In the draft accounts, it is not possible to discover how much has
been spent on staff or admin (such as rent costs for the London
offices). It looks like they may have been spread out under
"programme" and "project" line items.
In comparison in the draft budget for the coming year, "Admin and
fundraising" is a nicely intuitive line item and at over 300,000
pounds for "contracted+necessary", the largest item in the budget
(significantly larger than the "project" budget). Presumably this
indicates that the largest true expense in the last year was staff
costs, so it would be disappointing to avoid showing this more clearly
in the final accounts using natural language, rather than using oddly
different definitions for normal English words between the budget and
the annual report.
I look forward to the final version where hopefully the breakdown of
where the money was spent (and the cause of the declared overspend)
will be more obvious to the casual reader and potential donor/funding
body.
Fae
On 24 March 2015 at 13:14, Michael Maggs <Michael(a)maggs.name> wrote:
Draft annual accounts for the 2014-15 financial year
Today we are releasing our draft annual accounts for the 2014-15 financial
year, ending 31st January 2015 [1]. The contents of these accounts have been
a matter of significant concern for the Board, and we are making this
statement to provide some context and to set out the steps we have taken.
In December 2013 the board approved a budget for 2014-15 based on expected
income of £623,000. Net income over the period was in line with expectations
but expenditure on Wikimania and other projects was not well controlled
during the latter part of last year, and we are facing a projected deficit
of £192,000 as against our original budgeted deficit of £32,000.
While Wikimania 2014 was an international success, for which volunteers, the
Wikimedia Foundation and Wikimedia UK can all take some credit, the
experience was challenging for us as the local chapter. Although we were not
running the conference, we were providing significant staff and logistical
support, and we did so too enthusiastically given that not all of our
expenses were recoverable. Overall, and after allowing for a one-off
Foundation grant of £65,000 to cover our international support, we overspent
by around £45,000.
Our Wikimedians in Residence programme gained real traction over the year
with demand significantly outstripping available funds, resulting in an
overspend of £49,000. Much of this arose from agreements made with several
high-profile organisations late last year which could not have been deferred
without significant reputational damage to the charity. The board had hoped
that these costs could have been delayed until February, when they would
have fallen into the 2015-16 financial year, but have been advised that that
is not possible.
There were smaller overspends on a variety of other project areas as well.
Finally, we had an off-budget net expense of £57,000 during the year,
representing the Chief Executive transition.
These disappointing overspends in 2014-15 have left us with reserves of only
£165,000, which is below the £200,000 level that the board considers to be
the acceptable minimum for a charity of our size.
Action to restore stability
Immediately that the charity's overspends became clear, shortly before the
December 2014 board meeting, the interim CEO, supported by the board,
introduced a moratorium on further non-essential expenditure until a 2015-16
budget could be prepared. In order to allow time for the interim CEO to
review activity the second volunteer strategy day as well as a number of
other projected programme activities were postponed.
Draft budget and plans for 2015-16
We are also today releasing our draft budget for 2015-16 [2]. This is
subject to amendment, particularly on staff costs.
The funds we have available to spend on charitable programmes will be
significantly lower than in 2014-15. There are three main factors:
To ensure charity stability it is crucial that we increase our reserves to
the minimum level of around £200,000. The board has set a core budget for
this year which is break-even or better.
Our grant from the Wikimedia Foundation has been reduced from £353,000 to
£314,000.
For the moment at least the board does not consider it prudent to set a
budget that assumes in advance that the charity will be able to obtain
significant project-based or corporate funding, nor that direct debit income
can be rapidly increased.
The combined effect of these factors is that the board has to take decisive
and fairly radical action to ensure that we can work effectively within our
smaller core budget of £570,000 (a full £242,000 below the amount indicated
as WMUK's projected budget in the FDC bid of October 2014).
To ensure greater clarity and transparency for the future, as well as better
alignment with our strategic goals, our 2015-16 budget will be split into a
variety of categories, of which the first three ('contracted',
'necessary'
and 'should') cover limited core activities that can be supported within the
resources (funds, staff, volunteers etc) we are almost certain to have
available. The remaining two categories ('like to' and 'icing') cover
activities that we can support only to the extent we can expand our resource
base, either by specific project-based or general fundraising, or by
building active volunteer engagement.
Our aim with this project-based approach is to encourage community
involvement with decisions on what we should do and not do, based on an
assessment of which potential projects are best aligned with our strategic
goals. A large part of the assessment must be to decide which projects are
capable of generating sufficient active volunteer support (and fundability
if funds are needed), and then selecting based on those giving the greatest
charitable impact for the resources required.
We will need some new community mechanisms to embed volunteer inputs into
all of this, and we will be discussing widely, including further discussions
at the rescheduled second volunteer strategy day on Saturday 25th July.
WMUK organisational structure
In their comments of November last year the Funds Dissemination Committee
(FDC) said:
“While the FDC understands that reducing Wikimedia UK’s funding might be a
strain on the organization, the FDC hopes it will lead to a productive
re-evaluation of priorities and direction. The ED transition should be seen
as an opportunity to rethink and restructure. The governance reshuffle and
adaptation has been managed well, recommendations brought about by the
governance review have been implemented, and board diversity has been
achieved, which will provide a strong foundation for the coming transition.
At the same time, the FDC notes that it seems difficult to identify a
sustainable and clear staff structure beneath the executive level.”
It is clear to the board that many of the assumptions and plans on which the
current organisational structure was originally built are no longer fit for
purpose. As previously announced, we are already engaged in a review of our
staff structure. This is currently in a period of consultation with the
staff concerned and it would be inappropriate to discuss in detail. However,
the Board’s intention is to have a more streamlined organisation, better
focused on our strategic goals, better able to engage with and involve
volunteers of all kinds, and more appropriate to the level of resource we
have.
The committee further noted:
“The FDC urges Wikimedia UK to carefully consider its plans to hire
additional fundraising staff, and to articulate a clear strategy for how
that position will benefit the organization and the movement. The FDC
acknowledges that there may be many untapped resources in Wikimedia UK’s
context, but resources will need to be clearly identified in order to be
targeted effectively.”
The board believes that the charity's existing capacity and model for
fundraising is not adequate, and we cannot at present recommend a core
budget that assumes significant project-based or general contributions from
trusts, foundations and corporates. The board is seeking a permanent Chief
Executive with significant expertise in this area, and who is capable of
taking a stronger personal lead within a restructured staff team.
____________
Michael Maggs
Chair, Wikimedia UK
on behalf of the board
[1]:
https://wikimedia.org.uk/wiki/File:Draft_statutory_accounts_2014-15_as_at_M…
[2]:
https://wikimedia.org.uk/wiki/File:Draft_2015-16_budget_for_board_meeting_o…