I've been writing free software since 1997. At no time was there any need for a "managing organization". The notion that it can "catalyze community-driven development" is utter nonsense.
This NSF effort is obviously being driven by people who have no idea about self-motivated software development.
As a free software developer I need hardware and I need funding for travel to conferences.
The only "managing organization" that makes any sense would be a small group of accountants. Their job would be to act like a University provost. They manage grant funding, dispersing funds, manage receipts, and handle taxes. Most government and business organizations won't give grants to free software developers because they don't know where the money goes.