Should I donate to KDE?
Off the Beat: Bruce Byfield's Blog
Normally, I evaluate free software projects in terms of the functionality they provide. However, with many projects experimenting with crowdfunding, increasingly I find myself looking at them the way I would a non-profit to which I am considering donating. I want to know, for example, how much of the money a project collects goes towards administration, and how much goes to project activities -- in other words, if the money it receives is being well-spent.
This is the perspective from which I approached KDE e.V's financial statement for 2012 -- I wanted to do a spot-check on how well KDE was run in case I decide to donate to the project.
KDE e.V. is the non-profit organization that administers the KDE's legal and financial affairs. Based in Germany, it is run by a five person board of directors, including one woman, one Indian, and four Europeans.
The statement also gives a list of past and future activities for KDE, as well as the number of new Subversion accounts (25) as well as disabled ones (3). The effect is very like a public company's year end report, creating a picture of a project that is modestly thriving.
Financial statements for previous quarters in 2012 and for earlier years are supposed to be available on the organization's sites, but the links went nowhere when I checked, which makes comparisons of 2012 Q4 with other quarters impossible.
The inability to make comparisons is a serious handicap, since without it, viewers can only guess if the latest financial statement is typical. However, you can tell much from 2012 Q4 alone.
In the fourth quarter of 2012, KDE e.V. had an income of 179,770 Euros (just over $233,000USD). Of this total, just over 21% is listed as coming from corporate supporters, but presumably the 36% listed as sponsorships for Akademy, KDE's annual conference, is also largely from corporate donors as well. About 12% percent is listed as coming from memberships, plus, by elimination, just over 30% listed as Donations.
If these assumptions are true, then KDE is 57% supported by corporations, and 43% by individuals, a reasonable mix for a non-profit, although as a potential donor I would prefer to know exactly which corporations are donating. In a perfect world, I would also like to see a slightly closer ratio of corporate to private donations, which I would take as a stronger indication that corporations do not unduly influence KDE's activities.
KDE e.V. records expenses of 148,004 Euros. Of these, 46% is listed personnel, administration, and office expenses. This is somewhat higher than conscientious donors like to see in a non-profit -- 30-35% is usually considered ideal -- but fairly common. Given the modest income and small board, it seems unlikely anyone is profiting unduly from administering the project.
That seems all the more likely because other expenses include 41% to pay project member's way to coding sprints, Akademy, and other meetings, and 6% for Akademy. Having 47% of expenses attributed directly to KDE e.V's core business is reasonably assuring, although having 7% attributed to "other expenses" is higher than I care to see. A breakdown of those expenses would be very welcome.
To Donate or not
If I were immediately thinking of making a donation, I would probably contact KDE e.V. on the chance of getting more information. I should stress that the financial statements give me absolutely no reason to suspect any wrong-doing or incompetence in the organization -- but, as a potential donor, I would prefer more details so I could be sure that as much of my money as possible went to the activities that I wanted to support. After all, while I don't begrudge administration costs, they aren't what interests me.
As a potential donor, I would like both a more detailed financial statement and more diversity on the board (although I have seen far worse for both), as well as access to previous statements.
Still, looking only at the 2012 statement, I have to conclude that KDE e.V. raises no serious concerns. Its income managed to exceed its expenses by almost 18%, and the organization has 244,011 Euros in the bank -- over a year and a half's expenses.
On the whole, I am inclined to give KDE e.V. the benefit of the doubt, and say that its finances are acceptably managed overall. Assuming that the statement is typical, I would definitely consider donating to KDE e.V in the future.
Some pointsOne very important point to note is that the KDE eV has *no* control over the development of KDE software, it is strictly forbidden from attempting to control the direction of development by its constitution. A company could bung the board and membership as much money as they like but it would likely have no effect on what the developers decide. Note too that the board of the eV is elected by the membership and answerable to them for their actions, and as a member I know that they wouldn't get very far if they tried anything untoward, the eV mailing list is very "active"
The admin is high as a percentage solely because of the low income we have for an organisation our size, and I suspect as well as the salary of our sole employee it includes servers and bandwidth and the like, a major expense for a project like us.
Slightly disappointed that you didn't raise the issue of the broken links so we could fix them, that's a non-issue really as the documents are all on the eV website.
Through more donations, personnel and admin expenses would actually be relatively lowerThank you for this detailed analysis. I am one of the financial auditors for KDE e.V., we are perusing the finances to report at the general assembly. I would like to stress that KDE's organization is rather lean. Consider the size and productivity of this community, and relate it to the overall budget (roughly 150.000 Euro). There is very little staff for administrative support (one, to be exact). This is really the minimum of help we can get by with and still function.
Almost all other expenses go to travel and other cost for covering contributor activities. The meetings covered in the report where all supported financially by KDE e.V. Developer sprints and other contributions is what we try to focus on. The vast majority of the necessary funding is gained from donations of individuals and companies. If we could increase the amount of funding for that, the admin overhead would reduce even more percentage-wise. There are supporting memberships available to companies and institutions. Individuals are invited to "Join the Game".
KDE quarterly reportsYou can download all KDE e.V. quarterly reports including financial data here: http://ev.kde.org/reports/
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