wiki:org/meetings/2017Montreal/Notes/ThinkingDifferentlyAboutFundingTor
  • Led by Shari Steele
  • “Thinking Differently About Funding”

Tor has traditionally been set up like a university research institution, instead of a nonprofit; we were set up like a university from the beginning. Like with universities, many of our largest original grants are government research grants with specific deliverables that we bill for after completion; the org has been set up to bill for deliverables, which limits people “do we have money for me to work on X, and who do I bill it to at the end of the day?”

Sometimes other things come up in the process – you discover new things when you’re trying to work on a deliverable, and there isn’t always money to pay for working on the thing you found. This is frustrating from a project standpoint, but also unfair to our people – there was no cohesion or stability in what we could offer for contractors because the funding was unstable and we couldn’t guarantee money/work.

Comment: universities are larger and thus more flexible, can take on more risk. Tor can’t because it’s so much smaller and there was almost no unrestricted funding.

A lot of our money comes in this way, still. Funding for browser work recently ended, and people were worried about losing their jobs because there wasn’t an explicit funding source for browser work. Same with onion services. Long story short, of course we won’t be letting these people/projects go!

Primary sources of income:

  1. Least restrictive source of income: Individual donors! 2 years ago, Tor did its first crowdfunding campaign: “This is what a Tor user looks like” brought in around $200k. There was no infrastructure in place to handle the campaign, however, which put us behind in follow up to donors (i.e. thank you notes and t-shirts getting months behind). Idea to be a twitter campaign, but there were only a handful of tshirts sent out.

Last year, second crowd funding campaign: we have more infrastructure to manage the campaign, follow up with donors and make good on promises for swag. Went with “Tor at the heart of internet freedom,” brought in $200k. (We had a more low key campaign due to tensions in the internet freedom political climate.)

This year, we have $500k of matching funds from Mozilla! Our plan is to launch October 23rd with the matching funds – aiming for $500k from individuals, which would be amazing, because its unrestricted funding – we can keep browser people and onion services people funded while we look for other sources of funding.

Biggest issue with individual donors: lack of major donors. A strong, healthy organization has both regular and major donors. We have about 35 people who have given us >$1000, which isn’t enough. We need to develop these donors/donations via personal relationships, which we’ve started on. We were on shaky footing the last year, but we’re in a better position this year to develop these relationships

  1. Foundation money – Next less restricted money; they can give you money for things that vary from very specific to very general. Example: Rose Foundation gave us a “consumer privacy grant” to fund groups working on consumer privacy, including building technology that enhances consumer privacy. This is a general/broad grant that you could do lots of different things with.

Issue: SCALE. The grants we get from the government are around $1M. Foundation money is typically less, unusual to get that much in a year. A good foundation grant is like $100k - $250k, so you have to get more grants. Breaking into the foundation world is hard, but as soon as you’re in, they see each other funding things and are more inclined to fund those things as well.

Question about how foundations are formed. Answer: it varies – some are wealthy families, many large corporations. However, family foundations are smaller and more like individual donors, and there are usually specific people within the family/foundation who you develop a relationship with. These people don’t typically want to read grant proposals and/or reports, etc., and they can typically give unrestricted funds.

  1. Cy Pres – Class action lawsuit/donation mechanism. Where a large class action lawsuit would result in a negligible payout to the class of plaintiffs (because there are millions of plaintiffs, for example), the court can donate the class action settlement to non-profits who advocate for issues that were litigated in the case. For example: google did a thing bad for consumer privacy, so instead of giving everyone 10 cents, they pooled the money and gave it to EFF.

FYI: Tor’s 2017 budget just under $4M, and we switched the end of our fiscal year to June 30th to allow for better forecasting after end of year campaigns.

  1. Corporations – Sometimes directly, but usually through sponsorships, corporations make donations as part of trying to improve their own image. This can be event sponsorship, ads on a website, whatever. Unless there’s a charitable function within the organization, that’s what it usually looks like.

Q: Do we have guidelines about who we won’t accept money from? A: We do not presently. Willing to entertain the idea that some money would be immoral/icky to accept. There are some opportunities we don’t pursue, but no outright rejections thus far. Matt (Blaze suggests that maybe it could be a board question.)

Q: Is Tor going to move away from taking US government money? For the foreseeable future, we’ll continue to accept it. Shari is working on diversifying funding sources, but it takes time, and we absolutely need the money because of how we’re set up. Right now the focus is getting additional sources, there’s not presently enough to completely replace gov’t money. We have fewer options for funding anyway because most people don’t want to fund a software project. Also, we’d like to move away from government funding because of the administrative burden. It’s also bad optics to take money from the US government. Also, political winds could change and the gov’t money we depend on could dry up.

Hard to get money for a software project, but Tor is more than a software project, and that’s an angle we’re taking with fundraising: we’re a privacy/anonymity/anti-censorship organization. We shouldn’t only describe ourselves as a software project – we’re diversifying and clarifying our brand/identity, and then learning how to work that into foundation grant proposals. Learning how to message and talk about how we’re making the world a better place.

  1. Monetizing Tor – Exploring the possibilities but also aware of community concern about how the community will react. Recently, a group of Tor people met with Amazon – they want to secure its IoT and some other project, and wanted to talk to Tor. Nothing concrete came of the meeting, but a theoretical compensation scheme would be based on the number of transactions; everyone is still thinking very generally about it, still early idea stage, and lots of obvious potential conflicts of values. Another idea: not just dollars, but could be a huge gain in network infrastructure – would have to be something that would clearly benefit Tor, not a situation where a big corporation is using our free service and turning huge profits. Also, it would help with “cover” traffic.
  1. Another suggestion: making money on “powered by Tor” stuff available on the internet, but we don’t presently allow things like this (intellectual property).
  1. IoT – working on getting connected devices hidden on the web. Re-brand: it’s the light web! (?)
  1. Re: Earlier question about staff people not being sure about whether they’ll have a job next week – is it a communication issue? Example: we added a general funding category for tracking time, but people are afraid to use it. The issue is that the way the org has done things in the past sort of gave people PTSD, and we’re working to overcome that. Comment: Google found that psychological security is one of the most significant indicators of workplace satisfaction.
  1. Comment: Projects still feel separated, feel responsible for raising their own money, but the org is trying to relieve the burden of writing/getting grants. Some projects are having a hard time figuring out what the balance is between developing their projects and getting their own funding. (Pluggable transports, mobile, OONI, etc.)
Last modified 13 months ago Last modified on Oct 14, 2017, 9:46:22 PM