Dear members,
As promised in the previous communication the Board would like to share some more details on our current financial situation and the budget for our 2024-2025 financial year, which runs from 1st October 2024 to 30th September 2025.
Background
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The Foundation needs an approved budget in place because our spending policies use the budget to authorise what staff and committees are allowed to spend money on. This year we passed the budget on time for the start of the financial year, which was thanks to a lot of detailed and particularly challenging work by Richard, which the board is grateful for.
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We consider the budget in 2 distinct parts:
- Budget for our fiscally-sponsored projects. We consider their income, but not their expenses. The reason for that is that the Foundation takes a small part of the income as the fiscal sponsorship fee, supporting our administrative and operating costs. Funds received on behalf of other projects are tracked separately, called “reserved funds”, and the Foundation cannot spend money that belongs to the other projects.
- General operating budget for the GNOME Foundation, which is what this post is all about! At any later point, when talking about the budget, we’re talking about the general/unrestricted operating funds and it is safe to assume that income for fiscally-sponsored projects is not included.
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The budget for the previous 2023-2024 fiscal year was presented to the board as a roughly balanced break-even budget, anticipating $1.201M of revenue and $1.195M of expenses. The board considered two fundraising scenarios proposed by our previous ED, with the most ambitious scenario planning to raise an additional $2M for the Foundation, and one more conservative which anticipated an additional $475k of revenue from various sources (donations, grants, event sponsorship). This more conservative scenario was included in the budget, but in practice things did not work out as planned. This additional funding was not raised, meaning that in practice the Foundation once again ran at a deficit over the past year and used funds from our reserves.
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The new 2024-2025 budget considers a total income of $586k, and total expense of $550k. Two things are clearly different from last year: the expenses have been greatly reduced, and we have aimed for a surplus instead of the deficit we ended up with last year. Both things were a consequence of the budget from previous year not being executed as expected. Since our reserve policy requires us to retain enough money to sustain core operations without income for another year (specifically, 1.1 times core spending), we’ve had to reduce expenses to save money and restore our reserves.
So, let’s dig into the details:
Income
- $205,100 in donations. This number is based on previous years income, of individual contributions ($75,000), Advisory Board fees ($105,800), and other small contributions ($7,800) like matching donations (where companies double what employees donate). It also includes $16,500 currently pending from Wau Holland Stiftung, an organization we had a historic agreement with to collect funds from European donors that is tax deductible. We believe that there is a great potential for the GNOME Foundation to increase the amount of individual contributions received, and this has been included in the Strategic Plan and many board discussions. Unfortunately, without a permanent Executive Director, we cannot guarantee that we will be able to establish a program to do so in the short-term, so we have decided to budget conservatively to ensure economic sustainability.
- $64,500 from event sponsorship. Most of that money comes from GUADEC ($61,000), with some from LAS and GNOME Asia, which is one of the main reasons why we are able to maintain our events: because they are sponsored separately, they are mostly self-sustaining.
- $65,500 in fiscal sponsorship fees. This is based on a % fee the GNOME Foundation takes for our operational costs from hosting GIMP and Black Python Devs. This number is uncommonly high due as we have been workng with the GIMP on financial and legal arrangements to receive approx $1M of historical Bitcoin donations. (And sell them immediately - holding Bitcoin assets creates a regulatory/reporting problem for US nonprofits and our accountants have advised us against it.)
- $1,000 in interest from money in the bank account. This is budgeted higher than previous years, as work is already in progress to change bank accounts to increase this income, as recommended by our auditors.
- $500 profit from selling T-shirts and other goods ($2,500 income, $2,000 in expenses).
- $250,000 from the 2nd year of an Endless grant that was approved last year. This grant provides $50,000 for general funds that the Foundation can use at its discretion, and $200,000 that need to be spent on specific tasks. Currently, those are assigned to Flathub, Parental Controls, GNOME Software maintenance, and internships. Some of those will be detailed in the expense section.
Expenditures
- $10,000 interim ED salary. This is to be able to pay Richard to continue managing the Foundation and staff team until 10th December.
- $100,000 for development contractors for work associated with the Endless grant. This work includes improvements in Parental Controls and GNOME Software, and is being executed by Philip Withnall (development), Sam Hewitt (design) and potentially one more developer over the coming year. Philip gave an update on the work in his presentation at GUADEC.
