+
+
+
Fundraising Campaign: Non-Profit Accounting Software
+
+
+
+
+Update on 2013-11-15: As can be seen, Conservancy has not
+ reached our fundraising target. However, as we promised below, we've begun
+ work on this project, but we'd really appreciate more donations, as we've
+ needed to make a lot of compromises in our plans since we didn't reach our
+ fundraising goal. Furthermore, we welcome volunteers to join
+ us in developing this software.
+
+
+
+
Conservancy has a plan to help all non-profit organizations (NPOs) by
+creating an Open Source and Free Software accounting system usable by
+non-technical bookkeepers, accountants, and non-profit managers. You can
+help us do it by donating now.
+
+
+
To keep their books and produce annual government filings, most NPOs rely
+on proprietary software, paying exorbitant licensing fees. This is
+fundamentally at cross purposes with their underlying missions of charity,
+equality, democracy, and sharing.
+
+
You can help Conservancy fix this problem by donating now. We seek to
+raise $75,000 to employ a
+developer for one year to make substantial progress on this project.
+
+
This project has the potential to save the non-profit sector
+millions in licensing fees every year. Even non-profits that continue to use proprietary accounting
+software will benefit, since the existence of quality Open Source and Free
+ Software for a particular task curtails predatory behavior by proprietary
+ software companies, and creates a new standard of comparison.
+
+
But, more powerfully, this project's realization
+will increase the agility and collaborative potential
+for the non-profit sector — a boon to funders, boards, and employees — bringing the Free Software and general NPO communities
+into closer collaboration and understanding.
+
+
Thanks in advance for helping us develop Free Software to benefit all
+non-profit organizations, and the
+populations they serve.
+
+
Donors of $500 or more will be acknowledged in the THANKS file and other
+ appropriate places in the codebase itself.
+
+
Endorsers of this effort include April, Fractured Atlas, The Free Software
+Foundation, Mozilla Foundation, GNOME Foundation, OpenHatch, Open
+Source Initiative, QuestionCopyright.org, and Software in the Public
+Interest; all encourage you to donate and support it.
+
+
+
Background
+
+
Like many non-profit organizations (NPOs) in the USA, Conservancy's
+ financial accounts are audited annually by an independent accounting firm;
+ we recently completed our fiscal year 2011 audit. As usual, our auditors
+ asked plenty of questions about our accounting software. Conservancy uses
+ only Free Software, of course, centered around a set of straightforward reporting
+ scripts that we created to run on top
+ of Ledger CLI. (Conservancy's
+ current configuration using Ledger CLI
+ is publicly
+ documented and explained.)
+
+
Our auditors were only familiar with proprietary accounting software, and
+ so our system seemed foreign to them, as it relies on Ledger CLI's text files, Emacs and
+ version control. During their questions
+ about our setup, we asked them to hypothetically prescribe a specific
+ proprietary software setup as a model for managing Conservancy's
+ accounts. Our chief auditor started by mentioning a few well-known
+ proprietary solutions. But then he paused and continued: Given
+ that Conservancy's a fiscal sponsor with so many temporarily restricted
+ accounts, existing systems really wouldn't do that good of a job for
+ you
.
+
+
Indeed, Conservancy reached out into the broader fiscal sponsorship
+ community beyond the FLOSS
+ NPO community and discovered that many larger fiscal sponsors — even
+ those willing to use proprietary components — have cobbled together
+ their own unique systems, idiosyncratically tailored to their specific
+ environments. Thus, good, well-designed, and reusable accounting software
+ for non-profit fiscal sponsorship is not just missing in the software
+ freedom community; it's missing altogether.
+
+
+
The project that Conservancy proposes will take a modest step
+ forward in creating a better solution for everyone.
+ Many NPO leaders and academics agree with Conservancy about the
+ immediate need for work to begin on this
+ effort. April, Fractured Atlas, The Free Software
+ Foundation, The Mozilla
+Foundation, The GNOME Foundation, OpenHatch, Open Source Initiative,
+ QuestionCopyright.org, and Software in the Public Interest have
+ all endorsed Conservancy's plan, and they encourage you to donate and
+ support it.
+
+
Conservancy is uniquely qualified to undertake this task. Using only Free
+ Software, Conservancy already meets the complex accounting challenges of
+ earmarked, directed donations for over thirty different projects. We've
+ learned much about this work in our first seven years of
+ operation, and we're prepared to apply what we've learned to solve
+ this problem not just for ourselves, but for anyone who seeks a
+ solution that both respects software freedom and handles non-profit
+ accounting for all sorts of NPOs, including fiscal sponsors. General NPO
+ accounting is just a “base case” of fiscal sponsorship (i.e.,
+ an NPO is just a fiscal sponsor for one and only one specific project),
+ and Conservancy therefore believes a solution that handles fiscal sponsors
+ will also handle the simpler case as well.
