I'd like to open a discussion about the Drupal Association's experiment with fiscal sponsorship of DrupalCamps. In 2010 and 2011 the Drupal Association ran a temporary program with a small group of camp leaders to learn if there are benefits to fiscal sponsorship and to determine if it is a feasible program. As the year is nearing its close it is a good time to reflect on the program and review its value to the community.
Not everyone reading this post participated in the program but most of you are DrupalCamp leaders, sprint leads, Drupal Meetup organizers, and creators of other extraordinary community events. Your input is highly welcome as we are looking to determine the future of the fiscal sponsorship program as well as the activities of the Drupal Association in 2012.
To be clear this discussion is specifically to determine if we continue with the fiscal sponsorship program and turn it into a standard activity that the Drupal Association engages in.
Overview
Fiscal sponsorship provides the basic foundation blocks of a well ran camp and allows the camp organizer(s) to focus on the important part of their organizing; the attendees and content. Fiscal sponsorship also allows a camp to operate under the same 501c3 umbrella as DrupalCon with many of the same benefits.
Fiscal sponsorship provides a camp with the following:
- A bank account and credit card processing account to receive ticket and sponsorship sales funds.
- Access to the following methods of receiving funds
-
- paypal (USD/EUR)
- authorize.net (USD)
- oGone (Eur/GBP/DKK/SEK/etc.)
- Paper checks
- ACH/EFT/Wire transfers
- Credit card sent to camp organizing for paying expenses
- Checks for expenses are written centrally and paid to vendors
- 501c3 status
- General liability insurance
Read more about the Fiscal Sponsorship program
Activity
In 2011 the Association provided fiscal sponsorship for eight camps and held funds for one camp. Total gross receipts were 114.8K with expenses approximated at 95-100K (DrupalCamp Austin and DrupalCamp NYC have not yet recorded all expenses). Remaining funds were held for each respective camp.
Cost to run the program
At the beginning of the program we estimated a flat fee of 10% of gross receipts per camp. After reflecting on the year we determined that this was off but not by that much. Total cost of the program is estimated at approximately 7K (6.1% of total gross) or about $600-$800 per camp. Exact costs are not known because some expenses did not amortize evenly across camps. For example, DrupalCamp NYC's insurance requirements were above what the Association could provide, fortunately Zivtech was able to to provide Insurance for that camp.
Moving forward I would maintain a 10% fee with a cap, which was ultimately implemented with most camps charged between $400 and $600 for the service.
Running the program for all camps
In order for the Association to make the program a standard part of the services provided I estimate that the Association would need to provide a dedicated part-time resource for up to 15 camps per year and a full-time resource beyond that mark due to the volume of bookkeeping, customer service requests, invoices, follow-up, etc.
Camps could pay for this resource by either donating (or encouraging) enough funds to cover this individual's costs (salary, etc.) or by paying a fee of 6-10% of gross revenues, which is how the program was paid for in 2011.
Let's review
This is an open discussion about the program and a conversation about what works best. I have many ideas but before i discuss them I would like to get direct feedback from this portion of our community to learn how the Association can best support our camp and community leaders.
Comments
10%
I think there are a number of camps that would take advantage of this type of program, providing it is absolutely clear what they'd be getting for their 6-10%. The list above is a good start, but the devil is in the details. I think camp organizers would need to know that in the days leading up to their camps, any fiscal requests would be handled in a very timely manner. Customer service and (possibly online) reporting would be really important.
I'm a bit fuzzy on the event insurance item - why was DCNYC's so expensive? If it varies so much, it would seem to make it risky to include is as part of the "standard offering".
I think we can skip sending a credit card to camp organizers to pay for expenses. Large expenditures are generally known about well in-advance, so a check can be sent. Smaller, day-of expenditures can be paid for out-of-pocket, then reimbursed with a check. Seems like sending credit cards out wouldn't be worth any potential hassles.
-mike
This discussion
Mike,
I think you are absolutely correct that whenever a fee is being charged people need to know what they are getting in return. The purpose of this discussion is to define exactly that. Currently there are no dedicated resources to support camps. What I am asking is should there be? and if so are the camps willing to help fund that through a standard fee. As a group of community leaders I'm coming to you to solicit your thoughts and ideas.
