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3. Questions and Answers

Will it scale? To the point to being able to realistically support full-time developers?

There is a large population of potential patrons. There millions of people using Linux, which means that there are millions of people who were willing to invest on the order of $1000 on computer hardware, and some smaller amount on a Linux distribution.

Multiply "several million" by the nominal sum of $10, and you get tens of millions of dollars.

Taking the converse position, if the free software community cannot invest on the order of millions of dollars of value into continuing support, it is not likely that free software will remain viable. In effect, it can't not be realistic.

But will it scale to provide useful support to an individual recipient?

If a programmer receives support in the form of $50,000 worth of gifts in ten dollar increments, this means that he/she receives 5000 contributions, or on the order of 20 per working day. This is a rather large stack of mail to manage, and variations in "intensity" are likely. There would be days when the programmer receives nothing, and other days when the programmer receives almost literally bushel-baskets full of contributions.

In short, this doesn't seem to scale too well. Of course, we're obviously not there yet, and this is the sort of problem I'd like to have to deal with.

No doubt there are things that might be done to improve the efficiency of the handling of the paperwork.

In the long run, it would be nice to have a central "clearing house" that could manage the paperwork, likely in exchange for some small percentage of the contributions. There do exist agencies that do this sort of thing:

  • Credit card agencies

  • Kagi - Payment System for Internet Sales

    The Kagi agency does centralized collection of monies on behalf of vendors, and most commonly for sellers of "shareware" software. Their service has proven particularly useful to people that live in foreign countries (from their perspective, foreign means not the USA), as the costs of doing currency translations can exceed the prices of shareware software packages.

    They do handle Donations to non-profit organizations .

  • PayPal

These organizations charge "handling fees" that amount to a few percent of the total amount. It would be a particularly interesting idea to use something like Kagi to manage the deployment of funds to developers in foreign countries.

I suspect that in practice, an individual making a living off of developing free software would also seek to have diverse sources of income, adding "consulting" or other service-oriented efforts to the equation.

But my gift isn't tax deductible. (Whine, whine.)

Indeed. This may prove to be an obstacle to corporate "gifting," as they tend to expect to be able to deduct everything they spend.

However, examining the issue more carefully indicates that tax deductibility is a bit of a phantom. A charitable contribution may be tax deductible in the hands of the contributor, but winds up getting taxed in the hands of the recipient. In contrast, a "pure gift" is not tax deductible to the contributor, and because of that, is not taxable in the hands of the recipient.

Thus, a $10 donation may "kick back" to only costing the donor $7 due to deductibility. But since the recipient has to pay taxes, it is only worth $7 to the recipient.

And an equivalent (from the perspective of the giver) $7 "gift" flows through tax-free, providing the same overall value to both sides, while avoiding various sorts of bureaucratic hassle.

Note that a programmer who gets $50,000 in "gifts" may have, overall, the same purchasing power as someone who receives a salary considerably higher than that.

What is required for the "gift" to not be attributed as income for tax purposes?

According to my Ernst and Young Tax Guide, the IRS policy is as follows:

Generally, property you receive as a gift, bequest, or inheritance is not included in your income.

Items given to you as an incentive to enter into a business transaction are not gifts.

For more information, see Publication 525.

As a result, if amounts are contributed with any intended incentive, they may be argued to not be gifts.

Thus, FSEX gifts should have, attached to them, some form of declaration that they are gifts, and are not an "incentive" for some business transaction.

A natural way to handle this would be for the result of setting up a pledge to create a "cover page" that a contributor may readily attach to the contribution making a legally appropriate declaration about the nature of the transaction.

How does somebody get onto the list?

To get onto "the list," one needs to get three people to recommend addition. And to expect to actually receive anything, it is probably important to be associated with development efforts that are considered to be of some value.

It seems to me that this provides a nice way of gradually joining the list:

  • Start working on some useful free software that is being used.

  • Make sure that your changes are being released to the world, and that they are being "logged." CVS change logs are very useful in this regard...

  • Splitting a project just to get a bit of money is not likely to win friends or influence people...

Wouldn't it be a good idea to use cryptographic authentication for this?

It sure would be a k001 idea. The fact that you can evaluate all sorts of mathematical models in the process gives the appearance of being highly secure.

Moving from appearance to the reality of a truly trustable system is another matter altogether. People do not behave in so "mathematical" a fashion. If you give me a PGP key that has been signed by Phil Zimmerman, this establishes little more than that you have access to a PGP key that he was willing to sign. It establishes nothing more than that about such practical matters as whether you are personally trustworthy, or of whether or not that PGP key is also held by a "cabal" of other people, some of whom I might not trust.

PGP purports to build up "webs of trust;" without there being something to back up that the keys are forceably attached to something trustworthy, this does little more than provide mathematical tools that are devoid of real world meaning.

I don't think that, at this point, there is great value in establishing complex cryptographic protocols when they aren't what actually establishes trust.

