kubuntu-council team mailing list archive

[Michael Hall <mhall119@xxxxxxxxxx>]

Hi Harold,

I will attempt to address each of your questions in as much detail as I
have available.

On 05/28/2015 12:18 PM, Harald Sitter wrote:
> Hey David and Michael,
> 
> As previously noted on G+ [0] I do have various questions WRT how the
> donations are being handled and would love some answers.
> 
> 0. I think it would help a great deal if the community could get an
> outline of how exactly the donation process works. To that extent a
> lot of the question below seek to better understand how it works,
> where money goes and how it eventually ends up in an applicant's bank
> account. Could you perhaps document the process either on the funding
> page on ubuntu.com or somewhere else so the community as well as
> possible donors know exactly how the process works and how money ends
> up where it ends up?
> 

The basic process is discussed on
http://community.ubuntu.com/help-information/funding/, if that needs
additional clarification please let us know what and we can add it.

> 1. Were the funds described in [1] simply part of Canonical's revenue
> stream during the mentioned time period?
> 

No, those funds were distributed to the budgets of departments that
would be working on the item the donation was for. Some of it may have
been split between departments, for example between Ubuntu Engineering
(who write and package code) and CDO (who manages the servers).

> 1.1. If so, are the 'donations' now still part of the regular business
> finance or are they somehow kept apart (separate bank account and/or
> accounting)?
> 

The process described above remains the same, with the exception of
donations made to the "Community" slider. Those funds are still going to
the same place, but we are keeping a running account of the incoming
amounts, and drawing money out of that budget for use by Ubuntu Members,
community event sponsorships, and the like. Both the incoming donations
on that slider, and a detailed list of how it is being spent is included
in regular reports that we publish.

> 1.2. How is this working presently? Is Canonical managing the assets
> on behalf of the community or is it revenue that is graciously given
> to the community?
> 

I don't understand the distinction you're asking, can you clarify?

> 1.3. As the original setup (during the time period in question), where
> money was apparently [2] simply used for day-to-day business expenses,
> is in stark contrast to what the donor was and is being suggested when
> making his contribution. Is this still the practise for donations made
> towards non-community 'sliders' (e.g. phone development, juju
> development...). Or to perhaps put it more clearly: are all donations
> now actually target-directed as suggested to the donor, meaning they
> are used in the relevant departments within Canonical and only there?
> 

Donations are going to the appropriate department's budgets, as
explained in the answers to 1 and 1.1 above.

> 1.3.1. If not, why not?
> 

If I understand you correctly, they are being used as you describe in
1.3 after "Or to perhaps put it more clearly", and this has always been
the case.

> 1.3.2. If not, would this be something that could be implemented in
> the interest of not misleading the donor?
> 

This is hopefully answered in the above.

> 2. Who actually owns/holds/administers/accounts the funds until they
> are distributed?
> 

I don't know the answer to this. The Community Team gets told the
monthly donation amounts to the "Community" slider only, and we keep
track of that, applications for those funds, and disbursement of those
funds in our own spreadsheets. We have no visibility on any of the other
sliders.

> 2.1. Assuming it is Canonical, are the donations then actual taxable income?
> 

I don't know for sure, but given that we are not a tax-exempt
organization I would assume we have to pay taxes on it like any other
form of revenue.

> 2.1.1. If they are taxable incoming are the numbers we see in the
> community funding report before or after tax? I guess what I am asking
> is whether Canonical is paying tax on these funds without actually
> forwarding these costs, i.e. in a way paying the tax out of
> Canonical's pocket.
> 

I don't know. If this is important for the community to know, I'll be
happy to try and find out.

> 3. What measures have Canonical and the UCC specifically taken to make
> sure that donated funds are correctly reported and accounted for as
> part of the funding reports in a reliable way without them entirely or
> partially disappearing in Canonical's revenue stream as apparently was
> the case previously [2]?
> 

We publish reports every quarter (or at least we try to, the recent ones
were quite late being published) that detail the amount donated to the
"Community" slider as well as the amounts, recipients, and uses for the
recipients of it.

As I hope I have explained above, the "apparent" case referenced was
never the "actual" case.

> 3.1. In case the answer entails relying on numbers coming out of
> Canonical. Is there a process in place to verify the correctness of
> these numbers to ensure everyone is working with accurate numbers and
> no one made a mistake along the line? For example: can the UCC request
> a look at the actual books pertaining to the public community funding?
> 

No, Canonical is trusted to be honest and transparent in this. We have
already published one correction where we found that a mistake was made,
and will do so anytime in the future a mistake is discovered.

If there is any question of Canonical's honesty in these reports, those
questions and any supporting evidence behind them should be brought to
the attention of the Community Council.

> 4. Since recently a community member was incorrectly listed as having
> received community funding when in fact he only had been approved but
> not received any, could you please elaborate on how the reports are
> compiled such that an inaccuracy like this happened?
> 

The reports of expenditures are based on the approved purchase orders
raised as part of the community requests program. In the case of Rick
Timmis (who I assume you are referring to) the request was approved and
a purchase order raised and approved. The intended recipient was
contacted, but for some reason (still undetermined) he did not get that
email, and so was not able to receive the funds in time (and, it turned
out, he was not able to travel to the event he had requested it for).

Because this request was made, approved, and the PO allocated those
funds out of the budget, it was included in the report. After Rick
contacted us about the fact that he did not receive the money we added a
comment to the document about this, and those funds will be added back
to the "Carried Forward" amount in the next report.

Similarly, but unrelated, we had approved an amount for UbuConLA that
would have allowed them to hold the event at a hotel with conference
rooms, but after the approval the organizer found that the hotel was
actually going to charge quite a bit more, and so the event has been
moved to a local university instead. Because the cost of hosting it at
the university will be less than the amount approved for the hotel, we
expect some part of that expense to also be returned to the "Carried
Forward" amount in the next report.

For full transparency, both requests were left in the report, so that
the community knows what requests are being approved and for what
amounts. But since the money was not (or not all) spent, that money will
be returned to the running total that we track.

That was rather long, so I hope it answered you fully.

> 4.1. Are measures to make reporting more reliable already being
> discussed? In particular with regards to the fact that the incoming
> numbers for Q1-2 2013 were incorrect and funding being accounted for
> that has not actually taken place.
> 

The initial numbers from Q1-2 2013 were taken from a different source
than we have used for all subsequent reports. The new sources provide
this information is a way that is much clearer and simpler for us, which
should avoid us making the same mistake again.

> Finally I would like to point out that I strongly believe that trust
> should never be part of an equation that involves money. In particular
> with regards to funds that are considered donations collected on
> behalf of the community for the community. As a member of the
> community I feel that donations collected on my behalf need to be
> managed with the utmost care and at the end of the day every penny
> ought to be accounted for and be invested towards the end we promised
> it would be invested.
> That being said, I at least would feel much better if there was a
> transparent peer review in place. For instance by having donations go
> into a non-profit entity of which the UCC or the entire Ubuntu
> membership are members and can look into the books and verify the
> accuracy of accounting and management of the donations.
> 

The consensus among the Community Council is very much against being
responsible for this money. Our role is governance and oversight, not
financial accounting. We will investigate any questions of impropriety
in the use of these donations, but we won't take them over.

> [0] https://plus.google.com/u/0/+MyriamSchweingruber/posts/4VFRygUzyzA
> [1] http://fridge.ubuntu.com/2015/05/27/community-donations-report-oct-2012-apr-2013
> [2] https://lists.ubuntu.com/archives/ubuntu-community-team/2015-May/000510.html
> 
> HS
> 

Michael Hall
mhall119@xxxxxxxxxx