Regarding NYC. The venue in NYC required a 4M per incident policy and at the time we only carried a 2M per incident policy, the cost to add a rider for the camp was too expensive from our carrier. Zivtech was able to to provide the camp with an appropriate rider/policy.
Thank you for the feedback on the expenses, much appreciated.
-Jacob
-Jacob Redding
Details
Thinking about details, I'd start simple and add complexity as necessary. I would narrow/modify what you suggested in your main post as follows:
I think that the DA will need to have a single point of contact for each camp, with everything flowing through that one person: receipts, check requests, etc... This will make it as easy as possible for the DA to manage.
One area that might be tricky is when a venue requires a signed contract for the event, then who signs? If the DA is providing 501(c)3 status and event insurance, then it would make some sense to have a DA signatory, wouldn't it? I'm not sure this is something that the DA would want to get involved in (this might fall under the category of "add complexity as necessary).
-mike
Details Redux
Mike great point and thanks for distilling this.
1 agreed, BUT also e payments from sponsors (works well)
2 agreed, but also pay by credit card on miscellaneous pre-approved items
3 agreed, but google docs is not as good as an actual accounting system, however light weight (we already handle our balance sheets in Google docs, its adequate but not connected to the DA's accounting system itself
4 agreed
5 agreed
6 legal, yes, the DA signed for us on the venue and this is quite advantageous. Saved us in any legal review as well as being unable to sign as individuals w/o a legal entity. The DA signed our venue agreements and this was greatly appreciated
In the matter of camp management, it is imperative that the DA have a single point of contact, or minimally two (we prefer a 'backup' approach here in NYC). In our case, richbaldwin manages the finances, I handled general camp organizational work, including managing the legal agreements w/ venue. Others manage other aspects (food/beverage, signage/badges/etc) but they work through Rich to get items procured. Works somewhat well for us although we do see that the DA is working to establish its protocols for assisting us and others, which adds a little clunkiness to the effort.
Joe Bachana
First Employee at DPCI
1560 Broadway
NY, NY 10036
212.575.5609
www.dpci.com
Sharing the DA's 501(c)3 status and clout in general
I had conversations with Cary Gordon back in April of 2009 about how helpful the DA could be in sharing its 501(c)3 status and its clout with local groups in not just camp organizing but in general. At that time the DA did not have a NA entity like they do today. The potential is much greater today than it was way back then.
I have done a 180 on my 2.5 yr old thinking and now believe that we need strong and independent groups out there who do not need to rely on the DA. I would like to see groups relying on other groups. I would like to see more individuals start organizing camps in other states, or to help those who show an interest in doing so. This is what I have done in years following my conversations with the DA about their potential involvement in such affairs.
I don't think a reliance on the DA is healthy at this time. We are fresh on the heels of 2012 and there is much work to be done. How long will it take to get the DA in to a position where they can execute on the proposals stated in this thread? In that same amount of time we can help many groups organize themselves as legal entities and establish small boards to maintain and execute the affairs of those local groups.
Here are some healthy conversations I've heard that I think point the way to a more sustainable solution to the concepts raised here:
1. Discussion among groups who want to form a multi-state organization.
2. Discussions among groups of user groups who want to band together to facilitate these camp activities.
3. Discussions to organize the whole state under one entity and manage affairs through that.
I really like these local approaches as they are quick and agile and represent the flavor and personalities of the areas that they are serving.
I've even heard some people float the idea of DrupalCamp Management for profit! As inviting as the word PROFIT sounds I still haven't signed on completely with this notion. I have been DrupalCamp Management [sometimes highly involved other times more casual] as a volunteer for over 9 camps in a a 3 yr span. I don't know that I need a profit from that, but my position may change depending on how aggressivle this market grows and how much of my time and talent is sought.
