Should you ask developers for money? And other interesting fundraising dilemnas.

300x300_cjohnson Chris Blizzard introduced me to Clay Johnson. I had such an interesting time talking to him about social networking, free and open source software, governments and fundraising that I asked if he’d share some of his points in a blog interview.

Meet Clay Johnson, Director of Sunlight Labs!

Hi Clay, you have a lot of experience with online social networking. Where’d you get that experience?

It’s weird– I started out with social networking before social networking was called “social networking.” In college, back in the early days of the web, my Dad would always ask me to look things up on the Internet for him. I began to get tired of answering questions, so I built a service that would let people ask questions and answer them online– that way, I figured, he could have a whole community of people answering his questions. That was, the first “social network” I built on my own.
A few years later, I found myself working on the same kind of project with some friends called, which was a social networking service built into Outlook. And shortly thereafter, the Howard Dean Campaign hired me to be their lead programmer and build Dean Link, a privately branded social network. Then quickly found myself starting the company that created— yet
another social network.
It isn’t intentional, I swear! I find both socialness, and networking exhausting …

You now work at Sunlight Labs on “opening” the American government.
What’s that about? How can we help?

Our mission is to use technology to make government more open, accessible and accountable to its citizens. We’re now a community of about 1400 developers at Last year our community built out about 100 different open source applications based on making government more open accountable,  accessible and open.
The apps range from things like–which allows you to sort and view information about Congress, to— our own Open Source Mechanical Turk, to which takes data from the federal government and makes it relevant to your area and— a site that takes the Federal Register (the official Journal of the Federal Government) and turns it into something people can actually read.
Our hope is that our work will result in economic opportunity (GPS, Weather Data, the Human Genome– all built on government data!), a more accountable government, and more rational political debate as people have more access to facts. The fact that there’s more data on Manny Ramirez and his job performance than Nancy Pelosi’s is kind of crazy and we hope to change that.

I’ve heard you say you should never ask a developer for money. Most free and open source software projects turn to those they know best, developers, when they need funds. Why do you think that’s a bad idea?

Let me hedge here a little and say you shouldn’t ask a volunteer for money. For the same reason the folks at
Habitat for Humanity don’t come and ask you for money while you’re putting up drywall in one of their houses. There’s a spectrum when it comes to open source software. One one side there are projects that are
driven out of the hope for a larger good– I’d call these traditional volunteer projects– where people are  donating their time to help make the world a better place. Then there’s the other hand: stuff that’s driven out of necessity. Obviously this is a spectrum and projects move within it. When you have stuff on the ideological side– stuff built genuinely not out of the desire to solve a specific problem, but to make the world a better place, then those developers are likely already donating to your project with their time.  They’re being altruistic already. When you have a developer giving their time out of
necessity, they’re getting a return on their investment– usually a more efficient workplace, better software for them to use, or some other personal need filled. It’s entirely appropriate to ask them for money as well– as their return on investment will be even greater.
How do you think free software projects can effectively engage with donors?

Now if I had the secret to make all open source software economically sustainable and as well funded as
commercial software every time– well, I’d have told everyone by now, and we’d all be rich working on  projects we believe in. In the political world there’s a lot of best practices, but the one I like the most is to maintain long-term relationships with people via email and social media, and to make specific asks from them. So, for instance instead of saying “Donate to keep this project sustainable,” one could say “We need to build out XYZ, can you pay for ONE line of code to go to that project? Our estimate is that it’ll take X lines of code.”
Another thing you can do is look at what the clean energy community is doing– what if you created a code offset like we have carbon offsets now? What if an organization set up a website where folks could estimate the amount of free software they use and buy free software offsets on an annual basis, and make investments in free software projects? This works great because it helps donors alleviate their guilt for not contributing their time to open source projects, and makes it easy. I’d gladly put an open source offset sticker on my laptop to match my carbon offset sticker in my car.

How can we get donors participating in the project?

Allow donors to fund the projects they care about. Give them a voice in the project. Don’t just enable their participation but expect it. Build an email list and talk to them about what it is they want. Don’t send newsletters, send real emails asking them to help out. Give them a meaningful way to participate and what’ll happen is unusual: they’ll participate.

Do you have any fundraising tips for us?

Here’s what’s amazing: when you give users an active role in your community. They’ll participate more. So find ways to get them involved. For something like GNOME, come up with some principles, and get your users to sign on to them and you’ll find that if you ask them to help fundraise, they’ll do it.

