The Changelog – Episode #445

Funds for open source

with Pia Mancini from Open Collective

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This week we’re talking with Pia Mancini about the latest updates to the mission of Open Collective. Earlier this year Open Collective announced “Funds for Open Source.” The idea is simple, make it easy for companies to invest in open source, and they will. Also, since recording this episode, Pia and the team at Open Collective along with Gitcoin announced fundoss.org as part of Maintainer Week announcements. And right now, they have a matching fund of $75,000 dollars funding open source that you can support.

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Changelog

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So we’re here with Pia Mancini, who’s the founder and CEO of OpenCollective. Pia, welcome back to the Changelog.

Thank you. Thank you for having me. It’s nice to be here again.

It’s been too long.

It’s been too long, yeah.

So let’s just dive right into it, shall we? OpenCollective - remind the folks what it is, or for those who haven’t heard of it, tell us about the platform and what y’all are up to.

Yeah. OpenCollective is an open finances platform; it’s a platform that lets you raise funds and spend them transparently, and it’s paired with a whole network of not-for-profit entities around the world that act as that place where you put the money. So if you are a community, a group, an open source project, a mutual aid group, a movement, you wanna start raising funds today and you do not have a legal entity or do not want a legal entity, or it’s impossible for you to have one because you are distributed around the world - we’ve got you. We are gonna give you the platform that can act as that organizational structure and that place that you can manage your funds transparently, and also a business bank account or a not-for-profit bank account where you can receive the money. In the jargon it’s called a fiscal host, or fiscal sponsor. So OpenCollective kind of combines these two pieces.

And you’re no longer a fly-by-night. You’ve been around for a while, and so I think being established and having a history, especially for a fiscal host and a platform, is really important. So you’ve got that going for you.

Yeah, absolutely. We started five years ago, and we’ve really grown a lot in the open source space, and we’ll chat more about that… But also, we’ve grown - especially last year - substantially in the crises support, solidarity space, mutual aid groups. I know it’s been a crazy year for everyone, but for us it was a crazy year compounded with that 10x growth on that… So it’s been a little bit interesting to manage. So yeah, it’s been great; super-challenging.

Is the space that’s outside of technology where the growth is primarily happening, or is it just bigger there now? They’re both growing, but that one’s growing at a faster rate.

They’re both growing, but that space last year grew at a rate that was completely unexpected. So this is the combination of OpenCollective the platform, plus the OpenCollective Foundation that is a 501c(3). It’s a charity. The 501c(3) has never been very used, or we didn’t grow very much until last year… In 2019 that entity had a revenue across all its collectives of – I think it was something like 300k… And then it was close to five million dollars last year. So that level of scale made it quite interesting to survive, especially in the middle of a pandemic.

[00:04:31.28] Yeah. And it’s important to understand the full platform, too. I recall talking to you, Pia, before on Founders Talk, and then this show way back when, this idea of, as you mentioned, if you don’t have a legal entity in your group; you just wanna collect together and raise funds for whatever they are, and distribute them transparently in the open. That platform did not exist then, and you sort of began in this open space where it wasn’t really about open source or even software-driven communities… And then that space grew for you, and then now with the pandemic and things shifting as they had the last year (I guess a year and a half now), you’re seeing more growth in the non-tech spaces.

Yeah, absolutely. A lot more than before. In hindsight, the common thread between both growth spurts that we’ve had in the open source or tech space and now in that kind of mutual aid or solidarity space, it has to do with the fact that OpenCollective is best suited for groups that are – it’s like zero to one. You’re either able to fundraise or not. They are doing this level of mass-scale, global project-directed funding option. So an open source project, if it’s someone in the U.S, someone in Mexico, someone in Germany, it’s literally impossible for them to fundraise, because there is no legal entity that they can create. It doesn’t exist. So it’s like zero to one.

And for mutual aid groups, we’ve found that it was the same. It was literally impossible for the Brooklyn Mutual Aid Group, or South Chicago Mutual Aid Group to have a functioning charity, not-for-profit, that is able to give tax-deductible receipts, functioning in like less than at least six months if you’re lucky… So again, it’s zero to one. These kinds of groups also that we’ve seen this kind of massive growth are groups that are doing cash assistance, they are putting money together to pay for groceries for folks who have lost their jobs… This polar vortex thing hit (I think it was) Minnesota not so long ago, and just like that, in one day, a group came together and they were pooling money to get people off the streets, into hotels. And paying for – like, “We’re gonna help you do that today” doesn’t exist. So it’s not about being marginally better at something, it’s just about enabling something that wouldn’t exist otherwise. And I think that that’s where we are uniquely suited, in that space to work in.

That’s really cool. And I think it makes sense to think of yourselves as enablers, because it’s the time where either it’s technically or legally either very difficult - or impossible in the case of too difficult for one person to pull off - to do a thing. Or in the case that speed is of the essence. It seems like that’s where OpenCollective really shines, because you can get up and going quickly, or if you don’t have the expertise or the money or whatever the legal means are, especially cross-borders and stuff to get something going, is going from zero to one; you’re really enabling things that wouldn’t exist otherwise.

Yeah. And you know, we were doing a strategy very long call the other day… Because everyone else, we have limited capacity, and we need to decide what we are gonna say no to, and what we want to achieve… And we wanna focus on these spaces - whatever they are, but these spaces where it’s just not a marginal improvement. It’s this binary kind of situation, and scaling that. I think we did that with open source, in a way, for the vast majority of projects that are not under another foundation or are not newer, smaller, or more distributed, or whatever… We’re also doing it now for these solidarity space–

[00:08:10.06] So because of that do you see collectives or organizations outgrowing the platform? Do they need that marginal improvement and then the best thing for them is to move elsewhere?

