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Tag Archive for 'money'

The Alaska Collective?

From the most directly available news source about CouchSurfing it seems that the next Collective will be held in Alaska. And congratulations to Doogy, who seems to have been hired to work for CS. I wonder what his official function will be. Translation:

i have been hired to work for CS but then [i] have to decide before March 8 if I move to Alaska with the group for this Summer…

Casey Fenton needs to stay

To clarify what OpenCouchSurfing is and isn’t and to give a more balanced view in our blog posts I’m writing this tiny blog post about why Casey Fenton needs to stay.

  • Casey might not be the most educated IT guru, but he’s definitely a guru and at this point he’s probably the only person capable of keeping the CouchSurfing website up and running.
  • The entire CS “Leadership Team” and Board of Directors consists of Casey’s friends. They would be quite clueless if Casey suddenly disappeared.
  • Casey is great. He might not have made the right decisions and I cannot agree with his attitude in many ways, but I am sure that I will feel happy if I will be able to give him a genuine hug again, maybe in 2009.

Still, even legally there is a problem with Casey in a paid position while being a member of the Board. And it would be totally useful if Casey’s ideas about transparency and volunteer participation would change a little bit. Though, also without it, with an estimated half a million US dollars coming in during year 2008 it’s unlikely that the ship will go down any time soon. And I am sincerely happy about that.

Pickwick: money no valid argument for unhealthy growth pattern

About limiting the acceptance of new members Pickwick writes

Kasper: “major source of income”

Is that income needed? Surely a much smaller stream of new members, recruited in a better way, could raise the moderate amounts necessary to pay server costs, paper clips and a few postage stamps.

Current spending is mostly for
A) salaries, and I think we had much better quality work from the volunteers “no longer retained”;
B) the exodus to Thailand, and I have yet to see any actual WORK mentioned that was done there in the 31 days of December (other than picking the place for January).

So the money seems to benefit those who make the decisions. Thankfully we are a charity now and published accounts have to be more accurate and more detailed than hitherto. Which reminds me that there are still areas of concern regarding the charitable status:

1. The financial statements online are still not identical with the ones filed with the US tax authorities and the New Hampshire charities regulators.

2. Casey may have perjured himself by stating falsely to the Attorney General that from 2003 to 2006 the company had several directors besides himself. The major reason for that could be that the truth may affect the legality of his own employment.

a) New Hampshire law requires a minimum of five directors, so with Casey as sole director the company had no legally composed Board of Directors. For that reason alone contracts entered into during that time may be invalid, including the employment contract he made with himself.

b) Casey as sole director signed his own employment contract on the dotted lines of both sides of the contract. There could not be a more blatant violation of all ‘conflict of interest’ principles, and for that reason alone this contract may be invalid.

c) New Hampshire law does not allow the chairman/president of a charity to be an employee at the same time. So when Casey as chairman/president signed his own employment contract he violated that law, and for this reason alone the contract may be invalid.

d) If Casey’s employment contract is invalid, he will have received his salaries without legal grounds, and may have to pay ~$70,000 back to the company. (That, and the other ~$70,000 of accumulated profits in the bank should keep CouchSurfing going for a good many years to come, as a volunteer based charity, without ill prepared world trips for the management.)

At the New Hampshire Department of Justice the case has been queued for review by an investigator in early 2008. My advice to the new Board of Directors is: sort it out before they start asking questions.

To sum up: I don’t think money is a valid argument to continue this unhealthy growth pattern.

Follow the money

To anyone who is trying to sort out what is going on in CS and who to believe, I suggest you apply what many consider to be the “First Rule of Investigation”.

“Follow the Money”.

Something very significant happened to CS during the year since CS 2.0 was launched as a volunteer-centered community-based enterprise. The corporate income drastically increased from a level where there was barely enough to make ends meet, to a big surplus, with the reasonable expectation of much more to come.

It doesn’t take much imagination, knowing human nature, to construct various scenarios that would explain much of what has happened in CS. It’s a certain fact that Casey, at the very least, from early on, was leveraging his position in CS for his own personal profit.

“Site design by Casey Fenton Consulting”

used to appear at the bottom of all emails to members and (if I remember right) every page on the site, with a link to his personal business. Now, this, in itself, is not necessarily a problem. Whether it is or not has everything to do with with impressions given to and agreements made with people who signed on to do do full-time volunteer work for what they thought was a noble cause, for a community built specifically on the value of freely giving without expecting a financial reward, and who literally saved CS from termination.

Things are going well for a young rapidly growing volunteer enterprise, there is tremendous community spirit, creativity, new initiatives, large numbers of highly talented people wanting to get involved. And then suddenly, the rug is pulled out from under them. Some of the most active and committed volunteers are made to feel unappreciated and all but shown the door. Announcements come down about new paid positions for Casey’s close associates.

We are told paid employees are needed to do the necessary tasks that volunteers won’t do, because they tend to do things on a whim. I, myself, had spent 5 months doing nothing but things that needed to be done, fixing hundreds of bugs, postponing my “whim” project (which would have greatly benefited the community, I believe, but never happened). I did all this in spite of the LT, who for the most part, were unresponsive, non-participating, prone to arbitrary assertions of executive authority without understanding the situation, and even at times seriously undermining worthy, community-based projects.

We are told democracy can’t work in an organization like CS and that voting is impractical. Aside from any philosophical arguments, the plain fact is that democracy and voting are happing right now in, and very successfully, I might add.

These kind of statements defy logic and reality, so why would they be made? Just look at the result: concentration of power and money in the pockets of Casey and his hand-picked associates. A paid developer will be hired, who will do what he or she is told, to replace the 6 highly qualified computer professionals who used to work for CS but are now working for BW, where their individual creative ideas, personal ideologies and cultural diversity are welcome and valued.