What’s the single most important thing you think free software projects
could do to improve their fundraising efforts?

Start reading emails from organizations like and and start emulating them and their tactics. You don’t have to agree with them politically to see how they’re doing what they’re doing.
A lot of people are going to call me crazy, but look: I’d argue that GNOME has as much if not more installations than the number of people that are subscribed to’s email list. And unlike, a lot of these users are interacting with your software every day, not just when an email pops up in their inbox or when something happens in Washington.

What is Sunlight labs going to do next? What can we expect to see in open government?

We’re focused on launching a new contest a few short weeks. It’ll be a design contest. We want to make it so that by 2011, people who can come to and find the team they need to open their government. Developers are a part of that, but designers are too.

Book Review: The Complete Guide to Offshore Money Havens

I don’t usually blog about books I don’t like but I thought I could save people some time – don’t bother with The Complete Guide to Offshore Money Havens. I was in the library looking at finance books (like the rest of the world) and I ran across it. As I had a two year old with me (hanging out in the library is an excellent thing to do with a two year old on a cold rainy Sunday) I couldn’t really peruse it well, but it had 3.5 stars on Amazon. I figured that meant the writing style was hard to read but the content might still be ok.

I spent half an hour on the book this evening and it was terrible. The main point I got? "Taxes are way too high, start a bank in the Bahamas, sell yourself insurance and get deposits from your friends." Granted I didn’t really read it but I read the first few pages and skimmed the rest and what I read was … biased, wrong, and lacking any background explanation. You’ve been warned.

Now if anybody knows of a good book that explains international banking and finance … I’m still looking.

How much allowance did you get?

There’s an interesting blog post over on freemoneyfinance that is asking two serious financial questions:

  • How much did you get for an allowance as a kid?
  • How much did the tooth fairy leave you?

I answered:

I got $1/week allowance starting around first grade and $1/tooth from the tooth fairy. 

My seven year old stepson gets $1/week at both houses and $1/tooth
from the tooth fairy. I think the tooth fairy is being a bit cheap
since she gave me a $1/tooth over 25 years ago!

What about you?

What’s your credit card number mean?

I have two credit cards from the same bank and I noticed that they were almost all the same number.  That seemed strange to me since I got them at very different times. 

Turns out that you can tell a lot just from your credit card number.  For example, the first number tells you what type of company issued it: a bank, an airline or an oil company.  The first six numbers will tell you exactly which company issued it (if you had the master sheet of companies.)  You can read all about your credit card number in Anatomy of Credit Card Numbers

Have fun!

Do you live well?

I keep pointing out how cheap things are these days and how much we have.  Most people look at me like I’m crazy and then try to point out how expensive things are.   Really, you can eat out for an hour’s worth of work at minimum wage.  Groceries are even cheaper, if you buy the right stuff.  You can buy a t-shirt at Old Navy for $5!  You can buy an entire outfit in very good condition at my local thrift store for less than $10.  Toys are cheap – we consider a lot of them "disposable."  Looks like the author of Our high, high standard of living would agree with me.

as late as 1970 the median single-family home  was still less than 1400 square feet (versus over 2200 now).

I have a personal recollection of the 1960s and 1970s (I graduated
from high school in 1977). My dad was a college professor and probably
made a pretty good income, but we never had a standard of living as
high as lots of "poor" folks seem to have now: We never had air
conditioning. We didn’t get a second car until I was in high school. We
didn’t get a color TV until I’d gone away to college. We never took
vacations overseas. Eating out was for special occasions.

The only problem I’ve encountered with living inexpensively these days is that it’s hard to find a new, small home these days.  All the new homes in good locations are huge homes.  So most homes are expensive, but it’s because they are huge, not because the cost of living has gone up drastically.  It has gone up, but in general, we all live very well.

Money is social debt

I saw an interesting way to think about money in Steve Pavlina’s post The Abundance Mindset:

Remember that money is social debt.  The size of your bank account is a measure of how much society owes you for the value you’ve already contributed.

He’s not saying money is the only type of social debt, he’s just saying that it is social debt.  People pay for things they value.  So what do you do that people value enough to pay for?

Yet another unlucky lottery winner

This guy won $5 million dollars and is now living off social security!  His problem?  Bad investment advice.  It sounds like he might have a case although he probably should have gotten multiple opinions!  He was getting $98000 a year when an investment company convinced him to:

sell the future annual payments off to a private firm for an immediate
lump sum – in his case, about $2 million – that he could roll into
investments. He’d just live off the earnings and interest.