Yeah, absolutely. And look, right now, this year, for me it’s about focusing a lot on the whole lifecycle of a collective. We’ve become really good at “You need to be up and running today? We’ve got you. This is what you need to sign, this is where you need to send the money, this is how you do it.” It’s super-clear, zero friction. But then as groups start to grow on the platform, we are not so good at taking care of that middle-sized group that – you know, they manage anything between $500,000 to over a million budget, or $300,000 to over a million. Then they are like “Alright, at what point is it worth for me to start doing my own thing, my own entity? Is it now, is it later?”

So we want to focus more now on also supporting those groups… And once they transition out, what I would really like to see is for OpenCollective to also accompany these groups as they transition out… So we become kind of the backend; this kind of transparency and open finances ethos that we bring stays with these organizations even as they become their own legal entities. You know, we just keep giving them for free the OpenCollective platform for them to kind of keep this transparency.

And then I guess maybe more future thinking, how can we more like strive for non-profits kind of style? So you become a collective, we help you grow, you grow with us, you raise funds… It’s time for you to kind of move on. We’ll give you OpenCollective as your backend, but look - it’s hard to do not-for-profits; we’ve been doing this for many years. We have legal advice. We’ll help you create your not-for profit and then you can go do your thing in the world. That kind of whole lifecycle for me is very interesting, without losing our core focus that is from zero to one, really helping initiatives today.

Right. Because the crux, the important thing is the upstart, getting started fast, the zero to something quickly…

And obviously, graduating or incubating a group or an entity or a non-profit, or a [unintelligible 00:10:24.17] however you wanna frame that, to a point that they can blossom and move along and self-sustain, but still use the platform would be ideal. Is that happening a lot, where that’s the focus now? Is that why it’s a focus now, because you’ve been around for five years and you’ve got a lot of groups that have grown with you and now they need to move along, and they still need tooling?

Yeah, we have that. We’ve been an incubator of really interesting initiatives. And look, also for open source, and they not necessarily moved into another not-for-profit. We’ve had groups that because they’ve been able to support the maintainers during their initial period, then they were able to create a project that then they can make a business of, without losing their open source or without losing the community. We’re seeing some open source projects also moving into other types of business models… Or projects being hired by a company full-time to work on that open source project, but they were able to do it because they were able to dedicate enough time, because they were getting paid initially by their community.

So we’re saying that it’s a bit tricky sometimes, and it’s a challenge of mine to help the ecosystem a little bit more in governance tooling when these kinds of things happen, especially when an open source project moves into being a for-profit venture; the line between what’s part of the for-profit, what’s part of the community, how the for-profit still supports the community - it’s a very interesting conversation.

Yeah. Has that happened with anybody?

[00:11:52.07] Well, Gatsby is a good example. Gatsby was a collective, and now they are a super-big venture-backed, and the relationship between Gatsby the company – I think it was well-managed, but it was well-managed because it wasn’t a huge community in terms of a lot of people being very invested in that [unintelligible 00:12:08.21] turned into the company.

It’s starting to happen some, yeah…

Yeah. And I think Next.js is also another case where they’ve raised money and they became their own entity. I think they still have a collective, and they manage Octobox as well. Octobox has the company and the project, and they have different practices, but I think as a community we can start talking more about what are best practices when you’re gonna turn your open source project into a business.

I guess because the funds in OpenCollective are transparently available to the world and you can sort of dictate – so if you’re a company, or even a project that graduates into a company and still maintains a collective, those funds I’m assuming are used for community-related things.

Yes, that’s exactly right.

Not really business expenses, not really business income, it’s more like potentially tax-deductible funds that have been added to their collective and used in a transparent way where the community can see that and they can maybe do something with a pull request, or patch an issue, or something like that, and maybe get paid for it. Is that kind of how that maps out? Is that how it plays out for that?

Yeah. So one thing that I quickly wanna clarify - the Open Source Collective, which is the fiscal sponsor of most of (at this stage) 2,500 open source projects under our umbrella, it’s not a tax-deductible entity. It’s a not-for-profit, but it’s not a charity.

So I just wanna clarify that, just in case, because they have different regulations. But other than that - yes, the funds in the collective, the intention is that they are used for community stuff. Definitely, we wouldn’t pay back into a company. Our by-laws or our regulations wouldn’t allow us to do that. But also, we kind of want to see more money from the companies to the collectives actually, and that money being invested in the community.

I think it’s positive that open source projects find different business models, and that more maintainers make a great living out of doing this… So I’m by no means saying that this is wrong, I’m just saying that sometimes we need to walk that line, and as a community, we need to discuss what are best practices.

It’s worth mentioning that a core tenet of OpenCollective is the open side, and that’s transparency. So it’s transparency with money coming and money going out. All the expenses are itemized and explained and visible, and that’s really cool. I wonder if that’s been perhaps problematic for certain groups? There’s certain times where like “Well, this is a little bit grey, and I wish I could just –” I get it, I totally get why it’s there, and think it makes sense for accountability purposes, but we were talking with Sokra from WebPack, and I mentioned that he had never given himself a raise. And I was like “Does it feel weird to just go into your OpenCollective and just start paying yourself more, or why haven’t you done that?” He just was like – I can’t remember exactly what he said, but he kind of just shrugged it off… As an example of like maybe there’s just like a weird social thing of him giving himself more money, even if he deserves it; everybody else gets a raise over time… But that was just an example of like “Maybe the transparency kind of backfires.” Have you ever noticed that?

Yeah, for sure. Radical transparency is never easy, and social pressure is tough… And it’s also a hard ask on maintainers who are like – most of them are really good developers, and great at what they do; they might not be the best at managing communities or people, because it’s a different skillset. I wish all open source projects had a more diverse skillset. It’s something that we should really strive for… And this is one of the reasons why there has to be – you know, it’s a lot of pressure on the maintainers to do what they do, earn what they can, raise money and also manage the social expectations of “Oh, how much you’re getting paid for this work.”

