Open Collective Launches New Way to Support Open Source through Public Stock Shares

It’s no secret that companies are making loads of cash using open source technology. A 2021 survey of 1,250 IT leaders commissioned by Red Hat found that 90% are using enterprise open source software. Following the trail of major acquisitions (Red Hat at $34B, GitHub at $7.5B, and MuleSoft $6.5B), it’s becoming more common to see companies built on open source valued at billions of dollars.

With so much invested in open source infrastructure, many companies will assign employees to work on specific important issues for the projects they depend on, or hire them to support these projects full-time. This is an effective way to support maintainers when it works out but sometimes projects need to be able to funnel support to those who can further the software but who don’t happen to work for one of these corporations.

Open Collective is exploring a new way for individuals and companies to give back to the projects they use by donating public stock. The new initiative is called Open Stocks. It allows donors to support open source without having to pay capital gains tax on the appreciated amount of their stocks, which is up to 37% for those based in the US. They receive a tax write-off at the current market value of the stock. Donating some of those profits is one way to lessen the tax burden for capital gains while keeping the open source software alive that made the public stock possible in the first place.

Open Stocks is using Overflow, a VC-backed philanthropy platform, to streamline the stock donation process, which may have the potential to increase the average donation amount for open source projects. The startup claims “the average stock donation through Overflow is 47X the average online ACH/debit/credit donation.”

Here is how it works: Donors select the open source collective they want to support and then proceed to the checkout process, which happens on the Overflow website app. Donors are asked to connect directly to their brokerage account by authenticating through the app. The Open Source Collective team will receive the donated stock converted to cash and the cash is then transferred automatically to the specified project’s balance with a public contribution notice on their page.

It is not very clear up front for donors what fees they will have deducted from their total donation. Open Collective did not publish this information, and it wasn’t available on the Overflow website. Open Collective co-founders were not immediately available for comment on this.

All currently-registered collectives are automatically able to receive stock donations. The announcement hints at future support for non-traditional forms of payment:

Stocks and shares are a huge part of the economic power of traditional geopolitical structures, and while we believe that equivalent access to those structures is a positive move for the communities we support we can’t ignore that the world is changing… how we embrace and organize around that change may have an even bigger impact on our work. 

Open Collective co-founder Pia Mancini confirmed on Twitter that donation via cryptocurrencies is next on deck for the organization in its efforts to support open source creators.

Towards An Ad-Free Web: Diversifying The Online Economy

Money talks, and there is an awful lot of money on the web these days. That is not necessarily a bad thing in and of itself, but it does seem to have hamstrung how websites are designed and financed. The pandemic — and the consequent collapse of an already warped online ad ecosystem — makes it all the clearer that the web needs to diversify the way it makes money, and who it ultimately serves.

State Of The Web

The Internet is not in the best shape right now. Back in 2017, the founder of the World Wide Web, Sir Tim Berners-Lee, said:

“The system is failing. The way ad revenue works with clickbait is not fulfilling the goal of helping humanity promote truth and democracy.”

I think it’s safe to say things have largely gotten worse since then. Ads everywhere, tracking run amok, clickbait, misinformation, net neutrality under siege... engagement is king — more important than nuance, ethics, or truth — because that’s where the money is. The average user sees thousands of ads per day. The World Wide Web isn’t exactly humanity’s shining light right now, at a time when a whole lot of things are compounding our general sense of inescapable doom.

In the midst of this dog-track-dog online culture, the common website has been browbeaten into meek, insipid husks of what they could be. Can we get another ad in there? What about a few more pop-ups? Maybe a few affiliate links. We’ve all experienced the insidiousness of the modern web, we’ve all seen the pop-ups saying ‘We care about your privacy’ before asking us to sign away our privacy. One tires of being lied to so often, and so casually.

Still, I’m not here to complain. At least, I’m not just here to complain. There are flickers of light in the darkness. There are other ways to pay for websites. It’s just as well too because legislation will catch up with the wild wild World Wide Web eventually and then ads will be worth even less.

That’s what this piece is about: alternatives, and why they’re worth embracing. There will always be ads, and up to a point that’s fine, but there shouldn’t only be ads.

Further Reading

Exploring Alternatives

Not every website needs to make money. Let’s get that out of the way. Making money is not the measure of a thing. Not every website needs to care about cost. Hobbies, blogs, forums, digital art… plenty of things are worth doing for their own sake.

This article is directed at sites or web apps that offer some kind of service, with operational costs and long-term financial factors that extend beyond a few dollars on a domain name. This article is about widening the horizon of the online economy beyond ads, ads, and more ads.

Subscriptions

This is probably the most obvious alternative to ads, and trickier than you might think to implement. The principle of it is simple: a website does something of value and asks users to pay for it.

A major advantage of subscriptions is their simplicity. Want X? Pay for X. More and more people are wising up to the fact that few things online are truly free. More often than not when an online service is ‘free’ its users are the product. A valuable service reasonably priced is a welcome antidote to that.

A high profile example of this is Medium. Signing up for a few dollars a month gives members access to articles. It’s an increasingly popular approach in editorial circles. Some publications, like The Guardian, make their content accessible to everyone, while the likes of The New York Times use a paywall. In either case, the pitch is the same: help make what we do possible by subscribing.

Smashing itself does this well, having pivoted away from ads during the big site redesign a few years back. Ads still play a big part, yes, but they’re not the only part. Sustainability online isn’t about moving all your eggs from one basket to another — it’s about variety, about escaping the tunnel vision of advertising.

There are examples of subscriptions and donations working away from editorial contexts. Lynda charges for its courses. Wikipedia, mercifully, is ad-free, sustained by intermittent donation drives to its parent organization, the Wikimedia Foundation.

