Thomas Dalton wrote:
On 22/09/2007, Thomas Dalton thomas.dalton@gmail.com wrote:
That's not quite how it works. The donations that are coming in aren't going to be changing, so WMF will still be getting most donations in USD. Except, because of the poor exchange rate, it is much more expensive to do just about everything in the UK, including renting flats, renting office space, buying food, buying bandwidth, etc. The donations wouldn't go nearly as far.
If hosting is staying in the US, that's quite a lot of the expenses that will still be being paid in USD. And it's not that the pound is strong, it's the dollar that's weak, so any non-USD donations can be spent in the UK without problems. I haven't looked at the budgets and donation distributions to see how well it would work, but it shouldn't be too big a problem. Remember, WMF is non-profit - one of the biggest problems for profit making businesses is that they have to report profits in one currency, so even if the actual money isn't being converted, they still have to convert it on paper - the WMF doesn't have to worry about that.
I've just looked up the numbers. So far this year, 26% of donations have been in something other than USD. In 2006, Salaries and Wages and Operation, which are the only two things that would change currency (and not all of them, at that), constituted 20% of total expenditure. This is not a particularly accurate way of working out how a change of currency would affect things, but I think it's close enough - the change in currency would not be a serious issue.
Exchange rates alone have their effect over a much longer period of time. The Euro and US$ were last at par in 2002; now the Euro buys US$1.36. At the peak in June 2001 the Euro bought US$0.85. So what would represent 26% of revenues now would have represented 20.3% when the U.S. dollar was at its peak. That 6% difference may not seem like much, but that's because other country fundraising is still relatively small. This is a simplified calculation because I have only considered Euros, but similar things would happen with other currencies.
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