[HN Gopher] Open Collective Official Statement - OCF Dissolution
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Open Collective Official Statement - OCF Dissolution
Author : chenrui
Score : 64 points
Date : 2024-02-28 17:17 UTC (5 hours ago)
(HTM) web link (blog.opencollective.com)
(TXT) w3m dump (blog.opencollective.com)
| armchairhacker wrote:
| I think https://blog.opencollective.com/open-collective-official-
| sta... is a better link.
|
| It also seems "Open Collective Foundation" is shutting down, and
| "Open Collective" is a super-organization which contains a lot of
| sibling organizations ("Open Source Collective", "Open Collective
| Europe"). And most of the entities getting donations through OCF
| can simply move to other organizations (hopefully automatically
| keeping existing sponsors), although others have to find a non-OC
| organization because they have extra requirements? The whole
| situation seems strange and technical.
| bombcar wrote:
| Seems to me pretty simple - the "for profit" company behind the
| foundation (read: the for profit entity that charges the
| foundation as much as it can) charged too much so the
| foundation dissolved.
|
| >Unfortunately, over the past year, we have learned that Open
| Collective Foundation's business model is not sustainable with
| the number of complex services we have offered and the fees we
| pay to the Open Collective Inc. tech platform.
|
| It states it right there.
| yorwba wrote:
| The foundation paid a lot more for their own employees than
| for the platform
| https://opencollective.com/foundation#category-BUDGET so I
| don't think you can pin it solely on the company, the
| "complex services" performed by the foundation itself also
| cost money.
|
| What confuses me about the budget breakdown is that the all-
| time expenses and contributions don't add up to the top-line
| disbursed and income amounts. Especially the income seems to
| be almost entirely opaque; maybe that was a large one-time
| grant that is now running out.
| bombcar wrote:
| "This year" is all "no tag" which sounds like it's not
| sorted yet, or just shutdown expenses.
|
| Last year was $1.3m for 5 "number of expenses" (high but
| not insanely so depending on what it covered) and $400k for
| the platform.
|
| You can go into detail: https://opencollective.com/foundati
| on/transactions?kind=EXPE... and I'm not sure how they
| classify employment versus various other things.
|
| It may be that the for-profit company gave the foundation a
| ball of money to start, and it was to get self-sufficient
| by now, and failed to do so.
| elixiry wrote:
| I don't know what happened, but this def is not the full
| story. Surely if the company had known it was squeezing the
| foundation to death it would have been in its best interest
| to offer a better deal no? I mean it's not like the company
| has hundreds of customers, and keeping the foundation alive
| even with reduced to maintain some income and avoid
| repetitional damage seems like a no-brainer.
| ocdtrekkie wrote:
| OpenCollective used to be much more transparent about how
| this was handled, but I don't think the math has actually
| changed much over the years:
|
| Open Source Collective has a 10% fee. To my understanding, 5%
| of that used to go to OSC itself and 5% of it used to go to
| OpenCollective. OSC is stable, and still around, so I assume
| this math continues to work fine, but they simplified the
| view of it to just say "10% Host Fee" now, which includes
| both OSC and OC's portions.
|
| However, you'll notice Open Collective Foundation is only
| charging 5%! That means, even assuming OCF was getting better
| pricing than OSC (another arguably internal fiscal host),
| there's almost no margin for OCF to operate.
|
| It looks like OCF wasn't billing enough to cover what is
| otherwise probably a pretty reasonable platform cost.
|
| EDIT: Actually, even crazier, it looks like OCF became 5%
| because OpenCollective gave OCF free service starting in
| 2020: https://blog.opencollective.com/open-collective-
| platform-is-...
| dang wrote:
| (this was originally posted to
| https://news.ycombinator.com/item?id=39542039, which had a
| different link)
| TechSquidTV wrote:
| Very tragic. We have GitHub sponsors of course but that's also
| obviously tied to a specific vendor that I'm sure many or some
| would like to avoid for various reasons.
|
| Beyond the fact that I'm sure everyone currently receiving long
| running donation support is likely going to see massive drops in
| funding after finding a new provider.
| beberlei wrote:
| Its just one financial host that is closing down. Most open
| source is on a different host called "Open SOURCE Collective".
| The platform still stays and there is no need to migrate to
| something else for open source projects.
| NewJazz wrote:
| Is there a list of the 600 "collectives" that need to migrate to
| continue accepting donations? Do any of them already have
| alternative donation methods?
| beberlei wrote:
| Yes you can see the list on the opencollective page here
| https://opencollective.com/foundation
| simonw wrote:
| I think this is the list:
| https://opencollective.com/foundation#category-CONTRIBUTIONS
|
| That's a LOT of groups! This page here indicates they were
| raising $13m a year back when they had 300, so it could be
| double that now: https://opencollective.foundation/
| samspenc wrote:
| Too bad, I always saw Open Collective as one of the few options
| open-source developers (who are not supported by Big Tech) had to
| self-fund their work.
|
| Curious what people think are the best alternatives now? I can
| think of GitHub Sponsors as well as creator-friendly tools like
| Patreon, Locals etc.