OK... as usual, WAY too many topics brought up in one thread! ;-)
One size does not fit all
Doug,
This is an excellent suggestion. I do not think that there is one single solution or one single program that will assist all camps. The program that is being proposed here will only provide support and does not provide organizing capability. It is truly the ability to take care of the necessary business bits of the camp (bank account, tax status, insurance, etc.). The question I'm driving at is not "can we do this?" because that's been answered, yes, and we can scale to assist 50+ camps by providing a dedicated resource (i.e. this can be up and running by the end of the year). The question is "Should we do this" and if so "What do we provide?". Whether or not you create a local entity or utilize the fiscal sponsorship of another entity there is an inherent financial cost. Local entities have to pay filing fees, license fees, and bookkeeping fees, in addition there may be fees to achieve and maintain non-profit status. If the DA provides the service will have to pay a dedicated person to provide support.
Going back to the early days of the camp organizing kit (which I helped to write) I've long advocated that camps should find a local sponsor and run the camp as close to zero profit as possible. This eliminates nearly all filing needs, license fees, as well as avoids the tricky politics of answering the question "who has control over the funds". I still advocate for that.
-Jacob Redding
counterpoint
I really appreciate Doug's opinions on the matter of Drupalcamps, and I respect the obviously huge amount of experience that he is bringing to this subject. However, I believe that the exclusive raison d'etre of the DA is precisely to help support local communities in their goal to put on relevant Drupalcamps that make sense for their area.
If the DA hasn't gotten there yet, its because it is still a young organization. But it is willing to tailor itself to meet this stated objective in its mission statement. Having been involved in a few camps already, I can see how the DA keeps improving, ever willing to help our community. It seems that the three things plaguing the DA are shortage of human resources, not completely defined workflows/procedures/protocols, and no standard tools/platforms to leverage to support their work. All three can be developed/implemented over time and with sound feedback.
There had been talk about some local organizational entity here in NYC that would be self-sustaining. The thing we have to be careful of is anything like this being used like a 'ring of power,' whereby the founders end up wielding undue influence on how money is spent, how the local camps are executed, who gets to speak and who doesn't, what information gets shared. Alternatively, it can just add bureaucracy and bloat to our already insanely hectic lives.
With the DA, we have an executive director who, in my viewpoint, is earnest in his desire to turn that organization into a useful support agency to help us foster stronger Drupal communities everywhere (well, in EU and NA, for starters I guess).
Believe me, Doug, the NYC community is strong and certainly filled with independent thinkers. Gaining consensus in our town is a job and a half in itself. But most of us are very much in agreement that we should be making decisions about what content we want presented at the camps, where we'd like them to be held, how we want to organize them, what food we want to serve (wow, NYC drupalists are foodies and ardent about those opinions!) and other fun stuff. The operational plumbing? As long as there's an agency behind us that is fair and keeping the money safe, and it is transparent to both us and them how it has been collected and disbursed - we're in heaven. There is strong consensus that the DA is becoming more and more of that resource for us. And thats a great thing.
I agree with you on one thing Doug. The word profit and a Drupalcamp. Death knell. I wouldn't be interested in participating in that in the least.
As for supporting Jacob, there should be some sort of an advisory group that meets periodically, not only to help the DA with its objective to help support camps, but perhaps even as a peer group to help each other. Periodically stuff comes up for us that we're not quite sure to handle, but we all know well that somebody out there has dealt with it at one time or another.
Joe Bachana
First Employee at DPCI
1560 Broadway
NY, NY 10036
212.575.5609
www.dpci.com
Getting to the core
Mike,
Great summary and here's the core of what we're getting at:
Right on the money!
This discussion is ultimately answering the question "Is this an appropriate use of the DA's funds". I'd like to build this program, including its costs, in concert with the folks that the program would support.
-Jacob
-Jacob Redding
This seems like a big win-win
This seems like a big win-win for DrupalCon and the Drupal Community. Thank you for opening this discussion. I hope that camp organizers who participated, as well as those who did not, will chime in here. Were there other camps that elected not to participate or camps that DrupalCon was unable to approve for the program--would it be constructive to discuss generally why or why not, without getting into the specific cases?
This is an important program that should strengthen the community and ultimately make life easier for camp organizers. After this feedback is collected, I look forward to hearing about your ideas, especially about the pros and cons that DrupalCon has needed to consider. I have a difficult time understanding why DrupalCon would not want to move forward with this program; it seems like such an important win-win for all involved. I look forward to hearing more about the potential arguments against developing this program. What are the potential obstacles which carry unacceptable risk or which require such support/staffing etc. that DrupalCon would seriously consider not moving forward with this Fiscal Sponsorship program?
