User:Robbat2/FY2024 Gentoo Foundation Letters

Letter From the President

Dear Foundation Colleagues,

Fiscal year 2024 (July 2023 - June 2024) ended as expected. Gentoo Foundation Inc continues to operate healthy finances, including year over year growth of cash assets ($2697 net over FY2023), which we use to make capital expenditures to enable Gentoo development. Our ability to adequately fund Gentoo development activities remains healthy with minimal effort spent on marketing, press, and relatively low fundraising expenses.

Project: Infrastructure

• Gentoo had no major changes in infrastructure sponsorship during the FY2024 period.
  • This includes no new sponsors
  • Gentoo should work harder to solicit new in-kind sponsorship of servers and hosting, esp. with the transition to SPI making it possible to provide tax benefits to sponsors.
• Gentoo made capital expenditures for $9327 worth of additional components for the servers previously purchased in the FY2022 period.
  • Expenses of $1000 or more are capitalized with depreciation.
  • Expenses under $1000 are considered operational, and not depreciated.
• Note: The WorkOnArm sponsorship that provided access to a powerful ARM64 system did change very early in the FY2025 period; and further developments on that sponsorship will be reported in future Board communications.
• Note: The FY2025 period may hold further changes with alternative arches being deprecated, and recognizing failure of esoteric hardware hosted in the OSUOSL racks will free up electrical power in those racks.

Project: Nitrokey

The Gentoo Foundation has transferred decision making for the Nitrokey initiative to the Gentoo Council. Gentoo investigated Nitrokey's update for Nitrokey 3 devices, however have decided to not upgrade to Nitrokey 3 at this time, based on concerns with the new product. Further decisions will be made by the Gentoo Council.

Foundation Futures

Gentoo Linux successfully was accepted as an associated project within the Software in the Public Interest, Inc. 501(c)(3) non-profit as of 2024/March/11.

What remains is to complete the transition process and dissolve the Gentoo Foundation as the owner of the Gentoo Linux assets. That progress has been slow due to slow turnaround from the SPI's board & treasurer.

Conclusion

No further remarks

- Robin H. Johnson (robbat2) Gentoo Foundation President & Treasurer

Letter From the Treasurer

Dear Board,

As in my capacity as Treasurer, I present the FY2024 Gentoo Foundation Financial Statements.

Taxes: The Financial Statements are pending review by the CPA for tax preparation, as reminder only that review does NOT constitute a formal financial audit by a financial professional; As of 2024/08/31, Gentoo remains up to date with tax obligations to the US IRS.

SPI transition: the SPI's treasurer has not been overly responsive in the financial migration steps; e.g. the donations are still going to Gentoo accounts, as the SPI has not yet been able to provide the specific Paypal integration pieces to have donations directly on Gentoo's donation page.

Financial KPIs: As an financial analysis of the statements, and new this year, I have introduced measurement of Gentoo's financial management. This is intended to ease migration into the SPI, to ensure Gentoo's goals are aligned with those of the SPI. The SPI's metrics are available via Charity Navigator

If the intent of the Foundation were to change, and we would need to improve the Net Margin by soliciting more contributions; however it would not be urgent, as current income levels vs expenses would support the Foundation for at least 5 years, subject to significant changes in global inflation.

- Robin H. Johnson (robbat2) Gentoo Foundation President & Treasurer

Non-profit Expense Categorization

Future versions of the financial statements should provide this data and the ratios within the statements.

Program Service Expenses: $19,146.88

• Hosting: $5,201.98
• Infra replacement parts: $336.57
• Nitrokey: $269.21
• Depreciation: $13,300.23
• Services: $38.89
  • Anti-spam feed for program email service

Administrative Expenses: $1761.70

• Accounting: $1500
• Mail: $261.70
• Phone: $30.00

Fundraising Expenses: $1181.35

• Paypal Fees: $1181.35

Note: Some bank fees are included in the Administrative Expenses due to the mail service utilized by the Foundation.

Non-profit Ratios

The following are common key performance indicators that measure the financial management of a non-profit organization.

• Program Expense Ratio
  • Higher is better, Charity Navigator considers 70% or better good.
  • Formula: Program Services Expenses / Total Expenses
  • $19,146.88 /$22,119.93 = 86.6%

• Administrative Expense Ratio
  • Lower is better, good is considered less than 35%
  • Formula: Administrative Expenses / Total Expenses
  • $1761.70 /$22,119.93 = 8.0% (upper bound)
  • Note: Would be lower if the bank fees for check processing were moved to Funding Expenses.

• Government Reliance Ratio
  • Lower indicates a dependency on continued government funding for success.
  • Gentoo has no government funding
  • Formula: Government Grants and Contributions / Total Revenue
  • $0 / $20,844.93 = 0% # lower is better

• Personal Expense Ratio
  • Lower is better; Gentoo has no paid staff.
  • Formula: Total Salaries, Wages and Benefits / Total Revenue
  • $0 / $20,844.93 = 0% # lower is better

• Fundraising Efficiency Ratio
  • Lower is better: How much does it cost to realize $1 of contributions
  • Formula: Total Fundraising Expenses / Total Contributions
  • $1,181.35 / $17,102.76 = $0.069 per $1 contribution realized
  • Note: Upper bound of $0.084 per $1 contribution realized if the Mail costs are moved.

• Current Ratio
  • Higher is better, measure of liquidity
  • Formula: Current Assets / Current Liabilities
  • Positive Infinity as Gentoo has no liabilities

• Cash Reserves Ratio; also known as Working Capital Ratio
  • Higher is better; what period of time does the current liquidity cover expenses for?
  • Formula: Unrestricted Cash & Liquid Investments / (Total Expenses - Non-cash expenses)
  • ($104,726.47+$18,158.49)/($22,119.93-$13,300.23) = 13.9 years # higher is better

• Accounts Receivable Turnover Ratio
  • N/A; The Gentoo Foundation does not have any A/R.

• Leverage Ratio
  • Lower is better, how dependent is the organization on debt?
  • Formula: Total Liabilities / Total Assets
  • $0/$147,944.30 = 0%

• Net Margin Ratio
  • Higher is better
  • Formula: (Total Revenues - Total Expenses)/(Total Revenues)
  • ($20,844.93-$22,119.93)/$20,844.93 = -6.1%
  • Commentary: This is the only KPI that represents concern; due to Gentoo's dependency on balancing depreciation to reduce income taxes.

Conclusion

No further remarks