[gentoo-nfp] Re: [gentoo-project] Is an umbrella organization a good choice for Gentoo?

[Alec Warner]

If the objective is to compare the cost of the Foundation to an umbrella;
I'm all for it!

My primary critique of the blog post is in the financials and income
forecasting. I have two major objections.

(1) The foundation makes more than simply individual donations. The
methodology where we ignore a large portion of revenue seems rather
arbitrary to me. I might work on a more numerical model. Really what I
think we want is some moving average of past years (by revenue source) and
we say things like "well we make an average of Y$ from source Z, and we
made this over a period of A years, so we can forecast some of this revenue
into future years." It would be a discounted model, but I don't think it's
valuable to discount these extra sources of revenue to 0. Or to put this
another way; why don't we discount individual paypal donations to 0 also?
The answer appears to be because we have a historical model that says we
are likely to get some recurring donation revenue...which then leads me to
ask why we are not applying this same heuristic to other revenue sources
for the Foundation? So in short, I don't agree with only using paypal
donations and we should forecast other revenue sources.

(2) A follow on from (1) is that the actual income of the foundation
matters for efficiency calculations. If we spend 5k on ongoing costs (CPA,
taxes, etc.) and we make $7200 (according to the blog revenue model), we
are very inefficient on a percentage basis. Efficiency is a function of
expenses and revenue. Expenses are actually somewhat fixed; so a revenue
forecast that provides more revenue will also reflect a higher efficiency
for the company. I believe the model in the blog post basically makes the
existing cost structure worse than it is (and it does this by under
forecasting future revenue.) The revenue forecast also impacts alternative
structures. If we join SFC and we pay 10% of revenue as fees...obviously
the fees are directly tied to revenue, so under-forecasting revenue will
make SFC look more attractive on an absolute cost basis (the percentage
cost is of course fixed at 10%). If our revenue is 7200$, then the SFC is a
steal on an absolute basis. If our revenue is 20,000$, the SFC is less than
half the cost of the existing structure. If our revenue is 60,000$, then
SFC costs more than the existing structure.

The question of financial efficiency is basically a function of size then.
If Gentoo was bigger, the nonprofit would make fiscal sense (we could be
more efficient than SFC.) If Gentoo remains its current size, then the SFC
seems ideal and we can use a slimmer operational structure and likely still
support Gentoo. To me this decision is about what we want from this kind of
body. This sort of decision is part of what will be discussed in my
President's letter to members later this week, so it's not a question I
really pose here; but I want folks to think about:
 - How an organization, like the foundation at its current size could
support Gentoo.
 - How an organization, at double the current size, could support Gentoo.

Then thinking about which one to pursue. I think many people view the
foundation as perhaps a necessary evil, or as an opponent. I would instead
like folks to consider what the Foundation could do as an ally to the
community.

-A



On Wed, Aug 26, 2020 at 11:23 AM Andreas K. Hüttel <dilfridge@g.o>
wrote:

>
> https://blogs.gentoo.org/mgorny/2020/08/25/is-an-umbrella-organization-a-good-choice-for-gentoo/
>
> While I'm not the author, I think it's an excellent writeup.
>
> --
> Andreas K. Hüttel
> dilfridge@g.o
> Gentoo Linux developer
> (council, qa, toolchain, base-system, perl, libreoffice)