this post was submitted on 28 Feb 2024

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EMERGENCY ANNOUNCEMENT: Open Collective Foundation is dissolving, and Beehaw needs your help (beehaw.org)

submitted 8 months ago* (last edited 8 months ago) by alyaza@beehaw.org to c/support@beehaw.org

34 comments fedilink hide all child comments

Hello folks, this is an impromptu emergency announcement.

In short: Open Collective Foundation, the fiscal host we use for Beehaw, will no longer accept donations starting on March 15, 2024. They will shut down completely at the end of the year, December 31, 2024. This was an extremely sudden decision by them; we were only made aware of it last night through their email to us. The cause given is "Open Collective Foundation’s business model is not sustainable with the number of complex services we have offered and the fees we pay to the Open Collective Inc. tech platform;" they note that they froze accepting new collectives last year.

This obviously presents a lot of problems for Beehaw. Here are all the relevant dates given to us by Open Collective:

Last day to accept funds/receive donations: March 15, 2024
Last day collectives can have employees: June 30, 2024
Last day to spend or transfer funds: September 30, 2024
Day they formally dissolve: December 31, 2024

Because Open Collective holds our funds, based on our understanding it seems likely we will not be able to keep our existing funds unless we find a 501(c)(3) organization to be our new fiscal host or become one ourselves by September 30. (EDIT: Or, we just spend it all preemptively.)

Open Collective Foundation's also email writes that:

We will be providing assistance and support to you, whether you choose to spend out and close down your collective or continue your work through another 501(c)(3) organization or fiscal sponsor.

and so we'll be contacting them as soon as possible to see if we can arrange a solution with just their help.

But: in the mean time (and in case they can't help us, given the suddenness of this announcement) we need your help to find solutions--and we will probably need them urgently. If you have any help you can provide us, any services you can recommend, or anything that might help us quickly (and as painlessly as possible, given the short notice) transition to another service, that would be greatly appreciated. Fair warning that this will also likely derail the March financial update until we have a clearer picture of what we'll do and if OCF can help us going forward.

Thanks, and hopefully we can resolve this situation without difficulty.

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[–] PaddleMaster@beehaw.org 49 points 8 months ago (1 children)

I have nothing of value to add to your problem.

I do want to appreciate Beehaw mods (founders?) dedication to this. This is a huge headache to need an urgent solution, and you don’t get paid.

If you have a tips jar, buy me a beer, or fund my vacation fund, I’d love to give each one of you some $$ for all the work you do!

[–] admin@beehaw.org 35 points 8 months ago* (last edited 8 months ago)

Personally, I don't need the money. Feel free to pay it forward to your favorite charity. Thanks for your kind words as well.

[–] Dave@lemmy.nz 24 points 8 months ago (1 children)

Just checking, did you see the post here from the Open Collective company (separate from foundation) that lists some alternative charity organizations? Nothing stood out as an obvious move but if say you have the ability to move to Open Collective Europe then maybe that's an option?

https://blog.opencollective.com/open-collective-official-statement-ocf-dissolution/

[–] alyaza@beehaw.org 25 points 8 months ago (1 children)

yeah, we're vaguely aware of some of these. hopefully, when we reach out to OCF they'll be able to hand us off to one of them or something like that--but obviously, it's a good idea to have a backup plan, and you don't just want to have the single basket of eggs after the rug gets pulled out from under you like this

[–] odium@programming.dev 8 points 8 months ago* (last edited 8 months ago) (1 children)

Don't know anything about this kind of thing, but I found this post: https://lemmy.world/post/12531572.

Since OCE accepted lemmy.world, they'll probably accept you too. I checked OCE's main website and found this list of other affiliated funds: https://opencollective.com/search?isHost=true.

[–] Lionir@beehaw.org 7 points 8 months ago (2 children)

I would think OCE wants members to be in the EU - currently none of us are. I'd have to look into it.

[–] admin@beehaw.org 4 points 8 months ago

For collectives currently hosted by Open Collective Foundation in the US, if you are curious about Open Collective Europe and our fiscal hosting offerings, please reach out to us. We are here to assist during this transition, serving as the equivalent of a 501(c)(3) in the US. Alongside our partner organizations, such as Open Collective Inc. and Open Source Collective, we are mobilizing to provide solutions to ensure the continuity of your work. Feel free to contact us with any questions or concerns at oce@opencollective.com

Source

[–] Emperor@feddit.uk 2 points 8 months ago

Hi, Feddit.uk Admin here. We just launched our fundraising at Open Collective, so the on-boarding meeting is fresh in my mind and our fiscal host said that we could always go with Open Collective EU as he pay for our hosting in Euros. So I reckon they can be pretty flexible with this kind of thing. You'll have EU users and probably get some donations in Euros, which should be easy enough to get your foot in the door there, assuming they have any regional requirements.

