Re: Open Source endowment?

  • From: Steve Baker <ice@xxxxxxxxxxxxxxxxx>
  • To: technocracy@xxxxxxxxxxxxxxxxx
  • Date: Thu, 15 Jun 2000 21:59:37 -0500

Neil Doane <caine@xxxxxxxxxxxxxxxx> writes:
> Questions:
> So you invest $30k in an endowment, 5% of the profits goes do whatever the
> enodowers want...what happens to the rest of it?   You can take $30k in a
> bucket and toss it out the window of your Saturn on Highway 41 and make 5%
> on it...what happens to the rest of the profits?  It sounds like _someone_
> at ISU is making a killing if all the endowments are pooled together and the
> managers of the funds just dole out 5% of the endowment balances each year. 
> If you donate securities, how does the endowment make scholarship monies and 
> such off of it?   Sell the securities outright? margin trading? (or 
> something else?)  If an endowment sells securities (or recieves securities)
> who incurs the tax liabilities of profit from sale or unrealized gains? 

  I don't know, but I'll forward your question on to the man who would.
Maybe the rest goes back into the fund, and maybe the 5% is just to insure
that the fund doesn't stay stuck at the same amount forever (given that
tuition grows about 3% a semester these funds had better grow better than 8%
to continue to be relevant).  I know that some of it is used to cover
"expenses" whatever those are.

> > Source development lab and Open Source scholarships here at ISU.  While we
> > would need upwards of a half million in an endowment to be practical, 
> Where do you get this sum?  Can you define "practical" in this context a bit
> more clearly?

  If we're going to hire X number of programmers to work on say, the same
project, and maybe not even just programmers, but maybe even art students or
tech majors (who wants to build a robot?).  Then you'd want at least a few
students.  It'd take about $120K a year to fund one 20 hour per week student
on the 5% interest it'd earn.  $500K would be enough to hire 3 students and
some money for scholarships and any hardware expenses (assuming that the
math dept doesn't handle that end of things).

  Perhaps I'm thinking too big?

> I might be interested in contributing at some point (especially if it's
> deductable! :)  

  Well I'm sure it would be, I mean that's partly the point, give your money
to a cause you beleive in as opposed to the man. =) I'll be sure to make
sure about that though.

> Random thoughts: I would say that you would want to reward voluntary open 
> source contributors rather than to encourage open source development, like
> as in a 'scholarship'.  For instance, set up an endowment to be a "reward" 
> versus an "incentive".  Rewards get people to work hard, do things, submit
> code that is judged by <insert relevant open source judging criteria here>
> and compared against competitors to be rewarded on a case-by-case basis. 
> Incentive scholarships are sortof like threats, get the grades (or in this
> case, write the code) or you don't get the dough, which I think is the wrong
> approach.   As a reward, you could also dole out small sums on a
> case-by-case basis; if someone makes a nice little trinket and releases the
> code, the judges could dole out book money, if someone creates from scratch 
> a GPLed version of StarCraft, for instance, the judges could dole out
> considerably more.   Just some thoughts...

  Well, I'll have to look into that, but I got the impression that the money
was given to students in the form of fee wavers, and the like, but I'll look
into it.  I prefer the idea that the "scholarship" is for a single semester
or at most for a year, and that the student can then re-apply for it again
and again, etc.  I think though that a certain grade level ought to be
maintained though.  At the very least to insure that the money isn't just
being pissed away on someone who's just going to drop out anyway.  Of course
we don't have to do scholarships at all, we can just hire people, maybe just
for 5 hours a week or something at bare minimum wage until the fund gets big

                                                                - Steve

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