Pilot program
Eric,
This was a pilot program and was only offered to camps that we reached out to. We did this to understand the true costs of what it would take to scale up the program and if it was truly beneficial to the community. Playing devil's advocate for a minute on the onset the program seems like a big win-win for the community. However, camps still occurred without this program. It isn't necessary for camps to be produced.
I'd like to hear from camp organizers how they feel about this program and what they believe the true benefits to be. I have thoughts and ideas of my own but I would first like to hear directly from the camp organizers and leaders.
-Jacob Redding
Indispensable support, but needs tightening
Having been an organizer of the DrupalcampNYC this year, I can't possibly imagine what it would be like trying to manage the AP/AR without the assistance of Drupalcon, Inc./the DA. It isn't just the savings of the 501(c)3 designation, but being able to book collections of registrations and sponsorship with the DA directly is a great efficiency. Also, no shop wants to collect all those monies then have to explain that to the IRS at some point in the future in some audit. The thought of creating a local business entity to manage the money? Just a bad idea, too many personalities, too many conflicting notions about how the money should be spent or managed.
The fact that the DA holds onto the money that is left over in prudent reserve is also a great benefit, since we trust that the DA is safeguarding those funds. Just the simple notion of leaving money with the DA instead of with any agent, organization, or person, helps us get out of any concerns that anyone would work for personal gain with the funds. The DA is our Ft. Knox.
Another area, the accounts payable component, could really be an incredible benefit. Paying for the bills of a camp gets really complex, particularly with so many volunteers laying out cash, or paying on their credit cards. We obviously keep the number of people authorized to do this to a minimum, and we also define WHAT needs to get purchased, from what vendor, at what amount, and under what terms, in ADVANCE (done in Google docs).
Where we trip up with the DA is in execution. What we REALLY want is a local credit card, entrusted to one person we pick here in our community (http://groups.drupal.org/node/182374), so that nobody has to lay out cash then wait for some undetermined period for reimbursement. For bigger items that must be paid by check, that already works well, Daniel is really responsive to our needs, and we definitely get him that information as early as we can.
I think that ALL camps can benefit from some standard balance sheet interface to manage AP/AR. We're doing it in Google docs and its pretty lightweight and it works. Rich and I manage it, with help from a few of the other organizers. But that makes Daniel have to jump out of the DA accounting environment and into GD, which isn't ideal. We also don't have real-time reports on what we've received, which isn't great for us. So I think a critical component of this service should be some kind of accounting system with a view for our respective camps finances.
re: insurance - yes, that is a challenge here in NYC. Naming a venue as insured can have associated costs. Ideally we would like to go through the DA for this insurance service. For now AlexUA/Zivtech has graciously and generously been supporting our camps, but we can't just assume he will always have the means to do so. I'm not sure what his costs are, so I'd probably defer to him on this particular matter.
The key for us is transparency. We also want a place to archive our proceedings of the camps, for anyone to inspect in read-only. We are also working on a best practices/lessons learned guide, which may make sense for the NYC camp, or it may be useful for all camps. Currently G.d.o doesn't support the archiving of the trove of artifacts that come along with a camp (COD build including customizations, mobile apps built, Redmine project, google docs, wiki, mayfirst list data) and we sorely want to archive all of that to some repository.
The latter is a separate (nonfiscal) matter, but the DA can indeed help with this. I would love to get a BoF on camps together at Drupalcon. I had pitched a session but it got nixed ;-) Doesn't matter really, a BoF would probably be better, or maybe a few hour breakfast or dinner on this. I think its a really important conversation and I'm really anxious to hear from George, Tiffany, Matt, and a lot of the others I haven't met on their experiences and war stories in Drupalcamp organization.
Joe Bachana
First Employee at DPCI
1560 Broadway
NY, NY 10036
212.575.5609
www.dpci.com
A BoF? Most certainly
There was a BoF on this topic at DrupalCon Chicago and it was awesome. We will most certainly do it again but it doesn't necessarily need the Association's blessing. DrupalCon Denver will have plenty of BoF rooms available.
-Jacob Redding
does this reach out to EU / APAC zones?