+
+
The Plan
+
+
Conservancy proposes to hire a software developer for one year to
+ accomplish the first two phases of this project. Conservancy seeks to
+ raise $75,000 toward this project to help cover salary and benefits for a
+ full-time staffer to work on this project. We ask that you give generously
+ via the donation buttons on this page to support our work.
+
+
Phase 0
+
+
Some Free Software accounting systems do exist. A previous informal
+ survey of these systems that Conservancy conducted in 2007 led us to the
+ conclusion that, in general, these systems were heavily geared toward
+ for-profit endeavors, ignored the unique needs of NPOs generally, and
+ were completely hopeless for the specific needs of a fiscal sponsoring
+ organization. Conservancy's assessment at the time was that these
+ challenges could be addressed only with a large rewrite of one of these
+ systems. Conservancy chose
+ Ledger CLI precisely because
+ it provided flexibility and configurability not present in any other Free Software
+ double-entry accounting system.
+
+
However, while that previous informal survey informs Conservancy's
+ existing hypothesis that Ledger CLI is the right base system here,
+ Conservancy will first test that hypothesis. The first phase of this
+ project (estimated to last approximately 6-8 full-time weeks) will produce
+ a written survey of all known Free Software accounting systems, and
+ indicate what challenges exist to adapt such systems for the needs of
+ NPOs. The Free Software Foundation has
+ pledged their help in the evaluation of SQL-Ledger,
+ and the GNOME Foundation has pledged their
+ help in the evaluation of GNUcash (which they
+ currently use, respectively).
+
+
Phase 1
+
+
Phase 1 of the project will select the preferred codebase from Phase 0,
+ and improve that system to create a basic accounting system for
+ small-to-medium sized USA NPOs (i.e., Form 990-filers) — including fiscal
+ sponsors — with the following features:
+
+- Basic accounts payable/receivable (with invoicing)
+- Tracking and reporting of non-profit income types (related business
+ income, unrelated business taxable income, donations, etc.)
+- Basic backup documentation tracking for expenses and payments
+- Basic bank statement reconciliation reporting
+- Basic annual audit preparation reporting
+ (A prototype
+ of this portion is already complete and has been relied on for
+ real-life audits; but the prototype is just a hack and needs to be
+ rewritten.)
+- Ability to easily handle all these features on a project-by-project
+ subset of the accounts, and to easily export and excise that subset from
+ the system. (i.e., support for temporarily restricted assets, earmarked for
+ fiscal-sponsored projects)
+- Multi-currency support and reporting
+
+
+
We will consider the first year of this project successful only if all these
+ functions can be performed by a bookkeeper who is generally qualified as a
+ bookkeeper, but not necessarily familiar with standard Free Software tools
+ such as GNU/Linux, Emacs, version control, and command line scripts. This
+ requirement is essential: Conservancy's existing system using Ledger CLI
+ already provides sufficient functionality to manage non-profit accounting,
+ but our system requires a bookkeeper who is also adept with the
+ aforementioned tools already.
+
+
Finally, while the first year of work focuses on USA NPO needs,
+ Conservancy seeks to lead an international effort, and welcomes
+ contributions and input from everyone in the non-profit community from
+ around the world. Conservancy has created
+ a mailing
+ list for discussion of this project and
+ a Wiki for collaboration and encourages interested parties
+ from around the world to join the mailing list and contribute to the
+ project!
+
+
Why Conservancy Must Fund This Work
+
+
As it stands, nearly all Open Source and Free Software NPOs either use
+ proprietary software, or fully outsource their bookkeeping and accounting
+ to third-parties. Those that don't do so (such as Conservancy and the Free
+ Software Foundation) have long complained that existing Free Software in
+ this area is inadequate, and have been forced to develop customized,
+ one-off solutions in-house to make the systems work.
+
+
It's highly unlikely that the for-profit sector will adapt existing Free
+ Software accounting systems to meet the differing needs of NPOs (let alone
+ the more complex needs of fiscal sponsors; based on
+ advice from our auditors and other fiscal sponsors, Conservancy understands that no existing
+ solution — proprietary or Free — meets the requirements of fiscal sponsorship accounting). Fiscal sponsors like
+ Conservancy must track a separate set of books for every project, keeping
+ in mind that a project may leave at any time for another NPO and need to take
+ their books with them. Yet, the books of the entire organization are the
+ aggregate of the books of all these projects, and internally, they need to
+ be presented as a single set of books for those purposes.
+
+
Meanwhile, even if an organization is not a fiscal sponsor, non-profit
+ accounting is just different than for-profit accounting, particularly in
+ the USA. For example, for-profit-oriented systems often make problematic
+ assumptions about the workflow of accounting tasks (often because NPOs
+ rely primarily on donations, rather than fee-for-service or widget-selling
+ income). Also, non-profit income is categorized differently than
+ for-profit income, and the reporting requirements vary wildly from their
+ for-profit equivalents.
