[Foundation-l] 2010-11 Annual Plan Now Posted to FoundationWebsite

[Gerard Meijssen]

Hoi,
I agree that donors are happy to provide to these other goals as well. The
issue is however that they go together with the essential goal of keeping
our infra structure running. Take away the essentials from the equation,
give the impression that there are plenty of reserves and the need can no
longer be properly communicated.

I know of charities who lost money because of the economic downturn and lost
their ability to raise funds at the same time. Having large reserves and
protecting them from inflation is really hard. Why should people give hard
currency only to see its value diminish over time ?

The best other argument against going for an endowment is that we do not
even provide proper support for our projects as it is. At this time we do
not support projects other then Wikipedia related, we do not support our
volunteer developers (when they do not work on the centrally managed
projects).. we do not support the technical needs for many of our languages.
Thanks,
      Gerard



On 5 July 2010 11:31, Sebastian Moleski <info at sebmol.me> wrote:

> Hi Gerard,
>
> On Mon, Jul 5, 2010 at 10:58 AM, Gerard Meijssen
> <gerard.meijssen at gmail.com>wrote:
>
> > Hoi,
> > One of the reasons, for many the only reason for giving a\t the annual
> > fundraising drive is exactly to provide money to maintain our
> > infrastructure. Take that away and you take away the reason to give. Once
> > people get it in their mind that we have reserves to pay for our
> > infrastructure, they will remember this and not support us for our other
> > goals.
> >
>
> In my experience, donor motivation is much more complex than that. While
> the
> donor survey is still in preparation, anecdotal evidence suggests that
> donors do not just provide donations to cover our infrastructure but also,
> for example,
>
>   - as a voluntary payment for using Wikipedia
>   - as an act of charity to support education for people not typically
>   provided with decent educational material (i.e. the economically
>   disadvantaged)
>   - as an act of appreciation for the work of thousands of volunteers
>
> Setting up an endowment to cover part of the fixed costs of running the
> Wikimedia projects is something that IMHO is definitely sellable to donors.
> Check also the rationales given at the moment for not pursuing an
> endowment:
> they are not related to donor motivation but rather to effort required,
> opportunity cost involved, and funding sources cannibalized.
>
> In general, I think the arguments made against pursuing a general endowment
> are sound, at least for the moment. For an endowment to be meaningful, it
> needs to be fairly big. Let's say that we want to cover half of the current
> year's technology budget (about $1.65 million) and we can expect an annual
> ROI of 5%. The endowment would have to be at least $33 million to cover
> that.
>
> That's not an impossible amount to raise, in general, but it's definitely
> not easy. You would have to spread this out over several years considering
> that our existing donor base doesn't yield that sort of revenue. So it
> might
> take you, let's say, five years to get this together. Now it's 2016 and
> you've got a $33 million endowment yielding $1.65 million payout. Yet, from
> all we can tell at the moment, our tech budget won't be anywhere near $3.3
> million in 2016 (it's already planned to be $9.8 million in 2011). So what
> to do?
>
> Personally, I think we should an endowment drive when we've found our
> donation revenue, but also our operational spending to approximately level
> off. We are in a period of rapid operational growth, which will end
> eventually. When that happens, we will have a better understanding of our
> own actual financial need as well as our worldwide fundraising potential.
> Until then, let's focus on what has the most benefit at the least cost
> which, as it turns out for the moment, is community giving.
>
> Best regards,
>
> Sebastian Moleski
> President
> Wikimedia Deutschland
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