Over the past seven years the Ushahidi Platform has grown to be the world-class open-source tool used in situations as diverse as human rights activism, data collection, crisis response, and citizen-government engagement. Over the past seven years, the Ushahidi Platform has been deployed more than 100,000 times in more than 159 countries, in 45 local languages, with over 6 million testimonies, reaching nearly 18 million people. These figures are built on a spirit of constant innovation, a culture that encourages our team to pivot quickly as circumstances change, while staying humble acknowledging we have just scratched the surface and there is a lot more work to be done.

Staying humble keeps us open to learning the lessons we need to learn in order to improve. Ushahidi’s culture encourages us to be open and share information where it adds value. One of these areas is how Ushahidi operates financially. Where does our money come from, how do we spend it, how do we ensure the lights stay on? While we are aware this information is available in public documents we have decided to explain, here on our blog, Ushahidi’s finances in a simple and easy to understand manner. After all Ushahidi was founded by bloggers! We hope that this information proves not just interesting but also useful.

The structure

Ushahidi is registered in the United States as a 501(c)(3). The relevant part of that status for this post is that it means Ushahidi has been approved by the Internal Revenue Service (IRS) as a tax-exempt, charitable organization. There are several strict IRS tests we have to pass in order to keep our status. Ushahidi is also registered in Kenya, where our headquarters is, under the Companies Act and meets its obligations to the Kenya Revenue Authority (KRA). Our Finance team sits in Washington, D.C. and Nairobi. Our auditors are Gelman, Rosenberg & Freedman CPAs an award winning firm with expertise in both the United States and Kenya. All of this information is publicly available from independent sources.

The numbers

These numbers are taken from Ushahidi’s audited accounts for 2014.

The stories behind the numbers

It takes a team.

Salaries are our top expense as our most valuable resource at Ushahidi is our people. The impact we have at Ushahidi is down to the hard work of my colleagues. Everyone at Ushahidi comes to work at Ushahidi because we know that every day people around the world use the tools we build to improve lives in their community. People also come to Ushahidi because our team tends to think big and rewards creativity and an entrepreneurial attitude. Our ethos – we don’t just build products, we solve problems.

Ushahidi Team in Diani, Kenya Jan 2014

When someone is hired, their pay is based on three factors: The budget for the role, their pay at their previous job, the cost of living where they live. Afterwards salaries are reviewed on an annual basis and raises are given based on performance.

We are proud to claim that the highest paid staff member at Ushahidi worldwide (our staff are in 9 countries from Kenya to New Zealand) is paid less than 4x the lowest paid staff member at Ushahidi, regardless of the cost of living where they live. This is more than twice as good as the norm in the UK non-profit sector (the UK is the only place we could find that published this data), which is 1:8; however, from what we can tell reading this report their ratio is based on only UK employees, as in the highest paid UK-based staff member makes on average 8 times the lowest paid UK-based staff member in the non-profit industry. They are not accounting for employees working outside of the UK in places with a lower cost of living. Our average staff pay to executive pay ratio is 1:1.56. Now this is considerably more equitable than the norm in USA for-profit sector, which is 1:243. Yes that is 1.56 compared to 243, a roughly 155 times larger ratio. It would be interesting to compare these figures with Kenyan and African averages, if you know of any public sources of this kind of data please share it with us.

Being an Ushahidi team member comes with benefits beyond financial compensation. We generally don’t care where you live. As long as you have Internet access, live wherever you want. We don’t care when you work. There are no “business hours” at Ushahidi, we are milestone based, not a sit-in-your-chair from 8 to 5 company; quality of life makes for quality of work. Ushahidi attracts workaholics, so the organisation works hard to make sure everyone has a work-life balance - you can take time off when you want - a minimum of 25 days per year.

Earned revenue

Ushahidi’s earned income grew from USD 399,624 in 2013 to USD 868,932 in 2014 a growth of 177%. In 2014 we covered a quarter of our annual budget from earned revenue. During the same period our total expenses grew from USD 2,139,440 in 2013 to USD 3,535,028 in 2014 an increase of 65%. This larger than normal increase in expenses in 2013 - 2014 was due to several factors such as the cost of setting up large external projects such as Making All Voices Count. In 2015 we anticipate a drop in our our total expense growth percentage.

All external projects we take on, whether a smaller project maintaining technology for one deployment or broader multiple countries programmes such as Making All Voices Count, have to contribute to supporting the organisation while ensuring we deliver high quality work. For example, Ushahidi will bill Making All Voices Count for staff time spent on the programme and use these funds to pay salaries for those staff members as well as for some operational costs.

Preparing for growth

In 2014 we spent USD 503,842 more than we generated in revenue. However, our net assets at the beginning of 2014 were USD 1,569,033 which meant we had the room to expand when we need too. This is because of grant cycles. A number of our partners distributed funds at the end of 2013 to be used in 2014, which is why we had such a large amount in the bank at the end of 2013. This is pretty typical in the non-profit world. Our net assets at the end of 2014 were USD 1,065,191.

The focus of the organisation now is to grow our revenue streams so that we can be financially self sufficient while remaining true to our mission of building technology for social good. We want to prove that in the 21st century you can do good in the world, and be able to be financially sustainable. We are going to prove that building open source software for the good of humanity is something that people value. I’ll explore this focus in the 2nd part of this series.