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Grassroots Fundraising for Open Source Software

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By now, you've heard of Diaspora, the Kickstarter-funded effort to build an open, privacy-minded alternative to Facebook. In recent weeks, helped by a widely-circulated New York Times article, the project has raised over $180,000 from 5,000 backers. Considering that the project, while well-thought out by four undergrads at NYU, has not produced a single line of code, these figures are surprising to say the least. But hoping for the best, assuming that this project does deliver something tangible and useful at the end of the summer, it would inform a workable funding model for open source software projects.

Righting a Wrong

Since 2003, Internet-based grassroots fundraising has had a major effect on presidential campaigns. Think of Howard Dean with his bat, Obama's record-breaking numbers, and the moneybombs of Ron Paul. Surely, donors to those campaigns knew that their contributions would provide a direct benefit to their preferred candidate. But beyond that, donors felt their money would help the nation as a whole. They were donating for a greater purpose -- something beyond their own self-interests and the interests of the candidate trying to win an election. They were convinced that the country was off course, and giving money to their favored candidate would right the ship.

In that light, maybe the wave of money donated to Diaspora isn't so surprising. The recent negative attention Facebook has received around privacy and information sharing have left many disenchanted. Some have even gone so far as to delete their accounts. So, when Diaspora comes onto the scene as a direct antidote for those who feel icky about Facebook, people respond. In what may a bit of unintentional brilliance, Diaspora's Kickstarter Pitch tosses around what are effectively code words in "GPG" and "AGPL"; dog-whistle politicking at its finest.

In the Ruby world, a similar situation occurred in March, after it was announced that Ruby on Rails would not be a Google Summer of Code project. In fact, no Ruby projects were chosen, in stark contrast with previous years. Many felt that Ruby was being slighted. Within a week, the community rallied around it's own project, Ruby Summer of Code (RubySoC), and raised $100,000 to fund 20 distinct open source Ruby projects over the summer.

What's interesting about RubySoC is how the money was raised, because it mirrors political fundraising to an extent. A dozen companies donated the "maximum" of $5,000 to fund a full project, while eleven more chipped in $2,500 to fund half a project. Together, twenty-three companies accounted for $87,500 of the $100,000 the project needed. About 150 more individual contributors (yours truly included) donated the rest, at varying amounts.

The Diaspora contribution page is a bit more opaque when it comes to exact amounts, but does give a good sense of donation levels. About 4,000 of the 5,000 donors so far have given less than $50, with four donors giving $2,000 or more. The average donation amount to Diaspora is $35, which is the same average donation amount for a presidential campaign. Stretching the campaign analogy further, the Diaspora funding was that of a grassroots model, while RubySoC employed "high-dollar" fundraising from two dozen companies to achieve its goal.

So a fundraising model can look like this: Identify a serious problem within a community, propose a solution to rectify it, and then target the right audience to fund it. Ruby open source developers, a community numbering in the thousands, could not raise $100,000 from individuals alone. Ruby-centric companies needed to chip in a large share. On the other hand, Diaspora's community of disenchanted Facebook users is much higher, potentially in the millions. Thus, a large number of donations in relatively small amounts of $35 can be expected.

It's All About Execution

Jaw-dropping fundraising, of course, does not guarantee ultimate success. Just ask Howard Dean and Ron Paul. For half a decade now, Google Summer of Code has employed a model that's been effective: Provide funding for students to write code for well-established open source projects. Ruby Summer of Code follows the same path, and should be expected to yield similarly fruitful results. For example, it's expected that by the end of the summer, Ruby on Android will be a viable development platform. All individuals and companies who funded RubySoC knew exactly what they were getting.

But Diaspora is a big fat question mark when it comes to execution. Can four college students really build a viable alternative to Facebook? Will the wishes and desires of Diaspora's donors be fulfilled by the end-product? It seems just as easy to be overly pessimistic about the project as it is to be overly optimistic about it.

Funding Strategies

Running fundraising campaigns isn't the only way to fund open source software. Up to this point in Sunlight's history, fundraising has been done primarily through very large grants. Alternatively, figuring how to make the software pay for itself is another option. The Mozilla Foundation best exemplifies this, receiving over $50 million a year from its search agreement with Google.

What are other means of funding open source software? If Sunlight Labs were to seriously launch a fundraising campaign, what should that look like?