Off the Beat: Bruce Byfield's Blog

These days, large free software projects resemble any non-profit organization, with governing boards and obligations to release regular reports. How many users read those reports is uncertain -- not many, I would guess, because, even in free software, the reports tend to be glossy exercises in PR. However, if nothing else, their financial statements are worth a close look, because they suggest the priorities and directions of project's governing bodies.

Two examples are GNOME and KDE ( I would have looked at other popular desktops, but none of the others release quarterly or annual reports). Examining their statements for the 2013 financial year shows two projects have very different practices and are in very different situations.

Income and Expenses
To start with, GNOME's 2013 finances show an income of $521,228 and expenses of $600,193, for a shortfall of $78,965, with no overall balance given. By contrast, KDE's 2013 show an income of about $247,000 (the original figures are in Euros), and expenses of $208,000, for a small excess of $39,000. The 2013 report shows no overall balance, but, given that , and the line items seem largely unchanged over the last few years, KDE's 2013 balance is likely similar to those of previous years, too -- that is, somewhere between $200,000-270,000. These figures show that KDE runs a leaner operation, and suggest that KDE.ev, its governing body is more financially conservative than the GNOME Foundation.

GNOME's income includes $180,000 from its Advisory Board (that is, presumably, from corporate sponsorships), $198,000 from sponsorships, and $38,635 from individual donations, which strongly suggests a corporate-orientation.

Aproximately another $33,000 comes from GUADEC, GNOME's annual conference -- a figure that, to judge from other years, could become higher over the next quarter or two. According to Karen Sandler, GNOME runs GUADEC as a for-profit event, with sponsors that include Google, Canonical, Red Hat, Suse, Igalia and -- this year for the first time -- three Chinese sponsors (Seafile, CODE/CSDN, and GitCafe).

GNOME's expenses include just over $237,000 for administration and the salaries for the executive director, an administrative assistant, and a system administrator, a figure that suggests that its staff is paid market value but not, in all likelihood, extravagently. GUADEC and Hackfests account for another $67,000, which makes GUADEC -- at least so far -- a minor money loser.

However, the most unusual source of both income and expenses is GNOME's Outreach Program for Women (OPW), which encourages mentoring for women worldwide. In 2013, GNOME expanded the program to other project, which explains why its expenses jumped from just under $107,000 to $275,000. At the same time, sponorship for OPW brought in income of about $250,000. That means that OPW was responsible for about a third of GNOME's 2013 shortfall -- a solid amount, but hardly the reckless expenditure by out-of-control feminists that some commentators have alleged. It is a miscalculation, but its altruism makes it hard to fault.

KDE's 2013 income and expenses break down somewhat differently. To start with, corporate and individual donations are approximately equal -- $47,3000 to $53,000. This ratio that is more or less consistent over the last few years, and may explain why KDE seems less corporate-dominated than GNOME.

The other major source of income is Akademy, KDE's annual conference, which brought in over $102,000. Probably, like GNOME's income from GUADEC, this figure will increase as money trickles in over the next couple of quarters.

KDE's expenses include $64,500 for "personnel/administration/office," which includes one full-time business manager. The difference in this line item alone accounts for most of the difference between KDE's and GNOME's expenditures. It also suggests that KDE relies more heavily on volunteers, especially since the business manager can hardly be paid a competitive salary.

KDE's other expenses are some $59,000 for Akademy, and $20,000 for coding sprints. The amount for sprints is only two-thirds of what GNOME paid for hackathons, but, given KDE's European base, travel expenses to its sprints are probably less than those to GNOME's hackathons. A perspective donor, however, might prefer that the line item Other were replaced by a more precise breakdown of expenses.

Past and Present
The basic income and expense figures may reflect cultural differences between the projects. However, what is especially interesting is how these differences compare with past years.

If you ignore a line item called Big Donation of $210,000 (which appears to be a one-time donation), KDE's financials show only a few suggestive changes. Corporate sponsorship, for example, has halved since 2009, while private donations in 2013 were a third of what they are today. Today, too, neither KDE.eV memberships nor involvement with Google's Summer of Code contributes any income. However, administrative and personnel costs have remained more or less the same, while $35,000 for legal fees in 2009 have disappeared altogether by 2013. Yet, despite these changes in details, KDE's bottom line has remained much the same since 2009, differing only 5-7% each year.

However, the same cannot be said for GNOME. Conveniently, GNOME's 2013 summarizes finances for the years 2010-2013, and, in many line items, income is down and expenses up. Sponsorships declined in this period from &198,300 to $38,635. So far, GUADEC income has also declined, although it varies considerably in this period. Private donations and royalties have increased, but only by a few thousand dollars apiece.

Meanwhile, emplyees' salaries have gone from costing $158,510 to $220,262, and OPW from  $76,572 in 2010, its first year, to $275,000 in 2013. Meanwhile, money spent on Hackfests has declined from $82,681 in 2009 to $29,534 in 2013, and expenditures for GUADEC and the Desktop Summit from $65,439 to $37,377. Similarly, although marketing has never been a major expense, its budget of $3,657 in 2009 had declined to $600 in 2013 -- so insignificant a sum that you might wonder why anyone bothered.

In short, GNOME has a recent record of reduced income and increased expenses, and, at the same time, is spending less on key items. The decline in money going to Hackfest and other conferences seems particularly noteworthy, since many developers agree that regular face to face meetings are the best way to work. While KDE seems likely to continue for the next couple of years in much the way that it has in the past, GNOME looks as though it may soon be forced to become more active about seeking sponsorships or else to reconsider its priorities and reorganize its daily operations.

Reasons
Sandler notes that "some companies have had their sponsorships budgets squeezed in recent years." That is true, and perhaps GNOME was simply overly optimistic in its budget planning, and KDE only evaded its fate by being more conservative financially.

However, another possibility is that the decline in sponsorships is a reaction to the release of GNOME 3.0 in April 2011. This reconceptualization of the desktop causes many users to vote with their feet, explaining loudly what they disliked about it.

Could corporate sponsors have likewise voted by where they placed their donations? A possible proof of this idea is that KDE, which by early 2010 had responded to its own user revolt, did not suffer the same financial decline as GNOME. In fact, the last couple of years has seen renewed interest in KDE's Qt toolkit, at the expense of GNOME's GTK.

If GNOME 3 was a financial factor, then its decision to support extensions - a decision that removed many of the objections to it -- might result in corporate sponsorship returning to GNOME over the next couple of years.

Meanwhile, though, the financials suggest a distinct difference between the two desktops: GNOME corporate-based and accustomed to a large budget, and KDE more balance between corporations and individual users and more conservative financially. If you are considering making donations to the desktop, you might want to confirm these impressions for yourself and have a look at the financial statements to help you decide which is closest to your own values.