Money has a corrupting influence.

Imagine, in the abstract, an organisation that wasn't exactly accountable to anyone with a half-billion dollar pot as the prize for whoever ended up in charge. Can't possibly end well. Brand that with a "Mozilla" logo and the situation doesn't change much.

If anything, I think - paradoxically, but as I do for all charities - that Mozilla is acting responsibly if they are burning through all their cash. If they fall on hard times that is more a signal that they've lost the faith of the internet at large than a marker of financial imprudence.

A charitable foundation with no doners should be wound up. Otherwise it'll just invite corruption. Exceptions for tiny amounts of money, but not for the sums Mozilla is dealing with.

Which is why I am so proud about the way the Blender Foundation does things. Given the success of the project things could have gone quite differently, but that they found a good model for it to work

I am more confident blender, inkscape, postgres will exist than Firefox.

I think money corrupted Mozilla and turned it into another VC powered YC company where talent left and product and engineering management created a replaceable r&d team without passion .

> A charitable foundation with no doners should be wound up.

For many charities, probably, yeah. But Mozilla being in the position that an endowment more or less funds at least 'support' level of maintaining a fully independent browser beholden to absolutely no one, even if literal zero money is flowing in otherwise - that's a nice thing to have.

It does invite corruption, and in the end, if nobody cares about mozilla (the browser), it should indeed go away, but 'being cared about' and 'raking in the dosh' aren't quite the same. Sure, you can turn care into cash (donate buttons and the like), but if you don't have to, that's nice. Mozilla (the browser) is likely to die if the funding that they CAN provide is a decent salary but nowhere close to what other companies could possibly offer – _and_ nobody cares about it.

Here's what I mean by that last one: I'm sure PKK (author of linked article), for example, could be convinced to do the job of quirksmode/MDN for a salary. And that salary does not have to be close to what PKK could get as a freelancer or at google or whatnot, but it should at least be somewhat representative of his particular skillset. Effectively, then, PKK is still donating - a lot - namely the difference between the salary he'd get vs. the salary he could get, but he gets something in return: Working on a thing he likes to do more, and contributing to the open web.

Had firefox been raking in millions a month off of user donations, and spending it all on the projects they were spending it on, you might be right: That's fine, and if the money dries up, they downsize - that'd be a better way to do it vs. setting up an endowment.

But that is NOT what happened. Firefox got most of the running funds via e.g. having google as default search engine. That is a cashcow that may at some point run out; at the very least you are too beholden to too few parties, and that itself is far more likely to be 'corruption' (as in, have the same downsides) than a charitable foundation with more cash than carers. Turning THAT windfall into an endowment does strike me as a wise move. Especially if you earmark that endowment for a limited purpose (presumably, earmark it for team gecko and very few other parts of moz).

Does this mean private schools with big endowments are noticeably corrupt vs their public peers?

You are shocked that a non-profit competiting with $100Billion+ corporations, whose mission statement is "people over profit", hasn't been able to build an endowment? And that's the fault of Mozilla, not the billionaire techies who'd rather buy advertising on buildings on college campuses?

This has been my thought since the first time I heard Mozilla was raking in cash with affiliate search. With some planning, they could have had a never-ending income and been beholden to no one. Anyone in here with insight in the decisionmaking process?

Interesting you bring this up - why don't normal businesses also setup endowments like this?

How come i've only seen universities do this?

Shareholders generally like businesses to use their money on things only that business can do.

If the best thing the business can think to do with the money is put it in the stock market or a low-interest cash account, which anyone could do, investors usually demand that the money is returned to them (via dividends or share buybacks) so they can choose what happens to it.

Because "endowment" is a simply the non-profit term for "capital" in business.

Harvard's endowment is invested in profitable business to raise money. It's a non-profit so it doesn't pay out the profits. A profitable business invests its funds itself or returns them to the owner institutions, who chose whether to keep funding the business.

I'm not sure it would make sense for normal businesses, as owners want to, well, profit from the profits (share price rise, buybacks, dividends, sale of business at a higher valuation, etc).

However, in Mozilla's case, the owner of the corporation is a non-profit, and (to me at least) it'd make a perfect sense to set up something like this.

Normal businesses generally don’t have enough free money to do something like this. While the business has value by virtue of its assets, the amount of free cash is much less.

Software is an exception in this since you basically only have free cash, there are no physical assets as such.