[00:16:07.09] It’s tough, I get it, but for us, that is a non-negotiable space, because I feel like the benefits of having this level of openness by far outweigh it. And also, the uncomfortable moments… Also, I think that as a community we should also take stock of how poorly some of these folks are paid, and we should be paying them more.

One of the main goals of the Open Source Collective is making working for your open project, for your community something that is comparable to working for a corporation. And the only way of getting there is paying maintainers a competitive salary. We really wanna erase this choice of like “Oh, I need to be poor and work for my community” or “I’m gonna make money, but also I need to work for a corporation.” If we can close that gap, narrow that, make it as comparable as possible, for us that’s a huge win. But the only way of getting there is being open about the need to pay folks.

Money causes a lot of problems, especially in groups; I think the transparency is certainly a competitive advantage, because when you bring together a group, you have to have trust around funds, even if it’s like – like, that’s got to be the core thing, that brings groups there for one, but then enables the continued long-term trust between one another, because everything that comes in is visible to everyone, and everything that goes out is visible to everyone, so there’s no scrutiny. And even as someone like you, who runs 2,500 or more - or is at least the fiscal sponsor of 2,500 or more open source projects, even on your conscience, that you’ve got this feeling that “Well, hey, look at the ledger…”

Right.

“…the ledger is what it is.” You may be able to say “Hey, you shouldn’t have done that, or in your case, Jerod, where you mentioned “You should have paid yourself more, why didn’t you do that”, but at least it’s there, and the questions can be asked, and all those details are out there.

That’s a competitive advantage, in my opinion.

Absolutely. I think that we have worse problems with our transparency than what everyone is getting paid. I think that where we really have struggled with this kind of radical transparency stance that we have is when we risk exposing community members like trans folks, or they struggle with a chosen name, and their dad name, and because we’re a regulated not-for-profit, we need to have the name that folks are submitting their tax reports in, otherwise it’s problematic for us. Or for example we have a group that is making grants to folks that are struggling, so they are paying for their mental health bills… Having that transparent - that’s far worse than the discussion about…

The details of the transparency; not so much who it goes to, but the details of it…

Absolutely.

…and I guess in some cases the actual name… Because you’ve got to, for necessary reasons of clarity.

Absolutely. We have for example an internet freedom technology fund under the OpenCollective Foundation where we are supporting a whole group of projects working with privacy, anti-surveillance protecting tools for human right activists, VPNs that are being deployed in countries like Myanmar, for example… We absolutely cannot expose them, so that’s where we came to the limits of our very strong radical transparency kind of platform, very opinionated platform. That’s where we hit the “What do we do now with this?” We have this money that we want to give to all of these projects doing technology that is keeping – internet freedom technology that is keeping our activists or human rights activists safe. At the same time, we have this platform that is radically transparent and we cannot have that. So that’s really for me the most difficult space to navigate, and we’re still working with these projects and we’re doing some special features to guarantee their safety.

[00:20:00.28] I think transparency is interesting, and it’s fantastic, but also you sometimes obviously run into this clash between transparency and privacy and identity protection that you need to navigate. And normally, the ones that are hurt the most or those protections are not in place are folks that are more exposed, or minorities… So yeah, it’s an interesting problem for us, but yeah.

Break

[00:20:20.25]

So you have a brand new initiative as of March, the Funds for Open Source project on Open Collective… And it’s all about getting corporations better involved, more involved, bringing more corporate money into open source maintainers’ hands, making that easy and accessible. Do you wanna tell us where that idea came from and what you’ve been working on?

Yeah, so Funds for Open Source came from our awful, daily, soulless relation with corporations purchasing order process…

Okay, yeah…

Their financial systems and onboarding as a vendor and getting them to get their financial departments to approve payments is just bad, and it’s difficult. We want to make that very easy. And it’s bad for everyone; you have to use SAP, you know what I mean? It’s like, it’s bad. [laughter]

Right.

[unintelligible 00:22:13.27] Yes, it’s terrible.

It looks like Coupa, exactly. [unintelligible 00:22:18.29] with all the love in the world. And it’s bad for everyone. Okay, so for the projects it’s impossible; if you don’t have a not-for-profit or a legal entity with the right checks and EIN’s and things like that, it’s a non-starter. But that’s more the Open Collective proposition. But it’s also awful for the folks involved from the company side; you know, you are engineer or an open source officer in a company, and you’re trying to get funding for projects, and you go round to your financial department, and they’re like “Okay, great. Once you make 17 payments of $5,000”, so 17 different purchasing orders to these entities - some of them are entities, and then a couple of PayPal to maintainers… It’s impossible. That’s not gonna happen.

So what we did was this Funds for Open Source proposal, where companies have one payment, one purchasing order, a large tech… It’s not surprising, but it’s far easier to get $100,000 from a company than to get $10,000. A lot easier to get $100,000, because they understand that. The $10,000 raises a ton of flags. But a large tech to one not-for-profit that is already a vendor - it’s a really easy process for everyone. And then what we do is we turn around and create a fund for this company. So they can obviously give money from that fund to collectives on Open Collective, or under the Open Source Collective umbrellas, which is really easy, but they can also use that fund to disburse money to other organizations.

We have, for example, a CMS, the Google CMS fund. They gave us their whole budget, and then they wanted to give money to the Drupal Association. But instead of getting the Drupal Association that is now a very small organization in terms of staff to go through all the process of procurement with Google, we just sent them the money from the fund. [00:24:12.25] So it’s a lot easier for everyone involved to give money to open source projects and other organizations.

Funds for Open Source also has a grant-making feature built-in. So projects can apply to get funding from this grant.

