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Pros & Cons of non-profit associations in the open-source development sector

Backing an open-source project by founding an association can be a good idea. But does it work out as an answer to all financial questions or can we find better solutions for certain issues?

Estimated time to read: 7 minutes
Translation from the German original: Colin Hasenau

Two's company, three's a crowd

four or more is an association

As already described in last week's article Free as in "Free Speech", one option for the funding of an open-source project is a non-profit organisation that takes care of the financial and legal matters of that particular project. For the TYPO3 project this has been done more than a decade ago, when the TYPO3 association was founded in 2004.

While having an association with members and fees on the one hand is a good idea when it comes to legal issues, strategical planning and official representatives for the project, on the other hand it might be at least questionable as a credit instrument for extension development.

It involves a lot of bureaucracy, takes too much time to take instant decisions and leads to a lot of unnecessary disruption especially when it's about negotiating the budgets between the different applicants, since in most of the cases there is not enough budget to please everyone.

Audience with speaker in front of a big screen

Daniel Hinderink gave a talk about the lessons learned at the TYPO3 conference last year that clearly pointed out some pitfalls induced by the structures of this association and the way they had been established. Still having the association as one option to finance TYPO3 extension development seems to be reasonable, so this is our topic for today.

Companies that are willing to share, to withhold in order to further the growth of the company, willing to try to get a better atmosphere through a demonstration of democratic principles, fairness and cooperation, a better product, those will win in the end.

E. O. Wilson

Once upon a time

The TYPO3 association (hi)story

When it was founded in 2004 the original task of the TYPO3 association was the financial coverage of Kasper as the inventor of the project and the official head of development. Since the software was made available to the users for free, it was possible to found a non-profit organization for that purpose, so that money could be collected via member fees and donations.

After Kasper had resigned as the chief of the TYPO3 core team in 2007 the budget was split between two teams. The original TYPO3 core team lead by Michael Stucki and another team lead by Robert Lemke that was supposed to take care of the refactoring of the TYPO3 core with the working title "Version 5", which was planned as a complete rewrite from scratch.

Several positions that were crucial for the assignment of the budgets were covered in personal union by beneficiaries of the applied budgets. Moreover just a few developers were actually fully paid for their work on an hourly base, while the others just got their allowable expenses reimbursed.

King Kasper retires
Video: King Kasper retires

During that phase there was merely a supervision regarding the results of the "Version 5" team, which is why the development was permanently prolonged over the years and finally ended up in the NEOS project. This lead to resentment among the members of the association and subsequently to a rearrangement of the internal structures, thus the Expert Advisory Board EAB and the Business Control Committee BCC were introduced.

In the end the sponsor's lack of trust into the new product lead to an official break between the TYPO3 association and the NEOS team, which now has found its own ways to finance itself. Thereby much more funds are available again for the TYPO3 core team and other projects which accelerated their development process.

Still this is the reason why working hours paid by association budgets are kind of frowned upon.

Enabling people to share

An incubator for extensions

One of the main merits of the TYPO3 association lies within the realization of the TYPO3 motto "Inspiring people to share". Over the years the association contributed to the initial funding of different projects by paying for all out of pocket expenses of meetings, code sprints and other tasks.

When you're surrounded by people who share a passionate commitment around a common purpose, anything is possible.

Howard Schultz

This absorption of hotel-, travel and subsistence costs made it possible for people interested in development to get started in the world of developing extensions because they didn't have to carry any costs beside their own work. Partly the participants even donated their part and didn't need reimbursement by the budget.

Since a lot of developers are taking part in the implementation the association was able to contribute to the establishment of extensions like Gridelements or Fluid Powered TYPO3 which are able to get by now without the association budgets. However the application and assignment of those budgets is a long and bureaucratic process.

From seed to sprout

Applications have to be filed, budget plans have to be written, surveys have to be started and evaluated as well as allocations that have to be carried out and costs that have to be booked and checked concerning the common public interest. Moreover the allocation of the budgets happens only once a year and the assigned amounts are far from being the annual revenue for a developer.

Scattered propagation

How to deal with underfunding

The problem the TYPO3 association has to solve in its current state lies in the low volume of donations and membership fees. The TYPO3 system itself through the use by enterprise level companies generates an estimated revenue in the 3 digit millions, but sadly only a fraction of that goes into the budget of the association.

Each year more applications get submitted than the association with their own budget could ever pay for. With that in mind the fair distribution of the money proves to be difficult since there will always be people whose needs cannot be considered.

Because of that the situation for the members of the expert advisory board every year is the same. Money that would have gladly been spent on specific projects is badly needed somewhere else. That's why a lot of applications in the past years got at least partly funded with the budget of the TYPO3 core team.

On the one hand this ensures that the development of extensions is done in close collaboration with the core team, but then again this is the reason for questions being brought up about the voting and the assignment process, because applicants and voters both feel disregarded compared to others.

Watering flowers with a ewer

Another problem caused by the low income of the association are the relatively low hourly rates which are paid as a maximum in line with an association budget. In a lot of cases paid working hours are not even approved. Therefore it is still difficult to make a living with such a budget in the current situation, although this once was the original goal of the association.

TL;DR - Conclusion

An association could be a financing option for TYPO3 extension developers, but does it work out?

The TYPO3 association as a non-profit organization funds a lot of activities within the TYPO3 community. It serves as an incubator for extension projects and enables them to grow in popularity.

Since there is generally not enough money for all budget applications, the propagation of the money is scattered between applicants. In most cases enabling costs are paid, while the work itself if at all only gets paid with low hourly rates.

That's why association budgets are less suitable to make a living out of developing extensions in the TYPO3 universe.

Jo Hasenau