Online / 6 & 7 February 2021


Give open source a (tax) break

Financing open source using tax breaks on donations made to endowment funds or general interest associations is a construct available in France and a viable alternative to R&D expenditures for sponsoring open source projects. We will present several initiatives from the Libre Endowment Fund ("Fonds de Dotation du Libre" in French) - from financing feature development of open source software to releasing a 4G/5G base station as open source hardware or supporting litigation against the French government's decision to host Health Data on Microsoft servers.

The recently published FOSS contributor report showed that 48.7% of contributors were paid for their contributions by their employer with only 2.95% being paid by a third party. So even today as (open source) software continues to eat the world, almost half of all projects lack the financial base for ensuring their respective software's long-term existence.

To finance the long term maintenance of its open source software stack, Nexedi has created the Libre Endowment Fund ("Fonds de Dotation du Libre" or FDL in French). It is a French endowment fund which complies with strict auditing procedures. With this status, French Law permits corporations and individuals to donate to the FDL and claim back up to 60% from future income taxes (65% for individuals). Rather than investing directly in the maintenance or continuous development of own or third party solutions, Nexedi and other companies (ex. Amarisoft) can pool donations which then support the maintenance or development of open source software, open source hardware or open services.

During the last three years, FDL has been involved in a variety of projects:

1) "Open Source Software" - FDL sponsored the development of Jexcel v4, an open source online spreadsheet editor ;

2) "Open Source Hardware" - FDL has acquired the technological assets for a remote radio head (RHH) and is about to publish its PCB design and BOM under open source licence. It will be the first open source carrier-grade 4G/5G base station ;

3) "Open Service" - FDL is supporting the launch of an initiative called "HyperOpen" for cloud solutions built using open source software, open hardware and open service. Open Service applies to the service industry the four freedoms of Free Free Software. With Open Service, everyone can use a service, study how a service is made, modify the service and become provider of that service. It is a generic principle, that in theory can be applied to services beyond the cloud.

4) "Open Data" - FDL maintains a directory of European Open Source software publishers and their success cases. This directory is shared and contributed as open data (JSON) through pull-requests on a git platform.

5) "Open Policy" - FDL is helping to sponsor the legal cost of Santenathon, a group of IT companies and non-profit organisations who have recently succeeded in a court case asking the French government's Health Data Hub to stop collecting personal data of french citizens and to migrate their solution from Microsoft to a European provider.

The examples should highlight that provided the legal conditions in a respective country, funding of FLOSS solutions and related general interest projects can be partially subsidized by tax exemptions. It is important to notice that strict accounting and reporting rules apply in order to ensure juridical safety of the donor. FDL is managed using an open source ERP by a professional accountant and auditor. Those costs can be shared among the different projects.

FDL also benefits from a scientific board of advisors which include three developers of open source software (Jean-Paul Smets, Stéfane Fermigier, Gaël Varoquaux) who also hold a PhD in computer science or mathematics. This scientific board follows the same procedures as governement sponsored RTD projects and thus also contributes to the juridical safety of FDL.


Sven Franck