Sustainable Open Source: Funding Models That Work

The Sustainability Crisis

You built something useful. Thousands of companies depend on it. Your project is in 10% of websites on the internet. Fortune 500 companies run their infrastructure on it.

You’re working nights and weekends, burning out, and earning nothing.

This is the paradox of open source: creating immense value while capturing none of it for yourself. The result is predictable—burnout, abandonment, and security vulnerabilities in critical infrastructure.

But it doesn’t have to be this way. Sustainable funding models exist. They work. Real maintainers earn real income while keeping their projects open source.

This guide explores proven funding models that turn open source from charity into sustainable work.

Understanding the Funding Landscape

Before choosing a funding model, understand the ecosystem.

The Value Paradox

Open source creates a mismatch between value creation and value capture:

Value Created:                 Value Captured:
├── Users save $$$             ├── Maintainer: $0
├── Companies save $$$         ├── Contributors: $0
├── Ecosystem builds on it     └── Community: Goodwill
└── Everyone benefits

Traditional business: Value created = Value captured Open source: Value created >> Value captured

The Funding Gap

What it costs to maintain OSS properly:

Minimum viable maintenance (solo):
- Code review and merging PRs: 5 hrs/week
- Issue triage and support: 5 hrs/week
- Security updates: 2 hrs/week
- Documentation: 2 hrs/week
- Dependency updates: 1 hr/week
Total: 15 hrs/week = $30-50k/year value

Healthy project (small team):
- Multiple maintainers
- Dedicated community management
- Professional development
- Security audits
- Infrastructure costs
Total: $150-300k/year

What most projects get: $0-5k/year

The gap is real. Funding closes it.

Who Should Pay?

Users of open source:

• Individuals: Usually can’t afford to pay much
• Startups: Tight budgets, but derive significant value
• SMBs: Should pay, often don’t think about it
• Enterprises: Can and should pay, often don’t

The free rider problem: Everyone benefits, nobody wants to pay first.

Funding Model #1: Individual Sponsorships

The simplest model: people who appreciate your work give money.

How It Works

Platforms:

• GitHub Sponsors: Integrated into GitHub, low fees
• Open Collective: Transparent finances, fiscal hosting
• Patreon: Creator-focused, monthly subscriptions
• Ko-fi: One-time donations, low fees

Typical Structure:

## Support This Project

If this project helps you, consider sponsoring:

☕ $5/month - Coffee tier
- Sponsor badge on README
- Name in SPONSORS.md

🌟 $25/month - Supporter tier
- Everything above
- Priority issue response
- Monthly thank you

💼 $100/month - Professional tier
- Everything above
- Logo in README
- Listed on website sponsors page

🚀 $500/month - Enterprise tier
- Everything above
- 2 hours consulting/month
- Direct maintainer contact

Real-World Examples

Evan You (Vue.js)

• $18k+/month on GitHub Sponsors
• Enables full-time development
• Transparent about usage of funds

Sindre Sorhus

• 1,000+ npm packages
• GitHub Sponsors + Open Collective
• ~$5k/month combined

Henry Zhu (Babel)

• Left job to maintain full-time
• Funded through Open Collective
• ~$12k/month at peak

Making It Work

Keys to success:

1. Be visible about sponsorship needs

   ## Sustainability
   
   This project requires 20+ hours/week to maintain properly. Your
   sponsorship makes this sustainable.
   
   [Sponsor on GitHub](link) | [Open Collective](link)

2. Offer value to sponsors

   • Recognition (within reason)
   • Priority support
   • Input on roadmap
   • Direct communication

3. Be transparent

   • Show how money is used
   • Report regularly on progress
   • Open Collective publishes finances automatically

4. Make it easy

   • Prominent “Sponsor” button
   • Multiple payment options
   • Clear tier descriptions

Challenges

Pros:

• Easy to set up
• No strings attached
• Maintain full control
• Works with any license

Cons:

• Unpredictable income
• Rarely enough to live on alone
• Requires large user base
• Time investment in sponsor relations

Reality Check: Most projects earn <$500/month from individual sponsorships. Success stories are outliers. This works best as supplementary income or part of a mixed strategy.

