March 6th is Open Research Institute’s 501(c)(3) anniversary. As it’s our first birthday, we are going to celebrate!
ORI is incorporated in California, USA. There are a lot of statistics available for CA non-profits from https://calnonprofits.org/ which is an organization that provides support to directors and officers and the general public about the non-profit landscape. Here’s the highlights from their recent report that are relevant to what we are doing, followed by how we fit in and where we can go next.
There are 27,317 nonprofits with paid staff in California, and another 65,250 (70%) that are all-volunteer organizations, for a total of 92,567 active nonprofits.
We are all volunteer, with no paid staff, so that puts us into the larger of the two categories.
11.7% of non-profits are categorized as “public benefit”, which is what we do and is how we are set up. Specifically, we are a scientific and technology research institute. We’re part of a very small group of non-profits that fall into the public benefit category. Definition in the paragraph below:
“In this report, three common nonprofit organizational classifications (mutual benefit, public societal benefit, and otherwise uncategorized nonprofits) have been merged to create this category. Organizations include those working with civil rights and community development, advocacy groups, neighborhood associations, business leagues, civic and service clubs, science and technology organizations, credit unions, and public grantmaking foundations.”
So, how many other non-profits are like us? I don’t know yet, but I’m asking calnonprofits.org how to find out! Maybe we could all help each other better if we knew about each other and what we were doing.
California nonprofits employ a significantly higher percentage of women and a slightly higher percentage of people of color than the overall civilian workforce.
Contrary to common perception, the largest sources of nonprofit revenue are fees for service and government grants and contracts. We are different here, since 100% of our revenue to date is individual donations. We now have $18,875. I’m working as hard as I can to grow our finances.
Volunteerism in CA has undergone some changes since 2014, the last time that this particular study was completed. The percentage of adult volunteers has risen slightly, from 24% to 25%, but the number of hours per volunteer is down by 25%. What are the underlying reasons for this? Volunteerism is difficult when it’s crowded out by so many other demands on time. Activity in organizations and associations has been in decline since the 1950s. There’s whole books written about the theories as to why.
A lot of what we do requires skills that are earned through years of education, training, workplace, self-training, or avocational effort. While our mission is to demystify and make accessible advanced engineering concepts, we don’t dumb it down. We break it down. Regardless, it’s still hard work and requires real commitment and a willingness to fail along the way. That’s a lot to ask of volunteers, but our community has delivered. The number of hours donated to the effort is deeply appreciated, especially given the context of the statistics in this particular and admittedly geographically limited report. California trends don’t necessarily mirror the rest of the world, but I do hear a lot of the same sort of thing from a wide variety of volunteer driven organizations. Everyone seems to be doing more with less and under harder conditions.
That’s why it’s so important to make it easy to volunteer, reduce as many risks as possible from regulatory and legal points of view, and take on things worth doing that are ambitious and rewarding. We have done our best to do exactly this – especially over the past year! We have written clear developer and participant policies, we have a code of conduct, and we filed a Commodity Jurisdiction request to clarify how we fit into ITAR and EAR. Our technical progress has been steady and we are at the point where we can build functional prototypes.
If you have feedback or suggestions on how we have chosen to support, protect, and enable volunteers then please share.
The report states that non-profits with large budgets have more access to government funding and rely on it as a significant source of revenue. The findings suggest that non-profits can not “grow large” without government funding. There is a big difference between small non-profits, like us, and larger non-profits, like many healthcare organizations. Healthcare is by far the largest category of non-profits in CA, and they get their money from different places.
How big do we need to be to succeed? Do we have to go after government money to achieve that goal, given the realities of other non-profits?
Foundations were not the focus of the study, but the report talks about them for several reasons. First, CA is a net exporter of foundation grant money, and the report lists the top 25 foundations. The total assets of all ~7,000 CA foundations are $137.5 billion and they gave away a total of $9.5 billion. These numbers are for 2019. The single largest foundation is Silicon Valley Community Foundation, which gave away nearly a billion dollars *alone*. San Francisco is far and away the hot spot in CA in terms of foundation dollars generated and many other categories in the study.
