Crowdfunding for Free Software and Free Hardware Projects
Extensive analysis and recommendations by Snowdrift:
Snowdrift.coop is itself a funding site for FLOSS projects.
Typology of FLOSS Crowdfunding
"All-or-nothing campaigns (what most people associate with the term “crowdfunding”) achieve some assurance of critical mass. These sites run time-limited campaigns with strict funding goals. Fees are typically contingent on reaching or exceeding the goal.
As well as hard threshold, some sites below offer “keep-it-all” flexible funding campaigns (often with higher fees). Keep-it-all is basically just traditional donation
Recurring payments support ongoing projects or for supporting a particular teams who continue to produce new content on a regular basis. In the tech world, subscriptions may get used for hosting or support services. Some subscription sites emphasize special access for subscribers (i.e. “paywalls”), thus promoting proprietary restrictions and the separation of users into classes with different access levels. Subscription sites typically lack any matching or threshold or other mutual assurances.
Donations with no recurring pledge or assurance contract can use a simple “donate” button on their website. They may still define goals and perks and run special promotions. Yet many platforms are available for running special one-time fund-drives even though they work just like any “donate” button given the lack of a real threshold. These crowdfunding sites have value mainly from administration tools and marketing features.
As noted in the “threshold” section, many sites with flexible campaign goals charge higher fees if goals are set but not achieved.
Subset of donation sites based on “appreciation” or “attention” gifting. Some sites do one-time tips and others are subscription-style. Because they emphasize the “gift” framework for donation, tipping sites help to work against the trend of putting a price on everything. Tipping is generally friendly and open-ended but has no mutual assurance or any other incentives to donors aside from being nice. It’s really nothing more than small traditional donations.
Bounties are the reverse of the other funding approaches. Rather than the project expressing what they want to do and asking for funding for it, donors put a money offer behind their requests and seek people to achieve the goal.
Bounties become crowdfunding by allowing multiple people to contribute to a bounty listing and can be loosely threshold-like as several people add their pledge to a bounty until it reaches a level that makes it worthwhile for someone to claim it.
Bounties may face various problems with coordination and disagreements. What if multiple developers want to claim a bounty? How do we validate an accurate claim? We have compiled a long history of failed bounty sites with further discussion."
Treshold Campaign Sites
= "Though not perfect, we endorse Goteo as the overall most ethical FLO-dedicated threshold crowdfunding platform."
- Goteo: Crowdfunding for “the commons” with a strong focus on community organizing, ethical principles, and economic democracy. Culture and technology projects are all shareable — either fully FLO or with NC clauses (note that NC means non-FLO). The site itself uses the AGPL. Based in Spain, some of the documentation is only in Spanish or Catalan. Perks are fully optional. Projects have an initial 40-day campaign to reach a “minimum” goal and then an additional 40 days to reach an “optimum” stretch goal. Goteo strives for high ideals, and our only complaints involve the NC issue for projects and their inclusion of Facebook and Google Analytics trackers (which can be blocked, of course) and use of Google Maps instead of Open Street Map and some other minor details.
- Hatchfund is an art-focused platform run by a 501(c)(3) non-profit where all donations are tax-deductible. Rather than a true threshold where you only are charged when a threshold is reached, donors give to Hatchfund immediately. If a project does not hit their threshold, the donations go into a matching fund available to other projects. They also regularly partner with outside grant organizations to offer matching support that way. Hatchfund curates the campaigns to work only with artists with respectable credentials that fit adequately their 501(c)(3) art-focused mission, and they work to maximize the rate of success (they claim a 75% success rate, which is much higher than most generic threshold sites). They say no fees come out of the artists’ funds, but they require a minimum 5% donation to Hatchfund itself along with each pledge.
= "Patreon deserves a note as the most robust and successful in the subscription field with a more traditional business model and venture capital funding ... Of the other sites, OpenCollective, LiberaPay, BountySource Salt, and GitFund are the closest and most philosophically aligned. Like Snowdrift.coop, they are FLO and focus on (though most do not require) FLO projects."
- Patreon is a robust site that has proven successful with creative artists. Besides a simple per-month option, Patreon also offers a donate-per-release option (which adds elements of bounty and tipping systems to their subscription model). For per-release pledges, patrons can still set an optional per-project maximum monthly cap. The projects/artists choose which patronage plans to offer and set tiers with different dollar levels and perks. The per-release approach naturally creates issues with defining a qualifying release and emphasizes quantity over quality, but the recurring nature of the pledge still provides a level of accountability. Overall, Patreon emphasizes perks which are typically (but not always) restricted club goods, emphasizing the paywall service aspect of the platform. If using Patreon, we urge projects to use only FLO licenses (such as CC0, CC-BY, CC-BY-SA), use only rivalrous perks (like physical merchandise or dedicated time), and release all non-rivalrous work as public goods. We also urge any patrons on Patreon to specifically support FLO projects.
Tipeee is a French clone of Patreon with nearly identical policies, options, and issues. Steady is a German competitor to Patreon with a different set of features, not really a clone.