That’s cool.

And again, instead of that being one project’s storybook, trying to get into Google to get the funds, they just draw an application through the Open Source Collective to the fund, and everything is a lot easier, because the money already left the corporation.

Yeah. It’s been allocated to the cause of open source, essentially, through a trusted resource, which is their fund on Open Collective.

Correct, yeah.

And they can disburse in there. Does the same radical transparency participate there, too? So money in, money out - it’s the same on these funds as well?

Yeah, absolutely.

That’s cool.

That’s beneficial for those organizations too, because it’s like “Well, you can see how much we’re participating”, which has been a challenge. You can see some organizations taking advantage, or some organizations giving a lot, and it’s all behind the scenes, and the only way to really do it is maybe come on a podcast, or put out a blog post, or your advocates sharing this information… But in this case, it’s like, here it is for the world to see, in many ways, the stage where funding happens in open source. There’s many places it does, but this is one of the many prominent places where funding for open source does happen.

Yeah. And also, I think it gives another entity if you want, in a way; another kind of seniority. It’s like, this is Airbnb’s open source fund, and from here, we’re gonna do a ton of things, most of which would be very difficult to do if the money was in pieces coming out of Airbnb.

Does it mean that the endpoint that gets funded has to be involved in Open Collective? Or it’s just their fund, and you can issue checks to somebody outside of Collective.

Absolutely, you can issue checks to anyone. We really wanted to be very clear – well, we are very clear, but we really wanted to enable that to happen for smaller organizations as well. Because for us, the Open Collective team, it’s the same; to give money to a maintainer or to give money to an organization is the same process for us, because we’re set up for doing that. So we can give checks to any entity or open source project, whether they’re with us or not. And I think that that’s what makes a huge difference for these corporate players.

You mentioned Airbnb… We had a conversation with Duane O’Brien way back on the Changelog. Jerod missed that show. Where were you at, Jerod?

I was just listening…

Just listening. Episode #392, it was Indeed’s FOSS Contributor Fund…

And I know that you know Duane well, and Indeed is a part of – they have their own fund on Open Collective… Is there any back-story to some of the trials and tribulations Duane went through and shared on that show to kind of continue into what you’re now doing? Has there been any cross-over? Has he been an advocate or a confidant to you?

Oh yeah, he’s been a great advocate of funds for open source, the FOSS Contributor Fund for sure. He’s been right there, talking to his fellow open source peeps in different companies and getting them to start this. Indeed’s experience was really – I think it really kick-started a lot of what’s happening now with Funds for Open Source… Especially, they are a very democratic way of deciding which projects to fund; they have this poll with the employees.

Right.

It’s not everyone though. It’s really interesting, it’s not just everyone who’s an engineer that can vote. It’s those who have contributed to open source. So they don’t just want to get them to decide which project to fund, they also wanna get their staff to contribute more to open source. And that was suddenly a huge inspiration, and indeed has been very open about their blueprints, [unintelligible 00:28:00.05] the tooling that they use, and other bits and pieces… So I think they are really a role model in that.

[00:28:08.04] And we just came in to, again, enable. That’s what we do, we facilitate, we enable, we catalyze these things. We wanna make it so, so simple for companies to say “Okay, we’re just gonna put this many here, and from here we’ll decide how to spend. We’ll spend here, there, we’ll offer grants etc.” But it’s a hundred times easier because they have the money in one place.

I guess the biggest example that we have is Chrome’s fund. They have a pretty big fund on OpenCollective.com/chrome. I think it’s about $700,000, and they’ve just committed another half a million for this year… So they’ve been great at this. And you can go in there, you can see – not only they are kind of disbursing money to projects on Open Collective, they’re creating special projects from communities; they’re encouraging open source projects to join Open Collective so it’s easier for them to give them money and also track how that money is spent. Addy Osmani at Chrome has been a really good partner here.

So yeah, Funds for Open Source is a big one for us this year. When we launched, it had a lot of traction, so it clearly struck a cord with everyone who’s involved in procurement processes in companies.

Right. You mentioned persuasion… You didn’t say the word “persuasion”, but I was thinking about that. Or activism, or encouragement I think is the word that you used… And you’re an enabler. I’m curious if there’s a missing component to this. Because you have the tooling now, you have a mechanism, you have enablement, and then a lot of corporations need encouragement, or they need basically a sales pitch of why this is worth their trouble… Even though it’s way less trouble here than it would have been before funds existed, right? It’s easier, but – like, companies think about ROIs, they think about bottom lines, cashflow… There’s capitalistic reasonings behind it. Are there tools, are there people, are there classes you can take, like “How to convince your organization that it’s worth it to do this”? Or is it just gonna be a thing that everybody has to slowly come to the light and realize that they’re standing on infrastructure that they didn’t participate in, and that they’re just reaping benefits, but they’re not giving back? What does that look like today, and what might we do to make it better?

Yeah, I think we need to be better at that. I think companies are more aware now of the need they have to invest in the open source ecosystem. I’ve been seeing a lot of companies – Trivago is one of the greatest examples of this. Trivago - they’re very invested in supporting WebPack, Babel and Preact… And their recruiting – forget about last year, obviously, but their recruiting process a lot easier, and grow, and they’ve seen people who wanted to work at Trivago because they knew they were so invested in the open source ecosystem.

So I think that more and more companies are seeing this as an investment and not as a charity. More of a “I need to do this if I wanna keep my employees and my engineers happy and working for us, and also if we want to have a good name in the community, if we want to be responsible citizens.” I’m not saying that this is like “We’ve done it, folks. We’re good”, but I think it’s better, it’s improving.

So we need to be better – like, we, OpenCollective and Open Source Collective need to be better at having this conversation with companies. Right now it’s quite centered in me and (luckily now) Ben Nickolls, who joined as the executive director of Open Source Collective.

Shout-out to Ben.

Yes! Hi, Ben. But still, it’s a very kind of interpersonal relationship… Which is fantastic, but I also think every single day about how I can make myself redundant from my own company… Because I think that the only way of –

…I want to create something that survives me, and I believe that sustainable is a mission that survives its founders. So I think a lot about that, and I think a lot about that in the context of my relationship with all of these companies in the open source space. So I think that we need to do better tooling. We tried to do – like, if you’re an engineer and you need to move this up the chain, this is a letter that you can use to write to management, or this is what went well in this company, so read all of these use cases, or maybe try these 5-6 steps. We do a little bit of that, but not nearly enough.

[00:32:23.04] Sustain was obviously a big part of that conversation of convincing companies that they need to invest in this space… So yeah, I think I would like to do something that is like a toolkit for – you know, your sustainer toolkit. You’re in a company, these are all the resources at hand, these are all the stats, this is a presentation you can use, use these five slides… And then keep inviting me to your show and talk about it. [laughter]

Well, you might be preaching to the choir with our show in particular, but… Point taken.

To some degree. Well, you launched this, at least by the blog post, March 24th. We’ve talked about Airbnb, Chrome, Indeed as participants of funds. How many funds are out there? How do you find these funds? If somebody wants to start a fund, what’s the process to begin that workflow? Is there a button on the site, or is that something where they’ve gotta get in touch with somebody directly? What’s the beginning of that?

Yeah, right now they need to get in touch, and we are doing a lot of outreach ourselves with this, in any OpenCollective channel - on Twitter, support@opencollective.com, pia@opencollective.com, ben@opencollective.com… You know, everything gets to us.

*@opencollective.com.

Yeah, exactly. We are working on a flow for funds. I do not know how many funds we have, to be honest. I have no idea. We’ve been doing two things - we’ve been getting new funds, but also – and I’ll tell you about the types of funds as well, which is interesting… And also converting existing sponsors on the platform that they are giving recurring donations, and they’re sick and tired of their monthly credit card expense on their corporate credit card, or whatever it is. We’re turning them into funds as well…

That’s good.

…so instead of spending monthly this money, send it to us - one year, one invoice, one payment, and that’s it. So it’s both. It’s an outreach, and also internal corporations already on Open Collective. And then the types of funds that we’ve been seeing… We’ve been seeing corporate funds like Samsung or Salesforce, but we’ve been also seeing - which is really interesting for me, because I wasn’t really expecting this early in the process - more like topical funds, or themes funds. We want to create a fund to give money to Web 3 projects. And it’s different companies putting together a fund to do something. I really like that idea, because the economies of scale are amazing… So we’ve been kind of helping some funds, and one of the biggest ones that we have is – we have two really large ones at the moment. The Digital Infrastructure Fund, which is a fund put together by Ford Foundation, Sloan, Omidyar, Mozilla and Open Society Foundations, to give money to research and implementation, like public digital infrastructure projects… So anything from open source on Covid, to climate change, to FOSS foundations, like research in any of those areas, public infrastructure in India… And again, it’s like this structure where we can pull money from different corporations or foundations to support a specific set of projects.

The Internet Freedom Fund is another one, where we put money from Ford, Luminate, also Facebook started one with us to support this type of internet freedom technology projects. We’re seeing both - single company, that’s like “I’ll give you my money. Please spend it on open source” and “Let’s pool money together to support this specific type of projects.” I’m a fan of anything that happens in funds for open source. I think it has been a really interesting initiative.

[00:36:05.23] Yeah. Have you begun to quantify the impact? Because anytime you talk about organizing people and assembling these opportunities for corporations to participate, sometimes - as Jerod was saying - how do you convince, or encourage…

Nudge…

Yeah, nudge.

If you’re trying to encourage, sometimes the way to do is through what the actual impact is. Can you share any details around the launch of funds, and the initial impact, where you’re seeing things going, and if it keeps going that way, here’s the trend - can you quantify some of those things, to some degree? The impact?

No… I’m really bad at that, to be honest. It’s not in my skillset. I should do more of that. OpenCollective also doesn’t track anything. We don’t even use Google Analytics or anything. That’s how we are. We are radically transparent, but we also don’t track anyone and don’t keep any kind of analytics from users on the platform. So there’s not a lot I can say on that. We really just launched, and so maybe (I don’t know) in two months we’ll look back, look at the numbers and write a blog post about it.

I also wanna say that OpenCollective’s data is open. We regularly post all our data on a Google Drive that is publicly accessible, and if you go to a homepage, there is a link to open data, and everything is there. So anyone who wants to do this and run these numbers, and if there’s like any data scientist there who’s like “I wanna see how they spend the money”, please feel free.

One of the things that we are doing though is we’re building proper metrics tooling for collectives and fiscal hosts. So we will have a much better understanding of, you know, “They’ve been spending money on this”, or “From this budget, open source projects normally spend 90% of their budget on a monthly basis” or “They keep their budget forever.” All of that metrics and readings, with the new metrics dashboard for collectives, are gonna be much easier for us to do and have at a glance.

Break

[00:38:02.17]

Could the impact be quantified, to some degree maybe, just simply new money in? Because it’s assumed that the money is gonna go somewhere, and the money is gonna have some sort of impact. Do you have a metrics for new money in, or sort of how the total raised has gone up 25%? Or I’m looking at a budget for Indeed, for example - it is $125,000 total raise so far, and that’s a new fund, so I’m assuming that’s pretty much new money.

[00:40:01.24] Yes, I have – let me see… Let me open my Metabase dashboard. I have a fancy dashboard for this.

Metabase.

Metabase. I just don’t use it that often–

We’ve done a show on Metabase.

You did? It’s pretty good.

