Open Source Endowment launches with $700K to fund critical projects

The open source software community has a new potential lifeline in the form of the Open Source Endowment (OSE), a newly launched organization that aims to build a sustainable funding model for critical but underappreciated open source projects.

According to the organization, which describes itself as "the world's first endowment fund for open source software," the initiative seeks to address a longstanding problem in the open source ecosystem: the chronic underfunding of projects that form the backbone of modern software development.

The funding gap in open source

The need for such an initiative is well-documented. In 2023, Denis Pushkarev, maintainer of the widely used core-js library, publicly expressed frustration about the lack of financial support for his work, stating that "Free open source software is fundamentally broken." The sentiment echoes similar complaints from other maintainers over the years.

Christofer Dutz, creator of Apache PLC4X, previously lamented the uncompensated use of his software, while Google has highlighted the need to support critical open source infrastructure, particularly in the wake of vulnerabilities like log4j.

The problem extends back further than recent memory. Following the 2014 Heartbleed vulnerability—a dangerous flaw in OpenSSL—a Ford Foundation report revealed that the OpenSSL project, despite being critical internet infrastructure, had just one full-time maintainer and earned less than $2,000 per year in donations.

The scope of dependency

The scale of reliance on open source software is staggering. According to OSE, 95 percent of codebases rely on open source software, with each codebase containing an average of 500 open source components. Yet 86 percent of open source contributors receive no payment for their work.

The endowment model

OSE founding chairman Konstantin Vinogradov, a venture capital investor, believes he has found a solution by replicating the funding model that has sustained universities for centuries. In a Hacker News post announcing the initiative, Vinogradov explained his reasoning:

"Universities and the open source community, he argues, share reputation-based culture and functions, working together to create valuable ideas for the benefit of the public, educating each other, and commercializing only a portion of what's produced."

Vinogradov points out that for universities, humanity has just two sustainable funding models: public spending or private endowments. He argues that government support won't work for open source software at scale because it's too globally decentralized.

How it works

The Open Source Endowment operates as a US 501(c)(3) tax-exempt charity. The model is straightforward: donations are invested, and only the investment income is disbursed through grants. The principal funds remain invested in the hope of growth, creating a sustainable funding stream over time.

Currently, the fund stands at around $700,000, thanks to contributions from more than 60 founding donors. Notable supporters include the founders of ClickHouse, curl, Elastic, Gatsby, HashiCorp, n8n, Nginx, Pydantic, Supabase, and Vue.js.

Individuals who give over $1,000 can become OSE Members, which includes certain rights to participate in OSE governance.

Grant selection process

The organization has detailed its grant selection process on the OSE website and in its GitHub repository. According to Vinogradov, "OSE won't give money for commercial product development—it is dedicated to supporting existing highly-used nonprofit and independent OSS."

This focus on existing, widely-used projects rather than new commercial ventures distinguishes OSE from other funding mechanisms in the open source ecosystem.

Context in the broader funding landscape

While OSE represents a novel approach, it's not the only organization working to support open source software. Other entities include Open Collective, Open Source Collective, and the Rust Foundation's Maintainers Fund. Organizations like the Software Freedom Conservancy provide legal and infrastructure support to open source projects.

Individual developers may also receive contributions from companies, though this often involves "passing the buck" between organizations. Government-sponsored initiatives like Germany's Sovereign Tech Fund represent another funding avenue.

The challenge ahead

The success of the Open Source Endowment will depend on its ability to attract significant capital and demonstrate that the endowment model can provide sustainable, long-term funding for critical open source infrastructure. With software increasingly underpinning every aspect of modern life, the stakes for finding sustainable funding models for open source software have never been higher.

The initiative represents an ambitious attempt to solve a problem that has plagued the open source community for decades. Whether it can build the "big pile of money" necessary to make a meaningful difference remains to be seen, but the launch of OSE marks an important milestone in the ongoing effort to ensure the sustainability of the open source ecosystem.