Funding Model #2: Corporate Sponsorships

Companies that use your project pay for its development.

How It Works

Direct approach:

## Corporate Sponsorship

Does your company use [Project]?

Support sustainable development:
- $1,000/month - Bronze Sponsor
- $2,500/month - Silver Sponsor
- $5,000/month - Gold Sponsor
- $10,000/month - Platinum Sponsor

Benefits: Logo placement, priority support, security notifications

Contact: sponsors@project.org

Structured programs:

• Tidelift: Pays maintainers for meeting standards
• Open Collective: Transparent corporate sponsorship
• GitHub Sponsors: Corporate sponsorship tiers
• Thanks.dev: Automatic corporate sponsorship

Real-World Examples

Webpack

• Corporate sponsors via Open Collective
• $400k+ raised over time
• Pays core team members

Node.js Foundation

• Corporate membership model
• Platinum ($250k), Gold ($100k), Silver ($50k)
• Funds infrastructure and development

curl

• Corporate support program
• Companies pay for priority support
• Sustains maintainer Daniel Stenberg

Making It Work

Identify potential sponsors:

// Find companies depending on your package
npm info your-package dependencies
// Check who has your package in their package.json

// Look at:
// - Company engineering blogs mentioning your project
// - GitHub organizations depending on you
// - Job postings mentioning your technology

Outreach template:

Subject: [Company] uses [Project] - Support sustainable development?

Hi [Name],

I maintain [Project], which I noticed [Company] uses in [specific product/service].

To ensure [Project] remains secure and well-maintained, I'm reaching out to
corporate users about sponsorship opportunities.

Your support would help:
- Security updates and vulnerability patches
- Feature development and bug fixes
- Documentation and support
- Long-term sustainability

Sponsorship tiers start at $1,000/month with benefits including:
- Logo on our website (2M+ pageviews/year)
- Priority security notifications
- Influence on roadmap

Would you be open to a quick call to discuss?

Best,
[Your Name]
[Project Maintainer]

Challenges

Pros:

• Larger amounts than individual sponsorship
• More stable income
• Corporate sponsors less likely to churn
• Aligns incentives (they need project maintained)

Cons:

• Requires significant time for outreach
• Sales/business development skills needed
• Some companies move slowly
• May create power imbalances

Funding Model #3: Dual Licensing

Offer your project under two licenses: open source and commercial.

How It Works

Basic structure:

Open Source License (GPL/AGPL):
- Free to use
- Must share modifications
- Must keep open source

Commercial License:
- Paid
- Can keep modifications private
- Can use in proprietary software

Pricing example:

## Licensing

**For Open Source:**
Free under AGPL-3.0. Your derivative works must be open source.

**For Commercial Use:**
$499/developer/year
- Use in proprietary software
- No copyleft requirements
- Priority support

Enterprise: Custom pricing for large teams

Real-World Examples

MySQL (historical)

• GPL for open source
• Commercial license for proprietary use
• Generated millions before Oracle acquisition

Qt

• GPL/LGPL for open source
• Commercial license for proprietary
• ~$400M annual revenue (pre-acquisition)

Sidekiq

• Open source version (MIT)
• Pro version ($179/month)
• Enterprise version (custom pricing)

Ghost

• MIT licensed core
• Hosted service for revenue
• Self-host or pay for hosting

Making It Work

Choose the right copyleft license:

Strong copyleft (AGPL):
- Forces most users to pay or open source
- SaaS users must open source
- Maximum commercial leverage

Weak copyleft (LGPL):
- Libraries can be used without infection
- Modified library must remain open
- Less commercial leverage

Consider MPL:
- File-level copyleft
- More permissive than GPL
- Allows proprietary combination

Clear licensing page:

## Licensing Options

### Open Source (AGPL-3.0)
✅ Free forever
✅ Full source code
✅ Community support
⚠️ Derivative works must be open source
⚠️ SaaS use requires open sourcing

[Use for free](link)

### Commercial License
✅ Proprietary use allowed
✅ Keep modifications private
✅ Priority support
✅ Dedicated account manager

Starting at $499/developer/year

[Buy commercial license](link)

Not sure which? [Contact us](mailto:sales@project.com)

Challenges

Pros:

• Potentially significant revenue
• Clear value proposition
• Sustainable business model
• Keeps core open source

Cons:

• Requires copyright ownership (CLAs for contributors)
• May reduce community contributions
• Sales overhead
• Complex legally
• Some see it as “bait and switch”

Funding Model #4: Open Core

Free core product, paid premium features.

