[Osmf-talk] Treasurer's Report
Courtney
courtney.williamson at gmail.com
Sun Oct 1 15:42:53 UTC 2023
Hi, Roland,
There is a lot to discuss here, but there is one very simple thing
that I can clarify for you and for the membership.
The goal of the fundraising for this year is 521 GBP and that goal is
INCLUSIVE of corporate memberships and foundation memberships. You are
mis-categorizing "donations" as distinct from corporate memberships,
memberships, and other forms of giving such as sponsorship and other
kinds of gifts.
It is fine to label these categories differently in the books. But
your table creates a very skewed picture of what the fundraising looks
like. The fundraising committee created that goal, and we sought
funding through corporate memberships, corporate gifts, private and
corporate sponsorships, and other kinds of gifts all year as part of
our comprehensive approach to meeting that goal. All gifts, whether
they are called memberships or gifts or sponsorships are charitable
donations to OSMF. Thus, you are incorrect in showing the 66k in
broad base donations as the sum total of donations for the year.
Please find a way to correct this as it unintentionally misrepresents
this year's fundraising achievements. Guillaume and Mikel can support
me on this.
This detail is clear in my tables, which are visible in the community forum.
On Sun, Oct 1, 2023 at 10:49 AM Roland Olbricht <roland.olbricht at gmx.de> wrote:
>
> Hello Steve, hello Courtney,
>
> I'm extremely happy for your feedback. We need to arrive at a short
> enough one-pager such that people can understand the financial health of
> the Foundation. The thread on community got only few responses.
>
> So I'm open for concrete suggestions for improvements as e.g. Courtney's
> table. I'm not convinced now that a GAAP conforming report for YTD would
> be understandable for the majority of the Foundation's individual
> members. So it is not a good investment in time if I go into that grade
> of detail, but I would rather like to work with you to make the report
> compelling.
>
> In my ideal understanding, the financial health indicator for members
> and mappers would be a ticker on osm.org that says something like
> "OpenStreetMap is founded now up to ${date}", where "${date}" is
> something like "2026-08-11 08:15", and a $15 donation would push that
> date immediately by 15 minutes to give instant feedback on the donation.
> This would be an amount of time that has the same ratio to the year as
> the donation has to our yearly budget. But this leaves way too much room
> for interpretation to not confuse other people, because buying a server
> and even paying a monthly salary are rather one-time events than
> happening per minute.
>
> The current form has evolved over the year. We have for the accounting a
> professional accountant, and these are well detailed. However, the board
> had the concern that not even the board could easily detect if a working
> group or some other thing would grossly overrun budget.
>
> The form that I have published has been developed to show to the board
> that no working group or other thing has overrun its budget. So it is
> not intending to conform to any standard but to be such that at least
> all board members can understand it.
>
> Steve has asked:
>
> > Actual Amount Description Remark
> > 66 367.91 521 000 Donations Planned target of the donation drive
> >
> > This implies we’ve hit about 13% of our donation goal. Is that the correct interpretation or can we represent this in a clearer, more standard way?
>
> This is the correct bank account interpretation, because we have not yet
> seen large donations to materialize, not on the bank accounts and also
> not Purchase Orders or any other forms of contracts for donations. There
> have been more than one new corporate member, but this is not visible in
> this line.
>
> An alternative representation would be to lower the expected "Donations"
> cell and raise the expected "Corporate Income" cell accordingly to
> represent to expectation that most of this money will come from
> corporations.
>
> I would like to explicitly acknowledge here that our fundraising
> volunteers are doing exceptionally great work. It is expected and
> understood that we see the final benefit of the donations drive not
> before mid-2024 or even later, because decision making for larger donors
> takes time.
>
> Note that the money from this fundraising campaign aims to bring us
> through FY2026. This is where currently our reserves end. In this sense,
> it is more a, probably confusing, side-effect that one can track the
> going of the individual donations portion of the fundraising campaign by
> interpreting these numbers in this YTD.
