Forming a non-profit

I have been saying for a while that before considering collecting money on a project wide level (instead of individual people having patreons, for example), we need to form a non-profit to hold that money in order to greatly reduce the chance of someone running of with the money, which would be a huge setback.

Recently I discovered what might be another solution: joining software freedom conservancy as a project. They have a FAQ on this page: https://sfconservancy.org/projects/apply/
Basically I think we fulfill their criteria of being open source, so we could apply (but there is no guarantee that we would be accepted). If accepted they would manage collecting donations (they seem to do at least patreon and paypal donations), and contract developers (probably one / some of us existing team members at first) to work on Thrive as well as fund other project related costs like web hosting. And we wouldn’t have to change the way the project is ran, we’d just need to officially write down how the project is ran (who has authority to decide on money use etc.). So all in all it would be a pretty sweet deal. And I doubt there would be any big downsides to sending them an email and asking to join.

The other option is to form our own non-profit, which is a much more work, but might have some benefit over the software conservancy. I think some core member who is very active (which doesn’t leave many choices) needs to basically start a non-profit in their country (unless some neutral place like Switzerland offers very good options for registering global non-profits) and handle the registration process. This would likely entail even more legal paperwork in defining who gets to vote on board members, how are new members accepted, who has the right to sign up for a bank account and handle the money. I’ve looked into this a bit and it would cost me multiple hundred euros to create a registered association here in Finland, additionally there would be costs in renting a PO box equivalent and accounting services for handling paying people.

Anyway I just wanted to try to start an official conversation about these options (and if anyone has a better idea), as I’ve been wanting to do this for a long time and many fans bring up bringing money into the project up quite often.

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A few questions:

Would people still join the team the same way?
And what would happen with team members who don’t have a bank account?
Also, with money involved, would there be a minimum team member involvement for payments etc?

I think that basically yes. We don’t need to change that. However, if we form a non-profit in Finland there’s official members of the non-profit who will have an actual legal status in relation to the rules of the organization and can be given benefits, and joining can be limited whatever way we want. But that doesn’t rule out that accepted developers are given things like access to the forums and github, without joining the non-profit by signing paperwork.

Depending on where the non-profit is located, and where the team member is, if they are hired to work on the game (which I’ll consider to be the only money going to team members, other than supporting people paying for servers or something like that), labour laws must be followed. So the hired person can receive their pay any agreed upon legal way.

I don’t think we are suddenly going to be getting so much money that we can pay for multiple people. Hell, even me working part time while still studying would cost something in the ballpark of 400-500 euros a month (for about working 4 fulltime days a month). You can multiply that figure by 5 to get what one fulltime employee would roughly cost per month (extra fees that an employer needs to pay aren’t taken into account here).

Related to my previous point, I think that official work contracts would be (almost) the only payouts to team members. Meaning that everyone who gets paid would be in an employee relationship with a contract setting their pay level and needed hours of work. The contracts would likely be decided by board members of the formed non-profit, who may be voted by all of the developers or with some weighted voting system where longtime team members get more votes. I think we can pretty freely decide on these details when writing the legal contracts for forming the non-profit.

So we would run like Godot, which has a few full time employees who manage their github and also work on some features themselves, but at the same time they have a lot of community members and some trusted github repo members, who are unpaid.

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It’s a nice idea, I’d like to know if active artists would get paid. The problem is that it’s hard to set up any shaders and preview models (that’s why I’d love to work on an engine like godot) which means there is way less to do as an artist. So im not sure what would they do full-time.

I really like the idea of creating one, I actually live 20 Km from Switzerland for obviously reason I couldn’t be the owner of the non-profit.
Could be the option that I create it but the legal owner is someone else?

How will change the structure of thrive?
I image the team leader like the ones that participate most as you for example are the one that gain money, as you say as Godot there are employees and external contributor.

Which kind of contract are possible for non-profit structure?

There are just employees or can be different situation, like consultant, intern?

We can hire for whichever role is felt to be the most needed. But I don’t think we’ll going to be getting a lot of money so we need to prioritize the most important roles first, which currently is programming.

I’m sure we can think of many artistic things to work on, but it is true that many art related things need to be programmed to be automated, which does reduce how much art we need compared to other games.

I would like to improve on this. Let’s discuss that in a different thread:

I used Switzerland as an example as it seems many organizations have their headquarters there, so it might be easy to setup a company there without having to physically go there. But I don’t know if it is possible.

