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Fiscal Year Close a Good Donation Time for Free Software 24

Matt writes "The close of the fiscal year is a great time to encourage your employer to donate to open source non-profit foundations." (Follow that link for more information and links to various foundations.) Lots of businesses that might shy away generally from software they haven't paid for are happily using Firefox at the very least, and plenty are running free software from the GNU project -- the FSF would be happy to supply some manuals.
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Fiscal Year Close a Good Donation Time for Free Software

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  • by Otter ( 3800 ) on Thursday June 15, 2006 @10:25AM (#15540276) Journal
    Instead of coming up with better ways to waste money at the end of the fiscal year (incidentally, everybody's fiscal year doesn't necessarily end in June):

    Does anyone's company have a practice that eliminates the incentive to waste money this way in the first place? The amount of money thrown away in this fashion is staggering and it happens in pretty much every organization, private or public. Surely some accountant, finance head or game theorist has come up with a solution, or at least an improvement, no?

    • by gEvil (beta) ( 945888 ) on Thursday June 15, 2006 @10:30AM (#15540324)
      While I agree that it's wasteful and, quite simply, foolish, the basis for it is the simple notion that if you didn't need the money in your budget for this year, then there's no rationale for needing it next year. If the money gets spent in some fashion this year (it really doesn't matter how), then it can be justified as "necessary" during budgeting time for the next year. As anyone who's had to follow a budget will tell you, it's far better to be in a position of excess than it is to find yourself overbudget and having to cut true necessities.
      • by Otter ( 3800 )
        Sure, I understand the rationale for it. The question is whether there's an alternate budgeting system that doesn't create an incentive to hold an end-of-year blowout. I can't believe no economist has ever taken a shot at this problem.
        • I'm sure quite a few have. However, their theories probably go right over the heads of the BoD or whoever approves the organization's budget. It seems that a reasonable solution might be to have "rollover" surpluses. Of course, that still doesn't do anything to prevent the "hoarding" nature of many humans.
      • Now lets assume you requested a budget increase for the following year - then this approach will also ensure that (lots of circularity going on here):
        • sales must go up to cover the increased budget
        • features must go up to get those sales
        • revenues must go up because you had more sales (else your stock price may drop...)
        • labor spent must go up to cover the added features and added workforce (assuming you throw developers at the problem...)
        • customers must increase because not all your existing customers w
    • Well since it is a non-profit, the company may be able to reduce its tax liability by taking the write-off, so in essence, it is not just throwing money around, it is actually doing the company some good.
      • I'm not sure you're right anyway. (Remember that this isn't personal income tax -- you reduce your taxable income just as effectively by wasting a million dollars on a useless project as you do by giving it to a non-profit.) But in any case, paying taxes on money beats the hell out of throwing it out the window.
    • by Tackhead ( 54550 ) on Thursday June 15, 2006 @10:46AM (#15540462)
      > The amount of money thrown away in this fashion is staggering and it happens in pretty much every organization, private or public. Surely some accountant, finance head or game theorist has come up with a solution, or at least an improvement, no?

      If you spend your own money on yourself, you care how much you spend and how well you spend it.

      If you spend your own money on someone else, you care how much you spend, but you don't care how well it is spent.

      If you spend someone else's money on yourself, you don't care how much you spend, but you do care how well it is spent.

      And finally, if you spend someone else's money on someone else, you don't care how much you spend, and you don't care how well it is spent. That is government.

      - Milton Friedman, "Free To Choose"

      Replace "government" with "any large bureaucracy inside or outside of government", and Milt was spot on. Bureaucracy is a metastatic organizational cancer; in business, it's somewhat limited by the threat of bankruptcy, and in government, it's unlimited until the society collapses.

      Since we can't eliminate the problem, the only thing to do is to try and mitigate the collateral damage.

      Employer-determined donations, plus employee-directed contributions, strike a pretty good balance. Yes, you're spending someone else's (your employer's shareholders') money, and yes, you're spending it on someone else (your favorite charity), but by having thousands of individual employees making those decisions, you at least get the sort of efficiency gains that come from free markets -- and if you don't like econo-speak, you can rephrase that same sentence for "swarms of decentralized intelligent agents", or "social networking".

