How to facilitate sponsorships for open source projects

Cool. Welcome. Super happy to be here in Porto. Beautiful city. Really, really beautiful city. My hotel is ten minutes away. I got it on Google Google Maps by distance I should have gotten by elevation because it's it's ridiculous. So uh this talk is going to be very practical. My goal here and my audience is going to be mostly for open source maintainers if you have a project that is even like mildly successful, I want you to come out of this talk and be able to um to sort of facilitate uh the sponsorships from uh facilitate corporate sponsors in general. Make it as easy as possible for them to give you money.

And I was already introduced a little bit. I'm a consultant, I'm a developer, I'm a consulting CTO. Uh I've been on computers since I was a kid, programming since 04, open source since 06. I I was on Django 096, 96 I don't remember, but it was right around the time of the 1. 0 release, yeah. My first public open source contribution was on the Wine project. I don't know if you're familiar with it. It's like a Windows re-implementation for Linux. And uh my last startup was actually founded out of an open source project. DJ Stripe is corporate sponsored by Stripe and uh through that and through previous previous experiences I've learned a lot

and I want to share some of them. And I want to start with a story about OpenSSH. Uh you might have heard about this. It was in the news and it was a few years ago. In about 2013, uh Bob Beck from the OpenBSD Foundation Uh he he sent out an email on the OpenBSD mailing list uh and he was saying we don't have money to keep the lights on. Uh and they they needed twenty thousand dollars. Uh they resent the same email in twenty fourteen. Uh and it was huge. It was in it was in the news and eventually I think like Microsoft stepped up, Google stepped up, like there were there were some contributions that flowed in because OpenBSD uh they maintained the OpenSSH project.

Uh quick show of hands Who here uses OpenSSH and needs it at work? Who would be critically affected if open is uh open SSH were to disappear? Now another show of hands. Who contributes to it? Who contributes money to it? Alright, I I I think I heard some cricket. It's okay. It's hard. It's hard. I'll I'll show you why it's hard Uh because let's say you're inspired uh after this talk and you want to I don't know, you want to go see your CEO, you you you tell them Hey, like we critically depend on OpenSSH. If it were to go away, we would like die. Let's contribute money to it.

Your CEO, they hear you out, they they go, they Google, this is what they find Uh this looks like a fishing page, first of all. And there's more issues. Uh the the first issue is Uh the first i the first issue is is just some PayPal links. There's some crypto addresses lower down, by the way. Uh there's an address to send a check. Um it's not very practical. to to get a uh to get a receipt, you have to email the directors, you have to talk to the directors, whatever that means. That's going to be a lot of administrative work. Okay, no good And uh on top of this, donations

are not tax deductible. So there's no there's zero given incentive for a business to contribute. Now Why don't donations work for companies? You might have heard this, uh but This is why. This is right here your competition when you ask for donations. A company at the end of the year, they're going to look at their budget. They're going to look at uh their profits, they're they they're going to want to optimize them a bit, and they will have a donation budget. And that donation budget will get spread a little around various charities. Usually you need to be tax deductible in order to get into

that budget. Again, because of tax optimization. And your competition there, it's going to be the EFF, the Red Cross, the Médecins sans frontières. um it's not going to be easy to get there because well you're competing with cancer so uh your project is just yeah they're not gonna make the cut Uh instead, sell services. If you sell something, you're no longer in the donation budget. You're in the development budget. And it's very easy to get there because If uh if we're talking about a tech company and your project is uh like a critical part of their stack or just an important part of their stack, it's very easy to get there

by uh for example selling uh tech support right nobody in the world is better than you uh to give tech support for the code that you wrote Um and if you if you if you save the company like a couple uh couple hours even of development time, it's going to be already worth a lot for them. So it makes it makes complete sense. Let's talk about what you can sell. Um as I said, support, right? Tech support can be priority support. It can be uh things like uh if you file a GitHub issue I will I will look at it first, I will address it first, uh high priority It can be uh I'm going to give you my personal email address and give you an SLA on it, like uh

I guarantee a response within like two business days, for example, something like that. uh you can amp it up, g give them like your phone number. I have done that. Companies can pay a lot for that. It can also affect personal life, so make sure you put boundaries, strict boundaries on that. You can sell video calls like pair programming and all of this work works really nice for like a monthly recurring uh recurring subscription, recurring tier. Another model is selling contract work. This works well as hourly or weekly work And that can be like I'll customize my open source project, uh I'll add some features. Those features maybe they can be proprietary

or you You can also like uh sell some work under like a different license. Uh you can integrate with god knows what enterprise software they use. Uh Or you can just help them set up your software, your library, your whatever it is you're building, help set it up or integrate it with their stack. or upgrade it after a painful migration, for example. If you don't want to do any work, if you if you don't want to do any development work for uh for companies What you can do instead, uh, and you won't get into the development budget for that, but instead you can get into the marketing budget by selling what amounts to ad space. You might have seen this on GitHub

uh a readme with like these are our sponsors right uh I'll put your logo here on on a readme in our documentation maybe you have a we are hiring page uh uh maybe you want like to put that in in the documentation. I I think uh read the docs uh does that actually Let's look at how uh how to sell what you need in order to be able to sell those sponsorships Three things very important. Somewhere to handle payments, somewhere to showcase the sponsorship benefits, and a way for you to declare the income, to make it all legal.