The members who are most needed to be able to work on Thrive more should be prioritized. Right now I’d say we should maybe have 2-3 programmers before considering other kinds of team members, as programming is the biggest bottleneck currently. But we can decide this later, I doubt we’ll have enough money to hire more than one person any time soon.

I think, basically almost anything you can think of, as long as it doesn’t contain illegal elements. But to save on attorney fees we likely want to use some template and customize it, it needs to be done right so we probably shouldn’t skimp on having an attorney review it.

Perhaps. Though, usually employees are the cheapest ones to have long term. But I’m open to the idea of hiring some specialist contractors like the bsf developer or a graphics expert to fix some specific issues as a consultant.
Interns aren’t usually very productive and don’t provide enough value to warrant their salaries, this is the reason many companies don’t offer intern positions (and unpaid interns are pretty unethical in my opinion).

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Yeah I think you have the main issues right, it might be difficult to work out how any formal structure is controlled (as in who can authorise money to be paid and how many people need to agree etc) and who should be paid (though I think you hh are def the best candidate at the moment).

I am ok with trying it and if that foundation can do all the paperwork and legalities that could be a big help, do they need a percentage for doing this?

I do think personal patreons are good because it avoids a lot of the problems of centralisation, though if they don’t work in Finland then that is a problem.

More broadly I’m not super happy with the team structure where I think there is really no mechanism for changing team lead roles. We are sort of running a hereditary aristocracy where once you have a role it seems to stay forever. As part of more formalisation we could consider some other things (such as periodic elections or something).

Yeah, I forgot to mention. Their site says they take 10% of donations for administration fees, which seems pretty reasonable to me. With a low amount of donations, trying to do things ourselves would likely cost even more, but if we start getting serious money it would be cheaper to do it ourselves.
Their FAQ does state that projects are free to split off into their own non-profits and that’s fine with them.

They do work, as long as you are certain that everyone actually buys something, so that they get something in return for their money, so that it does not count as a donation.
I’m worried that trying non-official patreons just fizzles out and doesn’t work. I think we need a major push in all of our communications for promoting that we are finally collecting money for the game.
Untrustedlife said that (while it might be related to the thrive related content drying up) that his number of patreons has fallen quite a bit.

Definitely. I think that most hobbyist organizations have are organized so that they have like a general assembly every year that has the official members (who might be paying a yearly fee to stay a member in exchange for extra benefits) vote on some number of board members who then hold authority when a majority of them agree on something (for example hiring some person, organizing an official event or something). If we go this way then the board would be the ones voting on who they think should be team leads (and also other roles).
Other option would be so that everyone would be given a chance to vote to remove a team lead.

I do want guarantees for the project to stay on track, so I’d want to build in some mechanism for avoiding a hostile takeover from new members, perhaps so by having older members having more votes or needing a bigger majority than 50% for changing people’s roles.

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I guess patreon also takes a percentage.

I think the promotion is a slightly seperate issue. For example I am ok with the idea of strongly promoting a personal patreon for you. I agree though there is something nice about having a central fund, though it is a lot more complicated.

Not sure what the minimum is for this. For example could it be as simple as being able to submit questions which we will definitely answer in a podcast or something?

Edit: I guess another question I have is “is this sufficient?” Have we got to the point where the code is sufficiently complicated that really only you can work on it? Because if so what does that mean for the long term future? Or is it more the case that if we had some money we could hire some devs and that would really help?

If other people also promote it, then I guess it could work. I don’t want to feel like I’m just personally pushing it on everyone.

This is the new law (which apparently is coming into effect in march 2020): https://www.finlex.fi/fi/laki/alkup/2019/20190863
There doesn’t seem to be an English translation. But the most important part, I think, is this:
From the definitions what is collecting donations: “rahankeräyksellä toimintaa, jossa yleisöön vetoamalla kerätään vastikkeetta rahaa;”
Roughly translates to “collecting money is defined as activity where the public is appealed to give money without compensation” Here’s some possible other translations for “vastike”: https://www.sanakirja.org/search.php?id=168763&l2=3
So basically the law for collecting money without compensation does not apply if some compensation is provided (however it seems that a small token as appreciation for donating money might not count as compensation).
Basically I think that subscription services count as products so providing things like: access to patron only updates, dev builds and maybe guaranteed Q&A question answers, would be legal.