      $25000 thrown into the black hole of the government does more harm than good. $50000 thrown down the rathole of the United Way does no good, but does less harm than paying the taxes on that $50000.

      But 10 $500 donations to the FSF, 7 $500 donations to the EFF, 2 $500 donations to Mozilla, 3 to the Apache Foundation, 3 to the FreeBSD folks, and so on - and for the 75 nontechnical employees out of an imaginary company of 100, 75 $500 donations to 75 separate charities ranging from the local animal shelter to half a dozen parents who set up tutoring classes for kids who would otherwise be getting shot on the street...

      ...that's how you spend $50000 and get some good out of it.

      One guy with a $50000 budget isn't going to have the time to parcel out the cash like that, and even if he did, he's going to be sorely tempted to spend a day or two on the golf course (or on three-martini lunches) with the 501(c)3 equivalent of salesweasels who want to lobby him for a shot the whole $50000 prize.

      But if he just gives his 100 employees $500 apiece, and each of those employees spends just ten minutes making up their minds on what to do with their own slice of the pie, the process of apportioning the donations takes him neither time nor effort, affords nobody an opportunity to accept any kickback more interesting than a coffee mug, and actually does some good.

      Even if your only motivation is to get the tax deduction and/or burn through the rest of the budget, employee-directed contributions are a win. You get the same deduction, and spend the same dollars, for much less work, and you do vastly less harm (and even some good) in the process.

      • Here's a counter-example. Pick any organization you think this principle applies to and then open up the books - particularly pay. Most people do care if the organization they work for is paying an excessive salary to someone that does not contribute to the organization enough to warrant that salary.

        So, what is missing from Milton's examples? Oversight and the fact that decision making is singular. This issue is transparent in the first example because everyone that cares about the transaction (being the si
      • ...and in government, it's unlimited until the society collapses.

        Not at all. An informed, involved citizenry can limit government waste if they so desire. Waste will grow only to the point that citizens tolerate it.
      • And finally, if you spend someone else's money on someone else, you don't care how much you spend, and you don't care how well it is spent.

        I think you're illustrating your own point! It's easy for you to look at hundreds of millions of dollars flying out of my bonus pool and shrug and say "Who is John Galt?" But *I* care!!!!

    • Does anyone's company have a practice that eliminates the incentive to waste money this way in the first place?

      Yeah, a local company around here has such a plan. If an employee comes up with an idea to save money (there must be some level of approval) they measure the actual savings achieved by the plan. The employee and the company split the first year's savings 50/50. The company doesn't save any money the first year but it does every year after. I know of a lady making $40K who took home a $30K check
  • 2cents... (Score:3, Insightful)

    by Manip ( 656104 ) on Thursday June 15, 2006 @10:28AM (#15540310)
    I donate anyway... But would have ordered some t-shirts, but they are ALL so ugly... Sorry, but I just can't stand the GNU mascot... I love Tux and the BSD Devil, and would happily wear them on me... But the cow, the cow! ...

    Seriously that thing needs to be replaced by something cute...

    The only nice t-shirt they sell is the "Happy Hacking" / generic one. Why don't they do a design competition and bring in some money?
  • by Noksagt ( 69097 ) on Thursday June 15, 2006 @11:01AM (#15540612) Homepage
    I make modest donations to many F/OSS projects. While many of the sourceforge hosted projects have obvious donation links, some others don't. So, I've made a list of donation URLs [northwestern.edu] for projects I have supported.
  • Thanks to RubyCentral, RubyForge [rubyforge.org] is getting new hardware [blogs.com] and a nicer hosting location. Donations are appreciated and are tax deductible [rubycentral.org]!
  • . . . does the USA fiscal year end in June??? Would it make more sense if the fiscal year was the same as the calendar year, as it is here in Brazil???
  • What's the deal with non-profits not providing receipts? Wikimedia didn't receipt me. Neither did Software in the Public Interest, despite including a SASE per their website. :( It's a small thing, but this has soured my plan to give heavily to open source this year, and for $100 donations it doesn't seem unreasonable. At least Red Cross sent me an email... and keeps sending me emails to my chagrin :(

    Of course, I'm sure that running a charity is complex and there may be good reasons for this trend.

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