Preparation of approval of reserve building and 2025 budget

Hello,

with this message, I’d like to inform the board and the community that we will soon start the formal vote for approval of the reserve building and 2025 budget.

The financial report must accurately report all accounting-relevant items and numbers, list profits and losses, and contains our closing ledger and the reserve building. It will be sent to the foundation authorities and the tax office. It will be made public on our website, alongside an English translated version. The financial report will be prepared and verified by our tax advisor based on their accounting.

The filing as prepared by our tax consultant has been shared now with the board (Nextcloud folder TDF Board → Budget 2025). The essence of the budget has been discussed and agreed before ([DECISION] 2025 budget), and is being executed. What happens now is the approval of the formal documents to be filed with the foundation authorities, the tax office and the auditor.

In total, four files are relevant for the budget:

  • Our internal budget spreadsheet, as it was prepared, discussed and voted. This is the document that, in a redacted form, will also be made public.
  • the 2024 annual closing ledger (“Kontennachweis zur Vermögensübersicht”, “Kontennachweis zur Überschussrechnung”)
  • the reserve building (“Mittelverwendungsrechnung”, “Entwicklung der Rücklagen”)
  • the accounting ledgers

To fully review the closing, I can provide access to the account statements, cashbox journals, PayPal and Stripe balance sheets, 2023 closing ledger (to compare numbers) and other data, just let me know.

I’ve also created non-binding DeepL translations for the board’s convenience for the 2024 annual closing ledger and the reserve building. The internal budget spreadsheet is bilingual already, and I did not translate the accounting ledgers, due to privacy concerns and as the line items are unlikely to be translatable.

The vote will be similar to what was done last year:

  • approval of the reserve building and 2025 budget, in their binding German version
  • authorize Florian to sign and send in the documents to the foundation authorities, the auditor, the accountant and the tax office, on behalf of the board
  • authorize the tax advisor to file all of the above with the Berlin tax office, on behalf of TDF
  • authorizes Florian to communicate this vote result, in case it is approved, to the tax advisor

When the vote is done, I will also prepare a German summary of this vote that has to be filed to Berlin.

I am still in the process of reviewing all the documents and am about halfway done, what is missing still is a review of the individual project creation, dissolving and the respective sums. For the board to familiarize themselves with the documents again, I’ll send this information already now.

When I am finished, I’ll report back here again, so we can eventually start the vote. When the vote starts, it will run for the usual 72h. I plan to start the vote in the next 1-2 weeks.

Florian

Shouldn’t the board be informing you about their formal vote on the budget rather than the other way around?

Why are these documents tied up with each other, and why are they voted on together?

  • The annual budget is a policy document, and a prospective document, which is supposed to be proposed, discussed and passed by the beginning of the budgeted period (although, that’s botched up again); while the ledgers are just records of what actually transpired.
  • Also, the budget is a document the BoD authors (or is supposed to author if it is functional), while the ledgers are compiled/maintained mostly by the staff (although the BoD might have to do that work itself in a smaller organization with a lower budget).

Have we had such a document in the past? Or is this just the “1244814.12 €” line from the list of budget items, requiring a separate document?

I am preparing the documents and the vote for the board, which I’ve been doing since I became ED in 2014 (and probably also did before as chairperson).

All of them are part of the annual report filing. To quote from the budgeting howto:

The annual report consists of the activity report and the financial report (closing ledgers and reserve building).

The activity report needs to outline how the foundation fulfilled its objectives and must give a full overview of its activities. The activity report will be sent to the foundation authorities and to the tax office, and will be made public on our website. The legally binding version we have to file is in German. An English version based on the > German one will be published as a brochure with additional graphics. The team will write the English version 1 for approval by the board and then translate it into German.

The financial report must accurately report all accounting-relevant items and numbers, list profits and losses, and contains our closing ledger and the reserve building. It will be sent to the foundation authorities and the tax office. It will be made public on our website, alongside an English translated version. The financial report will be prepared and > verified by our tax advisor based on their accounting.

Yes, this is how we do the filing ever since, we have it each year.

I had a call with the accountant, and the questions have been answered.

  • free capital is 3.125.611,71 € instead of 3.125.615,06 €
  • 78.782,70 € for card account/sales tax/receivables are explained in an updated annual closing sheet that has been extended with the explanations and is in the folder for the board, including a DeepL translation
  • it is related to the VAT filings, the actual VAT inlcuding November and December which is paid only in 2025
  • I also asked about the calculation of the surplus for the business entity (105.666,43 €), which is likewise explained explained in the updated annual closing sheet
  • it is based on income from the business entity, minus commercial goods (e.g. t-shirts), the VAT for the business entity (36.727,35 €) and administrative flat fee (500 €)

I’ll write here again when I am done with reviewing existing and new projects.

I am now done preparing the document. As a part of the new budget concerns hirings for developers, and we ask candidates to send in their salary expectations, I will not share the actual planning, otherwise getting a good, competitve offer and comparison between the candidates will be harder. I will see if there is a way to present the budget in a way that doesn’t enganger the application process, but for now my goal is to get the budget finalized and filed.

Here’s the changes made in comparison to the document’s previous version:

  • A small correction in line 4 (“MC tooling”) in our budget spreadsheet to match the sum filed (and audited) last year, as reflected in the accountant’s spreadsheet. We adjusted the sum back then to match the concrete contract incl. VAT, bud did not adjust in our internal spreadsheet. The difference was 49,50 € which is now adjusted.

  • With the overall planning as it stands, we would overspend by quite a lot. While we can do that, we only need to budget for what we actually must spend.

  • In the past, we repeatedly lowered the annual employer cost, e.g. when someone started later the year. Also for the developer roles it is clear they will start quite late during the year, which advocates for adjusting the line items as well.

  • Additionally, for hiring it heavily depends on where we hire, and if we hire directly or with a provider like Deel or Remote. The employer cost range can be quite high.

  • Also, although we want to have people fulltime, it is not a given we only get candidates willing to run part-time.

  • Therefore, in lines 30-33 of our budget, I’ve now adjusted the estimated costs for the developers.

  • I’ve also updated the legal item in line 35 and reduced by a smaller amount, to have a budget that’s balanced and has all planned in that we must spend.

  • I discussed this with the accountant on the phone, and it’s fine from their point of view as well.

Unlike the other votes, I will not start this vote on Monday, to give everyone a few days to look at the final spreadsheet. If possible, I’d like to start it next Wednesday with the usual 72 hour voting period, so the accountant can finalize and prepare the documents the week thereafter.

All of them are part of the annual report filing.

Organizations are required to file all sorts of things annually, that does not mean they are created by the same bodies or people, or approved together.

I don’t even understand for or against what you are arguing here.

Please let me do my work instead of arguing about things that are simply not, and have never been, a problem.

We can debate about the color of the envelope to use and which stamp motive to buy next, but I am not up for it.

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