Budget Proposals


#1

Hello folks,

As promised, here are some thoughts about spending and budgets in response to our recent funding. This represents a year’s budget, and it isn’t some final masterplan, so comments are welcome.

I recommend not throwing out a big chunk of money in the first year. I’d rather start somewhat slowly so we can learn what works. We should be aiming to use this money to make the Foundation sustainable in the long run.

I have done some fairly speculative modelling with the aim of not running out of money over a 10 year timeframe assuming minimal additional revenue, but it really needs a little more work so I’m not going to share it publicly yet.

This is an initial stab at a first-year budget with that in mind, and also considering we want to ramp up our spending. It also contains some opinions and ideas on what we should be spending money on.

The total expenditure is around £11,000. I expect to see around £3,000 in interest income and perhaps £1,000 in subscription income.

Operating Expenses

Basic Operational Costs (£2000)

These are the running costs for the organisation. Major things we need to cover:

  • Accountancy & accounting software (£1200) - this is currently handled by me for free but we really should hire an accountant and use a slightly less weird accounting system now we have the money.
  • Server/domains/other tech (£150)
  • Travel for those representing the Foundation (£500) - Some provision for members to represent the Hackspace Foundation at conferences/other events and report back.
  • Organising meetings/maybe an AGM (£?) - we should be able to pay some expenses for these now.

Promotion (£1500)

It would be good to promote the concept of hackspaces & get our name out a bit. I’m mostly envisaging this money covering promotional material and travel/expenses for people to represent the HSF at events.

Fundraising (£1000)

This would let us start evaluating the possibility of raising additional cash for future sustainability. This might involve hiring a paid grant-writer, or at least paying whoever feels inclined to subject themselves to the process.

Grants

A few notes on grants in general - I think we should stick to the following basic rules which are generally used by grant-giving orgs:

  • Grants can cover capital costs only, not operational costs. (So they can be used for buying new things, but not for ongoing costs like rent.)
  • We should require some kind of (brief) summary of how the money was used, and if it wasn’t all used it should be returned.
  • The recipient organisation should be covering some of the costs of the project (perhaps a minimum of 20% or so).
  • The recipient organisation should be a member of the HSF.

We will need to organise a committee to handle grant applications before we start giving out grants (which will require us accepting some members).

I propose we start out with the following two categories of grants, which should be the most straightforward to administer:

New Space Grants (£2000 max total)

This category is a bit special and doesn’t actually follow the rules I just laid out. Way back in the day, we did something similar to this, funded by the Guardian, and it was pretty well-received.

It’s basically a small, no-strings-attached grant of perhaps £200 to new groups with limited funding which are starting out, which might help out with buying some tools, or helping to pay for pizza for meetups, or whatever.

Recipients don’t need to be full HSF members, and we don’t expect to see anything back from the grant (although we’d do some limited due diligence to make sure they’re going in the right direction and we’d obviously like it if the organisation joined the HSF once they’re established).

Accessibility Grants (£5000 max total)

These would be for member spaces that want to improve the accessibility of their space, which I think is a worthy goal and one we should encourage.

Loans

I think we can make the best out of our money by offering loans rather than grants to member spaces. It’s quite a common practice for co-op/mutual organisations, and since we’re familiar with the way hackspaces work, we can probably make a better assessment of the risk (as well as provide advice). We can price loans so we make a minimal amount of profit on them, or even an acceptable amount of loss.

Loans would be useful for spaces which want to buy larger tools (laser cutters being the classic example), which could potentially bring in more members and tool usage fees to pay the loan back.

There is quite a bit to consider here, so I’ve not budgeted for any loans for this year, but I’d like to start the discussion about it.


#2

Just thinking would it make sense that the funding panel would be a panel of experts rather than of member spaces.

Otherwise seems good.


#3

Looks great :slight_smile:


#4

Good!
Thank you for putting this together.

AGM cost: meeting room booking (even if at a host hackspace) + food + travel cost for those needing it. Or is the latter a bit too much?

I like the idea of coop/mutual way of thinking.

Would a realistic long term objective for budget be purchasing of tiny freeholds?


#5

Freehold ownership is a nice dream, but I’m not convinced it’s worthwhile, for a number of reasons:

  1. There are very few hackspaces in the UK, if any, where purchasing property is an appropriate investment to make. The legal costs (etc.) of buying property inherently make it a long term (10+ year) investment with no particularly guaranteed return. I don’t think any spaces in the UK have the capability to budget to that time horizon.
  2. I’m not especially familiar with the commercial property market outside London, but my experience is that there are very few small commercial freehold properties on the market anyway. The majority of commercial property which is appropriate for hackspaces tends to be smaller units within a larger building - and these are commonly leased out on short to medium term leases (even “long-term” commercial leaseholds are commonly 10-30 years).
  3. I don’t think it’s a reasonable way to use our money - to make a difference even for a “tiny” freehold would probably require tying up at least £10k for 10 years, when that money could be used more effectively for smaller, shorter-term loans.

I’m happy to be proved wrong here. If any spaces would like to go “here are some examples of properties which would make economic sense if we had more capital”, we can at least consider it. It would need a reasonable amount of research, though.


#6

Hi Russ,

With Makers Central in may what are the chances of getting some of that promotional budget to fund our presence there? Ideally I’d like for us to be able to hire a van with most of our stuff, get banners, leaflets etc (which could also be used at other events by other hackerspaces) and if necessary help other spaces with travel costs to attend.


#7

Justo thought that

Maybe extend to the cost of moving equipment between backspaces.

Like using parcel services like parcel2go or anyvan or van rentals. This is a thought since some spaces are willing to give up things for free but arranging for them to be collected or sent can cost a couple hundred£.