> Normal businesses generally don’t have enough free money to do something like this.

And why don't they? Decades ago, having cash reserves was a Good Thing.

We need to get at the root of the issue and that is that companies have gotten used way too much on government bailouts and redistributing everything possible to shareholders/customers.

Err, no.

The problem started with people like Carl Icahn.

If your company has too much cash, someone will attempt take control to carve it up and get their hands on the cash.

So, every business basically runs fairly close to cashless or even carries debt in order to avoid corporate raiders unless they have SO much cash that nobody can even hope to buy them (see: Apple).

And then people complain that they're holding onto cash rather than 1.) Doing something "productive with it" or 2.) Returning it to the owners (shareholders)--the latter of which at least is not a wholly unreasonable position as it isn't really the company's money to hold on to at some level.

I imagine there's a way to setup a trust such that hostile takeovers can't access the money.

Just don't go public and people can't take over the company as easily. They would have to go to each investor and buy them out.

This merely changes the target.

I was thinking more of the corner store, with tons of inventory that make up a large part of their value.

But relatively it probably applies to bigger manufacturing companies as well. Hell, it probably applies to Amazon (the retailer, not AWS).

> Hell, it probably applies to Amazon (the retailer, not AWS).

That's perhaps the most genius thing in the Amazon system: the actual amount of cash bound in warehoused inventory is negligible - they only have the risk for stuff they directly sell. For all the other products, the sellers are on the hook towards the manufacturers.

Essentially they are an online Walmart with next to zero of the risk a real Walmart has because most of their inventory risk is shifted towards the "sellers"...

Most retail has net 90 day payments and forced returns where manufacturers have to accept unsold product. Walmart and other big retailers likely have little money tied up in inventory. They sell a product before they have to pay the manufacturer for it.

Walmart is tough on terms but meets obligations. I worked on a farm in high school that sold would sell them Fall stuff — pumpkins, cornstalks, etc.

They would pay net-10, which was unheard of, most of their big buyers habitually paid late. The local grocery chain would pay 60-90 days late on a 30 day invoice. The cash in hand was worth sometimes losing a little money.

Walmart is specifically famous for having some of the most onerous terms amongst all large retailers. Anecdotally, Walmart has asked for net 270 terms from a supplier I am accquainted with.

I additional to the "no one has the money for that" / "profits go to shareholders" angle, also consider the systematic perspective.

If every business has an endowment, what are those endowments invested in?

They are invested in the business or diversified, obviously. Look at any corporate balance sheet

Because having "leftover cash" that is not immediately redistributed to shareholders is seen as a Bad Thing (tm).

Because in the end, when shit hits the fan like with the 'rona, the government will be conveniently pressurable to bail you out. Personally, I rather have government bailouts than mass bankruptcies - but bailouts should come with "strings attached" like, let's say, a requirement to always keep one year of expenses at a reserve to avoid the need for future bailouts.

That’s only an issue for a public company.

Or equity held by the city your major offices are in..

> "leftover cash" that is not immediately redistributed to shareholders is seen as a Bad Thing (tm)

sort of a short sighted view if that's really the case - since the cash being in the company's books, or in an endowment, is still value owned by the owner. The small penalty of it being illiquid shouldnt be a problem.

I guess, from a shareholder perspective, why would I want my investment to invest in other things/companies? Then they might as well pay out the money, so I could invest it myself.

One reason is that it makes the enterprise more resilient, and that is valuable in many industries.

Look at how quickly oil and gas companies implode when there is a price shock.

True, and I personally think it's a good idea.

The stockholders though would probably say that they can just supply the capital themselves, if the business is in trouble.

And that is why government regulation is overdue to ensure a fair and level playing field without leaving the government on the hook in crisis scenarios.

Lawsuits. If the endowment becomes known it becomes a target.

There's probably ways to setup trusts such that they're independent of the business and the business has no control over the trust.

Bosch is such an example

Greed? For too-big-to-fail companies, also the thought that profits go their pockets and losses come out of ours.

Most of the time, it has to do with investments failing regardless, so it is important to invest in multiple projects and to attempt to stay up-to-date with competitors. The story could have been "Why didn't they spend their money from the endowment to help ensure their product survived the competition". In hindsight, other people's mistakes or perception of mistakes is always skewed.

also boggles my mind that Wikimedia didn't do this