How we disbursed $480,000 in grants transparently, with minimum hassle
Last November, Ricardo Méndez and the Samsung NEXT team announced the Stack Zero Grants.
The Samsung NEXT Stack Zero Grant Program supports early stage teams that build the decentralized infrastructure, tools and applications for the future web to be open, interoperable and transparent…. This initiative is 100% non-profit. No equity, no strings attached.
Teams need to work on non-commercial projects, and develop in an open, decentralized way. Congrats to the projects that won a grant! 🔥👏🏽
So where does Open Collective come in?
We helped Samsung Next get the money out to these groups with zero hassle and in full transparency.
Think about it: you need to get funds out to teams working on decentralized, open, non-commercial projects, most without an existing legal entity or bank account. Where do you send the money?
From the perspective of a funder like Samsung NEXT, this is NOT FUN. They have processes for paying employees, vendors, or contractors, but this is different. Distributed groups, like open source projects, cannot go through vendor on-boarding or provide invoices. Legal entities speak to other legal entities. Someday this will change, but for now it’s the way the legacy world works.
In a nutshell, from my all time favorite thread about corporate purchasing department drama trying to interact with open source:
Open Collective makes this all so much easier.
The Open Source Collective, fiscal sponsor to most open source projects on the platform, is a non-profit that can act as vendor in corporate systems, providing invoices, details for POs, and everything else required.
The funder sends the money for all the grants to the bank account of the Open Source Collective, and then it’s allocated it to the Samsung Next organization on Open Collective. From there, Ricardo can send grant funds to the Collectives of each project.
People working on the project can then submit receipts for expenses and invoices for their work to the Collective, and get paid. It’s all 100% transparent.
As fiscal sponsor, the Open Source Collective takes care of disbursing payments to people in the project teams, accounting, and tax obligations. The beauty is, teams can also receive other financial contributions from backers and sponsors, which go directly into their transparent budget. It’s like decentralized match funding for the grant.
There are several sponsors on the platform using this process (learn more here).
That’s us, we manage the admin hassle of supporting Open Source, so no one else has to…. :)