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