Setting up a Collective is free, but there are fees if you want to accept and pay out money, usually 5%-10%.
Read on for more details.
You can set up a Collective absolutely free. However, there are fees to accept and spend money. If you want to do crowdfunding, get sponsorship, sell tickets, pay contributors, reimburse expenses, and generate receipts, you need to pay the Open Collective 5% platform fee, and get a Fiscal Host, who often charge fees on top.
A fiscal host is a legal company or individual who enables financial transactions, holds funds, and takes care of liability and taxes for a Collective. Fiscal Hosts make it possible for Collectives to transact without incorporating their own legal entity. Each Fiscal Host sets its own fees, most commonly 0% and 5%.
*plus payment processor fees
The standard fee for fiscal sponsorship, the service provided by Fiscal Hosts, is 10%. This service is commonly offered by foundations and other organizations who manage funds for unincorporated projects. Open Collective offers not only fiscal sponsorship, but also a great software platform for raising money, paying expenses, record keeping, and transparent budgeting. We charge 5% for Fiscal Hosting (for those Fiscal Hosts that we manage—other hosts set their own fees) and 5% for the software platform (if you put money through the system), so 10% all together. Payment processing fees are determined by the providers we use, Paypal and Stripe.
If a Fiscal Host agrees to receive money outside the Open Collective system, for example via bank transfer, it’s possible for them to add the funds manually to your Collective so they show up in your budget. It’s up to the Fiscal Host what fee they want to charge for this service, if any.
Fiscal Hosts managed by Open Collective charge only the regular platform fee and fiscal host fee for manual transfers, but we only agree to do them for large, infrequent payments or special circumstances, because it’s a time-consuming process.
Yes, it’s possible. To do so, you'd need to set up and manage both the Fiscal Hosting side and the software hosting side yourself. So, you’ll need to set up and maintain your own legal entity and your own servers running an instance of the Open Collective open source software. Maintaining a legal entity involves tax and legal liability, admin overhead, and a lot of paperwork, and maintaining servers running your own software involves a lot of technical skill and effort. That’s why many Collectives find that it’s good value to pay Open Collective to provide these services.