Financial Sustainability

There's no magic formula for sustainability in an open source project. Rather than describing business models at this point, let's pause here and consider what an open source project in the scholarly space needs to remain sustainable.

Dynamics of open source sustainability

Most every sustainable open source project will need to bring in funding to pay for the following:

1. Ongoing work and maintenance
2. Community engagement and education
3. Administration and overhead
4. Contingency funds

Many people in open source do some this work unpaid, an arrangement that tends to become a problem over time when the needs begin to outstrip the time and energy of the volunteer workers.

In the Dat Project, for example, there are currently no paid 'community engagement and education' professionals. Although managing this portion of the project on a volunteer basis is not ideal, the project can run this way for a while. However, when issues arise in the community, developers and others need time and bandwidth to deal with them.

Other projects may have additional help that lessens the need to fund every piece of the project. At Jupyter, for instance, some administration is handled by an academic affiliation.

What does sustainability look like?

A sustainable project can absorb some amount of uncertainty without a crisis, due either to astute budgeting, generous donors, or the potential for help from outside sources. For example, the Dat project recently needed legal advice related to copyright and trademark issues. There was no room in the budget for this, but the project’s fiscal sponsor was able to cover the cost.

It’s important to have a balance of funding from multiple sources, which usually change throughout a project's life. For example, Stencila was initially funded entirely by one grant. In the first year, they began developing services to sustain the business. In the second year, they applied for multiple grants and continued developing fee-for-service funding streams.

Example: How does the Dat Project think about sustainability?

The Dat Project is an open source data-sharing protocol used by scientists, civic technologists, and artists. When Dat considers its sustainability, the project leadership team starts by outlining what Dat needs to pay for, at a minimum, to continue a baseline level of operations. Here is their list for 2018:

1. Ongoing work and maintenance
   • Developer time
2. Community engagement and education
   • Documentation and tutorials
3. Administration and overhead
   • Fundraising
   • Administration done by fiscal sponsor
     • Financial administration
     • Legal support
     • Tax support
   • Travel
   • Strategic development
4. Emergencies
   • Legal issues

The core work of maintaining and sustaining the overall project can be difficult to fund. The Dat Project funds its core operations through a mix of grants and donations, detailed below.

Special initiatives and projects, like the foundation-funded Dat in the Lab project, may contribute to baseline sustainability. However, such grants are generally restricted to work on a particular initiative and tied to specific outcomes. And special initiatives are not possible in the absence of funds to pay for the project's basic needs, such as financial administration, travel, and developer time.

Here are the sources of revenue that the Dat Project brought in during 2018:

1. Grants
   • Gordon and Betty Moore Foundation grant for Dat in the Lab
   • Mozilla's Open Source Support grant program
2. Donations
   • Corporate donations
   • Individual donations via Open Collective, donate.datproject.org, or other sources

Each project evolves in part in response to the contingencies of funding its core operations. In 2016, Dat was run on a relatively large budget, and then in 2017-2018 after the funding from a large philanthropic grant came to an end, transitioned to operating on a lean budget. Its initial team of eight full-time staff was reduced to a team of three part-time people.

The experience of moving forward without any certainty for future funding has shaped Dat's growth and informs how it defines sustainability. During this period of reduced funding, Dat restructured its project governance to reduce reliance on permanent paid staff and make it easier for open source contributors from the wider Dat community to move into leadership roles. Dat focused on demonstrating value by engaging its core community and growing into new domains. Dat also sought new partnerships that might offer in-kind support and provide opportunities to show off Dat in new contexts. To reduce operations costs, Dat worked with its fiscal sponsor, Code for Science & Society, to pool fundraising and other administrative resources to serve multiple projects.

While the drop in total revenue that Dat experienced in 2017-2018 was challenging to navigate, Dat is in a stronger and more sustainable position today as a result of confronting that change. Many open source projects will experience gaps in funding. We hope that by sharing Dat's priorities, funding sources, and approach to a challenging time in the project's history, we can help other projects navigate similar situations.

Resources and links on sustainability

Here are a few good places to read more about sustainability in open source.

• Daniel Katz spoke at the 2018 NumFOCUS Project Forum in in New York, and wrote a companion blog post on the Fundamentals of Software Sustainability. NumFOCUS has a whole sustainability program that’s worth checking out.

• ‘Roads and Bridges: The Unseen Labor Behind Our Digital Infrastructure’ is a landmark report from the Ford Foundation about the business of open source.

• This post about open source sustainability by the editorial manager of TechCrunch gives a run-down of options for seeking support from individual software users.

• Andrew Nesbitt, developer of open source project such as Libraries.io, Octobox, and 24PullRequests, writes on Medium about what sustainability for open source looks like.