[Foundation-l] Report to the Board April 2009

[Veronique Kessler]

Hi Thomas and others following this thread,

I am following up with a more detailed response.  Since the Board report 
was for the month of April, but our fiscal year ended June 30, I'd like 
to re-cap the fiscal year's results for the operating budget.
 
The plan for 2008-09 called for $7.3 million of revenue and $5.9 million 
in expenses which would have resulted in a reserve of $1.4 million. Our 
current estimate (we are still closing up the books) are that we will 
have revenue of $7.7 million and expenses of $5.2 million which will 
result in a reserve of $2.5 million.
This is good news, but at the beginning of the last online fundraiser, 
back in October and November 2008, it looked like we might not make our 
target for community gifts which was $3 million for the entire year 
(much of it concentrated from October through January).    Thanks to a 
few different factors and the personal appeal from Jimmy,  the situation 
turned around and we found not only that community gifts would well 
exceed the $3 million,  they would be the largest source of revenue for 
the 2008-09 fiscal year and would help make up for shortfalls in other 
revenue areas.

Meanwhile, our expenses were lower than plan because we slowed spending 
and stopped some spending altogether from October to January.  This was 
in response to both the global economic crisis and concerns that 
donations might be impacted significantly by the crisis.

Instead, we had a strong year and now have the task of making the best 
decisions regarding reserve amounts.  As Sue said, we can't and do not 
want to continually grow reserves as donors like to see their money 
going towards productive work.  At the same time, we want to have a 
certain level of security that when unforeseen events occur, we can be 
confident that we can keep the servers running, keep the lights on and 
all will be well with Wikimedia's projects.

Feel free to email with other questions,

Veronique

Thomas Dalton wrote:
> 2009/8/12 Veronique Kessler <vkessler at wikimedia.org>:
>   
>> Your comment is very timely.  We are, and have been, thinking about the
>> best solution regarding extra money.  First, we want to consider an
>> appropriate "reserve" amount, i.e. this can range from 3 months of
>> expenses for some organizations to 2 years for others.  So, we are
>> discussing this; there are lots of theories of the perfect amount.
>> Beyond that, we are considering things like investment strategy, the
>> creation of an endowment, etc.-things that can help towards ongoing
>> financial sustainability.
>>     
>
> Thank you both for your replies. I drafted a Reserve Policy for
> Wikimedia UK so I have some idea of the challenge facing you there!
> I'm really glad you are giving the subject of an endowment serious
> thought, I think it would be really good to have that kind of
> sustainability in the future.
>
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