- $110,600 in contractor costs for program staff, including events and infrastructure. This covers Kristi’s work which is the backbone of events such as GUADEC, LAS and GNOME.Asia, and Bart’s work running GNOME and Flathub infrastructure. The Flathub portion of this work is funded by the Endless grant.
- $32,000 in Outreachy interships. This is a long-term partnership with Conservancy and commitment by the GNOME Foundation as the original birthplace of the Outreachy initiative. They are supported this year by reallocating some of the Endless grant, with their permission. This will pay for a total 4 interns between the winter and summer cohort.
- $20,000 in contractor support. This is allocated for part-time contracting of Thibault Martin and Dawid Jankowiak to support the STF team and work on a crowdfunding platform for our development fundraising. Some of this is funded by the Endless grant and will be spent on coordinating the next steps of the Flathub payments/donations launch.
- $158,000 in employment/contractor costs for operations and admin staff, supporting the GNOME Foundation across finances, events and community initiatives.
- $47,500 in professional services, ie legal and accounting. These include a reserve for legal fees ($10,000), an external accounts audit for the previous financial year ($17,500), which is required due to our income (mostly due to STF) being over the $2M threshold, and accounting fees ($20,000). Some of the financial and legal costs are driven by work setting up Flathub LLC and are covered by the Endless grant.
- $3,200 in office expenses, mostly related to postal expenses required for sending material between contractors, staff, and event organisers.
- $54,000 in conferences and travel. These include the budget for the conferences themselves ($30,000), which includes GUADEC, GNOME Asia, and hackathons around the globe, but also travel for staff ($12,000) and community ($12,000). Travel particularly has been significantly reduced from previous year, but should still allow for staff/organisers to attend our events, and for the travel committee to support some community travel to GUADEC and GNOME Asia.
- $15,000 in other fees. These include banking costs for sending money from the US to Europe, PayPal fees, and insurance. They might seem high, but are in total less than 1.5% of the cash flow of the Foundation, which is within the expected value for any organization.
Balance
- As of the preparation of this budget, we have approx $140,000 in GNOME Foundation reserves. There’s a lot more money in the bank, but they are reserved funds held for GIMP and BPD.
- We need to ensure that we meet our reserve policy of retaining 1.1 times core spending. Unfortunately, core spending is fairly loosely defined. This year, we have considered: Events and minimal staff travel, part-time infrastructure support, minimal staff, and some fees and professional services. In total, we accounted that we would need at least $158,000 at the end of the year to be able meet the policy.
- The approved budget should put our reserves around $176,000 at the year end, which is slightly above our reserve policy. Considering we used a very limited interpretation of the reserves policy, it’s better to include a small safety margin for any unanticipated costs.
Conclusion
With limited time from our interim Executive Director (ED), Richard Littauer, who is working part-time, the board is prioritising: recruiting our new ED, delivering our current project/grant commitments (to STF and to Endless), and fundraising for development work. This includes working with the community to launch our development fund crowdfunder/platform and plan a follow-up project for STF grant, so that the GNOME Foundation can support and grow its direct investment in project development.
Keen readers will note that there is nothing in the current budget for the ED’s salary. We are in discussions with a potential donor to see whether we can find support for the salary for the ED for the first year. In any case, transparently sharing our financial situation and fundraising needs is an essential part of any ED recruitment process, so we could still recruit somebody with “raise money for your own salary” being their first priority.
Hopefully this additional detail helps to show the challenges of our current situation, and why we had to make really tough decisions, like parting ways with some greatly appreciated members of our staff team. We hope this sheds some more light on why those decisions were taken, provides confidence on the work done by the board and the ED, and where we currently stand. We are also very relieved to be able to provide a surplus budget for the first time in many years, and doing so while still being able to support the community: events, infrastructure, internships, travel funding, and meeting our commitment to donors for work done in some parts of the stack, e.g.: Flathub, parental controls and GNOME Software.
We welcome any feedback and questions from the GNOME community. Thanks to all of our GNOME members, contributors, donors, sponsors and advisory board members!
The GNOME Foundation Board of Directors
