I commented just the other day on how the Foundation seems likely to fall short of its budget with the way the current fundraiser is going. I did some poking around, and actually this year's fundraising is pretty much on par with last year's: in the first 31 days of the fundraiser this year, Wikimedia raised $797,418.54. In the 31 days of last year's fundraiser, Wikimedia raised $983,058.43, but $286,800 of that was in the form of a single large anonymous donation. If you consider funds raised from the community only (and not the extraordinary donation) fundraising this year slightly outperformed last year. Given the declining economic conditions, especially in the United States, this is actually quite good. (Quite frankly, if people have a choice between giving to their local food bank and to Wikimedia, please give to the food bank. A website does no good to someone who is starving.)
And, it's probably also enough. Yes, it's well short of the $4.6 million that is budgeted for the upcoming year, and it's even well short of the 2.5 million that is allocated to "technology". But that number is larger than is absolutely required; it includes significant expenses for hardware replacement and expansion that could, if necessary, be deferred. A more realistic number for the absolute minimum required to provide the core services is about $1 million, although that number probably entails some reduction in service quality. With over $800,000 down from the fundraiser, it seems reasonable that ongoing base ratea donations will net the remaining amounts to meet core services over the next year. So while the situation certainly is not rosy, it's not dire either. The Foundation can continue its core mission, although perhaps with some compromise of quality of service.
On one condition: it must not squander money on extravagances that are outside that core mission. I've seen lots of talk from people about the "educational opportunities" that have been passed by. And the simple fact is that now is not the time to go chasing them. The Foundation still doesn't have the infrastructure to be looking to expand its scope of operations. It still needs to build a solid infrastructure to support its core mission (publishing Wikipedia and its sister projects) before it tackles other lines of activity. And it still needs to develop a stable, coherent system of community-based governance. Until such time as Wikimedia can complete an audit on time and without pain, it's not ready to do that. It's bad enough that the Foundation is already committed to an expensive cross-country move; that will absorb a lot of money that could otherwise be spent elsewhere.
And that's going to remain the case even if someone comes up with a bunch of "angel money" from somewhere. Setting aside issues related to the "public support test" (charities in the US aren't supposed to take more than 2% of their income from any one source), the governance just isn't there yet. In some ways, the two are related: the lack of governance is why the money isn't there yet. After all, it was a lack of governance that led to the books being in total disarray in the first place. Throwing money at the problem won't solve it; the culture has to change. And I don't see that it has yet; too many people have been actively trying to prevent the development of effective governance.
As to why that would be going on, I think I will wait until the next post.
And, it's probably also enough. Yes, it's well short of the $4.6 million that is budgeted for the upcoming year, and it's even well short of the 2.5 million that is allocated to "technology". But that number is larger than is absolutely required; it includes significant expenses for hardware replacement and expansion that could, if necessary, be deferred. A more realistic number for the absolute minimum required to provide the core services is about $1 million, although that number probably entails some reduction in service quality. With over $800,000 down from the fundraiser, it seems reasonable that ongoing base ratea donations will net the remaining amounts to meet core services over the next year. So while the situation certainly is not rosy, it's not dire either. The Foundation can continue its core mission, although perhaps with some compromise of quality of service.
On one condition: it must not squander money on extravagances that are outside that core mission. I've seen lots of talk from people about the "educational opportunities" that have been passed by. And the simple fact is that now is not the time to go chasing them. The Foundation still doesn't have the infrastructure to be looking to expand its scope of operations. It still needs to build a solid infrastructure to support its core mission (publishing Wikipedia and its sister projects) before it tackles other lines of activity. And it still needs to develop a stable, coherent system of community-based governance. Until such time as Wikimedia can complete an audit on time and without pain, it's not ready to do that. It's bad enough that the Foundation is already committed to an expensive cross-country move; that will absorb a lot of money that could otherwise be spent elsewhere.
And that's going to remain the case even if someone comes up with a bunch of "angel money" from somewhere. Setting aside issues related to the "public support test" (charities in the US aren't supposed to take more than 2% of their income from any one source), the governance just isn't there yet. In some ways, the two are related: the lack of governance is why the money isn't there yet. After all, it was a lack of governance that led to the books being in total disarray in the first place. Throwing money at the problem won't solve it; the culture has to change. And I don't see that it has yet; too many people have been actively trying to prevent the development of effective governance.
As to why that would be going on, I think I will wait until the next post.
Sometimes you have to spend money to get money. The Foundation most needs a well-run, professional staff overseen by a more experienced board that's a mix of dedicated Wikipedia types (like the current board) but also heavy hitters: university presidents, corporate CEOs, perhaps someone like the former Librarian of Congress.
