[Foundation-l] Wikimedia Foundation 2008-2009 Annual Plan

Robert Rohde rarohde at gmail.com
Wed Jul 2 20:36:31 UTC 2008

Please don't put words in my mouth.  Trying to reduce costs is a good
thing.  Trying to get donated hardware is a good thing.

Anytime you make a budget sometimes you will have unplanned savings, and
sometimes you will have extra expenses.

My reaction is motivated by your comment that "it is GOOD when there is some
conservative bookkeeping", which I disagree with.  Conservative bookkeeping
shouldn't be the goal.  Rather, we want effective bookkeeping that includes
planned contingency funds but is on target more often than not.  It
is too early to say whether the WMF will ultimately have a good track
record, but I would discourage a policy of intentionally overstating likely
spending.  Being conservative, with the intent of being consistently
underbudget, would be a bad thing.  It would imply that one is holding too
many resources back and misrepresenting your needs to the donor community.

AND if there are going to be large variances, then I would want to see that
money put to good use.  For example, if UNICEF (or insert your favorite
large charity) did have the good fortune to decrease their operating costs
by a large percentage, then you can bet they would almost immediately put
more money into feeding starving children (or your appropriate analogy).

Having extra savings is not a bad thing, but unless there is a good plan for
those savings then it is a sub-optimal place to allocate resources.  For
example, if you discover that you don't need to buy servers now, then one
could choose to accelerate hiring etc., which serves the mission more
directly that simply sitting on capital.

I'm not upset with the recent WMF performance (there are much worse things
than saving money), but in the long-run underutilizing capital should
be seen as an anomaly and should not be seen as a desirable goal.

-Robert Rohde

On Wed, Jul 2, 2008 at 12:58 PM, Gerard Meijssen <gerard.meijssen at gmail.com>

> Hoi,
> Ehm, so you are happy when money is spend according to plan as it shows
> that
> the plans were implemented and the budget was used according to plan... Now
> I am really happy when there is a plan that will allow for the spending of
> money according to a plan that will get us the results. I am even more
> happy
> when the people spending the money are smart and find ways to improve on
> the
> budget and spend less. In a company it is profit in a "Not for profit" is
> allows for other / more activities, this is a different kind of benefit and
> it is positive in my book.
> Now when the WMF budgets for the acquisition of hardware and at the same
> time tries to find donors to provide us with the same hardware, I think
> this
> is an excellent way of operating because it allows for the donations not to
> materialise.
> When you are of the opinion that this is not the proper way to do this,
> then
> i would say tough. I prefer a common sense approach that allows to spend
> our
> money as effective as possible. Let me be clear on one thing; the money has
> to achieve a goal. I want to see money spend, others want the WMF to have
> reserves. Having sufficient reserves that prevent the WMF from having to
> rely on donors is in my book excellent management.
> Thanks,
>      GerardM
> On Wed, Jul 2, 2008 at 9:43 PM, Robert Rohde <rarohde at gmail.com> wrote:
> > On Wed, Jul 2, 2008 at 12:10 PM, Gerard Meijssen <
> > gerard.meijssen at gmail.com>
> > wrote:
> >
> > > Hoi,
> > > This is not specific to non profit organisations, it is true for all
> > > organisations. A dollar not spend is a dollar saved and a dollar
> profit.
> > > This is what keeps the bean counters happy :)
> > > Thanks,
> > >       GerardM
> > >
> > >
> >
> >
> > That only helps if your goal is "profit".  For a non-profit, you don't
> want
> > them to have lots of unplanned savings because that implies they have
> > not allocating resources effectively.
> >
> > I don't think Nemo's comment about servers is fair (they are working well
> > by
> > historical standards), but at the same time one can ask: "Does not
> spending
> > this money mean that the mission is 6 months behind where it could be?"
> >  Any
> > real budget will include contingencies and have unplanned variances, but
> at
> > the same time we don't want the budgets to be consistently too high OR
> too
> > low as it generally implies resources are not being allocated as
> > efficiently
> > as they could be towards accomplishing the Foundation's goals.  We want
> to
> > know that unplanned resources go towards making the world better.  Having
> > savings and a contingency fund can be part of that, but it should be part
> > of
> > the plan and not just something one falls into for the lack of other
> things
> > to do.
> >
> > -Robert Rohde
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