Over the past year I have been working with the Drupal Association to build an organization that not only supports and fosters the growth of the Drupal community but also one that the Drupal community can be proud. In this post I would like to address the transparency around the Drupal community’s largest financial event; DrupalCon. In just a few short years this event has grown from a small handful of people to a million dollar event and we have expanded our reach by beginning to work outside of the United States and Europe. It is vitally important to the us that we continue to build trust with you, the Drupal community.
Recently there has been some online chatter about the production of DrupalCon, DrupalCon Chicago, and how decisions about the conference are made. I’d like to address these directly and open up a candid and frank conversation with our community. If after this post you are left with questions feel free to post in the comments or attend the next Drupal Association Town Hall meeting on July 22nd, 2011 online and live in Portland, Oregon.
Who manages DrupalCon?
The first topic that I’d like to discuss is how DrupalCon is produced. Until 2010 each DrupalCon was an independently produced event that was led and ran by a group of highly dedicated volunteers and a sponsoring company. These companies not only donated huge amounts of their employee’s time but they often provided (or created) the legal entity that would host the conference. Typically this donation of time and services was done on top of their financial sponsorship of the conference (an absolutely astonishing outpouring of goodwill to our community). Early on we recognized that this model was not sustainable as attendance of the conference was growing rapidly, so after DrupalCon DC we began the work to modify the structure of how conference were run.
A new legal entity was formed to host DrupalCon: DrupalCon Inc. (DCI). In August of 2010 this entity was formally recognized as a U.S 501c3 non-profit. This non-profit is not controlled nor managed by Drupal VZW (i.e. the Drupal Association), which is a Belgium non-profit. DCI was created in the best interest in community as it has allowed hundreds of thousands of dollars not paid in taxes to be reinvested in the community. Read more about the history of DCI and browse its financials.
The Drupal Association (legally known as Drupal VZW) is a Belgium non-profit. When you become a "member" related to Drupal, currently that is the organization you are joining. Although Drupal VZW does not run DrupalCon, the two organizations often work very closely together because we believe that it's in the best interest of the broader Drupal Community to do so. DrupalCon is an educational event for the entire Drupal Community.
Currently, DCI and Drupal VZW are in discussion about how these two organizations can work together to better serve the Drupal Community.
Let’s talk about DrupalCon Chicago
DrupalCon Chicago was the community's most production-intensive event to date. With the first budget of over a million dollars, the introduction of a hotel-based venue, the exhibit hall day stage, an official conference party, and many other new-to-DrupalCon pieces it was clear that we would need additional help. At the same time the organization of DrupalCon was shifting to DrupalCon Inc. who has just begun to hire full-time employees in November of 2010. DCI would eventually take over full management of the conference. These hires occurred about a year after the planning for DrupalCon Chicago began.
As previously mentioned, past DrupalCons had been significantly subsidized by companies like Acquia, Development Seed, Chapter Three, Commerce Guys, and GVS, who donated many hours of work and provided services at significant discounts in order to ensure that events were not only successful, but also as affordable and accessible to as many people as possible.
To help produce and organize DrupalCon Chicago Palantir.net stepped forward to help with the organization of DrupalCon Chicago.
If you don’t have time to look up the details, two employees of Palantir.net sit on the board of Drupal VZW. Drupal VZW has absolutely no control over DCI, but the Board of Directors of DCI always independently considers the advice and counsel of Drupal VZW, which represents many of the beliefs of the broader Drupal community.
It is important to us to openly discuss the intimate details of this relationship with Palantir.net and DCI.
Swimming into the details
Putting on a DrupalCon requires an absolutely amazing amount of work. DCI not only runs the longest, most involved OSS conference, but also one with the most moving parts: pre-conference trainings, business summits, well over 100 speakers, thousands of attendees, a giant party, evening events, a 24-hour coder lounge, code sprints, and so much more. In Chicago, there was even a wedding!
