Receiving and Spending Money
So you've been approved. What next?
Open Collective is the software platform that Open Source Collective (OSC) uses with our hosted collectives to manage financial contributions and payments. Open Collective has a ton of features like transparent budgets, custom collective profiles, donation tiers, fundraising goals, and other tools now at your disposal.
Using funds from your collective’s budget to pay expenses is simple:
- 3.Next, a member of OSC's team reviews and approves the expense. This is done to ensure the expense meets requirements, e.g., having a valid receipt.
Expenses are processed and paid out by Open Source Collective twice per week (on Mondays and Thursdays).
If you have any issues with a specific expense, the best way to get an answer is to post a comment on that expense page.
- Invoices are used to pay people for work or their services.
- When someone uses an invoice, they are treated as an independent contractor. If earnings for an individual exceed $600 in a year, they will be automatically issued a 1099 tax form to fill out per IRS regulations. This is automatically generated by the Open Collective platform at the end of the year and managed by Open Source Collective. Reimbursements do not trigger the 1099 form. More info about taxes here.
- Within the invoice option, you can either upload your own invoice, or you can create one directly on the platform. You will be able to detail what the services/goods are, and can include multiple items.
- Reimbursements can not be used to pay contributors for work or labor spent on the project.
- Reimbursements are used to pay people (often volunteers) back when they have made purchases for the group.
- Receipts are required so that we can ensure the requested amount matches the purchased amount in order to approve the reimbursement.
Open Source Collective provides virtual cards to Collectives on request. Virtual cards act like credit cards and allow you to pay for expenses online using your Collective's balance.
While we try to accommodate every request, we work within some limits defined by the IRS, human capacity of our staff, and technical limitations.
- OSC will only process payouts approved by an admin of the collective.
- All expenditures must be permitted under 501(c)(6) regulations.
- OSC cannot pay people in territories in the following sanctioned countries: Crimea, Cuba, Iran, North Korea, Sudan, Syrian Arab Republic, Venezuela). In addition we may be unable to pay people in: Afghanistan, Burundi, Central African Republic, Chad, Congo Republic, Democratic Republic of the Congo, Eritrea, Iraq, Libya, Somalia, Republic of South Sudan, Yemen.
- OSC only makes payments via Paypal, bank transfers, and virtual cards.
- We can't make direct payments via cashapp, venmo and similar services (because they don't allow nonprofits like OSC to sign up, among other reasons).
- Payouts must be broken down into individual expenses that detail what the money is spent on. We do not pay out undifferentiated chunks of money.
- We have certain paperwork requirements due to IRS rules and may need to collect W9 forms before we can pay someone. If this applies to you, we will let you know.