+
+
Conservancy's existing system is working adequately, but requires daily
+ the relatively more expensive time of a highly technical person to do the
+ job of bookkeeping. Also, the system cannot easily be adapted in its
+ current form for another NPO, unless they also have a
+ skilled technical employee to act as bookkeeper. This project aims to build
+ on what Conservancy has learned and produce a non-profit accounting system
+ that corrects these flaws.
+
+
Finally, Conservancy's mission (as stated
+on our Form
+1023 with the USA IRS) includes producing Open Source and Free Software.
+Thus, this project is a great way to pursue Conservancy's mission and address a
+specific need that so many NPOs (including us) have. If no one steps up to create Free Software to replace the widely used
+proprietary software, NPOs in aggregate will pay much more money for
+proprietary licensing than Conservancy will ever spend in developing a
+replacement. Please donate
+generously to help us do it!
+
+
+
Statements of Support For This Project from Others
+
+
As a national fiscal sponsor with over 3,000 arts and cultural projects
+under our umbrella, Fractured Atlas is ecstatic about this effort's
+potential. After 15 years wrestling with Quickbooks and other inadequate
+options, the idea of an open source tool designed specifically for this niche
+of the field is beyond welcome. We wholeheartedly support the Conservancy's
+work on this front and look forward to seeing where it leads.
—
+Adam
+ Huttler, Executive Director, Fractured Atlas
+
+
QuestionCopyright.org is
+just one of many organizations that would benefit from a Free Software
+accounting system that is usable by non-technical people. We
+enthusiastically support the Conservancy's campaign to create one, and look
+forward to using the result.
+— Karl
+Fogel, Executive Director,
+ QuestionCopyright.org
+
+
As a fiscal sponsor organization with over 30 currently-associated Free
+Software projects, Software in the Public Interest shares the Conservancy's
+needs and interests in this area, and welcome the opportunity to collaborate
+on the development of a Free Software solution to our accounting needs.
+— Bdale Garbee, President, Software
+ in the Public Interest
+
+
Open Source accounting software specifically tailored for non-profits
+ will fill a pretty large need.
+ — Thad Calabrese,
+ Assistant Professor of Public and Nonprofit Financial Management
+ at NYU Wagner, and co-author
+ of Financial Management for Public, Health, and Not-for-Profit
+ Organizations, 4th Edition.
+
+
Creating free software specifically designed to address the needs of
+nonprofits is a laudable goal and one that Conservancy is extremely well
+positioned to achieve.
— Karen
+Sandler, Executive
+Director, The GNOME Foundation
+
+
The Open Source Initiative has shared the experiences of Software
+ Freedom Conservancy in navigating the financial management needs of
+ non-profit organisations and shares their concern. We have many NPOs as
+ members and we welcome this useful initiative by Conservancy.
+ — Simon Phipps, President, Open Source
+ Initiative
+
+
The Free Software Foundation is committed to doing all of its work,
+both public-facing and internal, using only free software. We are thankful to
+the developers of SQL Ledger for providing the accounting software that has
+served us well for many years. As we have grown, so have the complexities of
+our finances. Because of our own needs and our mission to help other
+organizations — both inside and outside of the technology sphere
+— run their operations on exclusively free software, we wholeheartedly
+support this Conservancy initiative.
— John Sullivan, Executive
+Director, Free Software Foundation
+
+
Open source is a great way to solve new problems and make software that
+is more flexible and responsive to the needs of the people who use it. That's
+as true for the finance industry as it is on the web.
+— Mark
+Surman, Executive
+Director, Mozilla
+Foundation
+
+
As a young free software non-profit, OpenHatch is thrilled to see this
+effort; it would let us spend more of our time on programs and less on
+paperwork. I have already personally donated.
— Asheesh Laroia,
+Executive Director, OpenHatch
+
+
Some Important Details for this Fundraiser
+
+
+- Donations made are general donations to the Software Freedom
+ Conservancy, Inc., a 501(c)(3) charity incorporated in New York.
+ Conservancy is committed to doing this work described herein, but cannot
+ promise to complete the work if the fundraising goal is not reached. If
+ the fundraising goal is not reached, Conservancy will do its best to make
+ progress on the plan above with the resources available. It's expected
+ that work will simply proceed, but more slowly and take more time, if the
+ fundraising goal is not reached.
+
+- The license for the project is not yet chosen, since Phase 0 might
+ prescribe contribution to particular upstream projects, and Conservancy is
+ committed to contributing to upstream projects under their chosen license,
+ where possible. However, Conservancy promises that all software that is
+ written will be released under a license that is both approved by
+ the FSF as a Free
+ Software license and by the OSI as
+ an OSI-approved license. New
+ documentation that is written will be released under some license
+ compatible with CC BY-SA 3.0 USA.
+
+
+
+
