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I started an open source project in 2010 and the project is gaining some visibility. We are now 2 active committers and we hope to engage more contributors in the future. We received today the second offer to "partner" with a company. This time is a hosting company that wants us to offer a hosting plan with a automatic installation of the software and receive a affiliate payout for each (the company is well-known).

The question is: Is there a way we can share the revenue within the project contributors?

Our main goal for now is to have more contributors and make better software, not profitability...

PS: We are also in the process to assign the project to the Outercurve Foundation.

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You could found a non profit organization. Laws and procedures differ from one place to another. Which country are you in? – rahmu Oct 3 '11 at 9:21
    
I'm voting to close this question as off-topic because it's about business practices and/or legal issues, not software design. – Ixrec Mar 28 at 8:07
up vote 1 down vote accepted

There are many ways to share profits. Personally I favour a merit based share: the more you contribute, the more you get. However, using a good metric can be hard -- lines of tested code, documentation, test cases?... If you create a limited company those member will get a share of the profit, I would recommend making sure that whoever joins invest (minimum $300) into the company. This makes sure they are serious. From then, a share of the profit can be determined by whatever means.

Whatever you do, please take legal advise from a reputable solicitor/lawyer before signing anything with anyone.

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Thanks for your answer! I see a lot of os projects accepting donations in the name of the lead developer (ie: cmsmadesimple.org/about-link/donations ; yetanotherforum.net/donate.aspx ) this is somehow dark, isn't it? – jorgebg Oct 3 '11 at 12:16
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@jorgebg let's not hide behind a finger: most oss project have a single developer, oss contributors provide testing and sometimes maintenance, but nothing more. And that's why there's a single name behind the donate button. – ZJR Oct 3 '11 at 12:28
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"Les bons comptes font les bons amis" (lit. good accounting makes for good friends). If everyone is happy that only the lead developer gets money that is fine. There maybe a contract (written or verbal) that said money must be used for the project's costs. There may not be. There is nothing sinister if there is transparency. – Sardathrion Oct 3 '11 at 12:34
    
…and even if there is more than a single active developer they are probably not a business entity — starting and closing a society comes with big toll in some countries — so one may collect and redistribute. (Anyway would be cool if paypal could redistribute percentages of donations to a number of registered users in a single transaction — maybe it can and I don't know?) – ZJR Oct 3 '11 at 12:37
    
@ZJR thank you both for your honest opinions! – jorgebg Oct 3 '11 at 12:52

Establishing in advance you will be paying contributors, and making it public, is likely to attract not-so-passionate-about-the-product fellows. I wouldn't.

Depending on your jurisdiction, it could also need some authorizations.
(I can imagine with ease some thick bloke interpreting that as a contest of sorts)

Maybe writing a check, here and there, to a couple of professional programmers very involved in the process, people you end up considering precious to the project, let's say "premium contributors", looks safer.

Get invoices for that, (you should be able to deduce those from your earnings) and make sure they are business entities. (or that, anyway, according to your local laws, you're not accidentally becoming their employer and should be paying them social security)

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This time is a hosting company that wants us to offer a hosting plan with a automatic installation of the software and receive a affiliate payout for each (the company is well-known).

Be careful. Well-known is not the same as ethical. Some well-known hosting companies have recently changed their business model, and are wrapping open-source downloads in adware installers. If you object to adware, make sure you do not end up supporting it.

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Thanks for the heads up! – jorgebg Oct 4 '11 at 8:13

Stay away, this kind of revenue is mostly through a kind of adware which easily crosses the line towards malware and fraud. Currently, there are especially certain Israeli companies (aka Download Valley) engaged in this kind of business, but their partner sites are everywhere, for example: download.com (CNET) and even SourceForge (at least until recently), just to name two.

The adware will be foisted through fine print, pretending to be an EULA for your product (don't expect this to be a legally valid contract!), or by silently installing in the background without ever asking, dependend on the business model. Many of these adware products will open back doors and download or enable pushing of other stuff, possibly including genuine malware.

You may be held legally responsible for this, and the good reputation of your product will quickly be spoiled. Look at the FileZilla FTP client, for example, whose author deliberately chose to part in the SourceForge adware revenue program: Nobody with a sense for IT security will install it today, or, if, only with great precautions (other flaws may contribute to this).

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