[whit537]

Let's back up: The way an endowment works is that donors donate money, which goes into a more-or-less permanent investment fund. The interest from the investment fund is then used to a) fund mission-aligned programs (in our case, OSS), b) stay ahead of inflation, and c) pay operating costs.

Where are you seeing capitalists "extract a slice of the pie" here?

[verdverm]

The README on github

"pay operating costs" is one place non-profits often find fraud. Getting the money into the market between donors and builders, now you have to pay professional investors. You don't get to 7-8% returns without equities, what happens if the market tanks?

Why not build something super minimal that requires less management and operating costs? That doesn't have the market risk at the center of it all? That doesn't have more points for fraud and abuse?

[whit537]

> "pay operating costs" is one place non-profits often find fraud.

If you find it here please let us know.

[verdverm]

Can you explain the 2-3% gap between expected returns and outlays? Seems like a lot more than what is needed for accounting (based on the other main person here posting)

[kvinogradov]

The explanation is simple — nobody can predict exact annual returns, and they tend to fluctuate. We aim to spend at least 5% per year on OSS grants and need to decide if we can spend more on them or should reinvest based on specific annual results. And target earnings should overcome inflation.

[PaulDavisThe1st]

Reasonable answer, but this part:

> Why not build something super minimal that requires less management and operating costs? That doesn't have the market risk at the center of it all? That doesn't have more points for fraud and abuse?

could still be usefully addressed.

[kvinogradov]

The best long-term protection from fraud and abuse are aligned incentives through skin in the game. That’s why we legally require all people in governance to be Members ($1000+/year donation). This is an important topic, and here you can find more context on this: https://kvinogradov.com/osendowment/

[kvinogradov]

“super minimal that requires less management and operating costs” - that’s exactly our current setup, and always will be the target!

Now OSE has no paid employees - the team is 100% volunteers. Its Board Directors and the Executive Director are required to personally donate $1000+/year. Operating costs are close to zero.

As organization evolves there might be higher operating costs, but our commitment to keep them as low as possible.