Snowdrift.coop: Funding for free projects

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Funding projects in the "free and open" world is a perennial problem. "Crowdfunding" using Kickstarter and other platforms has helped to alleviate some funding issues for some projects, but it is a model that targets one-time goals, not sustained development. Snowdrift.coop, which is an organization aimed at providing long-term funding for free and open projects, has—somewhat ironically—announced a crowdfunding campaign to launch itself.

There are a number of ways that today's projects raise money: fundraising campaigns offering "perks", web site buttons encouraging people to donate to the project, bounties, advertising, and so on. The Snowdrift.coop project explores existing fundraising methods on its web site and finds them lacking in various important ways. What projects need is a stable source of funding that they can depend on, while donors want a way to pick and choose which projects deserve funding. Over time, if a project is not producing what the donors want, the funding may dry up and move to another project. Snowdrift.coop is aimed at facilitating all of that.

The "snowdrift" from the name refers to the Snowdrift Dilemma, which is a variant of the Prisoner's Dilemma. If a snowdrift blocks the road in a neighborhood, everyone needs it to be cleared—eventually—but everyone gains by delaying their participation as long as possible waiting for others to start in (and perhaps finish) before them. Of course, if everyone waits, nothing actually gets done. If there were some way to do your part and be sure that the others are doing the same, the work would be fairly and equally distributed.

Snowdrift.coop is not just targeted at software projects, but at any projects that produce "soft" goods: music, art, research, and so on. These goods take a lot of effort to create, but little or no effort to copy and share. Snowdrift.coop calls these Free/Libre/Open (FLO) projects; it would like to find a way for the community (and world at large) to sustainably fund these types of projects and it believes that a many-to-many matching scheme is (at least) part of that solution.

The basic idea is that participants ("patrons" is the term Snowdrift.coop uses) agree to donate a (small) amount of money monthly to a particular project that is based on the number of other patrons that the project has. So, effectively, each new patron is matching the contribution of the existing patrons as well as new patrons that come along. The amount is one cent ($0.01) per ten patrons, so a project with 100 patrons would cost each patron ten cents per month and raise ten dollars per month. But the numbers grow quickly, so a project with 1,000 patrons costs each one dollar and raises $1,000 per month; 10,000 patrons results in $100,000.

But patrons can allocate more than just $0.01 per ten other patrons. Each unit of donation to a project (known as a "share") is, effectively, $0.001/patron (i.e. one-tenth of a cent per other patron). Multiple shares can be allocated to a project, but they are not matched by others at the same level as the initial share from a patron; in fact, each additional share is matched somewhat less. There is a somewhat complicated formula to determine the share price. The idea is to try to ensure that some wealthy donor (or, worse, project confederate) can't artificially increase the matching for everyone else by pledging an enormous number of shares. The formula determines a per-share price that applies equally to all shares.

The complexity of this calculation (and of how patrons need to think about it) has been a source of some criticisms of the project (see this thread for some examples). In practice, there may well be problems with the way multiple shares are handled, but the plan is to work them out once Snowdrift.coop is up and running.

There are some safeguards, too. Patrons are choosing to limit their donations to what they have placed into an account on the site. Anyone trying to game the system would have to spend a fair amount of money to do so. In addition, projects that benefit from any kind of manipulation are likely to find fewer patrons over time. There may need to be some kind of soft limits established as well, since users may well deposit more than they want to spend in one month, even if a million patrons sign up for the "bouncing cows" game they are a patron of.

The Snowdrift.coop project is, itself, a FLO project (of course), but unlike Kickstarter and other fundraising platforms, it will fund itself just like any other project on the site, not by taking a cut of the funding provided by patrons. But, to get going, Snowdrift.coop needs to raise some funds. The original goal of $3,000 to cover some legal expenses has already been met in the first eight days of the 30 day campaign. In fact, the first "stretch goal" of $8,000 has been met with the addition of donations that have come in from outside the Tilt.com fundraising platform.

According to the request, $3,000 was only a bare minimum needed to cover some, but not all, legal expenses required to set up Snowdrift.coop. The more than $8,000 raised so far will allow the project to continue to employ its current developer for a few more months; more donations will fund additional developers and designers. As one might guess, even higher donation levels will lead to additional benefits for the project, including conference travel, funding co-founders Aaron Wolf and David Thomas to accelerate their work on the project, and international legal assistance. For anyone curious about the project's finances, there is an accounting page that lays out the income and expenses so far.

So far, there is the web site that has a great deal of information about the project, its underpinnings and plans, as well as a working demo of the code. In the demo, you deposit fake money into your account then allocate shares to two projects. Depending on how many shares are allocated by you and others, the "monthly" donation to the projects from your account will change—reflected in the status bar of the site. For the demo, though, months will pass a bit more quickly than they do in the real world: each day is treated as a new month in the demo.

The intent is to launch the site by Spring 2015 (presumably that is the northern hemisphere Spring). The Snowdrift.coop "company" will have an interesting structure: a multi-stakeholder cooperative that is owned by those patrons who also agree to the membership agreement (which is a stub right now, but will be fleshed out before launch). The bylaws explain that each member will be in one of three classes ("General", "Project" for those who are members of projects on Snowdrift.coop, and "Snowdrift" for members of the Snowdrift.coop project) and will vote on issues appropriate to their class using range voting. Coop-wide votes will be averaged first by class, then the three class averages will be averaged—which potentially gives the smaller Snowdrift and Project classes a larger say in the outcome.

All of the projects that will be hosted by Snowdrift.coop must release their goods under an appropriate free license (e.g. for software, a license approved by OSI or FSF) as is specified in the project requirements. Projects must practice patent non-aggression and release their results in open formats as well. There is also an honor system that must be followed, with guidelines for projects and for users. The intent is to clearly set out a space where participants are respected, projects are accountable, and disagreements are defused gracefully. It all seems a little utopian, but it is clear that a lot of thought has gone into the whole idea—governance and participant behavior included.

More of that thinking can be seen in the honor guidelines for projects, for example. While not mandating the use of free-software tools, FLO-oriented hosting sites, or privacy-respecting practices, they are strongly encouraged, as are things like consensus decision-making and paying a "living wage". There are clear philosophical goals for the project, which are embodied by the "Our vision" section of the mission statement:

We envision a world where everyone has equal access to a robust and vibrant public commons; where everyone is empowered to realize and share their additions to our cultural heritage and to participate in the ongoing development of science and technology; and where there is liberty, privacy, and human dignity for all.

It's a little hard to see the straight path from a new funding model for FLO projects to achieving all of that, but there's no harm in trying. Snowdrift.coop has been more than two years in the making—and it shows. Given that there is already some success on the fundraising front, as well as some supportive blog posts (e.g. Joey Hess, Paul Chisuano, and Mike Linksvayer), Snowdrift.coop looks like it has some good ideas to go along with some momentum. That still may not be enough to reach the ideals the project has espoused, but it may well be enough to make a difference in the FLO project-funding arena—and that's certainly a good start. More is just gravy.