S1E7: Open Collective – open source gets a funding partner
Making money legible to boost open source projects and communities.
What’s cool about Open Collective?
If open source can be considered public infrastructure, how we fund would be represented by the potholes and cracks of its crumbling parts. We all drive on the road; almost nobody funds building said roads, at least not directly (or too willingly at that).
Open Collective (OC) aims to fill that gap with an incredibly simple-yet-profund promise: make it easy (and transparent) for communities to raise, hold, and spend money together, thus eliminating barriers and the need for each project to become its own mini-nonprofit requiring the same back-office services.
Their platform and network of fiscal hosts (more on that soon) now support over 15,000 collectives (orgs) moving about $35M/year. The overarching premise behind these impressive numbers? “Let’s show everyone the receipts!”
OC is based on the following values/pillars:
Legibility is power. Money matters are usually opaque; OC makes it transparent, accesible and browse-able. This flips the trust equation for both donors and maintainers.
Speed to legitimacy. Fiscal hosting lets a weekend project accept serious money (in the way of grants, for example) without needing to become a full-on legal entity.
Network effects for the commons. Integrations (e.g., GitHub Sponsors) and curated initiatives (like Ecosystem Funds) make it easier to support not just the shiny top-level projects but the dependencies “hidden” underneath, way below the limelight.
Open source all the way down. Open-sourced platform code, public budgets, and transparent community governance norms reinforce each other.
This all amounts to Open Collective being much more than a donation button (nothing wrong with donation buttons; shoutouts to buymeacoffee.com!). It’s a new framework (?) for the 21st-century commons: make money flows visible, reduce legal friction, and distribute power.
Do that consistently, and do it well, and the roads we all drive on stop cracking under our feet (or thumbs). That’s the hope at least.
What they actually do (and why it matters)
Open Collective blends software and fiscal hosting.
Software-wise, every Collective gets a public page, paid-in/paid-out ledger, and expense workflow. On the legal/finance side, fiscal hosts hold funds on behalf of projects, handle banking, compliance, and payouts.
Put together, this lets a project start taking money as early as today and pay contributors by no later than next week—without negotiating bank accounts or tax letters.
On sustainability: Open Collective’s business model is transparent too. Fiscal hosts can set their own host fee (often 0–10%). The platform then takes a 15% share of the host’s fee (not of donations), plus standard payment-processor fees—aligning incentives with hosts actually supporting projects at scale.
With some perspective, you can see that this is an incredible proposition with incredible potential: cutting down significant amounts of time and red tape for the tiny, resource-constrained organizations when they need it most.
Our world is choke-full of obscure and obfuscated financial and technological systems. Meaning OpenCollective’s transparency has to go beyond marketing fluff for it to be credible. Luckily, it does: budgets are public by default—contributors, companies, and auditors can see where money comes from and where it goes (with personal details protected).
That social pressure loop is the real magic flywheel: openness builds trust, and trust unlocks funding.
A platform that’s actually…open and impactful
The platform itself is open source, its source code available on GitHub. That matters symbolically (practice what you preach!) and practically (community-visible roadmap, issues, and contributions).
On the open-source side, the Open Source Collective (OSC)—the fiscal host that serves thousands of software projects—reported $12.5M in contributions in 2024, $9.7M paid out to maintainers (up 20% YoY), and $50M+ lifetime contributions since 2017.
Those are real, substantial numbers. And if you “humanize” these numbers, you realize we’re talking rent, childcare, and maintenance time converted into shipped software patches and healthier ecosystems.
Why this matters right now
As alluded to before, a great deal of the software we rely on relies itself on open source software, which in turn is made possible by the contributions of volunteer developers with real needs, wants, desires and pressures.
Moreover, a few recent software vulnerabilities have had widespread effects for a lot of private software sold for money, highlighting the incredible reach and pervasiveness of open source projects, as well as its criticality.
I personally – albeit somewhat indirectly – had do deal with the Log4Shell vulnerability (which was deemed as a "true cyber-pandemic") at work in 2022.
More recently, the xz utils backdoor of 2024 was another reality-check: critical infrastructure maintained by overworked humans is, potentially, a security problem at the level of an entire nation. This is not appealing to the reptilian parts of your brain that get high levels of dopamine-inducing anxiety from alarmist tabloid headlines. It’s the reality of the world that we live in, a world which is significantly enabled by software.
My hope is that highlighting this stuff, and the organizations doing something about it, makes you more attuned to this reality. And if I may, I will offer my own proposal: let’s figure out better ways to pay people to maintain the commons, or the commons will surprise you in the worst ways.
