud or theft.

    Frankly, I'm not even convinced that you're telling the truth right now.

    If you have stupid processes, fix your damn processes. If you think should pay open source projects, then put things in place so you can cut them a cheque and be done with it. Otherwise, the money doesn't just get burnt - it goes back into the company to be spent on other things. Your choice.

  26. For a small handling fee... by JerryLove · · Score: 2

    I will invoce your company for "transaction services" and then donate the bulk of the funds to the open-source projects of your choice. Feel free to contact me to do so :)

  27. Income Tax by Roger+W+Moore · · Score: 4, Insightful

    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.

    1. Re:Income Tax by Obfuscant · · Score: 3, Informative

      Just like Warren Buffet says (paraphrased), just because you'll have to pay tax on it, doesn't make anyone stop trying to earn an extra dollar.... except apparently you.

      But paying tax so you can earn nothing more is often a reason not to earn more.

      Some company with a few extra bucks wants to "donate" money to you in exchange for "services". Since you weren't before, you now need to become a business and start paying self-employment taxes. And taxes on income. To the state, to the feds, and maybe to your local city. You need to spend the time on the paperwork, and sometimes a mid-year surprise payment (like at June 30) will trigger penalties for failure to pay quarterly taxes.

      That last one bit me when I was let go from my last job. I had a pile of options that were bought back, I had a sudden influx of taxable income. I spend most of the year unemployed, but when I filed my taxes I wound up having to spend a lot of time explaining to the friendly IRS that I had no way of predicting I was going to be fired and thus no way of knowing I was going to need to pay estimated taxes in the quarter before the actual yearly filing date. It took a lot of my time getting this straightened out. Time an OS developer might want to use to develop software, and a cost of getting "free money" that you've forgotten to include in your "extra dollar" calculations.

      And then, now there is a company out there that has an official receipt for money in exchange for "support". Hey, we need these things included in your software. We're paying for support ...

    2. Re:Income Tax by Chelloveck · · Score: 3, Insightful

      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.

      --
      Chelloveck
      I give up on debugging. From now on, SIGSEGV is a feature.
  28. Hire a programming intern to help supply code. by geoskd · · Score: 3, Insightful

    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.

    --
    I wish I had a good sig, but all the good ones are copyrighted
  29. Bureaucratic idiocies are real. by GPS+Pilot · · Score: 4, Insightful

    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!

    --
    That that is is that that that that is not is not.
    1. Re:Bureaucratic idiocies are real. by Princeofcups · · Score: 2

      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!

      No. You'd see people gaming the system to get the maximum budget (over what they need) so they could have the most unspent. These sorts of "obvious" solutions are almost always ridiculous if you put in a little thought.

      --
      The only thing worse than a Democrat is a Republican.
  30. I tried something like that a while back. by Anonymous Coward · · Score: 2, Informative

    I tried to get David Harris to let me pay him to do stuff on Pmail. I tried to get Red Hat to let me pay them to do stuff on Red Hat. I offered to give them signed contracts that said they weren't responsible if they ran out of (my) money before they finished. I offered to give them non-competition agreements and non-disclosure agreements. I offered to execute a contract to their specifications and requirements in Delaware (with its famous chancery) or their choice of other country or state. Everyone I contacted (except the Samba Team) reacted with apathy or belligerent distrust. I never asked for anything at all from them, just offered to give money with a suggestion of what new features or bugfixes I'd like pursued.

    But basically, only the Samba team seems to be able to handle this sort of thing. Everybody else involved in Open Source is apparently too busy coding to make gainful, responsible financial decisions. Ballmer is laughing somewhere in a solid gold armchair, because samba's basically a part of the MS software ecosystem.

    And as for the people who are so untrusting that they won't even try to investigate the legitimacy of offers (lots in this thread) I really pity you. That's all sad and terrorized.

    I ended up having to let many thousands of dollars get handed out in bonuses to (six-figure) executives instead of using it to fund FOSS. Those same executives were more than ready to sign off on a FOSS project but I could only find one that would take our money.

  31. Open Source Accounting Agency by timdaly · · Score: 2

    I have tried for years to find a funding source for Axiom, an open source computer algebra project. I checked with the NSF, DARPA, and several companies.

    If I were at a University there would be no problem. I could submit a grant proposal, they send the money to the Provost, he sends it to me, and HE ACCOUNTS FOR IT. The snag in trying to fund open source appears, in every case, that there needs to be trusted accounting. So, the problem is simple. We need a firm whose job it is to receive, disburse, and ACCOUNT FOR, grants and donations.

    That seems simple enough. Set up a small shop (1 person?) who is paid to manage funds, handle taxes, handle banking, handle receipts and invoices. How hard can this be, right?