>
> > As someone who works on the fundraising side of things, I have the same
> > question as Steve, plus several others.
> >
> > To start, with regard to the fundraising, I can answer Steve's
> > particular question. The issue is that in the current table the "broad
> > base" category of fundraising has been incorrectly conflated with the
> > overall fundraising goal. So that the fundraising report should look
> > something like this:
> >
> > Type FY2020 FY 2021 FY2022 2023 YTD 2023 Goal
> > Broad base 66,367.91 100,000
> > membership 6,769.67
> > corporate membership
> >
> > 107,590.22 300,000
> > SotM 17,985.69
> > 0ther gifts 100,000
> > total *198,713.49* 500,000
> [..]
> > Importantly,*this is fundraising for FY 2024*. No fiscally responsible
> > organization would fundraise "as you go" for the current year's
> > expenses. It is confusing that the numbers for FY24 fundraising goal
> > seem to have been matched to the FY23 goal for budget.
>
> This has been an explicit board decision, and I promise to insist for a
> different approach in the future. The rationale has been that it
> confused people if the budgeted income is different from the budgeted
> expenses, and that cash that materializes in the bank accounts shall be
> visible as income.
>
> As said, our reserves currently suffice into FY2026.
>
> > Which brings me to my many questions about the "expected" reporting.
> > 1. What is this year's budget, based on this year's expected expenses?
> > The numbers in the table do not look like a current year budget for
> > several reasons:
> > a.) "Reserves" are not budgeted expenses, so why are they reported as
> > such? It would, indeed, be nice to know, somewhere, what are the
> > foundation's reserves and how the foundation contributes to them, but
> > that should be a different table.
>
> There are a couple of conflicting concepts here.
>
> The expenses for servers are expected to be distributed unevenly over
> the years. In my understanding, the correct approach to this would be
> use depreciation, show buying of hardware as conversion from fungible
> assets to fixed assets, and build a structured approach of
> - how much hardware depreciation we expect in the next years
> - a multi-year forecast when we need to buy how much hardware
> - a representation of depreciation as expenses to set clear how much
> money we need a year on average for hardware
> - show the rest of the OWG budget for services (power supply, network
> etc.) as a different item
>
> The board did explicitly not mandate to break it down that detailed
> because it would be too confusing. However, I would like to make visible
> in the budget that we need a budget about 200k GBP a year on average to
> renew our current fleet of servers and have hosting on the same size we
> have now. Having a padding line item "OWG reserve" had then been the
> compromise to represent that we need on aver age 200k GBP for OWG, and
> that sudden spikes in years with many servers to review are not the
> OWG's fault or a surprise.
>
> If you have a good representation for that, the board and I are for sure
> more than happy to change the representation. There had been no point to
> push through a representation that not even seven competent people had
> been able to understand - the competing approach with explicit
> depreciation had been to incomprehensible.
>
> The second conflict is with when to realize corporate income. We have a
> handful of corporate members that have not paid their yearly renewal and
> are ghosting on any attempts to contact them. In strict accounting, you
> would put that claim dubious but have it still in the books. In
> practice, no so member has even later paid, and the Foundation has no
> credible way of pressure to enforce payment of these invoices. I'd
> simply throw them out after three communication attempts, but, Courtney,
> you have rightfully pointed out that this would be a missed opportunity
> at least for the larger members where we might want to get back into
> contract.
>
> There a decision missing like "eject after second dunning letter
> everybody below Silver level and treat everybody on and above that level
> as defaulting in the books, even if the contact continues". We had an
> approach for that but it had not found a majority, because it centered
> around severing ties to unreliable debtors.
>
> > b) What is the current year operating budget in actual GBP? Because the
> > only way to know if we are "in the red" or "in the black" for the year
> > is if we know what is the actual budget for this year in real money, not
> > in hypothetical money.
> >
> > I have other questions: 2. What is the year on year top level
> > comparison for the budget so that it is possible to know some context?
