[Wikimedia-l] Wikimedia (Foundation) endowment

[Theo10011]

On Thu, Mar 14, 2013 at 2:47 PM, MZMcBride <z at mzmcbride.com> wrote:

>
> As I understand it, the yearly annual Wikimedia Foundation budget is about
> $35 million. It costs about $2.5 million to keep the sites operational for
> a year. So even if an endowment weren't large enough to cover well over
> 130 full-time staff members, it could still keep us up and running for a
> while. Assuming $2.5 million, that's about $125 million, using your
> multiply by 50 formula. That's still a shitload of money, but it's much
> less than $2 billion. :-)
>
> I think we need to decide, as a community, whether this is something we
> want. If it is, we should set up an endowment fund sooner rather than
> later, so that people willing to donate to such an endowment have a place
> to put their money, I think.
>

This used to be my pet project for a while. My first edit to strategy wiki
was about an endowment fund[1], I don't think there was anything on the
subject before that one. Stu and Eugene's edit on the subject came later,
so I'll still take some credit for this one. ;)

I brought this up in person to a few board members, and to the foundation
staff on another mailing list an year or two ago. I believe they are all
aware of the idea and its implication. Eugene suggested at some point that
we should come back to this discussion later. The answers were always
ambiguous from what I recall.

There seems to be absence of a long term sustainable financial vision for
the foundation, or if there is, it doesn't seem to be public. The majority
of it seems to revolve around retaining x months of operational reserves
and putting all the chips on the annual fundraiser. I always thought that's
not a very mature financial strategy for an organization.

I started discussing this on strategy wiki, etc. and the first thought was
separating the core and non-core activities, and then separating the
funding models. The core activities are relatively stable, the non-core
differentiate a lot more year on year - moving the non-core to a variable
model where the revenue would define spending, and core activities to its
self-contained sustainable model would be an ideal strategy. The
bare-minimum operational cost of hosting, and being online, could be
covered with such a fund easily, leaving the annual fundraiser target to be
a variable each year without any target, which in turn can define the
spending. The correct calculation,as thomas started alluding to would be -
operating expenses + projected growth (year on year) + annual inflation
rate + reserve/contingency. I had a lot more worked out somewhere according
to tax laws and specific interest rates. Either way, the first implication
would be that this would nullify to some extent, the majority of the
urgency the fundraiser raises, the success of the fundraiser would be
irrelevant to the long term existence of the projects.

Regards
Theo

[1]http://strategy.wikimedia.org/wiki/Proposal:Wikipedia_Fund