Comment by dale_glass
2 years ago
One of the problems I found with this is that actually taking donations is hard work.
I live in a country completely unsuited to making money from a hobby project on the side. To take donations I'd need to register as self-employed, and pay monthly for social security as long as I'm registered, even if I make no revenue whatsoever in that month. That's an absolutely awful idea for a project just getting started. I'd be losing a very appreciable amount of money, regularly. It'd take lots of effort to have enough support that I'm back to zero, and still not making anything. This is because this is a system made for plumbers, not for people doing rare jobs on the side which might some day grow into something serious.
Apparently the government sort of looks the other way until you start making minimum wage, but that's not a bet I'm comfortable making.
But finally, we (https://overte.org/overte_ev.html) managed. It took us a long time and a lot of effort to get a non-profit registered, and it absolutely required the participation of multiple knowledgeable people. This couldn't have been done as a lone wolf effort.
And after that hurdle of course you have to somehow get people to notice you exist, and convince them to donate. This is unfortunately a tough job for people whose main passion is software development and who threw all their effort into that. Going out there and figuring out how to advertise yourself and how to ask for money is a whole new skill to learn, and a big time and effort investment.
I highly suspect that the reason why libcurl shows up here every week or so is because Steinberg spends about as much time marketing it as writing code and it's clearly working. That project appears to be quite successful in getting donations.
There have been steps forward in the direction of making donation easier:
https://github.com/sponsors
GitHub Sponsors directs individuals to Open Collective https://opencollective.com/ , which can serve as a "fiscal host." The advantage here is that the default rule at law for how a group of developers working together will be treated is partnership, which means joint and several liability. Working with a fiscal host partitions individual liability from group liability.
But there are still open questions. I don't know all the details of how Open Collective works from a corporate law perspective. How do they partition the liability of different collectives that are hosted by the same fiscal host? That is important to understand because otherwise, the collectives that share a fiscal host are partners. This is better than all of the individuals who contribute to each and all of the collectives being partners (because there's still a partition between individual and group liability), but worse than if each collective's liability was partitioned from the other collectives' liability (and the fiscal host itself's liability).
This seems like an active area for legal innovation. No jurisdiction I know of is optimizing to maximize speed and minimize cost of setting up corporations. Yet without the ability to shield the contributors of capital and labor from individual liability, there isn't much a group of individuals can do in our modern economy. The problems that many DAOs have had is a case study in this.
People who care about open source should also care about scaling up the speed and minimizing the cost of incorporating. Stripe Atlas and similar services are underrated sources of economic growth for this reason, IMHO.
> I live in a country completely unsuited to making money from a hobby project on the side. To take donations I'd need to register as self-employed, and pay monthly for social security as long as I'm registered, even if I make no revenue whatsoever in that month. That's an absolutely awful idea for a project just getting started. I'd be losing a very appreciable amount of money, regularly. It'd take lots of effort to have enough support that I'm back to zero, and still not making anything. This is because this is a system made for plumbers, not for people doing rare jobs on the side which might some day grow into something serious.
We need to keep in mind systems can be changed. You've set a very clear example that can be understood and communicated. Legislators should get to know this. Receiving donations for community work should be possible without hurdle (at least until it reaches a very high level) everywhere.
I call the idea that we spontaneously support what is right for all of us a Donation Economy. If most people are ethical, this would work well.
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Furthermore, I think we should also fight, in the long term, for organizations (collectively supported) that provide this function (supporting community work). Like pollution is a negative externality, where the act of someone is (an unpriced) bad for everyone, contributing to OSS is a positive externality, where the work of someone is (again unpriced) good for everyone. I propose creating distributed institutions for identifying and pricing those externalities (positive and negative), evaluating and rewarding (or pricing) them accordingly. What is the metric for externalities? Collective meaning and wellbeing of everyone.[1]
There are foundations like NLNet[2] that do this for OSS. I think we should donate to them in the meantime.
[1] More about this here: https://nlnet.nl/
not to mention some countries requirements around running a non-profit would mean you couldn't keep control of your own project if you did get it created as a non-profit or add others to the project without risking that they used the rules to take over ownership when it was advantageous to do so.
This is one area where cryptocurrencies are useful. Don't need anything other than a wallet address.
You don't need cryptocurrencies to commit tax fraud. The problem isn't being technically unable to get the money.
I guess then everyone accepting 50 quid from a mate for fixing up their car or something is also commiting tax fraud. Immaterial amounts like this are not on tax authorities' radar. And if you are making a material amount, nothing is stopping you from doing the right thing and reporting your side income anyway.
Crypto just reduces the hassle.
1 reply →
ORLY? That's your plan? Tax evasion?
And what about when you want to spend that money? At some point you have to declare that income and be taxed and the government doesn't care if you were paid in euros, bitcoin or seashells.
> One of the problems I found with this is that actually taking donations is hard work.
As many problems as there are with GitHub (social lock-in, Copilot laundering Open Source license violations), GitHub Sponsors is incredibly valuable and substantially reduces the friction for getting support for an Open Source project.
I don't think he is speaking about the ability to get donations. Rather about the tax consequences. It doesn't matter to governments how you got money, you have to declare it, even if it is GitHub Sponsors.
He did not say which country, but my guess would be Germany. You have to declare every penny here.
The last part of the post is about the difficulty of getting people to donate, which GitHub Sponsors helps with. The first part is about the tax consequences, which Sponsors still helps somewhat with: while you still have to pay the requisite tax, with GitHub Sponsors you have one source of income to declare, rather than many small ones, which often reduces the amount of paperwork.
I was thinking Spain, it describes the situation here perfectly.
As far as I can tell, the problem lies not with the payment processing, but rather with the bureaucracy around receiving money in OP's country of residence.