How It Works

Model structure:

Core (Open Source):
├── Basic functionality
├── Community edition
└── Self-hosted

Premium (Paid):
├── Advanced features
├── Enterprise features
├── Managed hosting
└── SLA and support

Feature segmentation:

## Editions

**Community (Free)**
- Core API
- Basic authentication
- Single tenant
- Community support
- MIT License

**Pro ($99/month)**
- Advanced analytics
- SSO/SAML
- Multi-tenant
- Email support

**Enterprise (Custom)**
- High availability
- Audit logs
- Dedicated support
- Custom SLA
- On-premise deployment

Real-World Examples

GitLab

• Core features open source
• Premium features (security scanning, advanced CI/CD)
• Ultimate tier (compliance, portfolio management)
• $500M+ ARR

Sentry

• Core error tracking open source
• Hosted service with premium features
• $100M+ ARR

Elasticsearch (historically)

• Core search open source
• Premium features (security, ML) paid
• Changed license to prevent Amazon competition

Making It Work

Feature split decisions:

Free Tier (Core Value):
✅ Core functionality that makes project useful
✅ Features most users need
✅ Enough to be self-sufficient

Paid Tier (Premium Value):
💰 Enterprise-specific needs (SSO, audit logs)
💰 Scale features (HA, performance)
💰 Convenience (hosting, managed service)
💰 Support and SLA

Key principle: Free tier should be genuinely useful. Don’t cripple it.

Pricing strategy:

Startup: $49-99/month
- For small teams
- Limited scale
- Basic support

Business: $499-999/month
- For growing companies
- Moderate scale
- Priority support

Enterprise: Custom
- For large organizations
- Unlimited scale
- 24/7 support + SLA

Challenges

Pros:

• Sustainable business model
• Keeps core open source
• Clear value proposition
• Scales with customer needs

Cons:

• Requires building premium features
• Community may feel excluded
• Potential license conflicts
• Sales and support overhead
• Can create two-tier community

Funding Model #5: Hosted/Managed Service

Offer paid hosting for your open source project.

How It Works

Value proposition:

Self-Hosting (Free):
- Full control
- Requires DevOps expertise
- You handle updates/security
- You pay infrastructure

Managed Service (Paid):
- No DevOps needed
- Automatic updates
- Professional support
- We handle infrastructure

Pricing model:

## Hosting Plans

**Starter: $25/month**
- 1,000 events/day
- 7-day retention
- Email support
- 99% uptime

**Growth: $99/month**
- 10,000 events/day
- 30-day retention
- Priority support
- 99.9% uptime

**Business: $499/month**
- 100,000 events/day
- 90-day retention
- 24/7 support
- 99.95% uptime
- Custom integrations

**Enterprise: Custom**
- Unlimited events
- Custom retention
- Dedicated infrastructure
- SLA
- On-premise option

Real-World Examples

WordPress.com

• WordPress is open source
• WordPress.com offers managed hosting
• Automatic Inc: $500M+ revenue

Discourse

• Forum software (open source)
• Managed hosting service
• Profitable, sustainable

Mastodon

• Federation software (open source)
• Managed hosting (mastodon.social and others)
• Sustainable through hosting + sponsorship

Plausible Analytics

• Open source analytics
• Managed hosting service
• $100k+ MRR, sustainable

Making It Work

Why people pay for hosting:

1. Convenience: Don’t want to manage servers
2. Expertise: Don’t have DevOps skills
3. Time: Their time is more valuable
4. Support: Want professional help
5. Trust: Want reliable infrastructure

Competitive advantage:

You have unfair advantages:
- Deepest product knowledge
- Can fix issues fastest
- Can add features customers need
- Can optimize hosting specifically for your product

Marketing approach:

## Try [Project]

**Self-Host (Free)**
For teams with DevOps resources.
[Documentation](link)

**Start in 5 Minutes ($25/mo)**
No servers, no DevOps, just works.
[Start free trial](link)

90% of our paying customers could self-host.
They choose our managed service because their time is valuable.