Anyway, sorry to hear about all the mess, having just set it all up I can imagine the hassle it would be to start over again but I am confident you can find another fiscal host on Open Collective and it should then be a fairly seamless switch over (at least as far as the general users are concerned). Good luck.

[–] its_me_xiphos@beehaw.org 23 points 8 months ago

I actually trust you all (like everyone here) to do the right thing and find a solution. My two cents:

-Find another fiscal sponsor as a stop gap to more stable roots. -501c3 can be faster than you expect. But you get complicated with your board governance, required reporting and records keeping, etc. -There are many types 501c orgs (c4, c6, c3) maybe this fits in a 3 or somewhere else. -Incorporation, in any sense, can lead to governance, legal, and fiscal issues that may be beyond volunteer capacity to deal with. -Shit happens, thanks for being transparent.

[–] acastcandream@beehaw.org 22 points 8 months ago* (last edited 4 months ago) (1 children)

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[–] Penguincoder@beehaw.org 16 points 8 months ago (1 children)

Thank you for the call-out and link to that comment.

[–] acastcandream@beehaw.org 11 points 8 months ago* (last edited 4 months ago)

spoiler

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[–] acastcandream@beehaw.org 21 points 8 months ago* (last edited 4 months ago) (1 children)

spoiler

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[–] Gaywallet@beehaw.org 23 points 8 months ago (1 children)

We'll make sure it doesn't disappear! I don't think that'll look like pocketing it, more likely just pay down a bunch of credit with our hosting services or something along those lines. No need to overthink or forecast right now, we've got time

[–] acastcandream@beehaw.org 11 points 8 months ago* (last edited 4 months ago) (1 children)

spoiler

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[–] Gaywallet@beehaw.org 11 points 8 months ago* (last edited 8 months ago)

I greatly appreciate and value the trust this community has placed in us, and I feel a responsibility to all of you wonderful beeple to do everything in my power to do things in an equitable and transparent way whenever possible.

[–] Blaze@reddthat.com 21 points 8 months ago

Sorry to hear, hopefully you guys can work this out.

Thank you for your work!

[–] Rentlar@lemmy.ca 18 points 8 months ago (1 children)

Hey thanks to you and the other admins for all that you've done for Beehaw. This news is quite a shock and probably an unexpected stress for your team so I wish you all the best to try and get through it.

For the time being, are you looking for more donations before the Mar 15 deadline or is it better to hold off until you figure out a new funding platform?

[–] Lionir@beehaw.org 10 points 8 months ago

For now, considering we don't know how we will get the money out of OCF, I think it'd be safer to hold off.

[–] furrowsofar@beehaw.org 13 points 8 months ago* (last edited 8 months ago)

Maybe https://sfconservancy.org. is worth a look. Member services include https://sfconservancy.org/projects/services. A little outside their central focus but might fit to the extent you provide services based on free software. They also may have other ideas.

[–] Quexotic@beehaw.org 11 points 8 months ago (2 children)

I'm confused, can't you register as a 501c3? I know there are some hurdles, but I thought that wasn't so hard as to be impossible.

Either way, This sounds very stressful. I'm with you.

[–] its_me_xiphos@beehaw.org 13 points 8 months ago (2 children)

501 is not that easy. Sure, getting nonprofit recognition can be fast. But you are now buried in reporting requirements that put a heavy admin burden on you.

Very broad and simple but: You must register in a state and abide by their rules. Then apply for tax exempt status in that state. Then ask the IRS for your 501c3. Boom. Now what?

You need to setup systems to maintain a balance sheet to complete your 990 or 990ez, keep minutes on record, have a board, board manual, whistle lower and harassment policies....it gets paper heavy fast.

Why? States and the Feds trust you to provide a public service or good, and thus determine you shouldn't pay taxes in exchange. They will absolutely bury you if they find you are violating that trust.

[–] BarryZuckerkorn@beehaw.org 13 points 8 months ago

Personally, I don't think the reporting requirements are all that burdensome (especially for an organization that receives less than $50k on donations per year). Most of the requirements are just good governance/administration, that it seems like they're doing anyway (the monthly Beehaw post outlining costs/receipts).

