Understanding Funds#
What is a Fund?#
A Fund is a profile built to pool a lump sum of money and distribute it to multiple recipients.
Why set up a Fund#
- Visibility and credibility. A named Fund signals that there's a dedicated source of support for a field or community, and that your company has real skin in the game.
- Simplified invoicing. You pay into one pot rather than juggling invoices with multiple recipients over time.
Who hosts the Fund? #
A Fund can be hosted directly by an organization or held by an external Fiscal Host.
An organization can turn on Fiscal Hosting and host their own fund, designating a set amount of money to distribute for a particular granting programme.
Some funds are hosted by External Fiscal Hosts.
Open Source Collective hosts several corporate Funds, each for a single organization wanting to support Open Source Software.
Examples:
Other Funds work as a way for multiple non-profits to pool money around a shared cause or topic, also hosted by an external Fiscal Host, e.g The Global Statelessness Fund hosted by Open Collective Europe Foundation.
Why organizations use a Fund hosted by a Fiscal Host#
For companies, the driver is often procurement: contracts, invoices, purchase order numbers, and approval chains, repeated every time you want to support a new project. That overhead doesn't scale when you're trying to support dozens or hundreds of small, often unincorporated projects.
A Fund solves this by letting you make one payment into one pot, held by whichever Fiscal Host administers your Fund, which then distributes the money out to the projects you want to support. You get the simplicity of a single invoice; if your projects are also hosted by a Fiscal Host, they can get money without needing their own legal entity, bank account, or tax paperwork.
The same structure works well for a group of non-profits pooling resources around a shared cause: instead of each organization managing its own separate disbursements, they contribute into one Fund and share the Fiscal Hosting fee.
Who can create a Fund?#
Funds need to be "hosted" by a Fiscal Host. So if you are a self-hosted Organization, you'll need to turn Fiscal Hosting on in your Advanced Settings.
Otherwise, all Fiscal Hosts on the Open Collective Platform can set up and use a Fund.
Who can Funds pay?#
Make contributions to a Collective's page on the Open Collective profile, selecting your Fund as the paying profile.
If a project you want to support isn't on Open Collective, that's not a blocker; you can still pay them by inviting them to submit an expense. It can pay any group, whether they are a company, have their own foundation, work with a different Fiscal Host, are entirely unincorporated, or are an individual.
How is funding decided?#
That's entirely up to you. Common approaches include:
- Using Open Collective's built-in Request a Grant feature, so projects can apply directly to your Fund, including all required information and payment details.
- Inviting grantees for an external grant program that already has its own selection process.
- Making the calls internally, with a private team that decides where the money goes and doesn't take open requests.
Getting started#
Jump into the details on the next page, funds.md.