Challenges

Pros:

• Clear value proposition
• Keeps core fully open source
• Recurring revenue
• Scales naturally
• No licensing complications

Cons:

• Requires infrastructure expertise
• Support burden
• Operational overhead
• Competing with self-hosting option
• May need to differentiate from core

Funding Model #6: Consulting and Support

Offer your expertise for hire.

How It Works

Service offerings:

## Professional Services

**Training**
- Team onboarding: $5,000/day
- Advanced workshops: $3,000/day
- Custom curriculum

**Implementation Support**
- Architecture review: $2,500
- Custom integration: $150/hour
- Performance optimization: $200/hour

**Support Contracts**
- Bronze: $500/month (email, 48h response)
- Silver: $2,000/month (email + calls, 24h response)
- Gold: $5,000/month (priority, 4h response, dedicated Slack)

**Custom Development**
- Feature development: $150-250/hour
- Integration development: $150-250/hour
- Minimum engagement: 20 hours

Real-World Examples

Linux Kernel Contributors

• Many paid by companies for custom development
• Support contracts with enterprises
• Training services

SQLite Consortium

• Core is public domain (free)
• Support and testing services
• Custom development
• Sustainable model for decades

Redis Labs (historically)

• Redis open source
• Consulting and support contracts
• Enterprise features
• Eventually shifted to open core

Making It Work

Positioning:

## Get Expert Help

The maintainers of [Project] are available for:

✓ Implementation assistance
✓ Performance optimization
✓ Custom feature development
✓ Architecture consulting
✓ Team training

We've helped companies like [Company A], [Company B], and [Company C]
get the most out of [Project].

[Schedule consultation](link)

Pricing strategy:

• High enough to be sustainable
• Low enough to be accessible
• Higher rates for enterprises
• Discounts for open source/non-profits

Challenges

Pros:

• Immediate revenue potential
• Leverages existing expertise
• No product to build
• No licensing complexity

Cons:

• Doesn’t scale (trading time for money)
• Takes time away from OSS work
• Not all maintainers like consulting
• Feast or famine potential

Funding Model #7: Grants and Foundations

Non-profit funding for open source development.

How It Works

Grant sources:

Corporate Foundations:

• Google Open Source
• Microsoft FOSS Fund
• Facebook Open Source
• Salesforce Open Source
• Comcast Open Source

Non-Profit Organizations:

• Mozilla Open Source Support (MOSS)
• Linux Foundation
• Apache Software Foundation
• Python Software Foundation
• Open Source Initiative

Government Grants:

• EU Open Source Program Office
• Sovereign Tech Fund (Germany)
• NSF grants (US, for research)

Typical amounts:

• Small grants: $5k-25k
• Medium grants: $25k-100k
• Large grants: $100k-500k+

Real-World Examples

curl

• Mozilla MOSS grant ($100k)
• Sovereign Tech Fund
• Corporate sponsorships
• Enables full-time maintenance

pip/PyPI

• PSF grants
• Mozilla MOSS
• Chan Zuckerberg Initiative
• Funded significant improvements

Rust Foundation

• Corporate founding members
• Pays core team
• Funds infrastructure
• Sustainable long-term

Making It Work

Grant applications:

## Mozilla MOSS Application Example

**Project Impact:**
- Users: 10M+ downloads/month
- Critical infrastructure: Used by 45% of top 1000 websites
- Security: Powers authentication for major platforms

**Funding Need:**
- Security audit: $50,000
- Full-time maintenance (6 months): $60,000
- Documentation improvement: $15,000
Total: $125,000

**Deliverables:**
- Complete security audit with remediation
- 500+ issues triaged and resolved
- Comprehensive documentation rewrite
- Onboard 2 new co-maintainers

**Timeline:**
- Months 1-2: Security audit
- Months 3-4: Issue resolution
- Months 5-6: Documentation + sustainability

Joining foundations:

## Benefits of Foundation Membership

**For Projects:**
- Legal protection
- Trademark management
- Fiscal hosting
- Infrastructure support
- Funding access

**Examples:**
- Join Linux Foundation: LF Projects
- Join Apache: Apache Incubator
- Join NumFOCUS: Fiscal sponsorship

Challenges

Pros:

• No strings attached (usually)
• Focuses on public good
• Can be significant amounts
• Builds credibility

Cons:

• Application overhead
• Competitive (low acceptance rates)
• May require specific use of funds
• Not recurring (one-time typically)
• Long application-to-funding cycle

Hybrid Models: Mixing Strategies

Most successful projects use multiple funding sources.