We question all this and are branded “whiners” and “CS-haters”.

I would never have given a good part of a year of valuable service to CS if I had known where it was headed. When I started having concerns about what the Admins were up to in their secret meetings back in December, I wrote a long, detailed, thoroughly documented letter to them. It was entitled “Request for Information from the Admins” (approx.). It was posted in a CS group named “CS Core Volunteer Communication” (approx.) created specifically for the purpose of allowing for communication between volunteers and the Admins, who previously were unavailable for communication as a group, and could only be communicated with through a liason.

I specifically mentioned problems with responsiveness, participation and arbitrary assertions of power. I expressed concerns about accountability. I said I was in CS to work freely for the community, and was not willing to work for Casey and/or the Admins if they were not accountable to the community.

The only response I got from the Admins was, from one of them, “Your letter is too long, so I’m not going to read it.” (approx.) This is when I became very concerned.

I started paying more attention to the NDA issue, which was very troubling to me, and I had only accepted it provisionally with the assurances that “it is being worked on and will be fixed soon.” (approx.). It was already going on 6 months.

I wrote another letter to the Admins after about a month or two, reminding them I was still waiting for a response from my first letter, and amplifying my concerns, which continued to be validated.

There was no response from any of the Admins who were in power before the crash.

Now, in retrospect, knowing what they were working towards, I believe I may have been allowed to continue to work for free under false pretenses, while the LT was planning to use the increasing revenue which I and many other volunteers were helping to generate, to pay some of themselves, without my permission or the permission of the other volunteers.

If this is what really what happened, and the total absence of meaningful response to my two inquiries was not just sheer incompetence or negligence (and how can I know when so much is kept secret), it was an ethical breach and I and the other volunteers have every right to feel mislead and disrespected. We certainly have the right to challenge the LT without having our credibility and integrity questioned.

So, to you new investigators, I suggest, follow the money and judge for yourself.


The trouble with CS finances

No, is not in financial trouble… Yet.

On June 19th, I published a analysis of the CS finances (sheet) , predicting that CS (technically it’s actually just Casey) would be able to hire 3 to 5 extra “employees” by the end of this year. It happened a lot quicker than I thought however (Jim Stone and Mattthew Brauer got hired as well as a thus far unannounced and unnamed developer). This is the part where I say “See! i was right!” and continue speculating.

Let’s have a look at where this money comes from. As far as we know, there is only one source of income for Couchsurfing: donations. This is logical, since there are no banner ads, no paid subscriptions or anything and Couchsurfing has been unable to register as a 501(c)3 organisation in the US so far, which excludes the organisation (actually, just Casey and his friends, since there is no officially elected board) from US government money.

But! Surely people that (mostly) like to travel cheaply cannot afford to collectively donate over 150.000 $ a year (projected for 2007)?!? You’re right. They aren’t donating, they are “getting verified” at 25$ per person (or less if you can prove you live in a poor area of the world). Verification is essentially proving to CS that you are who you say you are and nothing talks like money. If it was just verification they were offering, money wouldn’t need to be involved. I’ve heard of CS meetings where you could bring a passport and 25$ to get verified by an admin. Why would you need to pay if you could just show your passport and be done with it? Because, of course, this verification/donation scam is the main revenue stream for CS. Yes, a scam. If CS was genuinly interested in getting people verified for “security reasons”, a showing of passports would be more than enough. However, I have thus far never met anybody who was able to get verified without paying cold hard cash. The administrative cost of sending you a “verification code” is also negligable, a 2$ “donation” would be much closer to the actual need since all the physical posting is done by volunteers anyway.

In and of itself, this verification/donation scam is mostly harmless, even if the “sliding scale verification” is pretty cynical if you really think about it. (We’re asking people to pay as much as they can affor, so they can “prove” their identities and get the same benefits as those who can afford it, how’s that for intercultural understanding.) I mean, even I fell for it and payed to get verified. Then why is it such a problem?

The trouble is that verification money scales directly with new subscriptions to CS. This in turn means that CS can only continue to afford paying people like Jim Stone if people keep registering (and verifying) at the current rate. This definitely explains why there is so much “verification spam” on CS (visible when you haven’t “verified/donated” yet). If at any point the amount of new users starts to slow down, verification/donation money will automatically slow down as well. If CS ever hits the peak of possible subscribers, income will fall, rapidly. Subsequently, Couchsurfing cannot afford it’s employees anymore and soon it will be in real trouble.

How likely is this? Well, Hospitality Club seems to have hit it’s high point already, with subscriptions slowing down significantly. We can only assume that it’s only a matter of a year or 2 (at the most) before the same thing happens to CS, since both organisations tap more or less the same userbase.

At that point – as they say – things will start falling apart. CS will be practically forced to work with volunteers again at the “top of the food chain”, which no doubt will cause enormous amounts of stress on the tightly formed group that is privately running CS right now. Note that Casey is not preparing “his” organisation for this. It doesn’t appear that any of the donation money is being saved (for instance by not hiring Jim and Mattthew but opening a savings account) and long-term thinking doesn’t appear to be a strength of the organisation anyway. Couchsurfing is technically running on “borrowed” time, on finances that will only last as long as new users keep coming in.

An organisation like CS almost has to run on volunteers, unless it drastically changes its business model. So, either we see banner ads, “payed subscriptions”, “golden accounts”, regular “donation drives” or whatever or we’re going to see a financial breakdown. When that happens, and it most likely will, we’ll be here to pick up the pieces.