But won't everyone just send $10 to Linus, thus making him rich (and extremely busy just in counting the one million cheques people sent him...), and leaving everything else unsponsored?

This is indeed possible. But consider:

  • The fact that sending Linus ten million dollars is not likely to represent an actual incentive for improved support is something people are likely to recognize.

    It seems more likely that contributions will be spread across the diverse set of Linux projects that people are interested in. People don't just need a good kernel; they also need libraries such as libc, graphical components such as X11, desktop systems such as GNOME and KDE, documentation such as the LDP and many other such things in order to have a usable system.

  • Linus seems to be a reasonably trustworthy individual. He might even choose to pass on some of the resulting funds to others he considers "need the money more."

  • The previous point might be made more explicit; someone who feels they do not need any assistance may indicate such, and suggest that people send funds to people who might be more needing of assistance.

  • Homes in California are very expensive, and ten million dollars doesn't buy you all that much!

This is the best and the only way of doing things, right? All those other ways of supporting free software are clearly inferior and should be ignored!

Not provably, certainly not, and no, that's not nice.

This is one approach to the vast task of supporting free software. It has strengths and weaknesses, much as other approaches have strengths and weaknesses.

By having a variety of support methods that possess different strengths and weaknesses, the hope is that a diverse "support net" may be made more robust than even the strongest single means of support.

This is a strength of the Distributed Development approach.

While the Free Software Bazaar has gone by the wayside, Affero offers another approach with its own strengths and weaknesses:

  • A merit of Affero's over FSEx is that it doesn't need to give out a lot of information about individuals.

    In these days of "Identity Theft," people are reluctant to have terribly much personal information (such as addresses) published on the Internet; Affero transfers money passed in by individuals to a set of charities, which minimizes the transfer of such information.

  • Affero allows people to readily allocate contributions across multiple Free Software charities. While this isn't as diverse as allowing anyone to give anyone whatever money they want, it may well be more satisfactory than having the individual organizations marketing themselves to the public at large.

  • A disadvantage of Affero is that it has fairly considerable and rigorous bureaucratic requirements. They are collecting money, which gets them into a need to Develop Centralized Trust to a much greater degree than is necessary for FSEx. They also have to work with governmental and taxation apparatus, which adds to the paperwork.

One of the great political questions is of "Who guards the guardians?"

There likely needs to be a policy to determine who is permitted to be one of the three "witnesses" that vouch for the appropriateness of a would-be recipient of gifts.

Policy for removal from lists

There needs to be a reasonably objective policy to this end.

Probably some sort of "resort to a committee." A sensible approach would be to set up a set of "directors" who would be charged with dealing with "contentious issues."

Extensive policy isn't needed, rather merely having a policy, and then applying it consistently.

Shouldn't it just be programmers that are rewarded?

All those who expend effort usefully are deserving of reward, so no. There are many ways of encouraging the improvement of free software, including design, coding, testing, and documenting, and all of these activities are necessary.

Should someone be rewarded for "coordination?"

If their efforts are useful, surely.

What about projects with diverse participation?

Determining who, on the list of developers of a "bazaar-style project," should receive assistance, is a problem.

Note that this problem is not relieved by adopting a different method; if someone wants to "throw" $1000 at (say) the PostgreSQL Project, determining to whom that money will go is guaranteed to be problematic, irrespective of the approach we take.

By focusing on individuals, FSEX does not solve this problem. But focusing on the project or on other metrics (such as numbers of lines of code ) does not solve the problem, because the issue here is an allocation problem, and Allocation policies are arbitrary.

But the Free Software Bazaar sponsors projects. Why is this not project-oriented, when it is software projects that we want to see completed?

The Free Software Bazaar was indeed a good idea, and it is well and good for there to be multiple mechanisms out there to encourage the patronage of free software.

There are some demerits to looking at things from a "project" perspective; see the discussion of problems with project-orientation.

The issue is not so much that "projects are bad" as it is that projects provide only one view.

My favorite developer, Mr. Foo Bar, is not on the list.

Precisely how does this prevent you from sending him a Christmas card with a little something tucked into it?

If someone is left off the list, this does not cause disaster, because the registry is not an authority. It is merely an information registry.

The registry attempts to provide authoritative address information, but realistically can do little more than that.

I sent money to my favorite developer, and she used it for something I don't like.

" Doctor, when I strike my head with a crowbar, it hurts. " Well, then, stop doing it.

Unlike charitable donations, which may be directed to particular uses, gifts that are, legally speaking, given in appreciation of someone's efforts cannot have any intended incentive for tax purposes. Thus the recipient is free to do whatever they want with the money; if the one giving the gift stipulates a use, then it's no longer part of this program...

Wouldn't it be a neat idea to integrate together information from other sources?

It would indeed.

It would be a neat idea to add in information concerning actual and pledged contributions to other things such as the Free Software Bazaar, Free Software Foundation, and other such organizations.

It would be meaningful for people to know what other money is flowing, as allows them to make better informed personal decisions.

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