I think it’s complicated. Any significant system is difficult to work with. I don’t think there is ever any way to make it fully easy for new people to get aboard an existing software project. For example at work, it’s taken me many, many months to become somewhat familiar with our product and its architecture, and that was while working full time on the product, I still have to discuss things with our lead developer when doing something architecturally significant. I think this applies to thrive as well, it’s very difficult for even a good programmer to grasp what is going on. I would imagine that as this is starting to look like a very widespread problem to me, that there would be some research or advice online how to tackle this. I have two (or three) ideas to tackle this: make a section (perhaps on the community forums) for asking any thrive development or code related questions, which I would then answer (or someone else from the team if they know about what is being asked), this could maybe even be made into a video series as some things might be just easier to show on video than answer in text form. The other idea is that we’ll write a guide for developing thrive with the different parts explained, where to find things, and also answer any problem areas that the current developers have ran into.

As no one objected I think we should contact the conservancy. I’ll post a draft email on the discord soon to not mess it up.

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I don’t remember, did we have already an answer?

There’s been no reply. Their website does say that there’s an incredibly high demand for their services, explaining why they can’t reply fast.

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So I’ve been reading more about forming a non-profit. I wanted to share some findings.

  • Depending on how much legal help / document translations we need forming a non-profit in Finland can be as cheap as a little under 100 dollars.
  • The biggest two problems I see to forming a non-profit is that we need to write down the rules, and it might also be that the non-profit must have rules in Finnish for registration in Finland, this would get really expensive to translate needed documents into Finnish. The second problem is that the chairman and vice-chairman need to reside in Finland, though with special permission that can be wavered. So these things need more looking into.
  • I’m still not sure if there is some recommended country to form global non-profits in
  • There needs to be at least 3 founding members who sign the association forming documents, it seems that electronic signatures might be accepted, if not we need to sign printed documents and scan them.
  • It is possible to be a non-registered association, but still sort of kind of act as an association, so I think by using the name “revolutionary games” on stuff it is possible to kinda officially already use the name before registration, but it is not possible yet to open like a bank account or stuff like that for the association. That needs registration first.

And I read more about using patreon:

  • It seems that it is likely legal in Finland to run a patreon as long as the patron rewards that are offered are enough to be considered actual products that the person is buying. Patreon handles VAT.
  • So the only taxes that need to be worried about are income taxes (before setting up a non-profit) which I can personally report on my tax returns if they are under 1000 euros a year, after that they need to be reported in advance.

So I think I’m good to start setting up a patreon with the project name (revolutionary games studio), but as we aren’t a registered entity yet, I’d be personally responsible for the patreon.
I was thinking of having the following tiers:

  • $1 special patron only updates
  • $5 access to dev builds
  • $15 access to a patron (+ developer) only category on the community forums, where I’ll prioritize answering questions about the game, plus the dev builds can be used for getting feedback on game balance and new features. Also included could be occasional polls on which features should be prioritized. And finally we could start livestreams by answering priority questions from the patrons.

I think those would count as provided services.

And these would be the milestones to reach:

  • $50 hosting costs covered! Now we don’t need to worry about individual people not wanting to contribute these costs anymore.
  • $500 one part-time developer. This is it, guaranteed progress on Thrive! The development hours made possible by this level will mostly be dedicated to working on new features.
  • $3000 One full time developer. Now we can make Thrive even faster
  • $6000 more developers

We are unlikely to reach those goals anytime soon, so those will be enough.

Please let me know if you have some comments about this.

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It seems like opening a patreon is much less of a hassle, however you say that you’ll be responisble of it even if it’s named after the whole studio. Wasn’t the initial idea to make a personal patreon for you instead of making it for the whole team?
I like the tiers you proposed. One question tho, what kind of updates would be patreon only?
I think the second milestone is feasible to reach in a mid-long term, specially depending on how many people who have asked us to accept money are actually willing to do so.

The first thing patreon asks when making a creator page, is what name to show on it. So I thought why not use the group name, as I intent to use the thrive logo for it. I don’t intent to mislead anyone so I will be mentioning on the page that I am responsible for the patreon. I intent that (if we get enough money to cover the fees) we could found a non-profit in the next 6 months and move over the control of the patreon if possible, if not possible then we could sign a legal agreement about me managing the patreon with the non-profit.

I was thinking of doing an update at the end of each day when I work on thrive supported by the patreon money, basically showing people what their money was used for.

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This wasn’t linked here yet: