Today we removed the donation page and links from the Joomla.org family of sites. We did this because our lawyers advised us that soliciting donations on the web creates a host of problems. When you ask for contributions on the web, you are asking all over the world. It turns out that just inside the United States there are over 40 different sets of laws and regulations that you have to comply with, and there are more in various other countries. To file all of the paperwork to be able to do this would cost thousands of dollars and then maintaining the appropriate records and forms each year would be thousands more. The Project gets about 15 percent of its income from donations via our web form, and the OSM board and core team decided that it does not make sense to spend almost the same amount doing that all that legal work. By the way, this doesn't mean we won't take donations, just that we can't ask for them.

Some good materials about this:
http://www.rsmmcgladrey.com/RSM-Resources/Publications/Fundamentals/Fourth-Quarter_1/Protect-your/
http://www.charitableregistry.com/faq.htm

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The Project cannot really afford to lose this income (15 percent is a lot), but as financial stewards of Joomla! the OSM board is working hard to come up with ways to fill the gap.  Some of this we  hope will come from increased sales in the Joomla! Shop and we'd like to ask anyone who would like to to help support the project add a Joomla! Shop link to your site (See our new collection of banners).

A lot of people ask me how Open Source Matters is financed. As you can probably guess from looking at our websites, about 75 percent of our income comes from advertising. The rest has come from donations, royalties, shop sales and things like the Google Summer of Code (Thanks Google!) and prizes (Thanks Packt!). As a board we have been working hard to diversify our income sources in order to achieve long term financial stability and independence for the project.

People also ask me what we spend OSM's budget on. In 2007 our budget looked like this:
 

   
Taxes 18%
Administration 7%
Events and conferences 55%
Web sites 15%
Promotion 3%

 

Even though we are a nonprofit we currently have to pay taxes on advertising income, and those taxes consume a large portion of the budget. The taxes are something we are trying to decrease by getting advice from lawyers specializing in tax and nonprofit issues. Early on in the project the team realized it was important to ensure the Joomla! presence around the world and build the Joomla! community by sending people to Joomla! Days, Expos and conferences, and team meetings and that travel has traditionally been our major expense. As the project grows and becomes more complex this mix will doubtless change, but I think that OSM will always be an organization with low administrative overhead (almost all of which is for accounting services). Although, at times I dream of an office that isn't also my dining room table. This year for the first time we started paying for a post office box, and those kinds of basic operating expenses will probably continue to grow gradually.

Like most young nonprofits we're learning as we go. It's challenging, but it's also a pleasure to work with such great people and to have the support of such a vast and passionate community.