All these stories of lottery winners going broke almost makes you afraid to win the lottery!

Money is not Evil

Money is not evil.  Having money is not wrong.  Spending money is not wrong. 

Steve Olson has a great post about Why People Believe Money is the Root of all Evil – both Steve Olson and Steve Pavlina take that one step further and explain why if you think money is evil you will never have any.  Steve Olson’s post has a great list of things he grew up hearing that implied having money was bad.  Here’s the ones on his list that I also heard a lot:

  • He’s filthy rich
  • That house is a waste of space, can you imagine the heat bill
  • Whadda ya think money grows on trees
  • He’s got money to burn
  • How much money does a person need?

All of those are negative comments and imply that having money is evil, but money enables you to do things.  It’s very hard to save the world or even yourself if you don’t have any money. 

So, earn the money, make sure it doesn’t ruin you, use it wisely and accomplish your goals.  You can use money to find a cure for autism or to hang out on the beach for the rest of your life or make sure everybody in your town makes it to college.  Without money any of those will be hard to accomplish.  It’s even easier to stay in shape, eat healthy and live a longer life if you have money.   

Passing on having money won’t make you a better person, it will just give you one less tool to accomplish what you’d like to do in life.

Photo by Big-E-Mr-G.

Quote of the Day

"Spend at least as much time researching
a stock as you would choosing a refrigerator."

                                                – Peter Lynch

Cash or Charge? How to spend less money.

Spending cash does help you to spend less money than when you pay with credit.

Numerous personal finance experts claim that spending strictly cash will not only help keep you on a budget but will also help you spend less.  The problem I have is that I hate spending cash.  As a 11 year old I left $40 in a purse in McDonalds and ever since I’ve been terrified I’ll lose the money!  (We went back and found the $40.)  Also, I love credit cards because you never have to worry about how much cash you have, you never have to go to an ATM, and everything you spend is automatically tracked for you in a nice computerized report.  (And I pay it off every month so using credit cards is not a financial penalty.)  But I recently decided to try again for a couple of reasons:

  • I wanted to keep a budget and it’s easier to stick a couple of hundred dollars in your wallet and say "this is it for the week" than it is to track all the money you spend on gas, eating out, groceries, the coke from the vending machine, etc.
  • I think I’m over my fear of losing cash.  I realized a while back that losing the money in my wallet might make me upset but it wouldn’t really devastate me.  ($40 to that 11 year old was a lot more than $200 is to me now.)
  • I was curious … would sticking to cash make me spend less?  Would I treat money differently?

So I’ve been doing this for about a month – every Friday I put a certain amount of cash in my wallet and that’s it for the week.  If I buy gas with my credit card, I actually take that much cash out of my wallet and put it aside.  (Buying gas with my credit card is too convenient to give up.)  And it works.  I’m spending less money!  I’m not sure what I’m spending less on since I tend to track overall numbers not all the details but I don’t feel like I’m depriving myself of anything.  (If I had to guess it’s lunches by myself, snacks and impulse purchases.)  Here’s some of the reasons I think I’m spending less:

  • I’m very aware of what everything costs.  With my credit card that I don’t pay much attention to what anything costs.  Thirty seconds after I pay I couldn’t tell you what I just paid.  (I saw it, I made sure it made sense, and then I didn’t bother to store the information in my memory.)  With cash I pay attention to what things cost and I remember what I spent.
  • I make tradeoffs.  Since I can see how much is left in my budget I can say, "I’d better not eat lunch out if I want to go to sushi on Friday night."  Using credit cards I’d just do both.  (Note that giving out the lunch out if it’s by myself isn’t really giving anything up.  I just need to remember to grab leftovers at home in the morning – Frank always has lots of great leftovers in lunch size containers in the fridge.  See My Man’s Man for more on that.  I haven’t given up any lunches or going out with friends – those events are high on my priority list!)
  • Another theory that I don’t think applies to me is one from freemoneyfinance that says that if you keep $100 bills in your wallet you are less likely to spend them because you don’t want to break them.  I use $100s simply because they take up less room but I don’t think I’m any less likely to spend them than $20s.  But who knows, maybe that can be my next experiment.

What do you think?  Do you spend less when you spend cash?  If so, why?

Photo by velo_city.