I'm aware the goal of the Drupal Grants is for targeting "special cases" mostly being ones that belong to the US/EU oversight.
Just wondering if this new experiment is planning to involve Asia-Pacific zones (islanders), perhaps some time in the future?
Marc Caballero
Drupal Philippines
Marckee for Short
No but sorta
Two answers
No. The direct answer is no. To offer fiscal sponsorship of a camp outside of the U.S and the E.U would require us to have a legal presence there, we don't.
Sorta: Having a dedicated person to assist camps would allow that person to create the necessary relationships with camp leaders around the world. This person could then connect folks with a local non-profit or group that could offer them the support they need. However, this wouldn't be guaranteed and could potentially just be replaced by posting in this group asking for the same support. Our community is pretty awesome and offer just asking for help will result in receiving it.
-Jacob Redding
Not a fit
In 2010 me and my local group decided to put on our first camp. I had helped to organize other camps which proved helpful in organizing my own.
About 70 days out from the camp date I sent Cary Gordon an email asking how/if it was possible for the DA to be our fiscal agent. He replied that Jacob was the one to talk to.
Jacob replied and CCd Greggles stating that he was the one to talk to.
Greggles replied with the following questions:
What is the budget for the camp (provide specific details, if possible)?
How will you accept funds (Paypal, Check, Electronic funds transfer)?
If a mix of those, please estimate percent of each.
How many vendors will you have and how will you pay those vendors
(Credit card, Check, EFT)?
How many sponsors do you expect? How many have committed so far
(verbally or contractually)?
How many tickets do you expect to sell?
When will you need to start spending money?
Has the same group of people successfully run camps of similar size in
the same region in the past?
Are you able to cover the DrupalCon Inc's accounting fees which are
currently being determined, but no less than $200 and more than 10% of
your revenue?
We thought that contacting the DA 70days out from the camp would be more prudent, but the questions seemed [to us anyway] like the kinds of questions that would be answered as we continued to organize the camp.
What was our budget? Well... If we collected enough sponsorship to provide lunch we would; and the same goes for t-shirt, a FREE camp would be nice if we could afford it.
How would we accept funds? We wanted the DA to tell us how THEY would accept funds.
What percentages of funds would be collected by which means? Seriously? This question seemed particularly absurd.
How many sponsors did we expect? No idea. Our best hope was that we would have enough to keep the camp free.
How many sponsors had committed? We didn't want to solicit sponsors until we knew we had a way to collect the funds.
How many tickets did we expect to sell? No idea. We were hoping to offer a free DrupalCamp.
When will we start spending money? Pretty much as soon as we can.
Has the same group of people successfully run camps of similar size in the same region in the past? This [to us anyway] sounded like "If you're pulling off your first camp, don't even think about using the DA as a fiscal agent" . NOTE: I had been upfront that this was our first camp. While I personally had helped other camps and even single handedly organized one in SC, It was a fact that this "group" had not organized anything together as a group.
No one on the team objected to paying a percentage of collected fund as a fee for services provided.
I discussed this laundry list of questions with the group and the decision was quickly made to file with the state of Indiana and form Drupal Group Indy and simply use our own organization to handle the funds.
This worked equally well for 2010 and recently for 2011.
The unanimous decision of our organizing team was that the list of questions was a clear indicator that we were not the target scenario for DA fiscal agency assistance. Since then I have helped organized more Camps and I have always encouraged the model that we used.
It's important to note that when I was asking the DA to be our fiscal agency in August of 2010, the process was very young. I have to believe that the off-putting questionnaire that I was sent was not used for long. The list as sent from Greggles, looked to me like a list he shot off at that very moment as he typed it in. I'm not even sure that anyone but me ever saw that exact same list.
I think we need to encourage groups to in forming legal entities that will satisfy their needs. I strongly believe that this is a longer term, more sustainable solution to the needs of existing camps as well as the many new ones that will surely continue to pop up.
Great Feedback
Doug,
This is great feedback and it helps us improve our communication. I had not heard that the questionnaire was that off-putting until now. Greg answered a lot of questions about the program and did a lot of hard work to help craft the direction of the program. When you applied there was no real program or specific type of camp that was being targeted so it is unfortunate to hear after the fact that the questionnaire was that off-putting. However, your local group made a decision that was best for them and at the end of the day that is what is needed.