Somewhere to handle payments, so that means taking plastic with a master card and uh generating invoices and receipts automatically so that you don't have to do any manual work for this. Uh showcasing sponsorship benefits that means like a tiers page, right? Patreon, GitHub sponsors, you've seen it. And declaring declaring the income. I'm not going to go in depth there because this is different in every single country. What it amounts to is uh you register you can register either an independent activity, which is often uh going to be highly taxed or you can create a company for it which is a lot more management, it's more expensive, but it comes with lower taxes, it can be worth it if you have a lot of sponsors or a lot of clients or just additional activities.

Uh check with your employer as well by the way because all of this uh if if you have full-time employment it can uh it can conflict with your contract. I'm not an accountant, I'm not a lawyer, talk to Um you you've seen GitHub sponsors, I'm sure. Uh very easy way to get 90% of the way there. They offer most of this. They are well established, people trust them, companies trust them, they have they will have no problem putting money into GitHub and it's really well documented, they have excellent support uh they they will help you uh get set up. They're great. What I want to talk about today is less known and I want a quick show of hands of who's familiar with Open Collective, please

It's about like a third, maybe less of the room. And Open Collective, they predate GitHub sponsors, I believe. And yeah, they they market themselves as a legal and financial toolbox for grassroots projects. This is this is beyond open source projects. Uh but they're quite popular for open source projects as well, and they have a collective specifically for open source projects. Uh this is going to be especially relevant if your project has multiple maintainers. Uh because there can be questions about how to how to share money from like how to do the expenses, how to distribute and so on What open uh what open collective has, and we'll look at our prerequisites from earlier, we needed somewhere to handle payments, right?

So they have uh many payments method many payment methods including crypto if you care They take both anonymous and public contributions. They will generate invoices and receipts for you. They will handle all of the financial side there. We need it somewhere with our sponsorship tiers. They have a great editor for that. You can do however many tiers as you want. And you can also showcase uh your your contributors, whoever has contributed publicly. And we also needed a way to declare the income. They will assist you there by uh via their fiscal host system. We'll get into the uh we'll get into details in a bit.

Uh you'll have a dedicated bank account, you'll have a dedicated uh card even if you need that and all the reporting tools you need uh for uh for your accountant they're going to be super happy. Expense filing for like Drive-by contributors for example, uh if you want to set up a bug bounty, all of this is fantastic. By the way, I'm not affiliated with Open Collective, I'm a huge fan, I'm a user of them. But this will be a lot of fanboying uh for the rest of the talk. Uh bonus features, like I said, virtual cards. So the advantage here is you don't have to spend time doing like You pay twelve bucks a month for

twelve bucks a year for your uh for your domain name. You don't need to expense report that, you just use a card, for example. The expense approval system, like I mentioned, they have a public ledger. So this is really, really useful if you have contributors uh if you if you have a community that wants to see where the money goes uh it's really important in order to build trust that I don't know you're not buying a yacht or something And they finally they they integrate with GitHub sponsors. Uh I have done this. The the money can flow in from GitHub sponsors, so that can be your primary page and uh you can redirect it to open collective where they will handle all the legal and financial side and that's fantastic.

Uh they it just shows up as like GitHub sponsors being a contributor. They're fiscal hosts, like I mentioned earlier. They are entities which are often registered charitable activities. That doesn't necessarily mean tax deductible, but we'll get into that later. They have a dedicated billing address. They will give you your own bank account, your own bank account numbers. Uh and for for all that they take a cut. It's worth it. It's worth it. Uh I have no doubts about it And I have seen many companies themselves use Open Collective to to sort of handle all the

uh open source sponsorship aspect of it, including Airbnb , I think where they take like ten percent and it's out of like massive grants. Um and I wanna do a quick demo of uh Open Collective very quickly just to kind of show you what you'll be dealing with. And I One moment There we go. This is not very visible so

Okay. What we have here is Open Collective. And this is the open source collective. They host many, many projects. How how well can you guys see uh from the back? Like all good, yeah. So they they host many projects. You can see Webpack here, for example, Destiny Item Manager, OBS, all of those they use Open Collective. Earlier I took uh I went into the open source collective, this is how you would apply, and I chose a project. uh F-Droid. Uh the use Open Collective. And I I just went into it to kind of see like

what does this look like. They have an annual budget. All of this is public. These are their various sponsorship tiers. And they have their public list of contributors. And uh they also have uh a place for news and yeah, their budget. So the budget is going to be uh It's going to include all all of the incoming uh all of the incoming money and all the outgoing money. So if we dig into that We can see like all their donations and also how how they are spending the money.

So here for example we can see that uh somebody I can't quite see. Yeah, somebody took in uh 3. 6k for uh I think building a feature. I'm not sure what this is and we can uh we can go into it And uh sort of see there's an expense approval process. You can have multiple approvals required for contributors, you can have multiple people approving those. I can't stress how useful this is for multi-member projects. We use it at DJ Stripe. And it's it's a great way It's a great way of uh uh just making all this public and building trust.

As you can see on DJ Strep we don't really have tiers on Open Collective because we do that through GitHub sponsors. which is going to be just here and all the money will flow in through Open Collective. And that's the demo. And that's that's it for now. Uh I I'm open to take questions if uh if anyone has any.