VC and other big-name programmers are trying to solve open source’s funding problem, once and for all

A group of notable open source developers joined with a VC investor to launch a non-profit organization called the Open Source Endowment in hopes of solving once and for all a perennial problem with developing open source software: funding.

Backers of the Open Source Endowment include Thomas Dohmke (former CEO of GitHub who made a record $60 million for his startup dev tool Lonke); Mitchell Hashimoto (founder of HashiCorp, which sold to IBM for $6.4 billion last year); Supabase Founder and CEO Paul Copplestone; founder of NGINX; creators of Vue.js and cURL; and resources from Elastic, Spotify, and others. In total, the project has more than 50 sponsors so far.

The nonprofit organization, which recently achieved official 501(c)(3) status, has currently raised more than $750,000 in pledges. But if things go according to the plan of its founder, Konstantin Vinogradov, it will have $100 million in assets within seven years.

Vinogradov is an investor specializing in open source, AI and infrastructure software, and was previously a general partner at Runa Capital. So, he “has some experience with university endowments,” which are some of the biggest investors in venture capital funds, he told TechCrunch.

Vinogradov says that as he traveled around the world looking for open source projects, another complaint kept coming up: “There is no source of continuous funding for open source maintainers. And that’s a really big problem.” (“Maintainer” refers to developers who work on open source projects, such as fixing bugs, selecting and validating community-submitted features, or planning new features themselves.)

The grant will support projects based on criteria such as the number of its users, or how many other projects depend on that particular software to function. It will also select projects that are not already well supported by grants, donations or umbrella organizations such as Alpha-Omega for Linux. Vinogradov has already assembled the non-profit organization’s board.

The money was tied up, burned

The lack of money in open source is by no means new. Open source software is often provided, and since the community often donates time and effort freely, up to 86% of open source developers are paid for their work.

This isn’t much of a problem for hobbyists or professional engineers who are paid by their companies to take care of projects, but such a system stands on shaky ground. Open source software is the foundation on which the Internet stands, and almost every major company uses open source tools in some way. In fact, open source software makes up 55% of the technology stack in organizations, and is present in everything from databases to applications.

While it is possible for open source developers to trade their free projects for riches beyond their wildest dreams, the odds, to misquote The Hunger Games, are not in their favor.

There is, and has been for decades, a core of developers who donate their time and efforts for free to manage popular, important and valuable projects. And most of them are burned.

The issue entered the public consciousness briefly in 2014, with the OpenSSL Heartbleed disaster, where a flaw was discovered in an open source security project, used by most of the Internet, that was maintained by a single developer.

There have been many attempts to fix the funding situation over the years. Some projects take donations from corporate sponsors. For example, the Linux Foundation, which brought in about $300 million last year mainly from corporate sponsors, issues grants to select projects through its Alpha-Omega Project. By 2025, Alpha-Omega has released $5.8 million in 14 projects, it said.

Some projects take donations directly from corporate donors. In January, for example, Anthropic donated $1.5 million to the Python Software Foundation. While the Foundation says it’s excited to have that money, Anthropic itself raised $30 billion this month. One such contribution is to replace the sofa in the AI ​​lab.

However, not all developers want to take corporate donations, as there are concerns about giving too much power to the companies that donate. For example, there was a big hubbub last year in the Ruby community surrounding some long-term care leavers and their major sponsor Spotify, the Register reported.

The Open Source Endowment hopes to support projects while removing such risks.

“The only way to sustainably support open source is private funding,” Vinogradov said.

Why was the endowment never tried before? Gifts require patience, says Vinogradov. They invest most of their assets, spending a small portion of their income in any given year, and it takes years or even decades for them to grow to meaningful size.

But if done right, that patience will lead to a private fund that can support important open source projects forever.