2016 Draft Budget Feedback & Discussion

[vdrover]

The (now very late) 2016 draft budget is now available for discussion. Here is a project-wide summary of the revenue and expenses:

REVENUE
1240 Grants receivable, $3,000
4022 Non-event Sponsorship, $95,000
5450 Advertising revenue, $26,495
5461 Demo Site Affiliate revenue, $96,000
5462 Joomla.com Affiliate Revenue, $120,000
5490 Other revenue, $154,000
Total Revenue, $494,495

EXPENSES
7520 Accounting fees, $15,000
7530 Legal fees, $47,500
7540 Professional fees - other, $4,000
8140 Postage & shipping, $8,550
8150 Mailing services, $100
8170 Printing & copying, $18,850
8310 Personal Travel Costs, $162,600
8320 Conference costs, $183,000
8505 Bank Charges, $2,500
8520 Insurance - non-employee related, $1,200
8560 Outside computer services, $4,620
8570 Advertising expenses, $26,000
8580 Contingency provisions, $7,500
8590 Other expenses, $5,500
Total Expenses, $486,920

As you can see, the draft budget is very nearly balanced with a net gain of $7,575.

The budget process was done similar to past years with budget items submitted by the leadership teams and working group leaders. You can find a sorted list of the raw budget request submissions here.

A few notable changes:

• Departments were included to allow a seamless transition to the new structure.
• Requestors were asked to break their budget down in a more detailed fashion.
• Requestors were asked to specify metrics for success.

Some other budget breakdowns and info:

Budget Overview by Leadership Team:

Budget-Overview-by-Leadership-Team.jpg

Expenses by Department:

Expenses by Department.png

Full Budget with line item totals, line item owners, request titles, assets, etc:

2016 Detailed Budget.pdf

Next Steps:
The Open Source Matters board needs to vote on this budget, and given the lateness we would like to move quickly.

So please reply below your comments and questions and I'll do my best to answer them or refer you to the best person. Note that a lot more information is available in the raw budget requests than is even is in the detailed PDF attached. You'll definitely want to review that if you have questions about a specific line item(s).

If/when this budget is approved, I will be working with the Leadership teams (and then the OSM board) to lock this budget in for 2017 also (with proportional adjustments for changes in revenue) so the project can focus on achieving their goals for a solid 18 months.

[Radek Suski]

Disclaimer: I am trying to be constructive and there is no personal attack in my questions.

I am a bit confused about this:

Board travel for sprints and conferences: -$12,000

As far I understand there is no OSM board anymore. And it is in my opinion a huge amount of money for 3 people left in OSM.

Also this point, even if the amount of money isn't very spectacular, is not very understandable for me:

Sponsorships & awareness campaigns such as Grace Hopper , educational events or social events

I am not sure why are we sponsoring external events. I am fine (definitely) with sending people to external events but why do we have to sponsor those too? For me it is a bit like if would start spending money on advertising in Google ads.

As a a bit off topic question, I remember that after last Grace Hopper conference Ruth and Sarah told us that there is a huge number of women wanting to join the community and help the project. Did that happened? I'm asking because I would like to find the actually revenue for the project from spending our money on sponsoring such events.

The JET budged has been cut drastically and I personally feel like this project actually bringing people to the community. Although I may be a bit biased.

Frankly my last question: is there any way the community could find whose travel costs for which purpose and which amount of money is being covered? It would be very helpful for us to understand why we are spending this money.

Thanks in advance.

Regards,
Radek

[deleted user]

is there any way the community could find whose travel costs for which purpose and which amount of money is being covered?

I've said this before and I'll say it again here, I do not think the project's leadership should be publishing a by-name roster of whose expenses were covered for what events and at what costs. This level of detail IMO is inappropriate to just throw out there for public consumption. I have no issue with a general roll-up for an event broken down at a team level (so using JAB as an example I'd be OK saying that JET spent X, PLT spent Y, and CLT spent Z), but I don't think it's either fair or pertinent to the greater community to say that "Andre came to JAB via JET and used X, George came to JAB via PLT and used Y, etc." except for community members to be able to scrutinize and try to micro-manage the leadership's travel spending. And this comes from someone who will very openly say he probably spent almost $10K of the PLT's travel budget himself in one year because the funding was available, he was willing to "talk up" the project (within project circles and outside it), and was one of the few willing/able to travel for said purpose.

I am not sure why are we sponsoring external events. I am fine (definitely) with sending people to external events but why do we have to sponsor those too? For me it is a bit like if would start spending money on advertising in Google ads.

