A new funding model for open source software

1. I would like to make a little bit of money from my open source projects. I like money. But if no money comes ... that's okay too. It won't stop me coding for fun.

2. I write open source code because I enjoy the freedom to work on what interests me, and I can devote some time to it. I expect many developers would like to contribute to open source but can't; they have to put their time and effort into other areas of their life.

People are weird. They often do stuff without the need for an incentive to do it. Code up a pet project, write poetry or stories in their diaries, build an entire constructed world that nobody else will ever be interested in - all just for the fun of it.

The biggest two issues are that anything related to finances is heavily regulated, and that third-party services integrated into repositories/blogs/posts create lot of friction for users. It should come down to 1 button: donate fixed amount immediately. It's easy to press that button few times, or to press the button every time you update to new version. Simple is good.

One way around regulation would be for each online service to have a independent credit system. Like karma, but you can also spend it to reward others. Communities would reward each other for creating content. Independent entities could offer to exchange your GitHub credits to Reddit credits. Those entities could also handle exchange to and from actual money, with credit card fees and necessary financial regulation isolated to just those entities. Let the market regulate itself.

This doesn't sound like a way for open source projects to get money to me. It sounds like a way to get thousands and thousands of bad developers to spam me to support their tiny open source no effort project. For them to fork someone else's project and ask for money for their fork. etc...

Note, a similar thing already happens on patreon where people ask for support for their piracy activities. They run a blogspot blog with pirated movies/anime/porn and expect you to sign up to support them on patreon for helping you pirate stuff.

Basically the easier you make it collect money from random people the stronger the incentive is for bad actors to try to get some of it. I don't have a solution but in my defense I do sponsor 3 open source projects at $!00 a month each. But I'm sure my money is going to people/teams who are really dedicated to their project and not just one hoping for some coffee money for their tiny thing.

Whether you're donating to one person, one project, or a pool of projects, the business model just doesn't work out.

We actually planned on a wallet approach early on, and still consider it the superior option in many ways Not all), but we're launching with a monthly charge model because holding money is more complicated legally. To avoid higher fees for microtransactions, we're delaying donations until they total high enough to keep fees below 10%, then doing one charge for several months (ie, charging in arrears).

You don't need a wallet approach to do one-click, though. Just the ability to do many:many charges, which several payment platforms support (usually under "services for ecommerce platforms", like Stripe connect, if I'm remembering the name correctly). That lets you send one bill to each patron that totals their donations to projects, and one paycheck to each project, that totals all the individual donations from various patrons, avoiding a fee per patron-project-month combination.

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Broadly, we don't agree that friction is the core barrier to donations (although lower friction certainly helps!). Instead, we think the barrier is people's reluctance to be the first to donate. Colloquially: people would pitch in if they knew it would lead to enough funding to be useful (ie, actually pay full time developer salaries), but nobody wants to be the chump wasting their money on 2 minutes of developer time per month (which will really be 0 minutes per month, because you can't hire 0.01% of a developer). That's why crowdmatching donations start small and grow as more people support the same project as you.

Coming back to the article, I'd argue that both big and small projects alike have trouble soliciting donations from individuals (for the reason above). The difference is, large infrastructure projects can solicit funding from large companies that depend on them. These companies can donate enough money to single-handedly make a difference, so there's no coordination problem. Consider LibreOffice: they're a large project, and their potential audience is even larger. But, their primary benefactors are end users, and they struggle to make ends meet.

Snowdrift.coop won't address the small-project funding issue right away, since in order to actually get launched some time this decade we're restricting our initial scope to large projects with the potential to really change the software landscape if they were well funded -- but we do want to expand our focus later, both to smaller projects and areas outside of software, like journalism, music, and research, which suffer from similar coordination problems.