ReplyDeleteWith internal financial controls, a responsible board and a competent professional staff, major foundations would be happy to give large amounts of money to to the Foundation.
A town of 25,000 people raises $>1 million in donations to build a church or a library. $1 million should be chicken feed for an undertaking as ambitious as Wikipedia. But so far, that hasn't been true for several internal reasons that I'll let others pick apart.
The move to San Francisco, while expensive, is a good idea, putting the Foundation in the middle of the world's biggest high tech talent pool -- and the most likely set of sugar daddies.
Indeed, sometimes you have to spend money to get money. But there is a name for when you spend more money than you have: Bankruptcy.
ReplyDeleteAs far as I can tell, Wikipedia does not have savings. Nor does it have substantial assets that it can sell off without shutting down, unless you consider its soul to be something the world could accept it selling.
Kelly's post is making several important points. (1) Things aren't bad, the Foundation has brought in what it's always brought in. (2) What it brought in isn't just more than enough to keep things going in limp-mode, it is enough to keep things going as they have been .. pretty well. (3) But it hasn't brought in enough to do anything astonishingly expensive, like hire a bunch of high price tag people.
What she didn't say directly but what should be obvious, is that the foundation has not yet managed to improve its fund raising, at all, and much less to the extent needed for the sorts of grand visions that it is floating now.
These things take time, and I have complete confidence that they will get there eventually. The world wants and needs their product, after all.
I think that Mr. Wales needs to remember that no matter what his high flying business buddies at Wikia say, the entire world does not all run on Internet time. A few months ago I thought that wales had *already* sold Wikipedia out, because I was confused about his Wikia company. The news gets it wrong a lot of the time and these sort of issues take a while to settle down in the minds of the public, so it may be several years before Wikipedia reaches its full fund raising potential.
Since Wikipedia is powered by the love of the world, and not the blood money of investors and advertisers, it has the time to grow into its shoes.
And since Wikipedia is probably viewed by a hundred thousand people every day it shouldn't take much more polish to really bring in the donations once the public realizes it's not some corporate sellout scam.
Thanks for the thoughtful post Kelly.
"And it still needs to develop a stable, coherent system of community-based governance."
ReplyDeleteAfter 6 years, one would think that a functional model of community self-regulation would have emerged.
But Wikipedia appears to be run much the same way King John ran his corrupt regime just prior to the advent of the Magna Carta.
Whether the admins will reprise the historical model of the Barons vs King John remains to be seen.
Frankly, my hopes for any kind of enlightened advance in Jimbo's governance model is dwindling.
Kelly you said "publishing Wikipedia"! How dare you?! You're going to bring up all kinds of Section 230 questions, talking that way. You rabble-rouser.
ReplyDeleteAs for Commenter #2 saying it will just "take time" for people to realize that Wikipedia isn't a scam related to Wikia... Erm, I think the more time we allow, the more people realize it is in fact a corporate sellout scam. Wikipedia serves up 150,000 links to Amazon.com and its subsidiary IMDB.com. Amazon invested $10 million in Wikia. You do the math.
Odd that they lump the cost of salaries in with operational "technology" expenses like bandwidth and servers. Unbundle this, and we may well find that less than half the $4.6 million budget is earmarked for servers and bandwidth, with the rest eaten up by overhead: travel, office expenses, salaries, California relocation, self-promotion, consultants' fees, Wikimania[tm] convention expenses and $55,000 worth of board meetings.
ReplyDeleteOne point on which I'm very unsure is the ramifications of using individual local chapters to get tax-exempt status in various other countries. Effectively, these would operate as « prête-nom » or sockpuppet entities to meet requirements that a tax-exempt charity have local structures and an accountable organisation in those countries. However, if spending is out of control at WMF, couldn't the nominal operators of any of the local chapters created to funnel donations from abroad be potentially open for big liability under their home country's tax law?
Even if WMF (and the Chapters Committee) do manage to micro-manage the local chapters from stateside ("no, thou shalt not include a maple leaf in the proposed WMF Canada guidelines... thou has offended the mighty Visual Identity Guideline... be damned...") the names of locals are still going to be on those respective national chapter boards, as that's a requirement to get registration as a non-profit in all these countries.
I would not want to be on the board of Wikimedia Porchesia or whatever sock-puppet local foundation operates to collect for WMF abroad if the questionable "let's travel the world, and bill it to Wikimedia" junkets continue. The local chapters have little or no say in anything, but those who lend their names to get the local tax-exempt non-profit status may find that they are liable or at least legally accountable for every penny collected through their chapters.