Thanks Eugene! This is essentially what I would've written, had I gotten there first. So thank you.
I will just add: everyone wants an endowment campaign -- the issue is not whether to do it; the issue is when to do it. We're still developing our pool of donors (especially the chapters, who are with the exception of the German chapter very new to fundraising), and we are still finding our voice when it comes to fundraising. Given that --and given that we have lots of work to do improving our service to readers, and donors are typically more motivated to fund necessary work, before they'll fund permanence -- that's why we're currently focusing on growing the number of donors. Walking before running.
And yes, Ziko, thanks for calling out the new revenue strategy: it's significant. I am really grateful that hundreds of thousands of ordinary people are willing to fund the work we do: it's by far the best model for us from an ideological standpoint. Most non-profits are in two completely unrelated businesses: the business of mission activity, and the business of revenue generation ----- we are lucky that for us, mission activity and revenue generation can be 100 per cent aligned.
I am proud and happy about our new revenue strategy. We're in an enviable position, in that we don't need to make unhappy compromises -- instead, we have the luxury of being able to focus on the actual mission work we're trying to get done :-)
Thanks, Sue
-----Original Message----- From: Eugene Eric Kim eekim@blueoxen.com Sender: foundation-l-bounces@lists.wikimedia.org Date: Wed, 30 Jun 2010 09:45:49 To: Wikimedia Foundation Mailing Listfoundation-l@lists.wikimedia.org Reply-To: Wikimedia Foundation Mailing List foundation-l@lists.wikimedia.org Subject: Re: [Foundation-l] 2010-11 Annual Plan Now Posted to Foundation Website
On Wed, Jun 30, 2010 at 8:38 AM, phoebe ayers phoebe.wiki@gmail.com wrote:
A small point -- I don't know who the "you" refers to here -- me? -- but when *I* ask for an endowment, it is not because I think the current levels of support suffice; that's a different question. It's because I don't want the long-term support for Wikimedia to be dependent on our ability to fundraise increasingly large amounts from year to year. Fundraising above and beyond such an endowment is fine and good and necessary as well. I have heard that raising an endowment was rejected by the strategy process because it was hard; I don't know what that means, exactly, but raising an extra $20M in a recession is hard, too.
That was from me, and I obviously oversimplified my explanation in an attempt to be concise. Gerard and Ziko have already raised critical points that entered into the decision to focus on many small donors as an ongoing strategy. To expand on this, see this thread started by Sue a few weeks ago on strategy wiki:
http://strategy.wikimedia.org/wiki/Talk:Strategic_Plan/Movement_Priorities#R...
In regards to the endowment question, as you note, the motivation for an endowment drive is long-term sustainability and some level of protection from recession. The cost of doing an endowment drive is enormous. There is usually an 18 months ramp up time simply to start the drive, and you need a huge staff to manage it. That work comes at the expense of other work. Furthermore, endowment drives also typically court high wealth donors aggressively. We do that now, but that's not our focus, and I think that a lot of good things emerge from prioritizing many small donors.
What the Financial Sustainability Task Force (with help from the Bridgespan Group) found was that:
1. Our revenue has grown significantly over the past few years, despite the recession and a tiny fundraising team that has not grown. This is because we aren't close to tapping our potential, and it also speaks to the fundraising team continually getting smarter in how it works.
2. When we compare Wikimedia Foundation to other similar nonprofits, it's clear that our potential revenue is much larger, again despite the recession.
3. In particular, our potential is huge in other countries besides the U.S., which several people have already pointed out in this thread. Courting donations in other countries has a lot of positive benefits. It helps strengthen our chapters, and it increases international participation and ownership into our projects.
In summary, it's not clear that an endowment drive is a more effective sustainability strategy than our current model, and the opportunity cost would be much higher.
If you look at the targets at:
http://strategy.wikimedia.org/wiki/Strategic_Plan/Movement_Priorities#Goal:_...
you'll notice that the proposed financial goal is listed as the number of donors, not as a revenue figure. That speaks to the importance of getting many people to contribute, which I think jives well with our community's philosophy in general.
=Eugene