GitHub Announces Beta Testing of New Sponsorship Tool

GitHub today announced the beta launch of Sponsors, a new tool that allows you to lend financial support to your favorite open-source project on the site via recurring monthly payments.

While projects like Beerpay already integrate with GitHub for this very purpose, GitHub is hoping their own tool will make this funding model much more prevalent across the site. The mission, the company explained to TechCrunch, is to "expand the opportunities to participate in and build on open source."

But as TechCrunch reporter Frederic Lardinois also pointed out:

"That's likely to be a bit controversial among some open-source developers who don't want financial interests to influence what people will work on."

Indeed, the concern that developers will naturally gravitate toward projects that will likely earn more financial contributions seems valid, but only time will tell, we suppose.

In the meantime, GitHub is hoping to encourage broad participation in the program through its own matching contributions. During the first year, the company will match up to $5,000 per sponsor. They are also holding off on charging any processing fees during this time.  

For more information on the project, head on over to GitHub. 

In the three years since GitHub founded its Sponsors program, they have expanded it and added features. Developers can now set public goals to crowdsource and share the reason behind their goals.

GitHub Sponsorship Tool Goes Live

Open-source projects have become such a commonplace part of the information technology landscape that Microsoft joined GitHub, a leading repository and development platform for such projects. 

While the platform offers many benefits to developers and software users, its Sponsors program provides a key benefit to developers by allowing users to crowdfund the developers’ projects.

Developed in 2019, the relatively new benefit to users of GitHub provides development compensation to independent software developers. 

While individuals choosing a free software program might do so out of necessity, the Sponsors program lets those with funds to donate do so by the developer or by the project. These sponsorships can keep a software program or applet free for everyone.

Do you have a favorite open-source developer?

You can help them keep their project open-source with a sponsorship. Choose from one-time or recurring monthly subscriptions.

Some developers depend on sponsorships to pay for hosting or data acquisition, while others have full-time careers and use the money donated to them to fund student projects or other open-source projects.

Each sponsored developer sets a benefit level for the donation. Monthly donations typically earn the individual or business mention in the software’s README file, a Twitter shoutout, or a mention on the developer’s website. One-time donations can provide the donor with an in-person conference speaker or Zoom presentation.

How the Sponsors Program Began

Before beginning its own project, GitHub used Beerpay to offer compensation to developers using its site. The donation differs from offering venture capital or becoming an angel investor because the GitHub program doesn’t offer a return on investment.

During the first year of the program, GitHub offered matching contributions up to $5,000 per sponsor. While you might expect a rush to have occurred on using the option, few developers participate in the Sponsors program. You can view a list of fewer than 30 participants at a time by visiting the Sponsors page.

Sponsor or Get Sponsored

While most users don’t utilize the benefit yet, you can sponsor any registered developer from the Sponsors page, while any open-source developer using GitHub can register for the program from that page.

What’s the main benefit?

Let’s say a writer wants to quit their day job and create open-source software full-time. The sponsors’ donations let them do this by providing a “salary” for a job that creates free software. This means that the developer can create ad-free and unlimited software rather than needing to create a separate, full-featured program for paying customers.

The program inherently enforces the developer using the funds as intended because the sponsor can, at any time, cancel their sponsorship if they choose a monthly donation. For a one-time donation, they simply don’t donate to the developer. 

If a developer reaches their donation goal to quit work and develop open-source software full-time but doesn’t upload any code to GitHub, the sponsors can cancel their payments.

Provide Added Value for Your Sponsors

Any developer in an approved region can join the sponsor program and create sponsorship tiers for their potential sponsors. 

These predetermined levels let the sponsor choose an amount of one-time or monthly donation that they’d like and let you choose added value services, such as early access to updates to the software or a weekly newsletter. For example, many developers provide a private repository to their sponsors.

GitHub lets its users create up to 10 sponsorship tiers for one-time and for monthly, for a total of 20 tiers. You can’t add 20 tiers monthly, though, and none for one time. You only get 10 of each.

Regardless of where you live and your local fiat currency, the tier payments are shown in US dollars, and are the fiat currency of the main office of GitHub. You can use custom amounts, rather than the automated suggestions that GitHub offers, such as in increments of $25. 

You could create a custom amount for the jersey number you played in high school sports or the number of your startup.

Does GitHub Charge Fees?

When you sponsor from your personal account, GitHub charges no fees whatsoever. When you sponsor from an organization or business account, GitHub charges a 10 percent fee to cover its overhead. The full amount of sponsorship goes to the sponsored developer.

How Do You Cash Out?

As the sponsored developer, you have three methods of cash out. You can choose Stripe Connect, ACH transfer, or wire transfer. The latter two provide you with an automatic payment at specific intervals. If you choose payment through Stripe Connect, you can manage your payout schedule using the GitHub Payouts tab. 

This tab only shows if you participate in the sponsored contributor program, and use Stripe Connect. Any sponsored business or organization must use Stripe Connect for payouts. So, if you use the ACH or wire transfer method, you’ll only receive payments on GitHub’s pre-determined schedule. If you use Stripe Connect, you can request on-demand payments.

Other Benefits of the Sponsors Program

If you enable the opt-in email option, your sponsors can contact you and you can send them updates if they opt in. In your GitHub menu, click on your profile avatar in the upper right-hand corner of the screen, then scroll down to “Your Sponsors.” Choose “Update” to send the message. This helps you build your mailing list, a key marketing tool.

You can export your sponsorship data to .csv format or JSON format. This export lets you import the data into an Excel spreadsheet or database to better track your income. 

Speaking of income, if you reside in the US, you’ll need to complete a W-9 form before your profile can go live. You’ll receive a 1099 form to include with your federal income taxes. You’ll report this as earned income according to US tax law.