Drip by Kickstarter is a direct competitor to Patreon. As of November 2017, the only distinguishing features are an initial period where patrons are badged “founders” and some potential integration with Kickstarter.
- Liberapay emphasizes FLO software and culture but does no curation or enforcement. They accept donations from anyone for anyone but insist that all donations be pure gifts with no special rewards or strings attached. While recipients are individuals in the end, they have an optional “teams” function for groups to receive donations while passing the funds to the members. Liberapay holds funds in escrow (your “wallet”) so that donations can move around the system and only be withdrawn as needed.7 Overall, Liberapay minimizes payment processing fees and reaches near the highest standards for free/libre/open values.
BountySource Salt: simple monthly donations run alongside their bounty system.
- Open Collective goes beyond just donations by having an integrated accounting system for tracking how funds are used and which members withing a group get funded for what. They emphasize showing the accounting transparently for patrons. After setting up a group to receive donations, members of the group submit expense reports or requests for funds from the group account, and Open Collective helps manage the whole process. They also provide fiscal sponsorship (serving as a legal entity for a group) for FLO software projects and work with other fiscal sponsors for other types of groups (which can be any sort even groups that don’t publish anything like a local social club or anything else that is not a for-profit business).
GitFund from Espians (a FLO-focused idealistic organization) is simple monthly patronage with an emphasis on public marketing of sponsors. They emphasize institutional sponsorships while allowing individual patrons as well. Projects set a limited number of high-value sponsorship slots and boldly advertise their sponsors. In essence, this is just the most traditional form of advertising: static reference to generous sponsors put in prominent places in a project’s public image. Although all-FLO in its own code, GitFund emphasizes integration with GitHub (which is a proprietary platform). Like Snowdrift.coop and Liberapay, GitFund aims to use its own mechanism for self-funding rather than take a cut from other projects.
Rocket Fuel: British music-focused site provides a small set of fixed subscription levels with strong emphasis on perks. One-time donations also included. Also provides an online store selling merchandise for artists. They present goals as “missions” that look like threshold campaigns but just represent funding milestones and have no deadline or threshold.
Ratafire: A no-fee (aside from payment processor fees) site that emphasizes patronage of creative artists and researchers. Ratafire is simple unilateral donations with a range of monthly donation levels from $2 to $100. Ratafire requires log-in with Facebook (and may automatically link or make a Facebook artist page) and seems to specifically require that all posted work to the project be CC BY-NC-SA, no option for projects to use any FLO license.
Donor Box: A simple site where projects can specify amounts as either one-time or recurring donation, emphasizing what value the different donation amounts will have for the projects. Payment is with Stripe or Paypal. Emphasizes the ability for projects to set up their own branding, so Donor Box stays mostly out of the way. For those able to handle self-hosting, we recommend options like Fosspay instead (listed below under self-host) for being fully FLO.
Memberful is a lot like Donor Box: a simple form, integrated with your website. They provide Stripe-integrated membership subscription management for a relatively high price. Their service aims for and emphasizes offering making some things exclusive access to members, but that’s not required.
Autotip is a browser plugin that sets up automatic micropayments of Bitcoin to participating websites for each time someone visits the site.
TubeStart focuses specifically YouTube channels and offers threshold and one-time options as well. See Patreon comments above for potential problems with TubeStart’s per-release pledge option.
- CoopFunding: Site based in Spain that requires projects to be cooperatively-run and serve the public good. Given no real threshold, there’s no need for assurance of payment from everyone, so, uniquely, CoopFunding offers remarkably flexible payment methods beyond regular credit card processing including just collecting funds in cash in person among several other options. As of May 2016, the FLO status of the site is unclear, but they reference “copyleft” in the footer.
Supportly: Well-designed collective action site that allows for crowdfunding, petitions, events, in-kind donations, etc.
Pledgie: Requires user-submitted content to be licensed as CC-BY, but the site’s own code and content is still proprietary. Mainly good for low fee and simplicity.
Crowdgift.ca (previously Dana.io from a Buddhist term for freedom and generosity) supports “microphilanthropy” with the premise that all projects should do good for the community, environment, education, or innovation. They accept donations themselves and take no fee whatever. They don’t appear to be legally non-profit but pledge that 100% of their revenue will go toward improving the site. They seem to actually charge fees but they use past fee/tips to cover new ones, and maybe it’s effectively possible for some campaigns to pay no fee themselves. Unfortunately, at this time, they seem oblivious to FLO issues.
- Flattr: Allocates payments out of a budget based on proportion of “flattrs” (appreciation clicks associated with a creator’s content) granted during the month. Documentation explicitly encourages use of proprietary platforms with Flattr integration and quantity over quality to maximize clicks. On the plus side, Flattr waives fees for select non-profit organizations including the Software Freedom Conservancy. In 2016, Flattr announced a partnership with Adblock Plus called FlattrPlus which aims to apply the Flattr model via an algorithm that tracks users’ engagement with websites so that manual clicking to support is no longer required.