I don't think that it is possible to provide a single program for all camps. As a community there has to be a range of solutions available to meet the needs of the local community.
-Jacob Redding
Hi Doug!I have to believe
Hi Doug!
I'm really saddened to hear this feedback, and especially to only hear it now after I've left the program :(
That same list of questions was indeed developed the first time someone asked (I forget who it was, but it wasn't you) and then sent to everyone who asked to join the program.
Is it just that it feels "off-putting" or are there other problems with the list of questions? Did they just feel too hard to answer at that time?
I'm holding my opinion on the broader topic for a few more days to hear back about some questions sent to the Drupal Association accountant.
knaddison blog | Morris Animal Foundation
Defining "offputting"
I'm known for being pretty verbose.
In my reply where I described my teams reaction to the questions as "offputting" I also offered a line by line commentary that reflected the collective response that we, as a team, had to the questions.
Perhaps you have read each of those lines of commentary and find our reactions to be uncommon and even bewildering. If so, then the simple fact here is that we were an anomaly and the concerns that I raise are moot when weighed against the other responses that you received.
No need to be saddened. It appears that the opportunity didn't appeal to any of our team at the time. I only brought it up here thinking that we might not be all that unique in out response.
I was wrong.
I really enjoyed tom_o_t's story of how the DA model really filled a need for his camp. You should disregard the points I was trying to make and keep on keeping on.
For my part.... I'm bowing out of this conversation.
Just to be clear, when you
Just to be clear, when you say "in your reply" you mean in your reply here. And yeah, it's somewhat useful feedback - we shouldn't have asked what forms of payment people wanted we should have just said what forms we could do and which ones we preferred. That was an unnecessary question.
Your reply to Jacob and me at the time likened the questions to an overly intense investigation (the "Spanish Inquisition") and then said "I understand and expect formality and business procedures at this juncture." Maybe you were just trying to go with the flow, but in retrospect that was potentially damaging. Bummer.
In the comment here you said "NOTE: I had been upfront that this was our first camp." But in my re-reading of your emails to Jacob and me I see no mention that this was your first camp.
In short: I don't know what information to actually trust.
Moving on...
At the time our biggest concern was that the DA would decide to act as agent for a camp, the camp would spend a lot of DA money or make commitments on behalf of the DA, the camp would lose money, the DA would have to pay for it all. So, yes, we wanted to see evidence that the people were going to break even or have a small surplus. Saying you had "no idea" on several of the points feels to me like your camp was relatively high risk. Maybe it was profitable or break-even, but as a risk-averse person in charge of a program that could have lost some of our community's money I feel like asking some probing questions is totally justified (though obviously the tone could have been improved).
Two constructive take-aways:
That question #2 could, fortunately, be answered by some data from the DA accounting staff. In the original post Jacob mentions that the program had a surplus of about 15%. It would be great to know more specifically:
knaddison blog | Morris Animal Foundation
I'm still waiting on this
I'm still waiting on this information in order to evaluate the program.
If it's not possible to get this information in a reasonable time period that leads me to think the program was and is not accounted for in an organized fashion. Since "accounting" was one of the theoretical benefits folks got this leads me to believe (among other reasons) that the program should be abandoned until a time when we can make it a sufficient focus that it gets proper accounting.
knaddison blog | Morris Animal Foundation
The purpose
Greg,
As I've mentioned the reason that this information takes a while to be responded to it is because there is no one assigned to be the manager for this program. Daniel, did most of the accounting as a favor to the community and Annie provided customer service as part of her larger job. The question that we are answering with this discussion is if the Association should invest the proper resources into this program (i.e. hire).
Here is an example of what the job position would look like.
To answer your questions we look no further than the Association's Balance sheet.
https://skitch.com/jredding/gp4ag/balance-sheet-the-drupal-association-q...
The answers to your questions took me just a few minutes to answer:
How many Camps? 9 (2 are only holding accounts)
How many had a surplus (before and/or after the DA fee)? 7 before the fee (fee has yet to be charged, but all would carry a positive balance after the fee)
A distribution graph/table of surplus amounts showing how many were positive by how much/negative by how much? See image linked to above.
