Each year, the FSFE spends close to half a million Euro raising awareness of and working to support the ecosystem around free software. Most of our permanent funds come from our supporters -- the people who contribute financially to our work each month or year and continue to do so from month to month, and year to year. They are the ones who support our ability to plan for the long term and make long term commitments towards supporting free software.
You might be interested to know a bit more about how our finances are structured and where the money goes. Some of this, especially around the specific activities we have engaged in, you can also read about in our regular yearly reports, like this one. However, here are some further details about what this looks like on the inside, how this differs from what you see in our public reports, and why.
Our budget process and results
Each year, around October, I start putting together a draft for a budget for the following year, taking input from the people who are directly involved in deciding on how we spend our funds: our office staff, president, our executive council, and (from 2017) also our coordinator's team.
As more than half of our budget (about 55%) is employee costs, we are not thinking about how to divide half a million Euro, but about how to divide about 200k. And in reality, it's not even about dividing the budget: the budget is driven by our activities and the need they have for the next fiscal year. No area should get more than it needs, but each area should have a reasonable budget to be able to carry out its work.
If you are interested in our employee costs, our budgeted costs for 2017 are 273k. You do not see this in our public reports, and this is one area where they differ. When we calculate the results at the end of each year, we collect the time reports from each staff and divide the total cost for that staff according to the focus areas on which they have worked.
Our office manager, for example, works almost exclusively on administration and so the cost for her time gets included under the heading for basic infrastructure costs. Our president takes part in this too, but he does much more on public awareness and policy, and so the cost for his time gets split over those areas, according to what he has reported time on.
Basic infrastructure costs
To stay with our basic infrastructure costs, this also includes costs for our office rent in Berlin, staff meetings, our General Assembly of members, lawyers and legal fees, bank and similar fees, fundraising and donor management, and technical infrastructure. The total budget for this in 2017 has been 64k, and the last couple of years' result have looked about the same (55k in 2014, 63k in 2015, 57k in 2016).
The next budget is community support, which has was a new budget area in 2016 when it included the costs for our FSFE summit and an experiment to cover some costs for a local coordinator in one country. We subsequently decided not to continue with that experiment, but we kept the budget in 2017 for local activities and a potential volunteer meeting. We set the total at 11k, and I have recently delegated to the coordinators' team to manage the part for local activities.
Our work on public awareness, which comes next, has a budget of 35k, most of which is event participation (conferences, booths and talks at a total of 18k). The budget includes costs for FOSDEM, the Chaos Communication Congress, and many other events. We also have costs for information material (flyers and similar material at a total of 8k), technical support for our web pages (at 6k), and a smaller budget for public awareness campaigns (like our I Love Free Software campaign and similar, at 3k).
Our budget for 2016 for public awareness was similar, but as you can see on our public pages, the spending for public awareness was 142k that year. The difference between the budget and the spending is the personnel costs which gets included in the published results.
In our legal work, aside from a limited travel budget, the only expense we have is the annual legal and licensing workshop. The budget for this in 2016 was 40k. Compared to the spending of 117k, and you again see the personnel costs accounted for in the public report.
And so we then come to our policy work, where I feel we need to elaborate a bit on what has changed in 2017. Our budget for 2016 was 4k for policy work (most of the work on policy is staff time). You will see that when we publish the results for 2017, the costs for policy has shot up remarkably. We have increased the budget to 29k for 2017 to be able to invest in our Public Money - Public Code campaign, which we hope will be a major driver for our work in 2018.
The last and least interesting budget item, in some ways, is our costs for promotional merchandise (t-shirts and so on), as well as related shipping and packaging costs. We have a budget of 23k in total for this in 2017.
Incoming saldo, and what it means for us
By November, we have the results for the current fiscal year up until Q3, so we use that to project the spending for the entire fiscal year to know what we have in "incoming saldo" for the next year.
The incoming saldo is important to us because it is one of the metrics we use internally to get a feeling for the relative health of our finances. We use this in two ways. First, we calculate the income which we know with some certainty we will have in the next fiscal year (like our supporter contributions, and donations which have already been agreed to). This known income, together with our incoming saldo, is what we have to work with for the next fiscal year.
If our budget is larger than what we know we will have, we get a "funding gap", and it becomes the job of primarily the president and executive director to find donors or other ways to close this gap over the year.
The other way in which we use this incoming saldo as a metric is that we calculate how much of our budget for the year is covered by our incoming saldo. A value of 100% or more here means we would be able to survive the full budget year even without getting any other contribution. We have gradually increased this over the years and are now at 54% for the fiscal year of 2017.
Once all the numbers are in place, we send this first as a draft to our members to look at, and then based on their feedback, we finalise the budget and send a final version to the members.
Expenses for events & outreach
Some of the expenses incurred over the year, like bank fees, rent, and so on, get booked directly on the appropriate account. For some budgets, notably, travel costs and event costs, we have an expense request system. The person who would like to make an expense makes a request, which gets automatically sent to the budget owner (typically me, the president or our office manager) who then decides on it.
I will not go through all the possible expenses, but since I am responsible for the event budget (2513 in our accounts), I thought to give an overview of the requests I've approved on this budget for 2017. These are the approved numbers only though, not the actual expense. In many cases, the expense has been less.
- 2017-01-31: 1900 EUR for booth at ShaCamp 2017
- 2017-02-21: 309 EUR for booth at Chemnitzer Linuxtag
- 2017-02-22: 600 EUR for our president to give keynote at OSCAL17
- 2017-05-04: 750 EUR for our legal coordinator to give talk as OSCAL17
- 2017-05-29: 200 EUR for our president to give keynote at OpenSUSE Conference
- 2017-05-29: 660 EUR for booth at the Open Technology Fair in Madrid
- 2017-06-14: 250 EUR for booth and travel at OpenAg Zurich
- 2017-06-22: 350 EUR for booth at RMLL
- 2017-07-31: 60 EUR to design a new booth rollup
- 2017-08-09: 600 EUR for our president, legal coordinator and one intern to participate at CopyCamp 2017
- 2017-08-16: 1800 EUR for a booth/assembly at Chaos Communication Congress 2017
There was an experiment earlier to leave part of the decision making for this budget to a group of coordinators, but the way it was done didn't work out in practice. If the delegation of the local activity budget works out well, I believe it would also be time to delegate the events budget to a team and I'll be thinking about this as we get into the budget for 2018.