Well, after ten years you’ve done a show on everything, pretty much… [laughter]

True. And obviously, we are changing things on the – oh, we’re having a good month. That’s great. [laughter]

Surprise…!

Surprise! It’s great. We’re actually – can I say something? We’re sustainable, which is so amazing. Obviously, it was so scary for me, especially when my co-founder left, and I was like “Alright, this is your thing now, and you’re losing money every month… Like, a lot.” Now we are in the green, and it’s like “Aah…”

Congratulations. That’s awesome.

Thank you. I know.

Yeah. That’s an impact right there alone.

Exactly. We’re not gonna die.

Sustainably sustaining.

Exactly. Exactly. We’re default alive, which is great.

What I was trying to extrapolate was just essentially if I just go and add up Airbnb’s fund, it’s $385,000 total raise. Indeed’s is $120,000. You’ve mentioned Chrome, and their number, at least on the site, is $650,000 total raised. You mentioned now there’s half a million more, so we’re talking about - just doing real quick math here - close to two million, or a little bit more than 2.3 million dollars new money; that’s new money, all at once, rather than trickling into the system over time. It’s a lot easier – it’s almost like “Wow, here’s a ton of runway.” And it’s more like invigorating, because you as the collective, and you as somebody that’s active in these communities, you can be much more encouraging, because you can see “Well, we’ve got 2.3 million dollars to do something with”, whereas before it was hard to see that.

You sort of count on this recurring monthly payment or whatever, but it’s just harder to see the long-term finish line because you’ve got trickling money, versus a big wad of cash.

Absolutely. That’s also part of why we want to do better metric tooling for collectives. It’s like, now we have a fair bit of maintainers that are working full-time for their communities. Like, if I need these metrics to run our company, they need these metrics to run their project as well. They need to know how much money they’re getting in, and not only each month, from that how much is recurring revenue, how much is one-time revenue, how often do they lose donors, what’s the churn… All of those metrics –

Churn, yeah.

…yeah, that I have for OpenCollective, they need it for – and don’t ask me about those, because I need to look at them… We also need to provide it to collectives. But I think that historically, the Open Source Collective has raised 15 million dollars. That was like last year. A ton of that was in the past two years, for sure.

And that’s a lot of money. 15 million dollars is a lot of money, or at least for us, to go to open source. Not nearly enough what the ecosystem needs, but it was zero for many of these projects five years ago.

I was gonna say, it’s better than zero.

Yeah, it’s a lot better.

It’s more than zero and it’s better than zero, because it could be – if you and team weren’t working so hard on this, these last five years, and you’ve mentioned some of the ups and downs… If you weren’t doing all this, it could still be zero.

But it’s not.

It’s not. It’s 15 million dollars. Probably more this year. I’m trying to look at [unintelligible 00:43:24.18] absolutely cannot find, that gives you how much money – oh, here it is. How much money was raised by the host. 15 million dollars.

15 million.

That’s great.

And 34 in GBP. [laughs] That’s what the Open Source Collective – I don’t know why we have something in GBP. It was very funny.

You must have amazing accountants.

Yes, I have a whole team…

Very patient…

Yeah, yeah.

…very fastidious. That’s what it takes.

And external auditors, thank you very much. [laughter]

Necessary?

Well, yes…

Yes, for sure.

[00:44:04.15] I wish I could say “Nah, we incorporated our not-for-profit in Delaware. No one cares about how much we –” Like, no. We just went ahead and did it in California, thank you very much… So yes, a lot of external audits.

Oh, yeah…

California, yay!

You could close the company and sell it to your new company incorporated in Delaware.

Well, it’s not my company; it’s a not-for-profit (yes!!) But doing that is a little bit expensive, and I think it would derail our focus, because we would need to merge two legal entities… We could do it, but you know…

Lawyers are good at that stuff…

Lawyers are expensive, too.

Lawyers are expensive, yeah.

Yeah. Well, because it could be - I know how transparent you are - a smaller side in there, where you said the last five years cashflow [unintelligible 00:44:51.10]

Oh, yeah.

Is that something that we can leave in, if it makes sense to leave in? Are you okay with that?

Yeah, absolutely.

I’m just playing director now, or editor, later on at some point, to say “Does that make it –”

No, leave it in there if you want. Our investors updates are posted on our blog, so… There they are.

Right. You’re just airing out your stress, essentially, at the last couple of years, where – you’ve made it. You’re sustainable now.

Yes. [laughs] Well, it’s tough, man… It’s tough to make it sustainable. And we are 15 people now.

We have complete empathy for you. We feel the same.

Yeah. And we’re 15 across the world. I feel mightly responsible for a lot of people. Last year, between the pandemic – also, shout-out to my amazing executive coach [unintelligible 00:45:41.21] If anyone ever needs a referral for an executive coach, she is the best out of Nigeria, and now I think U.K. She’s amazing, and she really helped me through – I don’t know, we were losing a fair bit of money in February last year, and we were having really good profits in December last year… And she helped me through all of that in a way that I’m very grateful. So yeah, get an executive coach if you can, peeps; they really help. Don’t do it alone.

Yeah. That’s crucial. I hear CEO coaches, I hear life coaches, I hear executive coaches… Essentially, somebody that’s outside your organization, that can give you good advice to take action upon.

Yeah, someone to help you through dark times, and insecurities. In OpenCollective we changed – you know, we’ve been tinkering with our business model for a while… This is something that I don’t think a lot of people know, but most of our collectives are now on a tip basis. We don’t even take a platform fee. So last year during the pandemic we went to zero platform fees for all Covid-related projects for three months initially, and then we extended it… So we just gave up all our revenue, because we felt like we needed to do something for this situation. We were seeing all of these people coming together, putting money together, supporting each other… And you know, we’re like “What can we do – besides enabling this, what’s our role today?” and make this as easy as possible. So we just went to zero fees. That was in March last year, when we were still bleeding money every month. Now, it was the right decision, it was a no-brainer of a decision, because we knew that that’s what we had to do, but it was a tough call also, in the sense of like “We are giving up all our revenue.”