-Jacob Redding
You're not wrong
Doug,
Not all experiences are going to be identical and there is no single answer to how best to support and grow the Drupal community. I think your experience is incredibly valuable to the DA and to the Drupal Community, which is figuring out how to best support and grow the project.
Perhaps there was a misunderstanding or miscommunication but it doesn't mean you were wrong or that you were right. That was your experience and you did exactly what you should have done. You built amazing camps. In the end that is what matters. What we build as a community.
-Jacob Redding
Strong support for fiscal sponsorship
A busy week has kept me from commenting on this thread until now, and in that time joebachana & ultimike have covered everything I wanted to mention.
Having organized and helped organize several DrupalCamps in NYC, I am very grateful that we had the Drupal Association provide fiscal sponsorship. Before this was available we tried several approaches:
1) A local shop accepted all sponsorship money into their business account and then paid all expenses. This led to complications at tax time, and a worry about transparency (though there were no problems and nobody raised any concerns).
2) Sponsors paid directly for expenses - one sponsor mailed a check to the university that hosted the camp, another sponsor phoned the pizza place to buy half the pizza. This took a huge amount of my time to coordinate, and was very awkward for one food vendor that couldn't accept credit cards.
Now that sponsor money goes directly to the DA, things are much simpler. The only hiccup this time around is that we wanted to have a system in place within the NYC community to provide clarity on how we would get and use a DA credit card, and who would be responsible for it. That took longer than intended in the midst of organizing our largest camp yet. It would be great to have a group of community organizers collaborate on putting together frameworks that Drupal groups around the world could use to guide them through community-building processes like this to avoid reinventing the wheel.
This leads to what I see as the main benefit of the DA's fiscal sponsorship: we as community members should be focusing on putting together exciting events; we shouldn't be spending time forming 501c3s, figuring out what accounting software to use or worrying about the best way to nominate someone to be responsible for a credit card.
I think that in addition to the DA expanding it's fiscal sponsorship for local camps, the broader community needs to take some time to collaborate and build on the documentation that's already out there (thanks to ultimike and others) so that more people are aware of it, and things like the DA's fiscal sponsorship are included.
http://drupal.org/node/247972
http://groups.drupal.org/node/136494
http://www.thomasturnbull.com
http://twitter.com/thomasturnbull
Quick Thoughts
With regards to the cost of the insurance- it doesn't cost us much in the near term (we have large clients that require we carry that amount of coverage). However, we are taking on a fairly significant risk in the case that something goes wrong, as we could have our rates raised significantly if we had to cover some liability at the camp. I'm not that worried about the risk, but it is a real risk and not something many business will be willing to do, so I think that the DA should consider upping its insurance if it wants to keep sponsoring growing camps.
With regards to the local org/sponsorship vs. DA sponsorship conversation, I think that the fiscal sponsorships are going to be most helpful for those camps & communities that are just getting started (also, 10% for fiscal sponsorship is, imo, a good deal- in my limited experience non-profits that sponsor other groups often require more than 10%). However, I believe that local groups (like NYC) that have gotten large and mature enough would benefit greatly from having their own (c)3, or barring that, a local fiscal sponsor. All things being equal, I think that a local sponsor would make the logistics a bit easier (it's easier to get someone local to use their credit card). I also think that a local (c)3 would be more accountable to the local group, as well as responsive to their changing needs, than a national/international non-profit could be. Obviously, I have strong opinions about the lack of accountability of the DA (I mean, they're now telling us that the DA was not acting as a fiscal sponsor to anyone in the past: DrupalCon Inc, an independent non-profit with no official connection to the DA, and no oversite whatsoever, was), but even with that aside I think that you're much more likely to get the help and responsiveness you want from a local group. Just my $.02...
Alex Urevick-Ackelsberg
ZivTech: Illuminating Technology
Great points
Alex,
I think these are great points. The risk piece is definitely important and in Greg's post above it seems as though we might have been a bit too cautious when starting this out. One of the many benefits we saw from a move from NYC to Portland, Oregon is a reduction in our overall expenses, including insurance thus being able to offer increased insurance benefits to camps (amongst other items).