For 90% of nonprofits, foundation funds represent 50% or less of their revenue. For the “bottom” 50% of non-profits, foundations fund less than 10% of revenue. Only 5% of non-profits get more than 75% of their revenue from foundations. The perception that foundations fund non-profits is widespread, but the statistics in CA do not bear that out. Where is all the foundation money going? Like we see with a lot of other resource allocation patterns, most of the money goes to a few organizations.
What does all of this mean for us going forward?
If we can’t raise additional funds for the *products* that we want to build, then those things won’t happen. The financial needs are greater for the open source payload part than ground. However, without a payload or groundsat, the ground station design simply doesn’t work. We have a product envisioned. It’s the right time to step up and deliver. This the “development” part of “research and development”.
Yes, we’ve done very well building ORI from scratch and raising significant amount of money in a short amount of time. We’ve also had fun in the process, with very successful outreach events and the Trans-Ionospheric badges.
Fundraising was not at all what I thought I would be doing when I agreed to come aboard as a technical volunteer for Round Two of “build a GEO for amateur radio” several years ago, but addressing it like any other challenge, building a team, and tackling it with optimism and a willingness to learn has had good results.
Other organizations related to us generate revenue in other ways. It’s important to talk about what those strategies are and whether we should adopt the same methods. For example, a lot of amateur radio technical and advocacy organizations have member fees and generate income that way. We don’t do this, and have not since the very beginning of ORI, for several reasons.
First, the amount of time required to manage and account for paid memberships is non-trivial.
Second, paid members have expectations that must be met. Members expect services that must be delivered. We are not a member service organization, we’re a research institute. Our “members” are projects, and the expectation is that we help with scientific and technical goals. Member services, newsletters, trinkets, swag, books, producing social events, contests, and conferences are wonderful things that we love to see happen. ORI doesn’t *regularly* do those things because scientific and technical work is the very firm focus. This doesn’t mean we won’t have a conference, if it serves the research institute mission. It doesn’t mean that we won’t have a t-shirt, another badge project, or a newsletter, if that serves the research institute mission. The functions and benefits of a membership organization were what I thought we would be getting when the Phase 4 Ground project was part of AMSAT-NA. Now that we are a Member Society of AMSAT, over time, we should start seeing support, promotion, and cooperation. We are also associated with Open Source Initiative as a Member Affiliate of OSI.
Third, I believe that ORI must remain open to all, without the “us” and “them” that often arises when memberships are purchased. Individuals are “members” of ORI as soon as they show up and participate in the community at any level. There is no process of “joining”. Associate Membership, the only explicit membership status, is free for the asking and will stay that way. The way we’re organized and the practice of radical inclusion should be very familiar to anyone looking at open source technical projects and how they are commonly structured.
This structure (completely open, collaborative flat leadership structure, no membership dues) is common and highly effective, but it also opens us up to significant risks. Burnout of leaders, no easily distributed tokens or artifacts of membership to build pack bonding or loyalty, we give up “easy” financial income, and the repercussions of the intermittent nature of volunteering. These are the facts on the ground and we do whatever it takes to deal with them.
If we converted to a membership organization, we would gain some reliable revenue, but would give up a large part of what makes us extremely successful, adaptable, agile, and accessible. We’re here to supercharge organizations that don’t have a pure technical focus. Over time, I expect organizations that benefit from our work to help us in places where we need assistance, such as fundraising, marketing, promotion, and publishing.
Research and Development will always be a sink for money and will always be higher risk than delivering customary or traditional member services. Research and Development needs fearless funding.
In our first year, we have applied for several grants that would financially support the first phase of the transponder build. The foundations approached are in the amateur radio space and their values and conditions seem to align almost perfectly with us. You can read the proposal documents on the website.
We have early indications of valuable in-kind contributions from companies that want us to succeed. We have excellent relationships with universities and engineering firms. We’ve made a dramatic contribution to testing the regulatory process as well as enumerating ambitious yet achievable technical goals. We have the ingredients for success. Our second year will be as crucial as the first in terms of deciding our long-term trajectory.
Thank you all for a fantastic first year!