One of the challenges that businesses face is keeping their expenses below their revenues. Your grandpa would have said, "Don't spend more than you make."
In many respects an open source project is a business. Formally, Sugar Labs is a Not For Profit organized under the umbrella of the Software Freedom Conservancy. As such, we are legally able to do most things that other business can do. We can charge for our product, charge for service contracts to support deployments, and hire employees. The primary differences between Not For Profits and For Profit business is that we must have a clearly stated mission to help humanity and we can not distribute excess profits to shareholders. In short, Sugar Labs must have a clearly defined mission to help humanity, Sugar Labs must follow that mission, and Sugar Labs must use any money we have towards that mission. (Note, this is not the full legal definition. But it is close enough for a general conversation.) In exchange for agreeing to follow those rules(and filing a bunch of paper work) we become a tax exempt organization. At the risk of sounding coarse, Sugar Labs primary goal in any decision is remaining in business. It does not matter how grand our mission, how inspirational our vision, how worthy or goals, or how big our hearts. If we go defunct, we can't accomplish anything. 'Don't spend more then you make.' Remember that from the first paragraph. It does not day don't spend money, nor does it say don't make money. I am convinced that the correct business model for Sugar Labs, will be a combination of licensing the Sugar and Sugar Labs brands to partners and donations. What, this means is that our revenues are pretty low right now. Our brand is currently not strong enough to generate revenue from partners or donors. This is not necessary a bad thing. It just means that we will need to build our brand. Since we have no revenue, we must keep our expenses at zero too:( So, how do we survive until we earn enough revenues to cover expenses. Raising money for specif things and looking for in-kind donations. While raising money for specif things does not scale well, it does allow us to raise money for individual needs. The transaction cost of setting up the capital campaign ensures that we have explored other options first. The other option is in-kind donations. At this point in our life cycle we should avoid transactions and strive for relationships. In a transaction there is an implied exchange of goods of services for the donation. Since our product is so young, these exchanges tend to be in the form of promises of future goods or services. Too many promises and we spend all of our time working on fulfilling promises rather than our mission. Let's go get those in-kind donations. david _______________________________________________ IAEP -- It's An Education Project (not a laptop project!) [email protected] http://lists.sugarlabs.org/listinfo/iaep