In regards to local org/sponsorship vs. DA sponsorship a hybrid model would work well here. To be clear about the current test structure is that all governance was handled locally. We preferred to find a single leader in the local community and provide that individual with a DA credit card/account and entrust them to manage the camp(s). As an example, the Belgium community built their own Governance and accountability model with a president/vice-president/etc. and utilized Drupal VZW as a fiscal sponsor. They received non-profit status and did great things in their community but got off the ground much faster. In short, we empowered people with the tools and then got out of their way. Of course there is a bit of financial risk so we tried to manage that back n' forth with a bit of oversight by our accountant (Daniel) and Annie assisted with customer service. In the 2011 annual report we plan to provide a clear line-item denoting the funds held for camps and the number of camps we work with.
This current model isn't scalable, which is why I've opened this dialogue. As an example, the DA could hire a full-time program manager for this program and assist camps all over. A model that I've looked to for this is the Boy Scouts and Girl Scouts, which have local chapters/councils, etc. The local communities are responsible for all local activities with only guidance given from the national organization. The local troop maintains its independence and autonomy while also being supported by a larger national non-profit and benefiting from the economies of scale. To some extent we are already operating in this fashion although it is not formalized.
I am of the opinion that the DA needs to empower and support local communities all around the world.
-Jacob Redding
"Is this an appropriate use of the DA's funds?" Yes.
Having the DA as a fiscal agent was tremendously helpful to us in holding our first Drupalcamp Twin Cities (2011). As a couple of others have mentioned, fiscal agency is particularly useful to communities with little to no experience in camp planning/management.
Even though the discussion has been mostly constrained to fiscal agency, I think this sort of service could potentially grow into a slightly broader camp and/or event consultation service. For example, we did our own benchmarking and research on other camps, what their sponsorship structures looked like and so forth. It'd be helpful for someone to own this sort of information and be able to summarize and present various approaches to (again, especially new) camp planners and to generally lower the barrier to entry for camp and event planning, somebody with which you could, say, hold a kickoff conference call. We managed (quite well, I think) to get on without such a consultant, but I think it probably would have been helpful to have had such a resource. I do think fiscal agency is the critical service and most logical first step, however.
Finally, thinking about the DA's about statement (https://association.drupal.org/about), fostering local camps fits well within a couple of its core goals:
and especially
Good to have options
I definitely think the option of fiscal sponsorship would valuable to not only organizers of larger camps but also sprints, clinics, hackfests, and other good for Drupal events. Is there potential for the DA offering fiscal sponsorship to organizers of these types of events?
Gus Austin
Great feedback
If we determine the best funding model I think this is a great idea and does play with the creation/empowerment of local entities. Our goal is 100% to support and provide the foundation for the community. The Community should focus on content and not on underlying business necessities.
-Jacob Redding
DrupalCamp Austin
We just got done organizing our third DrupalCamp Austin and were happy to have our 2011 camp be part of the Drupal Association's fiscal sponsorship pilot program. Prior to this, all of the money ran through Four Kitchens.
Immediately after 2010's camp, I found myself asking, "How do other camps handle their accounting?" and put this question out to the community. My problem is that I didn't want the accounting of a non-for-profit event getting mingled with the accounting of my for-profit company. What we really needed was for the camp to have its own bank account, credit card, PayPal account, etc. And the only way for this to happen would be to start a new legal entity, ideally a non-profit. For many of the reasons already stated in this thread, this would be a huge headache to manage -- despite the benefits of having direct access to all of the accounts. Later, we were approached by the DA to participate in the program and we decided to give it a try.
Overall, we were very happy with the program.
Pros
Cons
Tools
We used a Google spreadsheet to track all of the income and expenses for the camp. This is probably preferable by those without any accounting experience, but I couldn't help but want something more. Next year, we may consider using Freshbooks to track all money as well as sending invoices. I'd like to hear the DA's opinion on a more sophisticated accounting tool -- especially for those camps that occur every year (or more) or have ongoing expenses -- like helping out the local Drupal user groups.
TL;DR
For us, the greatest benefit was being able to separate the money of the non-for-profit event from our for-profit company. However, using a third party for anything will never be as convenient as if you were doing it yourself -- and may actually result in more work. For us, that was a worthwhile compromise.