Securing sustainable funding is one of the key challenges for open source software projects. Across Europe, various funding programmes at the EU, national and local levels are increasingly recognising the strategic value of open source and supporting its development. Whether through dedicated open source initiatives or broader digital transformation calls, there are growing opportunities to access financial support for open source solutions. This page provides an introduction to the topic of the funding of open source software and helps you identify funding programmes and initiatives – at the EU, national and local levels – that explicitly target open source solutions.
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FAQ
FUNDING MODELS
Open source enables a diverse range of funding approaches, from public budgets to collaborative and research-driven mechanisms:
- Government-led funding
- Municipal co-funding
- Combined public funding, revenue, and donations
- Research and innovation programmes
Read more about each funding model below.
BENEFITS
of open source funding:
- Support for development and maintenance instead of licence fees
- Ability to share investment across multiple organisations
- Creation of reusable digital public goods
- Incremental, modular funding
TOTAL COST OF OWNERSHIP
When budgeting for open source, consider the following:
- Initial hiring of IT staff
- Exit costs for existing software
- Development or implementation of the new software
- Staff training on the new software
- Maintaining the software
- Developing and maintaining the community
The European Union has multiple instruments funding open source software used by the public sector:
- Horizon Europe: general R&I programme
- Digital Europe Programme (DEP): supports digital transformation, including digital public services and interoperability.
- Next Generation Internet (NGI): funds digital commons through NGI Zero and other grants, succeeded by the Open Internet Stack initiative
is directed to projects supporting digital transformation through the EU’s main funding instruments: Horizon Europe and the Digital Europe Programme. Open source projects can qualify under these calls, particularly when they promote interoperability, security, or cross-border public services.
Every €1 invested in open source generates at least €4 in economic value across Europe, thanks to reuse, reduced duplication, and digital innovation. Read more in the economic impact of open source study.
FAQ
Unlike proprietary software, open source solutions may not include upfront licence fees or bundled support packages. This can change how public administrations plan and allocate budgets. For example, while the initial development of an OSS project might be treated as a one-time capital expenditure (CapEx), maintenance and community support are typically ongoing operational costs (OpEx). Administrations should ensure that their financial planning reflects this distinction and allows for flexibility in updates based on user feedback.
Key considerations include:
- Estimating Total Cost of Ownership (TCO) — including development, implementation, staff training, and long-term maintenance.
- Accounting for costs tied to security audits, data migration, and legacy system integration.
- Supporting the broader open source community, which may involve co-development or contributions to shared infrastructure.
Overall, successful OSS budgeting is proactive and adaptable, aligning funding to both technical needs and long-term community sustainability.
Governments and public institutions across Europe are exploring diverse ways to fund open source software:
- Government-led funding: National agencies may provide direct grants, service contracts, or tenders (e.g., Germany’s Sovereign Tech Agency)
- Municipal co-funding: Local and regional administrations often pool resources to develop OSS collaboratively. Examples include Signalen (Netherlands) and eVaka (Finland), where multiple cities share costs based on size or usage.
- Diversified funding: Combining public funds with philanthropy, service revenue, or community donations creates more resilient models. The Spanish platform Decidim shifted to this model to reduce reliance on delayed public grants.
- Research and innovation programmes: EU-wide initiatives such as Horizon Europe, the Digital Europe Programme, Next Generation Internet (NGI) and Open Internet Stack fund open source projects with strategic value for digital infrastructure, interoperability, and cybersecurity.
Many administrations also explore co-funding or crowdfunding arrangements, though the latter must align with national legal frameworks. Choosing the right funding mix depends on the project's scale, scope, and long-term vision.
Public bodies can tap into major EU funding frameworks that encourage digital transformation.
The Digital Europe Programme (DIGITAL) (2021–2027, ~€8.1 billion) funds projects in areas like high-performance computing, cybersecurity and digital public services. Horizon Europe (2021–2027, €93.5 billion), the EU's key funding programme for research and innovation, explicitly prioritises digital leadership. Under Horizon Europe, NGI open calls invite proposals for projects like Fediversity (decentralised social web) and GNU Taler (an open source digital payment system). These calls fund R&D on community-driven open source platforms, with grants in the €5–50 k range for code enhancements. The NGI programme is being succeeded by the Open Internet Stack.
Other programmes such as Interreg and the Technical Support Instrument (TSI) also support the digital transformation of public services. In practice, open source projects can qualify under these calls, especially when they advance interoperability, security or cross-border public services. Public administrations should watch the EU’s funding portal for calls under DIGITAL, Horizon or specialised programmes that explicitly mention open licensing or require open source outputs.
Concerning programmes specifically focused on open source software, a prominent example is Germany’s Sovereign Tech Agency, a public initiative that supports “open digital base technologies” (libraries, protocols, tools) with substantial grants, starting from €50k. Since 2022, it has operated under German public procurement rules and leveraged €24.6 M for critical infrastructure software. For more information on the Sovereign Tech Fund, please read the dedicated case study.
At the EU level, a 2022 Commission‑funded study proposed creating a pan‑European open source fund to target open source projects maintained by an individual or a small group of developers. While that specific fund is still under discussion, the study highlighted the gap in funding for “vulnerable small projects” and recommended EU action.
In general, public administrations respond to relevant calls on the EU Funding & Tenders portal or regional funding platforms. Many calls welcome consortia of public agencies, industry and researchers. To prepare, administrations can leverage OSOR and EU networks: OSOR’s Knowledge Centre and events (e.g., the 30 June 2025 workshop “Funding Open Source: Towards Sustainable Models” ) share best practices.
They can also set up an internal Open Source Programme Office (OSPO) or engage with EU networks like the GovTech4All partnership (a Digital Europe incubator) to learn about funding and procurement models. For specific opportunities, officials should watch calls under Digital Europe, Horizon Europe (Cluster 4), NGI, and national digital agendas.
To keep open source software alive beyond the first grant:
- Diversify funding: combine national, EU, and internal budgets or explore service models to cover ongoing costs.
- Plan maintenance from the start: schedule updates, security patches, and technical support.
- Set up governance: use an Open Source Programme Office (OSPO) or designate staff to manage contributions, compliance, and strategy.
- Engage the community: involve developers, users, and other public administrations to share responsibility.
- Document everything: clear guidelines, code documentation, and contribution processes make it easier for others to take over or scale the project.
The Open Source Observatory (OSOR) has developed an eLearning course on Open Source Software for EU Public Administrations, now available on the Interoperable Europe (IE) Academy.
Module 3 focuses on how public administrations can adopt open source software legally, strategically, and sustainably. It explores the key practical aspects — from licensing and procurement to funding and long-term sustainability. The module takes approximately 30 minutes to complete, and participants can obtain a certificate of achievement upon completion.
Module 3 is structured around three chapters:
- Licensing open source software
- Procuring open source software
- Funding open source software: This chapter provides practical guidance on developing funding models that ensure the sustainability of open source projects. It explores how to design robust financing strategies to maintain secure, reliable, and impactful open source solutions within the public sector.
