A focus on FOSS funding

Among the numerous approaches to funding the development and advancement of open-source software, corporate sponsorship in the form of donations to umbrella organizations is perhaps the most visible. At SCALE21x in Pasadena, California, Duane O'Brien presented a slice of his recent research into the landscape of such sponsorship arrangements, with an overview of the identifiable trends of the past ten years and some initial insights he hopes are valuable for sponsors and community members alike.

O'Brien introduced the session as his personal analysis, noting that it stems from grant-funded research, and that he does not claim to be a data scientist or economist. Rather, he is an advisor who has built open source program offices (OSPOs) and spends a lot of time thinking about funding and sustainability. The research project is a study called Fostering Open Collaboration, which was funded by the Digital Infrastructure Fund Program. (That program has since been rebranded as the Digital Infrastructure Insights Fund.)

The problem

O'Brien proposed the research project for the 2020 grant class, with the expressed aim of providing cross-company visibility into sponsorship trends. This visibility is currently lacking, he said; increasing it can, in the near term, enable sponsors to coordinate their efforts more effectively by identifying under-funded organizations. In the longer term, he added, increased transparency may hold other benefits as well, such as enabling conversations on accountability.

Visibility, here, refers to the overall picture across all projects and all sponsors; the majority of FOSS projects publish some account of their own income sources — but that published data is not uniform. Essentially, any not-for-profit venture that hosts or otherwise supports the development of FOSS software can establish its own palette of "sponsorship levels" at whatever price points it decides. But to understand the overall contributions to those ventures by corporate or individual sponsors, someone would need to systematically scrape all of the "our sponsors" pages or other published data sources and collate that information. There are also regulatory filings, O'Brien noted, such as the IRS Form 990 that tax-exempt organizations in the US are required to complete, although the Form 990 numbers include other sources of income (such as merchandise or training) in addition to sponsorships.

Are a handful of sponsors underwriting more than their fair share of the non-profits — for any particular definition of "fair"? Are such sponsorships broadly the same across different industry segments? Are some sponsored organizations struggling more than others? These and a host of related questions are difficult to answer without collecting and collating the data, which is the principal task that O'Brien undertook.

The method

The process began, O'Brien said, with creating a list of organizations that receive funding to analyze. The initial set included umbrella-style hosting foundations, recurring FOSS events, and a few other program types, such as mentoring projects. For each sponsored party, he located all of the sponsorship-prospectus documents and regulatory filings available for the approximately ten-year time period studied (2013–2024; "approximately" here captures variability in fiscal years, events that were canceled due to the COVID-19 pandemic, and other minutiae).

For the hosting foundations, O'Brien sampled the sponsorship web pages of each organization through the Internet Archive Wayback Machine, using the captured page as close to July 1 of each year as possible. This date was chosen to be far enough into the year that most of the annual sponsorship budget decisions had been made. For events, the pages were sampled as close to that year's event date as possible.

The pages were scraped to record the identity of each sponsor, at each level, and the levels were matched to dollar figures where possible. It was on this point that O'Brien first raised the recurring theme that "every case is weird" in one fashion or another. Between the sponsored organizations analyzed, a wide variety of complicating factors were encountered, everything from sponsorship levels tagged with a dollar range rather than a fixed amount to sponsors who were difficult to identify based only on the logos recorded in the Wayback Machine snapshots.

The actual data collected through this process is available in a public GitHub repository, although O'Brien cautioned interested parties to note that he could not identify an applicable license to use for the collection, given that the data — although accumulated entirely through public records — originated from a wide variety of unrelated sources.

The numbers and the weirdness

O'Brien presented data for four foundations: the Apache Software Foundation (ASF), the Linux Foundation (LF), the Open Source Initiative (OSI), the Python Software Foundation (PSF), plus two events: Open Source Summit North America (OSSNA) and SCALE. He noted that data had also been collected for a few more foundations (including Numfocus and the Software Freedom Conservancy), events (including All Things Open and the Seattle GNU/Linux Conference), and the Outreachy program.

He related the data collected for each of the example organizations, primarily the sponsorship dollar amounts estimated for the ten-year period of the study, the sponsorship dollar amounts for 2023 in isolation, and whatever total revenue numbers were reported from other sources. He also provided a list of the top ten sponsors for each one and noted where data was incomplete or extrapolation had been necessary.

Perhaps most interestingly, he ended each overview with some comments explaining "why it's weird" — and, as it turns out, weird is common in FOSS. The raw numbers themselves are all provided in O'Brien's talk slides, although they might not elicit much of a reaction from those already involved in the FOSS community. The LF, for example, drew in substantially higher corporate sponsorship totals for 2023 ($23.9 million) than the ASF ($2.1 million), PSF ($1.6 million), and OSI ($366,000).

The weirdness begins when those numbers are examined more closely. O'Brien noted that the ten-year total for the LF was difficult to estimate for several reasons. The LF is host to a variety of sub-project organizations with their own sponsorship levels, and it is not always clear when those sub-project totals are or are not included in the overall numbers in each data source. The LF's list of sponsors is also considerably longer than the others, with more than 1,000 Silver sponsors, which made for such a densely packed sponsors page that it consistently triggered the Wayback Machine's rate-limiting threshold and forced a break in the analysis.

The numbers are more difficult to quantify for the LF because it is a 501(c)(6) organization, which is permitted to conduct "more transactional" sponsorship arrangements than 501(c)(3) charitable organizations. This would include arrangements in which (for example) training discounts or event tickets could make up part of the sponsorship package. The PSF also utilized several "in kind" sponsorship arrangements that are difficult to quantify in equivalent dollar amounts, he added, such as content delivery network (CDN) infrastructure from Fastly. The PSF had also permitted several joint-sponsorship arrangements over the years, in which a company was listed both as a PSF sponsor and a sponsor for the PyCon event. How those joint sponsorships are divided between the two revenue totals is unknown.

