kvinogradov

We explicitly explained to the IRS that our endowment plans to make awards and grants to individual OSS developers and maintainers in the US and other eligible countries. Given our limited target scope — not just any software, but critical nonprofit independent OSS — it was acceptable, and the IRS approved our 501(c)(3) status. And we plan to operate within what is described in our application.

We don't require a membership to participate in GitHub discussions, but it is required to be invited to closed events and to be part of the OSE governance.

The global average salary of a software engineer is $5,906/month, and the OSE membership is $83/month ($1,000/year), so it would require donating ~1.4% of gross income. This aligns fully with the 1-2% of income that an average U.S. individual donates every year, and we are targeting more senior engineers, not the average ones.

So it is affordable for our target audience, but requires some personal commitment. To be efficient in the long term, an endowment must be managed by people who have skin in the game.

It would also be irresponsible to have people who can't or don't want to personally donate $1,000 to our cause, or people outside of the tech industry, managing a multi-million-dollar community fund focused on solving a pretty niche industry problem. Otherwise, the endowment ends up being as efficient as a typical government!

It can be a recurring grant if a target OSS project continues to be highly valuable, but risky. When it loses value or is derisked (e.g. by extra funding), then grant priority will naturally move to another project.

There are areas where we experiment and take risks: raising the first-ever endowment for open source, making it very lean and digital-first, relying on bottom-up funding and governance instead of large corporate donors, etc.

But all other areas should be as low-risk as possible — like accounting, legal, and investment management of a community endowment fund. We are exploring a few ideas on how to grow the fund faster than the market without increasing its risk profile, but they are complementary to a very conservative core strategy.

Besides OSE, I am a full-time VC — that's the area where investors are bold and invest in off-norm opportunities, but it lies on the totally opposite side of the investment risk spectrum. And directly mixing them does not seem like a good idea.

Software has its own lifecycle, and the funding should not stick indefinitely to a specific project. Meanwhile, our grant format might evolve into some type of limited tenured positions for maintainers, which support the most critical yet risky projects. But this target scope should be dynamic and adapt to the market—global consumption of OSS; otherwise, we may end up maintaining COBOL in 2100...

“super minimal that requires less management and operating costs” - that’s exactly our current setup, and always will be the target!

Now OSE has no paid employees - the team is 100% volunteers. Its Board Directors and the Executive Director are required to personally donate $1000+/year. Operating costs are close to zero.

As organization evolves there might be higher operating costs, but our commitment to keep them as low as possible.

Now the Open Source Endowment is a very small organization that starts with ~$5k microgrants. It is not enough for a living but still should help maintainers not only financially but also by allocating attention.

As it grows bigger, the grant size will also grow. One can help with this by donating and bringing in new donors!

OSE has a diverse community of donors, and most of them are not even close to that net worth level. Around 75% of our donors contributed in $1-200k range. We think that every donation matters, and hugely respect everybody supporting open source.

May I ask what it’s the right share of net worth one should donate to OSS? And what’s this share in your personal case?

Sure - we donate our own money to this endowment fund and carefully choose partners who have a solid reputation and can deliver maximum efficiency. I don't think we will have any of them in former socialist countries,except for those based in Berlin :)

The explanation is simple — nobody can predict exact annual returns, and they tend to fluctuate. We aim to spend at least 5% per year on OSS grants and need to decide if we can spend more on them or should reinvest based on specific annual results. And target earnings should overcome inflation.