How and why to fund your projects the crowd source way
This is a garbled rant at the moment, stand by for rewriting
You already know you want your project to be open source, but why fund it via crowd-sourcing? Well firstly I'd like to suggest that you also maintain other forms of revenue stream, whatever works for your project be it Logo printed t-shirts or the production and sale of hardware - this can then either supplement or be supplemented by donation money.
Some people will ask why have money at all in an open source project? While i can't help but sympathise with this view I haven't discovered a way which it can be truly actionable in today's society. Put simply people need money, projects that hope to attain desired quality levels must also use funding, simple tasks such as server space and general running costs can soon mount up.
When a community project has a float of money stashed away it can consider running competitions for content entry, paying for advertising space, attending conferences or even having high quality professional content created specially for the project. The realities of running a project involve finding people to perform dull or tough tasks such as solving bug reports or adding complex features, with a float of cash available bounties can be fixed on such jobs making them attractive to contributors - this is just one of the many ways even a small amount of money can be used to help drive a community project forward.
One of the main advantages of a community sourced funding strategy is that this encourages community integration, people with a recurring subscription are much more likely to feel 'part-of' a project and thus to follow it more closely, the project being aware it's key source of funding is from the public will naturally find it easier to interact with their user base. A more engaged userbase should also allow projects to further improve their scope by inviting participation in events with useful outcomes, such as a publicity drive or content creation event.
If your project is lucky enough, or important enough, to have a large number of followers who are willing to pay a small amount of money every month then you should be able to establish a structure which allows you to effectively budget for important bills, hardware upgrades and trade events. With a large and stable income you might decide to employ a member of the project to work on it full time, for projects with a visionary such as linux or gnu the choice of who to employ first was clear cut, in many projects it could certainly cause rifts and divisions - certainly there is no one size fits all funding model, If you're unsure what your community wants then ask them about it, they'd love to tell you...
Being community funded means you should have your community as involved as possible
How to spend money
An initial and inevitable portion of raised funds will of course be spent on general running costs but how to spend other money should be carefully considered, here are some ideas worth thinking about.
Contests
Recently the Liberated Pixel Cup has set a brilliant example of how to run an open source competition, before announcing it they drew up a style guide and employed artists to create base assets from which to build on - within this framework they set hopeful artists the task of making the best possible art they could within the style bounds, this art was then to be used in the coding phase where hopeful teams were tasked with creating an open source game using the resources. The art phase of the competition was completed with many brilliant entries all within a usable style set - not only does this provide a good pool of artwork for entrants into the coding phase of the competition but it's established a 'LPC standard' tile set, should in the future someone wish to make artwork in a similar style it's likely they'll choose to make it LPC compliant so as to benefit from not just the other art available but also the many game engines which will be pre-set with the LPC tiles and sprite sheets thanks to the latter stage of the competition, such as the Flare engine.
An LPC style contest is brilliant for either a project based on developing a piece of software or for a wider community hosting project, LPC is a great example of the latter, the creation of LPC styled game art has given a the community a whole new direction and energy during the contest while also helping to establish the groundwork for a good community standard. Open Source Ecology have provided an excellent example of the former by successfully hosted a design contest to create a quick release wheel coupling for the Lifetrack, further the maker community website Instructables runs constant design based contests to produce high quality, fast flowing and well grouped content.
A common problem with community driven projects is that users will upload what they want rather than what the project needs, this might mean that you receive a wild array of styles, formats a subjects - while all content is good content, some content is more useful than others and a thriving community is unlikely to develop around a project which fails to provide a useful service. By setting out the rules and judging criteria you can establish standards and minimums which the community is used to sticking to, also by setting a theme for the competition you can establish complete or at least 'established' groups of content on your site; an image sharing space for instance might award prizes for the best flower photo - this will result in the 'nature' section having a sudden influx of flower images, by rotating the theme you can fill in sections of the site which were getting ignored.
An LPC style contest is brilliant for either a project based on developing a piece of software or for a wider community hosting project, LPC is a great example of the latter, the creation of LPC styled game art has given a the community a whole new direction and energy during the contest while also helping to establish the groundwork for a good community standard. Open Source Ecology have provided an excellent example of the former by successfully hosted a design contest to create a quick release wheel coupling for the Lifetrack, further the maker community website Instructables runs constant design based contests to produce high quality, fast flowing and well grouped content.
A common problem with community driven projects is that users will upload what they want rather than what the project needs, this might mean that you receive a wild array of styles, formats a subjects - while all content is good content, some content is more useful than others and a thriving community is unlikely to develop around a project which fails to provide a useful service. By setting out the rules and judging criteria you can establish standards and minimums which the community is used to sticking to, also by setting a theme for the competition you can establish complete or at least 'established' groups of content on your site; an image sharing space for instance might award prizes for the best flower photo - this will result in the 'nature' section having a sudden influx of flower images, by rotating the theme you can fill in sections of the site which were getting ignored.
Bounties
Employing Staff
Content Creation
make sure you're making content and sharing it in a way which it can be used by the wider open source community, this way people aren't only donating to your project they're also, in a way, paying you to give something to the FLOS world - it's great value for money and people love getting value for money.