In December 2013 the board approved a budget for 2014-15 based on expected income of £623,000. Net income over the period was in line with expectations but expenditure on Wikimania and other projects was not well controlled during the latter part of last year, and we are facing a projected deficit of £192,000 as against our original budgeted deficit of £32,000.
While Wikimania 2014 was an international success, for which volunteers, the Wikimedia Foundation and Wikimedia UK can all take some credit, the experience was challenging for us as the local chapter. Although we were not running the conference, we were providing significant staff and logistical support, and we did so too enthusiastically given that not all of our expenses were recoverable. Overall, and after allowing for a one-off Foundation grant of £65,000 to cover our international support, we overspent by around £45,000.
Our Wikimedians in Residence programme gained real traction over the year with demand significantly outstripping available funds, resulting in an overspend of £49,000. Much of this arose from agreements made with several high-profile organisations late last year which could not have been deferred without significant reputational damage to the charity. The board had hoped that these costs could have been delayed until February, when they would have fallen into the 2015-16 financial year, but have been advised that that is not possible.
There were smaller overspends on a variety of other project areas as well.
Finally, we had an off-budget net expense of £57,000 during the year, representing the Chief Executive transition.
These disappointing overspends in 2014-15 have left us with reserves of only £165,000, which is below the £200,000 level that the board considers to be the acceptable minimum for a charity of our size.
Action to restore stability
Immediately that the charity's overspends became clear, shortly before the December 2014 board meeting, the interim CEO, supported by the board, introduced a moratorium on further non-essential expenditure until a 2015-16 budget could be prepared. In order to allow time for the interim CEO to review activity the second volunteer strategy day as well as a number of other projected programme activities were postponed.
Draft budget and plans for 2015-16
We are also today releasing our draft budget for 2015-16 [2]. This is subject to amendment, particularly on staff costs.
The funds we have available to spend on charitable programmes will be significantly lower than in 2014-15. There are three main factors:
To ensure charity stability it is crucial that we increase our reserves to the minimum level of around £200,000. The board has set a core budget for this year which is break-even or better.
Our grant from the Wikimedia Foundation has been reduced from £353,000 to £314,000.
For the moment at least the board does not consider it prudent to set a budget that assumes in advance that the charity will be able to obtain significant project-based or corporate funding, nor that direct debit income can be rapidly increased.
The combined effect of these factors is that the board has to take decisive and fairly radical action to ensure that we can work effectively within our smaller core budget of £570,000 (a full £242,000 below the amount indicated as WMUK's projected budget in the FDC bid of October 2014).
To ensure greater clarity and transparency for the future, as well as better alignment with our strategic goals, our 2015-16 budget will be split into a variety of categories, of which the first three ('contracted', 'necessary' and 'should') cover limited core activities that can be supported within the resources (funds, staff, volunteers etc) we are almost certain to have available. The remaining two categories ('like to' and 'icing') cover activities that we can support only to the extent we can expand our resource base, either by specific project-based or general fundraising, or by building active volunteer engagement.
Our aim with this project-based approach is to encourage community involvement with decisions on what we should do and not do, based on an assessment of which potential projects are best aligned with our strategic goals. A large part of the assessment must be to decide which projects are capable of generating sufficient active volunteer support (and fundability if funds are needed), and then selecting based on those giving the greatest charitable impact for the resources required.
We will need some new community mechanisms to embed volunteer inputs into all of this, and we will be discussing widely, including further discussions at the rescheduled second volunteer strategy day on Saturday 25th July.
WMUK organisational structure
In their comments of November last year the Funds Dissemination Committee (FDC) said:
“While the FDC understands that reducing Wikimedia UK’s funding might be a strain on the organization, the FDC hopes it will lead to a productive re-evaluation of priorities and direction. The ED transition should be seen as an opportunity to rethink and restructure. The governance reshuffle and adaptation has been managed well, recommendations brought about by the governance review have been implemented, and board diversity has been achieved, which will provide a strong foundation for the coming transition. At the same time, the FDC notes that it seems difficult to identify a sustainable and clear staff structure beneath the executive level.”
It is clear to the board that many of the assumptions and plans on which the current organisational structure was originally built are no longer fit for purpose. As previously announced, we are already engaged in a review of our staff structure. This is currently in a period of consultation with the staff concerned and it would be inappropriate to discuss in detail. However, the Board’s intention is to have a more streamlined organisation, better focused on our strategic goals, better able to engage with and involve volunteers of all kinds, and more appropriate to the level of resource we have.
The committee further noted:
“The FDC urges Wikimedia UK to carefully consider its plans to hire additional fundraising staff, and to articulate a clear strategy for how that position will benefit the organization and the movement. The FDC acknowledges that there may be many untapped resources in Wikimedia UK’s context, but resources will need to be clearly identified in order to be targeted effectively.”
The board believes that the charity's existing capacity and model for fundraising is not adequate, and we cannot at present recommend a core budget that assumes significant project-based or general contributions from trusts, foundations and corporates. The board is seeking a permanent Chief Executive with significant expertise in this area, and who is capable of taking a stronger personal lead within a restructured staff team.
____________
Michael Maggs
Chair, Wikimedia UK
on behalf of the
board
[1]:
https://wikimedia.org.uk/wiki/File:Draft_statutory_accounts_2014-15_as_at_March_2015.pdf
[2]:
https://wikimedia.org.uk/wiki/File:Draft_2015-16_budget_for_board_meeting_of_7_March_2015.pdf