| buildfocus wrote:
| Open Collective isn't shutting down - open-source funding is
| unaffected. The Open Collective _Foundation_ (OCF) appear to be
| part of the funding structure for open collective sponsorship
| of charitable but not necessarily open source organisations in
| the US, and only groups using the OCF to host their finances
| are affected.
| beberlei wrote:
| Its just one financial host that is closing down. Most open
| source is on a different host called "Open SOURCE Collective".
| The platform still stays and there is no need to migrate to
| something else for open source projects.
| ShaneCurcuru wrote:
| Naming things is hard, as software engineers know. It's only
| OCF that's shutting down, not OC, or OCE, or OSC, or even OCNZ
| (I just found out about that one today).
|
| In any case, there are plenty of other funding models/sites out
| there, the trick is finding one that really fits how your FOSS
| project works:
|
| https://fossfunding.com/#how-are-individual-projects-or-main...
| lopkeny12ko wrote:
| As a developer, the only exposure I have to "OpenCollective" is
| open source projects spamming my terminal during installation
| begging for donations.
|
| So hearing that it's shutting down? Great news to me!
| samspenc wrote:
| Open-source is the one place where I actually don't mind the
| "spam" or self-advertisement.
|
| Pretty much all software projects today use some open-source
| libraries. These open-source libraries need funding to sustain
| and thrive, and also remain supported for the long haul and
| make feature improvements and bug fixes.
|
| But precisely because they are open-source, they get very
| little funding since people get it for free. What to do then?
| The only way is to ask for donations.
|
| OpenCollective is just one of the options open-source projects
| use for fund collection - there are others, but not surprised
| to see OpenCollective so visible in this aspect of open source
| funding and outreach.
| simonw wrote:
| This is going to be a huge pain for the 600 groups that this
| affects (few of which are open source projects - this is NOT the
| part of Open Collective that handles open source).
|
| The key thing to understand here is what a "fiscal sponsor" is in
| the US charitable world.
|
| If you want to accept charitable donations from people in the US
| you really need special tax status with the IRS. This involves a
| lot of bureaucracy and paperwork.
|
| Or... you can find an existing 501(c)(3) that is willing to be
| your "fiscal sponsor". They handle the IRS paperwork and do
| things like provide a bank account for the donations to go into
| and make sure you are behaving correctly and legally.
|
| They will generally do this for you because your cause matches
| with their mission - plus they usually get a small portion of
| your donations to help cover their costs (lots of accounting and
| legal work).
|
| Once you've set that relationship up everything becomes massively
| easier for you... unless your fiscal sponsor dissolves itself, at
| which point you have to unwind that relationship and kick up a
| new one with someone else!
|
| I learned about this because the Python Software Foundation
| occasionally acts as a fiscal sponsor.
| ShaneCurcuru wrote:
| I have a general explainer about the OCF shutdown (not the OC,
| or OSC, or OSE, or OSNV!) over here, where I include more links
| to software foundations that might also act as fiscal hosts,
| like Conservancy, SPI, or NumFocus.
|
| https://communityovercode.com/2024/02/open-collective-founda...
|
| What we really need is a lawyer/accountant/tax person to write
| a focused guide for collectives and how to move their money. US
| tax law means that generally, 501(c)(3) public charity
| organizations can't just transfer the money anywhere - it'll
| most likely need to be another 501(c)(3) or equivalent. That's
| going to trip a lot of people up who want to go to OC (for-
| profit) or OSC (a 501(c)(6) business leage), because neither
| will qualify for accepting fund transfers (I think).
|
| Also, if you have any offinity for Europe, look at the OCE -
| they are a charity, and they sound like they're seeing if they
| could accept fund transfers from OCF for projects that fit
| their model.
| https://opencollective.com/europe/updates/regarding-the-anno...
| samspenc wrote:
| I've wondered about this for a long time - can't a 501(c)3
| non-profit hire open-source developers as employees, or
| easier, employ or fund them as contractors and pay them
| through a 1099?
|
| I'm sure that non-profits hire for-profit companies or
| contract out work in some way, wouldn't that model apply to
| supporting open source projects through a non-profit?
| reverius42 wrote:
| It might be hard to justify the need for that software -- I
| don't think 501(c)3 orgs can do literally anything they
| want and keep their 501(c)3 status. The things they fund
| have to go towards a specific mission, and "putting more
| OSS into the world" might not be a valid mission (?).
| JamesCoyne wrote:
| Given this news, it's interesting to read the "Investor Update"
| published by Open Collective earlier this month:
| https://blog.opencollective.com/open-collective-inc-investor...
|
| Open Collective will (presumably) experience a further drop in
| revenue as they lose the "platform fee" they collected from OCF
| neilv wrote:
| If OCF couldn't afford the fees paid to OCI, is there related
| risk to the other Open Collective entities (OSC, OCE, etc.)?
|
| > _Unfortunately, over the past year, we have learned that Open
| Collective Foundation 's business model is not sustainable with
| the number of complex services we have offered and the fees we
| pay to the Open Collective Inc. tech platform._
|
| -- "Open Collective Foundation Dissolution Announcement"
| https://docs.google.com/document/d/1odj1zfwqZgIyGOeBhv5QZxYH...
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(page generated 2024-02-28 23:00 UTC)