Budgets

We need money to operate.

Rationale

When there is unlabeled money to spend there is also discussion, arguments, bikeshedding and sometimes fights how to spend it. This is not healthy for a community. Some organizations solve this by having an authoritarian decision making entity (dictator, committee, board, etc.), this does not solve the problem, but only creates an abstraction converting the fights on how to spend the money into fights over who has authority to decide. This is also not healthy for a community. Another unhealthy solution is not to collect any money and not to have centralized decision-making entity.

The following is a description of a system that minimizes community infighting, while allowing to still collect and spend money on things.

The Foundation

The main goal of the the Hackerspace Nijmegen Foundation is to focus on providing a physical location, by taking care of collecting contributions for the upkeep of it. Minimizing power over the budget of the foundation makes it a servant of the community and not an authority over it.

The community

By minimizing the authority of the foundation the responsibility is shifted to the community. Members of the community can start to collect money to spend on certain things. This has many benefits:

  1. anyone can be steward of a project, there is no single-point-of-failure.

  2. committed members decide on collection and spending instead of the general community, which reduces bikeshedding and smartassing by uninvolved bystanders.

  3. Expertise and contributions matter when making decisions, instead of seniority of some committee.

  4. There is no single entity to take control of to control the community.

  5. Members assume responsibility and thus increase their commitment instead of waiting for/blaming the authority.

  6. Votes in favor of spending for a certain goal can be measured directly in money or other contributions donated to this goal, eliminating endless discussions.

Contrast this with one big unlabeled budget governed by a committee/board and all the general discussions and votes when someone wants to spend part of it for something that no one else or only a minority really wants.

Income

It is important to note that the income of the hackerspace are more diverse than only monthly contributions from members. There is income generated from selling beverages/munchies, there is income generated by participating in events (like the AVG awareness event at the Province), donations by visitors, proceeds from sales of kits, t-shirts, other merchandise, in-kind contributions sold at events (like self-baked cookies, homebrew beer, etc), etc.

The budgets

The operation of a hackerspace involves a bunch of different budgets, some are essential, some are of general interest and some are specific interest.

The essentials

The most important budget is the monthly operating cost of a space: the rent and the utilities (electricity, water, internet, bank account, insurance). This is a budget that is essential, without there would be no space, and little community. This budget and the contract with the landlord is the reason for the existence of the foundation. It is the interest of everyone caring about the space, the budget is collected by the monthly contributions and governed by the principles laid out in contributing. The monthly contributors are directly responsible for the sustainability of the space. If there is not enough contributors to pay for the essential upkeep costs then that implicitly means there is not enough interest/demand for a hackerspace, and it is thus cheapest to cease operations and maybe virtualize or disband entirely.

  • Owner: Foundation
  • Size: ~350EUR/month
  • Purpose: rent

General Interest Budgets

There is a bunch of general interest budgets that although not all necessary for the daily operations, they are useful for certain events.

Emergency Budget

One budget that has been noted is an emergency budget in case of some major accident like the roof leaking or suddenly all monthly contributors stopping at once. This budget should be at least one month of rent in case of canceling the contract. The maximum should be chosen so that this budget does not constitute too much dead money. The most important about this budget is, that is should be only used for emergencies. After filling up this budget there is no need to collect more, so this should not be a regular burden for the monthly contributions, only as long as the decided buffer is not filled up. This budget should also be handled by the foundation.

  • Owner: Foundation
  • Size: minimum 287EUR (one month cancellation fee), maximum 6-700 eur?
  • Purpose: emergencies

It is important to note that this budget is not intended to cover up the case when there is not enough contributors to the monthly upkeep. That case is not an emergency, that case is a clear indicator that there is no demand at this cost to operate a hackerspace in Nijmegen.

Fluctuation Smoothing Budget

In case a monthly contribute fails to chip in their part for whatever reason the others should not be forced to change their contributions accordingly. For this a small smoothing buffer of 2-3 average monthly contributions should be maintained by the foundation. This should smooth out fluctuations and provide some leeway for other contributors to figure out if this is a permanent change and adjust their own monthly contributions or if there is a way to resolve the missing contributions in another way.

Operating Budget

This budget is mostly for replacing consumables like soap, toilet-paper, cleaning chemicals, light bulbs, etc. stuff that breaks or needs replacement regularly. This budget does not have to be to big, a few dozen euros should be enough. Also important is that this is spent on things that are urgent and can be handled by anyone. The proposal is to keep a bit of cash for these kind of expenses directly in the space so that members who notice something needs replacement can quickly and unbureaucraticly replace what needs replacing. This budget can be filled up with the proceeds of the bar.

Continuity Budget

In case we have to move out of the current place and only find something more expensive we could setup a budget to bridge the gap between the current and the new rent. This gives us a possibility to recruit more contributing members, and if we fail to make the new space sustainable we can decide to scale down again to something we can afford or to disband. This budget would be handled by the foundation. The size of this is up for debate, but should probably not be more than a few months of the current rent (which means we can operate at 2x the price for that amount of time).

Specific Interest Budgets

All other budgets that are not covered by the General Interest Budgets are special interest budgets and should be handled by those who want to work towards a specific goal. Specific goals most often include general decoration and investment into new tools. Taking responsibility for an investment speeds up the process, instead of having to wait for some committee to discuss and decide whether and how to do things, those who are committed to the goal self-organize and collect the money themselves for this goal. If the goal is widely recognized as a worthy goal for the community then the support will be quickly gathered, if there is little interest in a goal that will also be quickly determined. Instead of long never ending threads on IRC or mailing list, things get decided by the material and financial support towards reaching a goal. This not only decentralizes the decision making, it also ensures that the decision is made by those committed to the idea and it is not impeded by those who are only bystanders. It is much easier to collect financial support for specific goals like:

  • "we want to buy this display $url for the decoration of the space it costs $eur"
  • "we want to buy this laser cutter $url for $eur"

Goals that are more generic will have a harder time to collect the necessary resources, and will also generate much more discussion and disagreement in the community especially when factions committed to the budget do not agree on spending it for something more concrete.

All this does not mean there cannot be some very unspecific budget built up and handled by some members of the community. It only means that the foundation itself will only be a party to this if there is a clear financial benefit (e.g tax optimization) or contractual obligation (like the rental contract). Even if the foundations is involved in such budgets the decision of how to spend this lies with those committed to the goal for which the budget was setup, the foundation only provides a bank account and legal entity, no decision authority.

Specific interest budgets should be handled separately from the monthly contributions for the upkeep as they are ad-hoc and optional.

The monthly upkeep budget can be considered a special case of the Special Interest Budget. The community contributes to the very specific goal of paying the upkeep.

Thanks

Thanks to themba, joostvb, sa007, ayke, raboof, mrngm, buzz, bugblue, dekkers, realitygaps for all the inspiring comments and questions.