- Ko-Fi (a homonym for coffee) offers a lot of the promotional and social benefits of a dedicated platform that highlights recipients and has aspects of other categories like stating “goals”. But in the end, it is just a nice, no-charge front-end for Paypal donations.
Tip the Web: Similar to Flattr, but allocated as one-time payments, not from a budget.
NoiseTrade: Allows musicians to post tracks for free download in exchange for emails and ZIP codes from users, and also asks users to tip the artists. The site takes an unusually high 20% of all tips (even though the site also has ad revenue). No FLO focus and no recognition of Creative Commons licenses. Tracks must be in the proprietary MP3 format but are all DRM-free.
Tip4Commit: Very simple FLO system to donate Bitcoins to software developers for every commit they make to FLOSS projects. Currently works only with GitHub. The system is run by the same people as the advertising business (Anonymous Ads) that places non-tracking ads and pays only in Bitcoins. They seem motivated by Bitcoin promotion as much as by supporting FLOSS. Sponsors deposit Bitcoins to an overall per-project pot (as opposed to a per-sponsor account); each commit to a project gets 1% of the pot (so the pot can never run out, but tips diminish proportionally until new deposits come in). This odd system means that tips vary primarily by whether or not a commit occurred just after a deposit. Although this presents a clear quantity-over-quality problem (just splitting each update into several commits will claim more of the funds), new deposits to the pot could be done sooner versus later depending on how the donors feel about the progress overall. The same developers also run Coin Giving which is a simple system for publicly acknowledging and promoting donations in Bitcoin to all types of projects.
BitHub is some software that works almost identically to Tip4Commit except with a system-wide pot for tips instead of per-project. This means the same problems like quantity-over-quality and requiring projects to use GitHub. (Note: BitHub.com is something totally unrelated that was for a while a points and swag reward system for FLO volunteering but is now some sort of social media aggregator.)
ChangeTip does Bitcoin tipping and currently requires users to be registered through centralized web platforms (Reddit being the only FLO option). They charge no fee for tipping, only for funds coming in or out of the system. Unlike many other Bitcoin-focused sites, they show little emphasis on respecting user privacy.
Coinbase offers their own tip button now which makes it easy for anyone to accept Bitcoin tips.
Pling appears to be just a promotional site where FLO projects (their criteria for FLO hasn’t yet been determined that we can tell) get listed along with a plain old donation button. They take no fee.
- Bountysource offers software bounties as well as a threshold campaign option and a sustaining subscription donation feature. Although they originally had a proprietary backend, Bountysource released their full site code in 2015. They have (or had?) some corporate backing and connections to various corporate (typically proprietary) companies. With that backing and effective marketing, BountySource has become probably the only bounty site in a long history of failed sites to have any truly substantial success. They also offer a threshold “fundraiser” option and a subscription donation system called “Salt” (see the subscription section).
Freedom Sponsors is an honorable site that avoids third-party trackers and shows consistent dedication to Free/Libre/Open ideals. While not formally non-profit, fees are low and based on hosting and processing costs. Based in Brazil, they offer English, Spanish, and some other international support. Sponsors can divide bounties to settle developer disputes. Issues can be suggested without first placing bounties. They offer integration options for GitHub, JIRA, Bugzilla, and Trac; and can include links to any other external ticket system. The minor downsides include their focus on logging-in through various proprietary sites (although they also offer their own private log-in option) and the integration with Paypal that requires a Paypal verified account in order to send or receive funds.
GitCoin is an Etherium (cryptocurrency) based bounty approach focused on GitHub projects. The system itself is AGPL, but no clarity (as of this writing) on whether they will actively weed-out non-FLO projects (as long as the project is on GitHub). The payment to contributors is tied to the acceptance of a pull-request on GitHub.
Bountify focuses not on bugs or fixes that end-users want but on programmers asking other programmers for help. Tasks should be clearly defined with verifiable solutions. This approach accepts the idea of multiple offers of solutions and picking a particular winner. With the focus on this really clear tiny bits, this approach fits the bounty concept better than most. Bounties have only one week to be claimed or else the funds are donated to a charity. Extra tipping functionality is also available to tip any of those who offered solutions to a bounty. Mainly in regular currency with Paypal, they also accept Bitcoin.8
Hacker One offers a suite of hosted, proprietary tools for handling security problems. Among their tools, they have a bounty system for offering bounties to hackers who report security bugs. They offer no-charge use of their hosted software to FLO projects.
DemandRush (in early state as of this note) aggregates patrons who pledge to give ongoing support (for 3 months minimum? terms unsure) if someone builds a new software or service for the purpose the patrons request. This focus on a bounty for a new project matches the long-defunct CoFundOS. The new twist seems to be that DemandRush emphasizes projects as online services that are likely to not be FLO and may even be SaaSS but there’s no reason a project couldn’t release under FLO terms.
Big Leap: A seemingly inactive, unsuccessful site hosting bounties for solving social problems like providing educational games to children. Notable as the only bounty site we found outside of software focus." (https://wiki.snowdrift.coop/market-research/other-crowdfunding)