What's the issue with Joomla sponsoring events? It's a perfectly fair method of marketing exposure. If we're just sending people to attend events there's very little return to the project. If they're going to speak about the project, there's a little more return but not very much. Sponsorship has the potential for a greater return. And IMO Google ads is a completely different topic than event sponsorship and that's not the most fair comparison.

[uaintgotthisid]

I'd say the most powerful marketing tool we have is the volunteers, but such a little budget is assigned to them. People who are already volunteering to make the project better should be better supported as they have the most passion for the project and can "sell" Joomla! best.

[vdrover]

I am a bit confused about this:

Board travel for sprints and conferences: -$12,000

As far I understand there is no OSM board anymore. And it is in my opinion a huge amount of money for 3 people left in OSM.

There are 3 voting board members but other non-voting members also. And depending on what happens with the transition, these members may need to come together, or new members added to handle to the workload the way PLT has continued to add members. In addition, some board sprints are needed with our accountants and such. Finally, at 3.5% of the budget, this is well within norms for administrative costs for non-profits.

Sponsorships & awareness campaigns such as Grace Hopper , educational events or social events

I am not sure why are we sponsoring external events. I am fine (definitely) with sending people to external events but why do we have to sponsor those too? For me it is a bit like if would start spending money on advertising in Google ads.

As a a bit off topic question, I remember that after last Grace Hopper conference Ruth and Sarah told us that there is a huge number of women wanting to join the community and help the project. Did that happened? I'm asking because I would like to find the actually revenue for the project from spending our money on sponsoring such events.

The JET budged has been cut drastically and I personally feel like this project actually bringing people to the community. Although I may be a bit biased.

Grace Hopper and other non-Joomla-event sponsorships all fall under account 8570_Advertising. In total, the project is spending $26,000 or 5% of it's annual budget on advertising. This is again not a large number for a non-profit. Grace Hopper specifically represents 0.8% of the budget.

For me personally, I think sponsoring a conference that focuses on women in tech fits well with the projects tradition of supporting gender diversity. But the CLT is best informed as to their motives for selecting this event. PLT can speak to their motives for advertising at non-joomla events.

That said, one thing that has lacked in prior budgets in which I have participated is accountability. So in this year's budget, we asked requestors to describe what success looks like. I'd say in general, the replies were a little less specific than I had hoped for. But the idea is that expenditures need to be accountable. I hope that the next treasurer and new board (made of department heads) requires reports from the line item owners on wether or not they achieved success. Ideally we'll get to a place where return-on-investment (direct or indirect) is built into the DNA of the budget process. We're not there yet, but i feel asking the "success" question is a good start.

Specifically related to the JET budget, the CLT set their own amounts and they had a lot of cutting to do because of the big drop we experienced in our revenue. However, I did advise all the stakeholders/line item owners/budget requestors that discretionary travel should be a big target for cuts, as OSM would be looking very hard at all travel line items.

Relating to sponsoring events in general, the stakeholders/line item owners/budget requestors had some discussion regarding who's budget should be in charge of sponsoring events. As background, some of you will know, OSM transferred all event sponsorships to CLT last year, and the other event OSM used to sponsor — Google Summer of Code — was transferred to PLT. In the recent discussion, there seemed to be a "soft" consensus that advertising the project should probably be under the purview of the marketing team, and thus currently CLT. There was no vote or anything but I can imagine that in future budgets advertising via event sponsorship will be part of marketing.

Is there any way the community could find whose travel costs for which purpose and which amount of money is being covered? It would be very helpful for us to understand why we are spending this money.

I personally feel that this should be public. However, there are privacy issues. If/when the project makes a decision to publish this info, we would need to have project participants agree to the publication of some of the their personal information (Just first and last name could be enough).

I also think any travel done on behalf of the project should require a report before (i) reimbursement is issued and (ii) subsequent travel approved. This goes back to the idea of accountability. We do need to be careful to not create so much bureaucracy so as to limit participation and progress, but compared to now, even a few sentences would be a good improvement. Even a 2-3 question survey with simple ratings scale would be a great way to evaluate the events/sprints folks travel to because currently we have no metrics for these things.

[deleted user]

I personally feel that this should be public. However, there are privacy issues. If/when the project makes a decision to publish this info, we would need to have project participants agree to the publication of some of the their personal information (Just first and last name could be enough).