[00:47:44.08] So that was in March, and half-way through March last year we decided to experiment with something that I’ve always wanted to have on OpenCollective, but we never had the guts to do it… That is tips. We’re just gonna try and see if we can just sustain ourselves, instead of just getting a fee from the projects… Enabling donors to give a tip on top of their donations, and use that as a revenue.

We were so surprised… If for example OpenCollective was taking 5% platform fee, and then we moved to zero, when we went to tips, it was always over 6%-7% that we were making.

So by going to zero, we actually increased our revenue.

You learned something.

We learned something. So we rolled it out for almost everyone; certainly everyone in Europe. All other hosts have that kind of tipping model. It’s been great to see, and we wanna expand this and keep rolling out more hosts and more collectives on this new plan… But that was a very humbling moment, I guess, for us. And for me, facing our team and saying “Alright, we’re gonna go to zero platform fees”, it was like…

“What are you, crazy?!”

“I hope you trust me, folks…” [laughs]

“Whaat?! For real?!”

So how does the tipping work? Is it the collectives that tip the host, or is it the –

So the donors tip the platform. The host keeps their fees if they want.

So let’s say I’m gonna go give $200 to the Open Source Collective, and I put in my $200. Is there like a button that says “Would you also like to tip OpenCollective?” Is that how it works?

Okay. Cool.

Do you quantify it, like some give 5%, some give 6%? Do you quantify that and give them norms? Is it like [unintelligible 00:49:26.08] it’s like “Do you wanna give 10%, or 15%, or 20%?” Because I know that’s what happens when I slab my card in. It’s like 15%, 20%, 25%. You’ve got some options, essentially.

Yeah, exactly. Options, and then “No, thank you.” You can always opt out. But these metrics – these ones I know, because I’ve been looking at them very carefully for the past year… [laughs] We are at about over – I think it’s about over 55% of orders have tips… Which is huge. Because they could have like zero. And they have tipping.

So we’ve changed that model and we also changed our relationship with other hosts. So OpenCollective is a platform that has a platform. It has our host, Open Source Collective and Open Collective Foundation etc, but we also enable other not-for-profits to use the platform for their communities… Like the WordPress Foundation, for example, or the .NET Foundation, or Social Change Agency, whatever.

Now we have - I hate myself for saying this, but like an Apple Store kind of relationship with them. If it’s a not-for-profit that they don’t charge their collectives, we do not charge the not-for-profit. If they’re doing this as a volunteer kind of thing, we don’t charge the host. But if they’re charging their collectives, we assume that they’re like a professional fiscal host and we share a 15% of their host fee… Which has really aligned our incentives and other hosts’ incentives really well, and it made a clear proposition. So all of this was last year madness, in the middle of a pandemic… So yeah.

How do your costs scale with the scale of users, or collectives, or donors?

Not a lot, to be honest. 15% is a lot, but it’s also 15% only, and the Open Source Collective has one full-time person and support staff, and it’s for 2,500 open source projects. Now the foundation manages suddenly a 7-million budget in a year, and it has, again, one full-time–

One person.

Double that to 5,000 projects - do you still have one person, or do you have two?

Yes, maybe two.

So not too bad.

Two-and-a-half.

[00:51:44.21] Two-and-a-half, yeah. [laughter] But you know what - the Open Collective Platform actually makes it really easy for us to manage all of these groups… So I guess it depends on how we wanna grow the hosts. For example, we started doing non-monetary asset holding for projects, we are starting to offer employment services for projects… Because we acknowledge that if we are coming into the world saying “We want the community to have economic power, and we want people to be able to make a decent living being paid by the community”, we need to provide the services for that to happen, employment services. Every kind of thing that we add on top of our just bare-bones financial “Get money and spend it” proposition obviously scales our costs.

Right.

But as the groups grow, we are running into more and more this space where they need services for larger kind of projects. You know, legal, trademarks, things like that.

Yeah. The reason I asked is because I thought “Well, if you’re getting 7% on tips, that’d be one heck of a way to scale the user base, is to go no platform fees, completely community-supported, tipped only. I don’t know if that’s feasible or smart, but it just seems like if you wanna be the enabler for more people, reducing those platform fees to zero – I mean, zero is obviously way better than any other number for that, for marketing purposes… Is that something you have considered, or is that just like a bridge too far? Like, it was good enough if we’re in a pandemic, but it doesn’t really–

No, we keep that. We keep that. So for all charitable collectives, our platform fees are zero.

Oh, okay. Cool.

Yeah. It’s just tips.

It’s forever. [unintelligible 00:53:21.18]

It was a pandemic thing, but when we saw that it worked, we just “That’s it.”

Alright, that’s awesome. I missed that part.

Yeah. I agree, I think that zero is the best number for this. We haven’t tried it yet in the open source space, because – like, the charitable ecosystem is very clear. Donors are used to tipping on top, or tipping the platform, or they understand that there are admin costs involved in managing tax-deductible donations and things like that. It’s unclear to me, and I wanna try it. I really wanna pick collectives to explore if this is feasible for the Open Source Collective to move to zero platform fees and just tips. It’s unclear to me yet. I wanna find an excuse like the pandemic for the charitable collectives to be able to try this and see if it works… Because it’s a huge leap of faith to do it.

Yeah. Well, if it doesn’t work, it’s hard to roll that back, you know?

It’s impossible to roll it back without losing your community.

