Understanding the Types of Funds we Handle

As a nonprofit fiscal host, it's important to distinguish between the types of funds we manage on behalf of our hosted Collectives. In this document, we'll review two types of funding: Contributions/Donations and Payments/Funds from Customers/Contract-based Funding

Contributions/Donations

Contributions, or donations, are funds provided by individuals or organizations to support the mission and activities of a project. These funds are managed by OSC with the following key principles in mind:

• No goods or services are exchanged for the contribution

• Contributions are intended to benefit the broader mission and activities of the project, rather than a specific individual or customer

• Refunds are generally not applicable, as contributions are not payments for specific deliverables or services

In alignment with nonprofit principles, contributions fuel mission-driven work that benefits the open source community as a whole, rather than payments tied to transactional agreements.

Payments/Funds from Customers/Contract-based Funding

Business payments, or contract-based funding, on the other hand, involve a transactional exchange. These funds often arise when a hosted project engages in activities that directly benefit a customer or client (in some cases, though, they might also come from a grant, which may have a broader scope and have a larger impact base). These payments typically involve:

• Providing goods or services or engaging in work that results in specific deliverables

• Formalized agreements

An example of this could include grants, which OSC can assist with. These often require a signed agreement to ensure accountability for certain deliverables. While OSC, as a nonprofit, does not have a 'No Outside Money' policy, we ensure that any expenses that we process are ultimately used to benefit the open source side of the project, adhering to our nonprofit mission.

Why this Matters

As a nonprofit in open source, transparency, compliance with nonprofit regulations, and trust with the community is of the utmost importance to us. Contributions drive collective impact and align with our mission to advance the open source ecosystem. While business payments can also assist with that, it also requires hosted projects to fulfill specific contractual obligations or client needs that OSC can only assist with in certain capacities.

Understanding this difference ensures that all funds are managed by OSC and our projects responsibly.