Part 1: Core Team Finances - Platform Sponsors

2021-05-26 03:59
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Josh here with the CiviCRM Core Team. Each January we publish an annual report that highlights our past operational and financial performance as well as our plans for the coming year. This year, we’re taking it a step further and hosting quarterly community round tables in conjunction with the CiviCRM Community Council (the next one is on July 13, details forthcoming).

One of the areas of the report, and of CiviCRM in general, that we hear about most, albeit only from a handful of people, concerns how the project is funded. Most users of CiviCRM, in fact, aren’t really clear on how the project is funded at all. That’s ok. There are a lot of moving parts to this project, so it’s really impossible to know everything about it.

So, I thought I’d take an opportunity to review how CiviCRM is funded in a series of blog posts, starting with what I believe is an increasingly important income stream: funding from our ‘Platform Sponsors’. It’s also a good starting point because discussion has been raised about it previously, and full disclosure and transparency is a good thing.

Before we jump into what Platform Sponsors are and how they help CiviCRM, let’s look at some of the history of CiviCRM, specifically around its funding.

Disclaimer: I will probably make broad statements here without going into too many details. Needless to say, we are truly grateful for all of the financial and contributor support that CiviCRM has received since its founding. If you have specific questions, email us.

In the beginning, CiviCRM was supported by only a handful of private individuals and foundations. Starting in 2014, approximately, CiviCRM began making a shift toward being “community funded”. I use quotes there because being “community funded” can be tough to define. I won’t go into that too much right now, however suffice to say that by “community funded”, we mean that the funding 1) comes from the community 3) benefits the community and 3) largely isn’t attached to a specific task or requirement (but not always). Let’s look at a few quick examples:

  1. The CiviCRM Partner program collects dues from expert providers and hosts for the Core Team which we use for general operations. There’s not a specific deliverable per se for this support, which is broadly used, so we consider this “community support”.
  2. Make It Happen campaigns generally attract support from users and providers in the community for a specific improvement. And while these are pegged to a specific task or outcome, it’s the community that is funding the improvement that wouldn’t happen otherwise. We’d consider this “community funding”.
  3. Extended Security Release is funded by a handful of organizations and partners, and its use is restricted to them. The funding we receive is pegged toward overall software maintenance, including updates on versions other than ESR. So, while the funding does come from the community and it is used on general maintenance, it is for a specific service and it’s available only to a small subset of users. We do not consider this “community funding”.

I want to note that whenever we talk about the project’s funding, there are opportunities to view things differently. That’s because there are different interpretations, perspectives and opinions on where money should come from, how it should get recognized, and how it should get used. Suffice to say, there are a lot of gray areas. We’re presenting things the way we see (and record) them, but by no means are they perfect.

Ok, about those Platform Sponsors...

Let’s start with what exactly Platform Sponsors are; they are companies or organisations that financially benefit from CiviCRM and that share a portion of what they generate with CiviCRM. We refer to this as a ‘revenue sharing agreement’ or a ‘revshare’. 

The best, and only, examples of a revshare with CiviCRM are with payment processors with which CiviCRM integrates, notably: PayPal (since 2016), Stripe (since 2018), TSYS (since 2019) and iATS Payments (since 2020). These companies provide a portion of each transaction they process on behalf of organizations using CiviCRM back to the CiviCRM Core Team.

Before I go on, I want to stress that these revshare agreements have no impact whatsoever on the cost per transaction to the organizations using these payment processors along with CiviCRM. There is no increase or change in rates. The fees charged by the payment processors are the same with or without these agreements in place.

In fact, it’s that very point that makes these relationships so important and so valuable to CiviCRM. These companies are helping fund the ongoing maintenance and development, i.e. the underlying ‘platform’, of CiviCRM at no cost to any user of CiviCRM. As CiviCRM grows, so too does what each of these sponsors generates. And, in turn, their funding back to the project grows. And, as the core team’s budget grows, so too do our efforts around improving the software.

Look at the past year where we added new team members, focused heavily on security, and ramped up development on major projects like SearchKit and Form Builder. Now, obviously, our platform sponsors did not fund all of this, but their increasing significance to our budget opens up our capacity to take on such initiatives while at the same time continuing to maintain and release the software.

In fact, for the past 12 months (up to today), Platform Sponsors have provided $62,461 in support, up almost 42% from the previous period. Platform Sponsors account for nearly 15% of our total budget and represent 34% of the total funding provided by the community, and they are the fastest growing source of funding, outside of earned income, in the project.

You can tell that we’re pretty stoked about these relationships. We truly want CiviCRM to grow for many reasons, not the least of which is that we believe it is awesome software that does a lot of good around the world. If CiviCRM does continue to grow, we can scale our budget and resources in order to continue to improve the software and the community, and to ultimately help empower nonprofits around the world. 

That sounds like a win for everybody!

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