Yeah. Do you think it’s different because of the corporate support of open source? Like, a lot of it is corporations, whereas maybe on the charitable side I’m guessing a lot of it is individuals. But maybe I’m wrong there, too.

I think it works when you have people going to the platform and using their credit card to give a donation. When you have people just wiring money to you, it doesn’t work, because the platform is not – we don’t have a space to offer this.

Right…

There’s nowhere where I can put this “Okay, do you wanna give money to the platform so we can keep offering collectives zero fees?” [unintelligible 00:54:50.02] because you’re Google and you’re sending money to a bank account…

It kind of flies in the face of the funds effort, which is to make it dead simple for these corporations to do it, whereas now you’re making it more complicated again by adding this tipping mechanism.

Exactly, exactly.

Is that platform fee a part of the transparency ledger, so to speak? So when somebody donates, you see it was this +5%, if that’s the number?

…you see that in the ledger?

Yeah, you see that on every transaction. If you click on any transaction, you’ll see donation amount, platform fees or fiscal sponsorship fees. If they have a host, payment processor fees, and then net amount.

I was gonna suggest maybe A/B testing it, versus at an individual level, or an individual collective… Maybe just A/B test, where it’s like “Hey, for this transaction you show the 5% platform fee. For this next transaction, which is just maybe who knows what, the option to do a tip mechanism.” So the current UI you have, just swap between the two and just test 100 transactions and see what the results might be… Rather than doing an opt-in, and involving other humans, and deliberating. Because if it’s all transparent, you could just in that same ledger say “There’s no platform fee, there’s no tip.” Or “There is a tip, and it’s 7%.” It’s very clear in the ledger, that way you can kind of maintain your transparency, as you do already.

[00:56:07.24] Yeah. Or even something like “This transaction has costs for the collective. Do you wanna cover them?” and that’s it. Some very simple kind of thing.

Yeah. We’ve done that, too. Through our shows we’ve donated on hosts’ behalf, and ten times out of ten we’re adding too to cover the platform fees for the donation.

Exactly.

Because we don’t want that organization to have to pay the fee, and we’re appreciative of the person’s efforts with us, and we’re appreciative of the organization and all the work that goes into it… So just as an act of generosity - yeah, sure. Cover the fee, whatever it is, whether it’s $10, $15, or it’s $2. It can be whatever it is; it makes sense. And I think in most cases in this scenario - or I guess maybe a lot of the cases in this scenario - people are generally generous. And that’s the whole point, they’re on this platform to be generous. They’re giving a donation to something, or an attribution to a fund somehow, so it’s an act of generosity already.

I’m gonna try it. [laughs]

There you go.

I’m gonna A/B test that. I was always thinking about this from the point of view of like “I need a collective who wants to try this”, but actually no, we just need to kind of randomly see – you know, put this in front of financial contributors and…

…see what happens.

Someone has to pay for us to exist in the world. It’s either we take the money from the collective, or you can cover it.

Right.

Yeah. And I think in most cases - every case for us, at least, in our example of usage of Open Collective or other platforms - we would wanna pay for the fee, for them to not have to incur it, so that all the money we wanna give them–

Goes to the collective.

…goes for their cause.

See, it’s funny, because when I’ve done it – I’m maybe on the [unintelligible 00:57:42.22] because I always say no, because I just want my round number. Like, I’m giving $200… I don’t wanna give $205, or $203,75… I like the round number, so I’ll just be like “Meh…” But maybe I’m just being selfish.

Our A/B testing [unintelligible 00:57:56.02]

Okay, so Jerod will be a zero, and I’ll be a seven percenter.

As long as I can round up from $200 to $250 - fine. But if it’s $203.75 - like, who wants that on their ledger? I’m just a round numbers kind of guy. [laughs]

I get that. I actually get that.

I can appreciate that.

Yeah, me too.

I’m the person at the gas pump, trying to get the exact –

Yeah, pour in a little bit more…

Yeah, just like top it off… 75 cents? Fine. 76 cents? There’s no way I’m stopping. I’ve gotta go to a round dollar.

I have my guinea pigs here, folks. I’m gonna send you links in like two weeks.

There you go. Here’s your A/B test. Adam’s A, I’m B. [laughter]

Exactly.

Funny. Well, that’s cool… You’ve gotta report back your findings.

I will report back.

That’ll be fun. Anything else we haven’t talked about that’s fresh and new? Your mission - you’ve talked about it. Anything else? Ben Nickolls - new executive director. Shout-out to Ben, of course… Anything else we should talk about that we haven’t asked you?

No, I think – maybe just to mention that the Sustain community, even if we don’t have live events, is still live and thriving in Discord, and also our fabulous working groups that come out of Sustain events are still ticking along. We are hoping we’re able to do a face-to-face event early next year, hopefully… But yeah, that’s still happening. We have our own podcast, which we should totally invite you guys on…

Totally.

Sustain Podcast, that is hosted by Richard Littauer and a heap of panelists that rotate.

So yeah, it’s good.

What’s the touchpoint for that community? Or what’s a URL, or a place to go?

SustainOSS.org is the website, and hello@sustainoss.org for “I wanna be on the podcast…!”

Awesome. We’ll link that up in our show notes for folks who wanna click through… Well, Pia, thanks so much for coming back on the show, all the hard work you’re putting into Open Collective, and the greasing of the skids that you’re doing to help get more money into the hands of maintainers… Obviously, an effort that we are proponents of and advocates for, so we’ll continue to point people to Open Collective as they look for ways of sustaining their open source work. You keep doing what you’re doing and making that easy and enabling folks to give and to get, and to do awesome stuff.

Yes. Thank you for having me again. It’s been great. I had a really good time, and also I’m going back with good business ideas, so… There you go. There you have it. [laughter]

There you go. Good to have you, Pia. Thank you.

Thank you.

Changelog

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