The subscription approach isn’t for everyone. The above examples all happen to be household names, after all. Strange that. Trust is such a big factor, and if you’re new on the block how many people are likely to give you their moola?

And, of course, there is also the Catch-22 situation of paywalls making a site inaccessible to most of the Internet. It’s bad for growing an audience and at odds with the web’s founding spirit of openness and transparency. That doesn’t sit well with a lot of people — including myself.

I think the saving grace here is that the ‘subscription model’ is much more of a spectrum than it was even five years ago. You can have everything from paywalls to ‘buy me a coffee’ buttons depending on what a website does.

If you provide a service — be it quality editorial content, useful tools, open access to data, or whatever else — don’t be shy about asking for support. And don’t be shy about incorporating those requests into the website’s design. A variety of tools and platforms can be integrated into existing sites with relative ease. Patreon, Ko-fi, and plenty more.

This is not about making people feel guilty. Not everyone can afford to support the sites they visit, and not everyone will think you’re worth supporting. It’s on you to make a positive case for yourself. Crowdfunding platforms like Open Collective and Chuffed are especially good reference points for this, modeling behavior such as:

  • Not making visitors feel guilty;
  • Telling stories people want to be part of and support;
  • Transparency about where the money’s going.

There is also the question of integration. Buttons, pop-ups, prudently placed CTAs. It all adds up, having started and pushed a reader patron scheme at a previous job.

Further Reading & Resources

Micropayments

It’s early days for this one, but something to keep an eye on. Web Monetization is a concept whereby Internet users have a kind of fund they top up regularly — let’s say $5 every month. When time is spent on a site, a fraction of the fund is transferred to that site.

The Brave web browser is a major example of this. Another is Web Monetization, which is being proposed as a W3C standard. Or Scroll, a kind of catch-all ad-free web package.

This approach seems to have struck a nerve, I think because it hits a balance between a Wild West Internet and a corporate one. The more people believe in it, the better it works. Three billion people use the web. If 10% signed up for three bucks a month that would still be a cool ten billion dollars up for grabs.

For the time being results are closer to pennies. But hey, nothing worth having comes easy. Supporting this approach is a two-way street. Depending on the system, implementation can be as simple as adding a line of code to the <head> of your website. It’s also a case of walking the walk.

Will this approach alone save the Internet? Probably not, but again, moving away from ads is about diversification, not finding a silver bullet.

Free, Non-Corporate Platforms

Now obviously, free platforms are not the answer to large-scale applications and web experiences. They are, however, often a perfect way to have an online presence without being sucked into the engagement black hole of modern social media.

Places like Neocities — a homage of sorts to GeoCities — still have a lot of life in them. I know, I’m on it. Independent, playful non-corporate platforms feel like something from another time, but they’re still perfectly good ways of planting your flag online.

It seems marketing has hammered into people that the only website worth having is one you’re paying through the nose for. Not so. The DIY weird web is alive and well.

With the likes of Netlify and GitHub pages about it’s perfectly possible to piggyback along without paying for anything more than a domain name, and even that is optional.

Of course, there is a limit to this kind of approach, but that doesn’t make it any less viable. By the time a website is bringing in enough traffic to warrant a dedicated hosting plan, it’s likely well placed to be asking for support.

Further Reading

Taking Control Of Your Data

All this talk of diversification and sustainability ties into a broader discussion going on right now about privacy. Half the battle is messaging. Although awareness is growing, a lot of people still don’t know about the costs of ‘free’ online experiences. That’s not an accident. Take the time to explain that if someone subscribes to a website’s service, they’re not just receiving the service. They’re receiving priority, respect, and privacy.

Advocating for a less ad-centric web means taking an honest look at who our masters are online. When you make a site, who is the site for? Is it for advertisers? Affiliates? Clients? Or is it for the people visiting the site? How lovely would it be to have robust, ethical income strategies that made websites beholden first and foremost to the people who use them.

The Role Of Developers

In a line of work where projects are increasingly fragmented, it’s easy to remove oneself from the moral failings of any given project. Edward Snowden said the same was true of the NSA spying programs he leaked in 2013. Just this year he identified social networks and apps as carrying similar risks.

Incorporate sustainability into your designs. Communicate what you do and how you survive and what people can do to help. Progress does not happen on its own. It never has and it never will. We have to be the change we want to see.

FOSS Responders Group Brings Financial Help to Open Source Ecosystem Affected by COVID-19

The pandemic has caused economic hardships and upheaval in nearly every industry. Open source communities and contributors have been affected in a myriad of ways – whether it’s a loss of donations, the burden of nonrefundable travel expenses for canceled conferences, or severely diminished business and fundraising opportunities.

FOSS Responders is a working group of volunteers that aims to future-proof the open source infrastructure we rely on by helping sustain those who maintain the software. The group’s website allows those in need to apply for emergency funds. FOSS Responders is raising money on Open Collective and 100% of donations go to open source technologists in need. So far the group has an estimated annual budget of $8,145.05. Open Collective is also waiving its platform fees on COVID-19 solidarity collectives until the end of June.

On May 22, FOSS Responders plans to host a virtual funding event to provide financial support for organizations affected by the profound economic disruptions caused by the pandemic. Organizers have a $5,000 goal for ticket revenue from general event ticket sales.

In addition to providing emergency funds, the FOSS Responders group is aiming to address non-financial needs. Open source projects that relied heavily on events for fundraising need help amplifying their projects and recruiting volunteers. FOSS Responders is also creating a Resource Center for projects to find tips and tricks on how to manage fully virtual community interactions and events. Anyone with a skill or service to volunteer can get in touch on the FOSS Responders website and the team will work as matchmakers to connect experts with projects that need help.