The LF and the OSI also differed from standard practice by offering a range of prices for particular sponsorship levels. The LF's Silver-level sponsorship is determined by the number of employees the member has, starting at $5,000 for organizations with fewer than 100 employees, and up to $20,000 for organizations with more than 5,000 employees. In some cases it was possible to determine the size of a sponsor from other data sources, such as Crunchbase, O'Brien said, but in many other cases that was impossible. More difficult to assess still was the OSI's approach, which (in some years) had offered sponsors a range of self-selected suggested prices intended to scale up with the sponsor's annual revenue. Though the annual revenue data could be estimated for some sponsors, he observed, what each sponsor chose to donate could not.

Between the two events explored in the talk, O'Brien noted that OSSNA was estimated to operate on a ten-year budget of $8.2 million (i.e., an annual average of $820,000), while SCALE operated on a ten-year budget of $1.7 million. SCALE, he noted, shared many of its top ten sponsors with OSSNA, but received about one-tenth as much in sponsorship dollars from those sponsors.

He also observed that what the Linux Foundation takes in for OSSNA sponsorship is a small portion of what the foundation takes in overall. This was noteworthy, he said, because one of the most common criticisms he hears about the LF in FOSS-funding discussion is the size of OSSNA and other large-scale LF events.

The trends

O'Brien then offered some analysis he hoped could serve as "actionable recommendations" for organizations seeking sponsors and OSPOs (or others involved in sponsoring FOSS organizations).

Head-to-head comparisons of the sponsored organizations are a tricky endeavor, he reminded the audience, due to the differences between organizations and the weirdness discussed earlier. However, he suggested that all companies that are interested in sponsoring periodically sit down together and assess their sponsorship arrangements with regard to whether they are covering the work that they believe to be important. For example, he cited the current popularity of Artificial Intelligence (AI) topics in FOSS and noted that OSI is one of the only FOSS organizations directly investigating practical questions about AI's interaction with FOSS licensing and governance. If sponsoring companies consider that topic important, they should discuss how their various sponsorships could affect it. Such cross-corporation collaboration is not the norm, perhaps, but O'Brien advocates for it nonetheless.

Where the question of who funds FOSS organizations is concerned, he noted that there is considerable overlap to be observed atop most of the sponsor lists each year, with a familiar palette of companies (such as well-known software vendors and service providers) in somewhat-similar permutations for most foundations — but not all. LF's top-sponsors list has the least in common with the other sponsored organizations. In the top ten, half of the companies — Fujitsu, Qualcomm, NEC, Samsung, and Hitachi — did not appear at all on the other top-sponsor lists.

One potentially troubling trend that O'Brien saw in the data is that, while overall sponsorship price levels have increased over the decade studied, the sponsorship levels used by events have remained relatively flat. That puts direct pressure on the event organizers; he shared a series of graphs illustrating that overall inflation, wages, housing, food prices, and other expenses have steadily increased in the past decade. If FOSS event teams cannot keep up with the rising costs, their events may suffer.

Here, again, O'Brien suggested that OSPOs and sponsoring companies take a deliberate look at their sponsorship choices' impact, periodically "spreading all of the sponsorships out on the table" to check that they remain effective and aligned with the goals. Similarly, he noted that event sponsorships may come through a different office inside the company than do foundation sponsorships; comparing all of a company's sponsorship commitments on an equal footing might enable the company to more effectively balance how its funding affects the sponsored parties of interest.

He also offered some advice to organizations seeking sponsorship. There is not a secret answer to the question "how do I ask for money?" but there are things that they can do to be more effective. He recommended being transparent and up-front about rising costs, and to communicate that to sponsors when adjusting sponsorship levels. He also advised them to simplify the sponsorship options offered to companies: too many options or permutations can create confusion or slow down the negotiating process. Finally, he advised organizations to resist the temptation to make "reactive changes." Sponsored organizations should be careful who they compare themselves to, and they should avoid making a change in their own policies or arrangements merely because another FOSS organization made a change.

The future

O'Brien ended the session with some prospects for future research and transparency about corporate funding of FOSS organizations. In particular, he highlighted julia ferrioli's ongoing work conducting video interviews of sponsorship decision-makers. He said ferrioli has conducted six interviews thus far. She has targeted corporations with 200 or more employees, and has asked them open-ended questions about sponsorship-funding decisions. The early interviews, according to O'Brien have revealed some arguably non-obvious motivations at work: risk-reduction, for example, was the most-cited reason for sponsorship of FOSS foundations. Benefits to the corporate brand came in second, and the ability to influence the direction of the technology, which he expected to be the most important reason, was third.

Further research is forthcoming on the motivations and decision-making process, with the likely release of a white paper and perhaps another formal research proposal. In the meantime, O'Brien encouraged all parties interested in a more transparent discussion about corporate sponsorship to look up Shane Cucuru's FOSS Foundations Directory, an extensive information resource for sponsors and beneficiaries alike. O'Brien also facilitates a working group named FOSS Funders that works to increase support of FOSS development through other means.

Where funding of free software and open-source organizations is concerned, it is perhaps tempting to notice the logos of well-known big tech vendors and presume that their massive financial power keeps the community on a stable footing more-or-less automatically. O'Brien's research illustrates how even a direct assessment of the status quo quickly runs into complications and raises nebulous or even unanswerable questions. Transparency in such matters is not trivial, but the open discussions that O'Brien advocates are doubtless a step in the right direction.