Open Collective seems to be one of the few platforms that turns this notion from an abstract pontification into a concrete, repeatable practice: move money, in the open, to the people doing the work.
Of course, the state of our economy – the macro picture, if you will – hasn’t helped. Budgets tightened in 2023, and many community-funded efforts felt the stress. Open Collective’s own note to investors acknowledged the slowdown—and then the rebound in 2024/25, with data from the Open Source Collective fiscal host showing why resiliency tools matter. It sounds obvious, but it’s anything but.
So here it is again: make it easy, transparent, and compliant, and the money seems to flow to where it’s needed.
A little aside: maybe funding of open source projects tracks well with the cycles of the art market, which would be an intriguing data spelunking project beyond the scope of this little essay.
Challenges worth keeping an eye out for
Naming confusion (OC vs OCF vs OSC vs OCE) is a real onboarding tax. Their comms have improved, but the ecosystem could use a single “What lives where?” explainer tattooed on every page.
Regulatory and operational load on fiscal hosts is non-trivial; the OCF wind-down is a sober reminder that community infrastructure needs responsible operations and sustainable fee models.
Cultural shift for funders. Transparent budgets mean donors can—and will—ask hard questions. That’s healthy, but it changes grant-making behavior and expectations.
How to plug in (today)
Maintainers: If your project isn’t fundable in one click, fix that. Apply to Open Source Collective (if you’re OSS) or a relevant fiscal host; wire up GitHub Sponsors; publish a basic budget + wishlist.
Companies: Move from “we sponsor a logo” to “we fund our dependencies.” Try an Ecosystem Fund and publish what you support (and why).
Foundations & community orgs: Pilot a Fund on Open Collective to run mini-grants with public ledgers and lightweight ops.
If you liked this, you’ll love the rest of Season 1 of One Cool Org—subscribe, share, and tell me which collectives deserve a deeper dive next…
Essential Questions
I’m trying out a new “section” for each post that I’ll title “Essential Questions” after the work of Jay McTighe and Grant Wiggins.
Here I will aim to pose “inexhaustible” questions (my own interpretation of EQs) and give some preliminary answers. Take this as gentle embodiment of the “strong opinions, loosely held” notion in the tech world.
How does financial transparency build trust within communities?
Transparency shifts the power dynamic from “trust us” to “see for yourself.” When contributors, funders, and community members can openly view where money comes from and where it flows, suspicion is replaced with accountability. Trust no longer depends on personal relationships or opaque promises; it is earned through visible, verifiable records. In Open Collective’s case, this allows maintainers to demonstrate legitimacy quickly and funders to feel confident that their resources directly support work that matters.
More broadly, transparent financial systems can make communities more resilient. In an age of misinformation and institutional distrust, showing the receipts is a simple but profound act: it proves that fairness is not just a slogan but a commitment and a verifiable practice, one transaction at a time.
What responsibilities do companies and institutions have to fund the public digital infrastructure they rely on?
This is a tricky one, and it’s up to policymakers in office as well as Big Tech to figure this out.
What is true, however, is that every company today runs on a partially-hidden stack of open-source software and community-maintained tools. These are the digital equivalents of roads, bridges, and clean water—but unlike public works, they’re rarely funded at scale. Companies benefit disproportionately from this infrastructure, yet often treat it as free and inexhaustible. Once again, the xz utils backdoor reminded us that neglecting to pay maintainers is no longer just unfair—it’s a security risk.
Institutions have both a pragmatic and an ethical responsibility: to ensure the commons is funded so it doesn’t collapse under its own weight. This requires shifting from symbolic sponsorships (a logo on a page) to systemic investment (supporting dependencies, funding maintainers, and resourcing boring-but-critical maintenance). The cost of not doing so is far greater than the cost of proactive support.
Could Open Collective’s model of shared infrastructure redefine how we think about institutions and organizations in the 21st century?
Traditional institutions—nonprofits, foundations, governments—tend to centralize money and decision-making. Open Collective flips this by offering modular, transparent infrastructure that communities can adopt without themselves becoming formal entities. This lowers barriers to entry, democratizes access to funding, and distributes power across networks rather than concentrating it in a single organization.
In the long run, this approach could point to a new kind of organization: one that is less about buildings, charters, and bureaucracy, and more about protocols, shared infrastructure, and collective governance. It suggests that 21st-century organizations may look less like monoliths and more like ecosystems—lightweight, interoperable, and resilient precisely because they are decentralized.