>
> From an official of view, we are presenting in Dec 2023 to the members
> that we have started in 2022 to employ and pay for Grant. This is an
> artifact from that our FY fits extremely bad with the date of our AGM.
>
> So neither exists a year over year comparison nor would it be of much
> help, because we are just starting to see the cost of employing people.
> This does not mean that it is impossible to do, but that it takes time
> to build it in an understandable way.
>
> > How is this year compared to other years? It is always illuminating to
> > compare the past with the present. 3. Why is the "overhead" number not
> > included in the main budget, but rather marked there as N/A?
>
> The overhead is listed below in the detailed break out. You are the
> first to ask for the sum explicitly in the cell, so it now makes sense
> to invest time in copying the sum from below into that item.
>
> > To me, in the simplest terms, the top level budget, based on the numbers
> > currently being reported, should look something like this:
> >
> > type fy2020 actual FY2021 actual FY2022 actual 2023 to date Q423
> > expected 2023 planned
> > OWG 41, 339.43 169, 197
> > EWG 50,000
> > LG 5,168.64 1000
> > Other WG 5000
> > Personnel 181,018.14 275,000
> > Overhead 16,268.84 40,500
> > SotM 533.95 0
> > debt
> > Total 202,989.57 371500
> >
> >
> > If the previous years were filled in and if we knew what the operating
> > reserve was, we could have a real conversation about the health of
> > the organization. As it is currently reported, it's impossible to know
> > what is going on at all. I find this deeply problematic. If this level
> > of detail is not something that should be public, that is fine, but then
> > something else should be reported here. (Please note that I didn't
> > report any numbers that were not already in the treasurer's report. I
> > simply put them in a different table.)
>
> As pointed out, no-one has asked for this, so other things have got
> priority.
>
> > With both of these new charts in hand, I am able to see something that
> > inspires another question. 4.) Why are we reporting almost 18,000 in
> > revenue from a SotM that is not taking place? [..] Or are they monies that came in from last year's
> > SotM in FY 2023?
>
> This in money from the last SotM that has been booked in FY2023. There
> is the necessity to set up contracts with large corporations that have
> to get this through their internal decision making process, and this has
> taken much more time than expected.
>
> > The reporting of the OSMF finances has troubled me for a long time, and
> > as someone involved in the fundraising, I want to note that if we are to
> > credibly ask for donations, small and large, we owe the people who give
> > to the foundation a level of reporting that matches standard accounting
> > practice on a quarterly and annual basis. We don't have to give all the
> > details, but we do have to offer a rational lens into how we are
> > managing our finances. If we can't do that with a volunteer
> > board, because it does take time, we need to pay someone.
>
> We pay for professional accounting. This works well, and the problem to
> solve is to have a good idea how to present it and then a lot of
> one-time work to set that up. Guillaume has started this already some
> time ago, I have taken over to have something this is good enough to
> present it to the board. And we are now working towards something that
> is understandable by the average member also without an accounting degree.
>
> There are the yearly fiscal reports, see here
> https://osmfoundation.org/wiki/Finances
> and the unanimous feedback on them is that they are incomprehensible to
> our members (and most likely some potential donors, too). Having an
> incomprehensible report per quarter instead is not a solution.
>
> So I'm happy to work with you and anyone else interested in on a further
> format that is comprehensible for the average member an can be easily
> kept up to date from the existing bookkeeping.
>
> From my understanding, the next steps would be
> - to make the server fleet needs more explicitly, such that you can see
> what we have spent on operations in past years and relate that to the
> OWG's budget (which is prudently careful for contingencies)
> - to properly sort one time donations in the past from those which have
> a chance to be recurring, their ringfenced portions, and the interaction
> with the expenses for employment
> - to then make up a multiyear past expense and income overview that
> enables to understand what we reasonably could expect as income and
> expenses for the next few years to come
>
> I'm happy to shift priorities here if you have better ideas. We are on
> our way to make the financial state of the Foundation understandable.
>
> Roland
>
>
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