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I've been in a similar place raising funds for a makerspace. Sponsorship is a marketing expense for a company and can be accounted for as a cost of doing busine

I've been in a similar place raising funds for a makerspace. Sponsorship is a marketing expense for a company and can be accounted for as a cost of doing business. A private donation is hit by income tax and, where I live, depending on the structure VAT. I used to be 100% against tax deductible contributions to not-for-profits. I've turned 180 on this. Citizens are much better at allocating funds to worthy causes than a central government. In the case of our Makerspace, we couldn't get any public funding because we didn't fit into a predefined category such as a "sports team", and operating a garage full of tools could be seen as competing with private industry. Somehow there was money available for the lawyers who delivered that opinion to the local government though.

alexchamberlain 6y ago
In the UK, a company can deduct a charitable donation from its profits before calculating income tax. For an individual, the charity can claim the basic rate tax the individual paid (Gift Aid) and higher rate tax payers can claim the higher rate taxes using their self assessment, so in round numbers, it doesn't really matter who makes the donation. That being said, it relies on there being a UK charity, which a lot of software foundations are not. (Aside: I work for a US company that does support US foundations, as well as employ a few CPython core devs)
- chippiewill 6y ago
  Individual still has to pay NI on their charitable contributions though.
ValentineC 6y ago
I'm trying to turn around a bleeding hackerspace. Did you end up coming up with company sponsorship plans for your makerspace? What kind of perks did you offer your sponsors?
- 0xfaded 6y ago
  Facebook actually came in with a generous contribution. We also had a couple local people make private donations.
alex_portabella 6y ago
How would you feel something like Help Jar (https://helpjar.org https://helpjar.org) fits into this space. It's a platform I've created where you can allocate anywhere from 0.1 - 5% of revenue to causes you believe in. Right now it's geared towards charities but I'd love to include open source sponsorship in there too.
- 0xfaded 6y ago
  I like the idea, and kudos for keeping your costs at 1%. Putting on my company hat, and I'm no expert, I believe for this to work in Denmark (where I live), you would need to be able to put some form of goodwill on the balance sheet. Companies still need to pay tax on donations (at a reduced rate up to ~2300€/year for recognized charities). Unfortunately, 0.5% of the Danish workforce is directly employed by the tax office. It's a serious threat over here.
edmundsauto 6y ago
> Citizens are much better at allocating funds to worthy causes than a central government. You kind of threw this out there. What makes you think this, is it something different about a charitable cause versus say health care? Both are distributing the same resources. I might agree that decentralized decision making about resources is superior, but even that is full of caveats. I’m not sure why you think independently unorganized citizens are better than a group of citizens whose official capacity is to allocate (ie why call out government as something different? The important piece is centralized/decentralized, not govt vs citizen.) At least it is supported in the literature - the lag and loss of resolution in reporting back centrally makes decisions a worse fit for actual conditions on the ground.

alexchamberlain 6y ago

In the UK, a company can deduct a charitable donation from its profits before calculating income tax. For an individual, the charity can claim the basic rate tax the individual paid (Gift Aid) and higher rate tax payers can claim the higher rate taxes using their self assessment, so in round numbers, it doesn't really matter who makes the donation. That being said, it relies on there being a UK charity, which a lot of software foundations are not. (Aside: I work for a US company that does support US foundations, as well as employ a few CPython core devs)

chippiewill 6y ago
Individual still has to pay NI on their charitable contributions though.

ValentineC 6y ago

I'm trying to turn around a bleeding hackerspace. Did you end up coming up with company sponsorship plans for your makerspace? What kind of perks did you offer your sponsors?

0xfaded 6y ago
Facebook actually came in with a generous contribution. We also had a couple local people make private donations.

alex_portabella 6y ago

How would you feel something like Help Jar (https://helpjar.org https://helpjar.org) fits into this space. It's a platform I've created where you can allocate anywhere from 0.1 - 5% of revenue to causes you believe in. Right now it's geared towards charities but I'd love to include open source sponsorship in there too.

0xfaded 6y ago
I like the idea, and kudos for keeping your costs at 1%. Putting on my company hat, and I'm no expert, I believe for this to work in Denmark (where I live), you would need to be able to put some form of goodwill on the balance sheet. Companies still need to pay tax on donations (at a reduced rate up to ~2300€/year for recognized charities). Unfortunately, 0.5% of the Danish workforce is directly employed by the tax office. It's a serious threat over here.

edmundsauto 6y ago

> Citizens are much better at allocating funds to worthy causes than a central government. You kind of threw this out there. What makes you think this, is it something different about a charitable cause versus say health care? Both are distributing the same resources. I might agree that decentralized decision making about resources is superior, but even that is full of caveats. I’m not sure why you think independently unorganized citizens are better than a group of citizens whose official capacity is to allocate (ie why call out government as something different? The important piece is centralized/decentralized, not govt vs citizen.) At least it is supported in the literature - the lag and loss of resolution in reporting back centrally makes decisions a worse fit for actual conditions on the ground.