/Follow up note:/ On the advice of our accountant I have struck the
paragraph relating to Wikimedians in Residence as it probably gives a
misleading impression. In fact, direct cost spend on this programme was
almost exactly as expected, and the £49,000 figure is an accounting
artefact resulting from the treatment of a gift in kind plus salary
costs. Our accountant advises that the two major items which contributed
to the overrun of the deficit were (1) Wikimania and (2) the CEO
transition expenses.
The link to the Wiki is:
*From:* Michael Maggs <Michael(a)maggs.name>
*Date:* 24 March 2015 13:14
*To:* "wikimediauk-l(a)lists.wikimedia.org"
<wikimediauk-l(a)lists.wikimedia.org>
*Subject:* WMUK update, 24 March 2015
*Draft annual accounts for the 2014-15 financial year
*Today we are releasing our draft annual accounts for the 2014-15
financial year, ending 31^st 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
besplit 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 givingthe greatest charitable impactfor 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 25^th July.
*WMUK organisational structure*
In their comments ofNovember lastyear theFunds 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 theassumptions and plans on
which the current organisational structure was originallybuilt are no
longer fit for purpose. As previously announced, we are already
engaged in a review of our staff structure. Thisis 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'sexisting 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
fromtrusts, foundations and corporates. The board isseekingapermanent
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…