A formal board of directors or trustees that meets once a month? I'm pretty sure they already have regular meetings. Minutes? Yeah, someone just needs to send out an email summarizing who attended and what was decided or voted on in that meeting.

Annual filings? Seems like a straightforward transfer of the information they're already putting in the monthly posts to fill out the IRS's PDFs.

As for employment stuff, they simply don't need to have employees. If it's all volunteer officers and board members, with a few contracted vendors here and there, they just need a bank account (which can be free for nonprofits).

It'll cost a little bit more in overhead, not least of which is a donation payment processor, but I don't see it as being more administratively burdensome than what they're already doing.

[–] Quexotic@beehaw.org 7 points 8 months ago

That's incredibly helpful and informative. Thank you!

[–] Overzeetop@beehaw.org 11 points 8 months ago* (last edited 8 months ago) (1 children)

The most difficult part is creating the charter and selecting the appropriate category; after that it's a small filing fee (most states) and - as long as you stay under $50k income - a trivial tax reporting burden. I'll be filing two returns - one for MD and one for VA - for two non-profits I'm on the board of this weekend. I'll be done before breakfast. They both have federal EINs and both are small enough we use Excel for ledger (since QuickBooks has gone to online-only annual extortion as their business model). Without paid employees or stockholders (just a board of directors), edit: and have no substantial physical property, and without donations coming from prohibited individuals or sanctioned stated, there is diminishingly little paperwork. If it's just a virtual organization with leased remote assets like web services, the bar is pretty low. Maryland has no annual fee; Virginia has a small one ($75, I believe) to maintain the corporation.

[–] Quexotic@beehaw.org 3 points 8 months ago (1 children)

The organization's I'm involved in are beyond that part so I never was exposed to those difficulties. I guess all the hard work's done for me already right?

[–] Overzeetop@beehaw.org 5 points 8 months ago (1 children)

LOL - the paperwork is the easy part. Getting money and keeping the org alive and relevant is the real work. But I think you know that. ;-)

[–] Quexotic@beehaw.org 3 points 8 months ago

It's a real task

[–] Overzeetop@beehaw.org 8 points 8 months ago (1 children)

What is your annual income at the moment and do you think you can transition to your own 501c3 in a reasonable time frame. I am the director of a 501c3 which I am, for lack of a better word, “holding” until I have free time to do something with it. If you would like to discuss offline, send me a dm or just email me at my user name at gmail. This would have to be temporary and there would be some expenses for legal I’m sure, but as long as I can stay under my irs reporting threshold it should be minimal.

[–] alyaza@beehaw.org 8 points 8 months ago (1 children)

What is your annual income at the moment and do you think you can transition to your own 501c3 in a reasonable time frame.

speaking personally: no, probably not. there are a lot of hurdles we'd have with trying that even in non-rushed circumstances. separately i think it's unlikely an arrangement of this sort would work. over the past 5 months we've averaged about $415/mo after expenses, which works out to around $5,000 a year. taking contributions before expenses this is probably closer to $7,200 or more over a given 12 month interval.

[–] Overzeetop@beehaw.org 6 points 8 months ago

Interesting. That's well under the limit for reporting and filing a detailed return, presuming there aren't any other flags or limitations. The biggest stumbling block would be filtering international donations from sanctioned entities and regions, I suppose. TBH, I think the other (active) non-profit board I sit on has never actually worried, but we don't have any members (donations coming from) outside of NA , UK and EU.

[–] Radiant_sir_radiant@beehaw.org 8 points 8 months ago* (last edited 8 months ago) (2 children)

As I'm not too familiar with the US financial system, allow me a potentially ignorant question: in the case of Beehaw specifically, would it make a big difference if the recipient did not qualify for whatever 501(c)(3) represents (presumably a tax-exempt charity of some sort)?
I.e. would it make things much more complicated or impose disproportionately high taxes if one of the admins received the money directly?
I appreciate that OCF adds a public audit layer that makes sense in many cases, but you seem like a trustworthy bunch and direct donations would work for me (though I obviously can't speak for anyone else).

Either way, thank you so much for everything you do.

[–] ericjmorey@beehaw.org 9 points 8 months ago* (last edited 8 months ago)

It would be the difference between paying no taxes to either a) paying taxes on all funds received at regular income tax rates without the benefit of deduction of expenses or b) doing 99% of the work to still need to pay income taxes on net income (revenues less expenses). So if you're going to do the work, it's worthwhile to do the additional 1% to get all of the benefits.

[–] Gaywallet@beehaw.org 7 points 8 months ago

We will be reaching out to OCF for clarifications based on whatever potential solutions we come up with