To pull this very complex event off, DCI relied on over a hundred volunteers that dedicated both personal and professional time to the conference. We as a community owe all of these individuals a great deal of gratitude.
DCI also used the time and services of Palantir.net, who really stepped up to the plate and helped save the conference tens of thousands of dollars by providing professional time at heavily discounted rates.
In exchange for the professional services Palantir.net rendered to DCI with respect to the conference, DCI provided Palantir.net with a Diamond sponsorship of DrupalCon Chicago at the $45,000 level.
This was an in-kind transaction, which means that DrupalCon did not pay Palantir.net for their time and Palantir.net did not pay DrupalCon for their sponsorship, though the two organizations did have a formal, written contract.
This is not the first time that DrupalCon has paid one of its major sponsors or a company from the organizing team, and it is certainly not the first time we have paid for work to be done. Overall administrative overhead expenses (event planning, website, project management, graphic design, accounting and sponsor coordination) for DrupalCon Chicago were $198,469, inclusive of staff time, all vendors, including Palantir’s sponsorship. By comparison, DCI spent $184,614 for the same work at DrupalCon San Francisco.
This is how it breaks down:
|Sponsor Coordination||0*||Sponsor Coordination||14,595|
|Event Planning||68,492||Event Planning||65,991|
|Website Development||29,880||Website Development||56,373|
|Project management||15,000||Project Management||35,520|
|Graphic Design||15,000||Graphic Design||5,792|
|*Staff handled sponsor coordination||
**As a new organization DrupalCon Inc.
Palantir.net’s contract with DCI covered three line items:
- Website Development
- Project Management
- Graphic Design
Palantir.net also served as the conference lead setting the tone and direction, although they were not contractually obligated to.
Conference over conference, Palantir's services saved DrupalCon over $52,000 reducing the costs for the same three line items from $97,685 to just $45,000. However, since the transaction was done in-kind, the actual cash cost to DrupalCon was even less, because sponsorships are designed to subsidize ticket prices.
This in-kind transaction benefited the conference and the Drupal community.
Keeping the records
As part of the sponsorship trade Palantir.net signed a contract with DCI for a minimum number of billable hours (500 hours), already at a below-market hourly rate, and a requirement to submit hourly reports. In return, Palantir.net only received the Diamond sponsorship and no cash payments.
The hour breakdown (click for details) is as follows:
|Oct and Nov||542.4|
*On-site management at the conference was not billed/tracked
In total 2,309 hours were exchanged for a sponsorship worth $45,000, making the billable rate approximately $20/hour, significantly below market rate. Considering that the cash cost to service the sponsorship, the net cash flow impact to DrupalCon, Inc. was even less.
Wrapping this up
Putting on a DrupalCon requires an incredible amount of time and effort by hundreds of individuals. After each conference we review and evaluate our processes and our decisions. As the Executive Director of DrupalCon Inc. and the principle in the decision to contract with Palantir.net. I believe that we made the right decision in offering Palantir.net a sponsorship in exchange for their work.
With that said we think that there is a perception problem. Although the sponsorship in-trade was financially beneficial for the conference and the community and everything was kept above the board, it may not look that way. In retrospect, we could have disclaimed this earlier, been more public, and potentially created a sponsorship distinction for in-kind transactions.
We took these lessons forward with us to London and Denver. For example, you'll notice on the DrupalCon London site Deeson is listed as providing the Creative direction and site design. This is because they are donating a significant portion of their time, being paid at below-market rates for part of their time, and have taken responsibility for all creative direction, graphic and site design. This is a small way that we can thank them for their generosity while also maintaining equality and fairness with our sponsor base.
What do you think?
Move forward with us
The folks at the Drupal Association and at DrupalCon Inc. are dedicated to supporting you, the amazing folks of the Drupal Community. We are here, we are listening, and we are constantly adjusting.
Grow with us as we learn how to best serve and support you.