How do other open source projects spend donations?

Question

I'm a developer on the Synergy+ project, and today we received our first donation! Now, I did write at one point that we would spend the money on advertising, in order to find new developers - but I'm not really sure how to go about this, or if it's the best way to spend the donations. We would spend it on hosting, only we use only canned hosting for our site which is free. Maybe in future we'll have some hosted services, but I don't know if it'll ever be necessary.

Does anyone have any experience with handling donation money from end-users? I'd like know what other projects have done about this (e.g. Ubuntu). Should we just save it for a rainy day? Also, I'm accepting the PayPal donations to my personal account, which I'm a little wary about, since the project doesn't belong to me - it has a collective ownership really. Is it normal to have a single person who is the treasurer?

Update 1:

Thanks for your comments! In response, I have changed our statement about how donations will be spent.

"We are currently establishing a funds reserve, so that we can hire professional open-source developers to fix the most critical bugs, and move the project forward. We promise to spend your donations very carefully, and discuss how the funds should be spent between all of our key project members. Not only will your donation help our project to move forward, it will also boost moral and community spirit - because it shows that what we're doing really matters! Thank you."

Answer 1

Pizza and Beer?

In all honesty though, I think the open source community respects honesty above all else. If you said you were going to spend the money on something, you should probably follow through.

Answer 2

I wouldn't spend the money on advertising to attract new developers: I think that's way too small a target market for the advertising to be at all effective.

I'd either save the money for future contingencies, or spend the money on advertising meant to attract general users of the project. Or I'd pay myself for the time I put in (after checking with the donor to make sure that wouldn't piss them off). Last resort would be a huge party with strippers and coke.

Answer 3

Many large open source projects have setup a foundation that solves most of the problems you ask here.

If you really received such a large donation and need developers, I would actually put that money into hiring a developer. Instead of spending money on advertising, spend money on the product and the current developers so they don't get bored of maintaining it.

An open source project should be successful by merit, not by advertising money.

Answer 4

Many larger open source projects that request donations have incorporated as a non-profit corporation, and the donation goes to the non-profit. A great example is the Apache project.

Often, a single developer-led project will accept donations. Technically, in this case, the developer (in most countries) should treat the "donation" as income. This gives complete freedom to do nearly anything with the money - but usually it should be funneled back into the project in some form.

Normally, I'd recommend using the money to pay developers, pay for infrastructure (like hosting), or potentially even use it for something like stipends for student contributors. The latter is my personal favorite - I enjoy giving money to groups that help fund new development and encourage students to contribute.

However, whatever you choose to do with the money, I believe it is very important to be public about that information. If there is no mention of how the money is spent, I'd expect it to stop coming over time... People are more willing to donate when they know how their contributions will be used.

Answer 5

Speaking as an occasional donor, I really don't care what my money gets spent on. My one and only goal when I donate is to encourage the developers to continue working on the project. If that means they all used it for beer money that's fine by me. :)

So my advice would be, spend it on whatever you think will encourage you and the rest of the community to continue developing and let everyone know the how&why.

For a first contribution a few beers seems like a great idea to me. "In celebration of our first contribution and a lot of hard work by all..." etc.