Including the $100 million endowment, the WMF will now have investments of around $200 million (excluding cash and cash equivalents), for an annual investment income of over $10 million. That is already enough to run core services. Wikimedia posted total expenses of $3.5 million in 2007/2008, a year after Wikipedia became a global top-ten website.
Well, it's not 2007 anymore. Just because it cost $3.5 million in 2007 doesn't mean it'd cost $3.5 million now. I don't know enough about the current financial situation, staff, data centre expenditure, hardware, etc. to state whether $10 million is actually enough to continue to maintain the infrastructure required for the project. Could you share your breakdown and financial analysis?
I recall Erik (Möller) saying[1] here on this list, around the time the idea of an endowment took shape:
WMF has operated in the past without staffing and with very
minimal
staffing, so clearly it's _possible_ to host a high traffic
website on
an absolute shoestring. But I would argue that an endowment,
to
actually be worthwhile, should aim for a significantly
higher base
level of minimal annual operating expenses, more in the
order of
magnitude of $10M+/year, to ensure not only bare survival,
but actual
sustainability of Wikimedia's mission. The "what's the
level required
for bare survival" question is, IMO, only of marginal
interest,
because it is much more desirable, and should be very much
possible,
to raise funds for sustaining our mission in perpetuity.
Now the annual $10M+ of operating expenses Erik spoke of were already for more than
bare survival – they were for what he called "actual sustainability of Wikimedia's
mission."
Right now, the WMF collects about 15 times as much, while still
pretending to the public that Wikipedia "really needs" their money "this Friday" to
"stay online", "to protect Wikipedia's independence," etc. What does that last phrase even mean, given that the WMF is by any definition bigger and wealthier than ever?
The WMF is $200 million richer today than it was in 2015,
when the Washington Post asked, "Wikipedia has a ton of money, so why is
it begging you to donate yours?[2] (At the time I actually thought we had
turned a corner, hence I am the only one quoted in that article as saying the
problem had been satisfactorily addressed. More fool me!)
Latin America is currently being treated
to fundraising banners telling the public to give the WMF more money to
"show the volunteers that their work matters" – the same wording the
WMF just withdrew after two weeks or so when the Brazilians complained[3]. That wording runs along with the other familiar banner messages, like "humbly" asking people to donate "to defend Wikipedia's independence", etc.
At least this year's India fundraising drive has been cancelled (for
now, who knows ...).
I think this is why we need more cohesion between language communities. When the English fundraising banners run, there is the annual moan about how the banners are misleading, annoying, too big, too persistent, too dishonest, not classy, manipulative, etc. And then January comes, everyone breathes a sigh of relief, and forgets ... until next November.
Meanwhile, though, the exact same banners start running somewhere else on the globe. And when the Brazilians get rid of one banner, the same banner starts running a couple of weeks later in neighbouring Argentina. Even if an objectionable wording is dropped to placate one subset of the community, the objection is never really taken on board – the WMF just moves to a new target unaware of the previous controversy, and carries on as before. I can't think of a better definition of "Divide et impera".
Let's just note: with $100m in the Endowment and another $100m in short-term investments (not to mention another $70m in cash and cash equivalents, per the 2019/2020 audit report), the WMF has got to the point Erik envisaged above. It's able to ensure the "actual sustainability of Wikimedia's mission" just from the interest its investments accrue, and has got there in half the time anticipated.
The problem for me – and many other rank-and-file volunteers – is not the idea of an endowment as such, but fundraising messages saying "Wikipedia really needs you this Tuesday" to donate money so Wikipedia can "stay online", "protect its independence", etc., or "to show the volunteers their work matters".
The WMF creates the impression that it struggles to keep Wikipedia up and running; people then feel scared or guilty, think Wikipedia is struggling, or dying, or will soon put up a paywall;[2] and the WMF does little to correct that mistaken impression, even when directly asked about it as in Katherine's recent The Daily Show interview[3]. One is left with the uncomfortable conclusion that the WMF creates and fails to correct that false impression because it benefits financially from it.
Indeed, as the endowment grows I would expect our fundraising messaging to change, from talking about donations being required to maintain the projects, to instead highlighting the new developments that donations enable. As mentioned before, I don't know if we're there yet. I look forward to us getting there.
We have "been there" for a long time. I pray that one day I will see a WMF fundraising banner that does not threaten that the lights will go out, or Wikipedia will lose its independence and be taken over by ... who exactly?
(I'll ignore your nonsenscial remark about the WMF somehow profiting from this.)
Well, let's look at the video[4] and let's see what's missing. In the video, Noah comments on
the fundraising banners which he says used to irritate him much. But then,
reflecting on the cost of a traditional encyclopaedia set, he adds,
"I wonder
if that has been part of the reason you’ve been so successful in remaining
neutral. When you don’t have profits, you are now in a space where you don’t
try to generate profits. The downside of it means you often struggle to have
enough money to keep Wikipedia up and running. So, two parts. One, is that true
and how does it affect you, and then two, Why would you make this thing if it’s
not going to make you money, why, if it’s going to be a non-profit?"
Katherine[5] makes no effort to dispel the idea that the WMF "often struggles to have enough money to keep Wikipedia up and running", but talks at length about how the WMF doesn't try to sell you anything and doesn't have ads.
I am reminded of a Middle Eastern parable:[6]
Nasrudin
used to take his donkey across a frontier every day, with the panniers loaded
with straw. Since he admitted to being a smuggler when he trudged home every
night, the frontier guards searched him again and again. They searched his
person, sifted the straw, steeped it in water, even burned it from time to
time. Meanwhile he was becoming visibly more and more prosperous.
Then he
retired and went to live in another country. Here one of the customs offices
met him, years later.
“You can
tell me now, Nasrudin,” he said. “Whatever was it that you were
smuggling, when we could never catch you out?”
“Donkeys,”
said Nasrudin.
I disagree, SJ. The Meta page[1] has a blue progress bar showing how much money is in the Endowment. To me it is incompatible with the idea of a wiki – a website designed to support continuous updates – for such a progress bar to be up to a year out of date. It's not what a reasonable reader of that page would expect.
"People expect wikis to be updated, and information on the endowment is on a wiki, therefore we should have monthly updates on the endowment" isn't a very compelling argument. I don't see why the reporting cadence should go beyond what is typically expected of endowments in the nonprofit space.
If you have a problem with that particular bar on that page on Meta for some reason, perhaps a disclaimer about the last time it was updated could be added. That seems like a much simpler solution than drastically increasing the financial auditing and reporting overhead.
Do you think it involves a drastic increase in financial and auditing overhead for the WMF to know how much money it has in its Endowment? Surely, the Tides Foundation knows how much money enters its accounts, just like any bank can give you the balance of your account any day.
This said, your suggestion to note on the page when the blue bar was last updated is a practical and sensible one, regardless of how often the bar is updated.
Best,
Andreas
[5] Katherine's annual compensation alone was about $400,000, equivalent to 200,000 Indian readers donating the suggested 150 Rupees
[6] Idries Shah, The Sufis, p. 59