I see publishing even names as opening the door for borderline harassment regarding the use of project funds of travel which is why I have always encouraged summarized reporting (make the by name lists available internal to the leadership teams if you must). Speaking very openly on my project related travel, most of my flights were on United because RDU ran a lot of flights to their hubs at IAD and EWR which enabled me to move quickly and efficiently to almost any location. Yes, this did come with some added expense. That also doesn't account for the out-of-pocket expense I incurred each time (generally 15-25% of the flight cost paid by OSM) for "comfort" seating to help deal with my physical condition which if I had requested and received support from OSM on would have just left the door open for more scrutiny and borderline harassment. If it was announced on a weekly/monthly report that I attended 6 events in an 8-week period (which did happen though I don't remember the exact costs for travel anymore), that's going to leave the project leadership defending my travel choices and itineraries, to include why I was attending so many events or why my flights were not with cheaper alternative carriers or any other excuse that publishing a certain level of detail will come with. I don't think that's a fight that needs to be had publicly; it needs to be justified to whomever is approving the use of that budget for those activities and it should be recorded in the books for future auditing purposes but I personally would not feel comfortable having my travel expenses published like that and I'm sure others may feel the same way.

[vdrover]

As I said, this is a project-wide decision, and not directly related to budget discussions. My preference or your preference is just that. Maybe we can start another thread on this topic if/when it comes up.

[deleted user]

Radek opened the door and I just responded with my concerns. As someone who's had to deal with stolen financial and identity details from what was supposed to be secure sources in the last couple of years, anything regarding publishing of personal data (even at a summarized level) is always going to cause some concern from me.

[vdrover]

yes, no problem at all. Just thought further discussion might be better suited to a dedicated thread.

[brian]

For the record some personal information about the amount of money an individual spent in attending an event has been published in previous OSM board minutes

[Radek Suski]

If we are not going to publish individuals travel costs it would be at least good to have an independent group of people as an control organ I think.
But this is totally of topic.

To the sponsoring: I don't think there is any revenue for the project sponsoring this kind of conferences. I may be wrong because it's just a feeling but if I am wrong it would be great if someone could prove me wrong.
Additionally I think we are in small financial trouble and in this case sponsoring events the are not even directly PHP related is not the best idea. We are cutting sponsoring of events for our own community but sponsoring external events. IMHO we have enough volunteers within the community and we would do better trying to encourage those people instead trying to involve someone from outside.

There are 3 voting board members but other non-voting members also. And depending on what happens with the transition, these members may need to come together, or new members added to handle to the workload the way PLT has continued to add members.

Makes sense. Thanks for clarifying it.

[Chris Davenport]

Am I right in assuming that 5450 Advertising revenue is (mostly) from Google Ads? If so, that appears to be very low. A quick look back at 2009 shows it to have been just shy of $150,000 that year. Any particular reason for such a dramatic decline, or have I interpreted the figures incorrectly?

[sozzled]

$12,000 a year for travel—even if it were for as few as three people @ $4,000 each—is chicken-feed for a world-wide organisation. Pfft!

[vdrover]

Am I right in assuming that 5450 Advertising revenue is (mostly) from Google Ads? If so, that appears to be very low. A quick look back at 2009 shows it to have been just shy of $150,000 that year. Any particular reason for such a dramatic decline, or have I interpreted the figures incorrectly?

Yes, Advertising revenue is primarily Ad Sense, and revenue is indeed down quite a lot. It's clear that reduced traffic to j.org properties is an important factor. There may be other factors also, but most are only speculation on my part. For example, in the JED reboot, I have been told that the number of banner spots was reduced. I can't verify that, but maybe the JED team has some insight.

The Capitol team has been working on a plan to boost banner placements project-wide. Mike Demo may have some insight here.

[dhuelsmann]

Any chance you can start publishing regular monthly financial reports so that the community sees some evidence of OSM transparency?

Haven't seen a P&L statement in years.
Haven't seen a Balance Sheet since 2013.
Haven't seen a Budget Compared to Actual in years.

Surely the board of OSM must require those documents each month in order to fulfill their fiduciary responsibilities. It should be no trouble to post them monthly on the OSM website after the monthly board meeting is completed and the reports have been approved by the board.

Also, the last federal tax documents posted ostensibly for 2014 was actually the same 2012 document already posted. So we are missing 2013, 2014, and soon 2015.

Thanks

[dhuelsmann]

As I suspected, there is no interest in real transparency. I am just talking to myself here. So frustrating.