    IBM contributes to open source through a Linux foundation. I contacted the Linux foundation about setting up an accountant or two to handle the accounting. They never replied. I contacted several people I know at IBM to "donate accounting services" or fund an open source accounting person. They said it was not possible.

    The money would be useful to pay for things like servers (currently costing me about $3000 per year out of my pocket), or fund a conference, or fund developers to attend the usual conferences. It would not be to pay developers.

    Anyway, I have tried to fund this project for nearly 12 years and have yet to be successful. If you can figure out a way to handle the accounting, I'm all ears. Send your ideas to daly at axiom-developer.org

    Tim Daly

  32. You worked at Enron or something? by WebCowboy · · Score: 2

    ...because I cannot figure any other reason you would thing such a practice is "ttotally normal". It does happen, it is on the fuzzy legal line where it probably wouldn't result in legal trouble yes. However, this is FAR from "totally normal".

    The spending pattern you talk about *IS* a common situation, though in my experience it is mostly what happens in public institutions or perhaps a few of the largest of corporations in departments that are "revenue sinks" rather than "revenue generators". That is because of the budget cultire. Managers are compensated and their departments staffed based on a budget handed down in a political process. Such operations are not profit driven--the goal is to reach a "zero balance". Chronic deficit spending can be politically harmful, but chronic UNDERspending makes you a target for budget cutbacks--it is perverse but that is what happens--there is no incentive for efficiency in such an operation (and is why socialised industries without private competition are notoriously bureaucratic and inefficient).

    In Canada political pundits call this "March Madness" because that is the fiscal year end, when federal government offices that are in surplus spend like drunken sailors, whilst at the same time politicians grandstand and court lobbyists and so forth at the same time. Until the Great Recession started it really was madness, becasue the whole government had been operating in surplus for many years and every department tried to maximise their spending to motivate expansion of their budgets. Now with a few years of deficits they've sobered up a bit, but the motivation to spend all allocations is still there to try and defend against cutbacks.

    What is NOT commonplace at all these days is a trumped up "purchase" of imaginary products or services because if the Auditor General finds such items it could (and has) become a political mess--this is exactly what happened in the "sponsorship scandal" in Canada, where the federal government earmarked many millions of dollars to campaigning against a vote in Quebec to secede from Canada. a very large portion of that money was not spent on "real" materials and services, so government officials "bought" fake marketing services--worst of all the "supppliers" of those fake services were mostly supporters of the ruling Liberal party of the day who in turn made nice donations to the party ini the following elections (essentially funneling taxpayer revenue into the political party).

    Since that scandal the government has been under a microscope over questionable purchases--no matter what the scale. Presently there is a bit of a scandal over expenses filed by Senate members--and though it is literally about %1 the size of the sponsorship scandal it has been very damaging politically. Now, say that a gov't department approached you unsolicited and said "here is $5000--you don't need to do anything but send us an invoice" would it not cause you to pause? Even if they wanted nothing else what would happn if it surfaced? Would you want to be associated with an unethical scheme of this nature? What if you had donated to the ruling party in the past personally? Optics of that are terrible.

    I'd have to say that I woud not take this kind of "money for nothing" for just such a reason, whether it was from a gov't department or a corporate windfall. It may not be obviously illegal but it is ethically dubious and bad optics--enough to raise red flags in an audit. I would want no part of that.

    There is another problem with this as well not even related to the above. If these project maintainers get money in exchange for an invoice for any reason it cannot be a "donation" or "gift" on the books--and that has significant tax implications especially if the FOSS project is a registered foundation or simply a personal project. In such cases unless proper services can be delivered and the amount is large enough it may be less trouble financially or legally to accept a "donation" in the form of a fake invoice. And in this c

  33. Bureaucracy not the Tax itself by Roger+W+Moore · · Score: 2

    Just like Warren Buffet says (paraphrased), just because you'll have to pay tax on it, doesn't make anyone stop trying to earn an extra dollar.... except apparently you.

    It is not just tax that is the issue it is the overhead to do the government's job of figuring out for them how much you owe. If you already had a company infrastructure set up I would completely agree with you but this is a group of open source developers we are talking about here. They probably don't even exist as any sort of legal entity. The cost and effort required to set themselves up as a legal entity and then figure out whether tax is due and if so how much and what sort (should they be charging VAT/sales tax for example?) is unlikely to be adequately compensated by $5k.

    Really it boils down to a simple cost/benefit analysis. If earning you a one-off $5k payment costs look like they will be $5k or more in admin overhead and taxes, not to mention an additional cost in time, why bother?