Example: Successful Mix

## [Project] Sustainability Model

**Individual Sponsorship:** $3k/month
- 500+ GitHub Sponsors
- Community support

**Corporate Sponsorship:** $12k/month
- 15 corporate sponsors
- Open Collective

**Managed Hosting:** $25k/month
- 200 paying customers
- Core stays open source

**Consulting:** $8k/month average
- 2-3 clients typically
- Implementation support

**Grants:** $100k/year average
- Yearly MOSS grant
- Foundation membership

Total: ~$48k/month = $576k/year
Supports: 3 full-time, 2 part-time contributors

Diversification Benefits

Single source risk:
├── One sponsor drops out → Financial crisis
├── Grant ends → Scramble for funding
└── Hosting competition → Business model fails

Diversified income:
├── One stream drops 50% → Small impact
├── Multiple revenue sources → Stability
└── Various strategies → Resilience

Choosing Your Funding Model

Match your project to the right model.

Decision Matrix

## Library/Framework:
Best: Individual sponsorship + corporate sponsorship + consulting
Why: High impact, many users, expertise valuable

## Developer Tool:
Best: Open core + hosted service + individual sponsorship
Why: Developers pay for convenience, premium features valuable

## Infrastructure/Database:
Best: Dual licensing + support contracts + hosted service
Why: Enterprise customers, high value, clear ROI

## End-User Application:
Best: Hosted service + corporate sponsorship
Why: Users pay for convenience, businesses need support

## Niche Tool:
Best: Consulting + sponsorship
Why: Smaller user base, expertise is the product

Starting Point

Year 1: Individual Sponsorship

• Easy to set up
• No commitment
• Test the waters
• Build community

Year 2: Add Corporate Sponsorship

• Identify major users
• Outreach to companies
• Professional approach
• Structured tiers

Year 3: Consider Commercial Model

• If demand is clear
• If you need full-time income
• Dual licensing or open core
• Hosted service

Progressive approach avoids over-committing early.

Making It Happen

Action plan for sustainable funding.

This Month

## Immediate Actions

Week 1:
- [ ] Set up GitHub Sponsors
- [ ] Add sponsorship links to README
- [ ] Write sustainability section in docs

Week 2:
- [ ] Create sponsorship tiers
- [ ] Set up Open Collective (if needed)
- [ ] Draft corporate sponsor outreach email

Week 3:
- [ ] Identify 10 potential corporate sponsors
- [ ] Start outreach
- [ ] Add sponsors page to website

Week 4:
- [ ] Evaluate response
- [ ] Adjust strategy
- [ ] Plan for next quarter

This Quarter

• Define long-term funding strategy
• Explore commercial models if appropriate
• Apply for grants
• Build relationships with potential sponsors
• Measure and communicate impact

This Year

• Achieve sustainable income level
• Diversify funding sources
• Build financial reserves
• Plan for growth

Conclusion

Sustainable open source funding is possible. It requires:

Strategy: Choose models that fit your project Transparency: Be open about needs and use of funds Value: Provide clear value to sponsors/customers Persistence: Building sustainable funding takes time Professionalism: Treat it like a business

Remember:

• Your work has value
• Companies should pay for what they use
• Sustainability helps everyone
• Multiple funding sources provide stability
• It’s okay to earn money from open source

Open source doesn’t mean working for free. Build something sustainable.

Your project deserves funding. You deserve to be paid for your work.

Start today. Set up GitHub Sponsors. Identify potential corporate sponsors. Explore your options.

The future of open source is sustainable. Be part of building it.