[WikiEN-l] Foundation audit

Mon Feb 11 09:57:25 UTC 2008

gwern0 at gmail.com wrote:
> So, the audit was released a little while ago (if you missed it, the important thing is at <http://wikimediafoundation.org/wiki/Image:Wikimedia_2007_fs.pdf>). I'm a little surprised at the general silence here - did I just miss the threads or something?

Actually, me too :-)

> Anyway, I read through it carefully and found it of great interest. A number of points stuck out at me in particular:
> 
> # Isn't it interesting how much Google stock was donated? On top of what I hear were previous donations? Some of the Googlers must like us.

I am not sure what you see as "interesting" here. Stock may be owned and 
given by anyone. Not Google guys only.

> # Wow, that's quite a bit to spend on salaries. And I think the amount is only going to go way up, what with Erik Moeller abruptly
going from non-paid to paid status, and all the other hires. It strikes 
me as odd to see employee expenses rising past
equipment and hosting costs, but I suppose that just marks me as being a 
product of the old days where the mission of the Foundation
was seen as keeping the servers running (and not whatever else the 
Foundation does these days).

The same (board)/staff who
* negotiated much better hosting costs (which decrease operating costs)
* provided a lot of optimization work (see Tim email)
* got hardware donations (which decrease operating costs)
* managed to get hosting donations (eg, Kennisnet)

Even today, most of the activity of the Foundation is about running the 
website. But to get a 24/24, 7/7 website running, you need tech staff. 
Once you get bills to pay (high amount and numerous), you need an 
accountant. Once you get people calling the office once every 5 minutes, 
you need an office manager. Once you get invited to visit the tribunal 
from time to time, you need lawyers etc...
And once you need more money to get in, you need staff to make the money 
get in.

There are tasks which may be handled by volunteers. But others tasks may 
not. And other necessary tasks which could be handled by volunteers are 
... not always handled.

> 
> # WOW, that's a lot to be spending on travel! I do hope I am not the only one who thinks that spending $264,361 (as compared with $140,605 in the previous year) is excessive.
Firstly, I am concerned by the almost doubling in travel expenditure: I 
don't see any particular reason for that. Yes, I am sure Jimbo and 
others did an awful lot
of traveling to promote Wikia and its search engine - but that obviously 
wouldn't be on the Foundation's dime. Yes, no doubt expenses increased with
the decline of the dollar, increase in jetfuel costs and so on - but I 
can't see that. I have to question what good all this traveling does
the community. It's eating up an impressive amount of resources (a 
substantial fraction of what we spend on important stuff like keeping
the servers running), and strikes me as 'fat'. If people really want WMF 
people to give a lecture or something, what's wrong with having
them pay the fare? If WMF people need to meet, what's wrong with 
videoconferencing? Why should donations from strapped college students 
and so on be going to this.
> :#It may just be my overreaction, but the next time I hear the WMF is hurting for funds, I am probably not going to donate; it clearly
has money to spare.

The particular reasons for travel costs increase are
* during the previous fiscal year, we had 2 staff members. We now have 
over 10 staff members, not all of them located at the same place. They 
need to meet face to face from time to time
* when Jimbo was chair, the board basically only met on irc. When I got 
chair, I made sure that the board would have face to face board 
meetings. It may be more expensive, but it is also incredibly 
productive. Additionally, now that we have an office and staff, it also 
make sense that board members sometimes meet with the staff. Sure 
enough, it has a cost, but this cost is at the benefit of strategy and 
control. You do not run an organization of 50 000 dollars (2004) in the 
same way than an organization of 5 000 000 dollars (2007)
* travel costs include scholarships of wikipedians to go to Wikimania. 
This is not really a cost since we got restricted donations from 
sponsors to precisely cover that cost
* last, we are more known (and criticized) than in 2004. There are 
travels which make sense from a political and advocacy perspective.

I'll add that "others" did not travel to promote Wikia.

I'll also add that in the very very large majority of cases, people who 
want us to give lectures pay the travel fare.

Last, regarding videoconferencing, you have a point. However, 
videoconferencing will NEVER replace the richness of real life meeting. 
For example, no reasonable organization will ever hire an executive 
director without even meeting her. That's non sense.
This said, I agree that installing videoconference system in ALL the 
homes of board members and offsite staff might be an idea for the 
future. Will be costly though :-)

> # Heh, talk about understatement:
> 
>   "A substantial number of volunteers make significant
>   contributions of their time in the furtherance of the
>   Organization's projects. The value of this contributed time is
>   not reflected in the accompanying financial statements, since
>   it is not susceptible to objective measurement. Certain
>   contributed services requiring specialized skills are recorded
>   as support and expenses at fair value when determinable, or
>   otherwise at values indicated by the donor."

Yeah. Board members free time is also not measured ;-)

> # I must be misunderstanding something, but does this really mean what it seems to me on the face of it:
> 
>    "Note C - Contingencies
>    In the normal course of business, the Organization receives
>    various threats of litigation on a regular basis. In the
>    opinion of management, the outcome of the pending
>    lawsuits will not materially affect present operations or the
>    financial stability of the Organization."
> 
> That the reason current lawsuits don't matter is because there is nothing put aside for them? Seems kind of reckless.

This was very explained by another person. Afaik, we have only one 
lawsuit going on, and it is pretty obvious there is little to fear from it.

> # As usual, relationships with Wikia are concerningly close and ambiguous:
> 
>   "The Organization shares hosting and bandwidth costs with
>   Wikia, Inc., a for-profit company founded by the same
>   founder as Wikimedia Foundation, Inc. Included in accounts
>   receivable at June 30, 2007 is $6,000 due from Wikia, Inc.
>   for these costs. The Organization received some donated
>   office space from Wikia Inc. during the year ended June 30,
>   2006 valued at $6,000. No donation of the office space
>   occurred in 2007.
>   Through June 30, 2007, two members of the Organization's
>   board of directors also serve as employees, officers, or
>   directors of Wikia, Inc."

> They share staff, WP favors Wikia in well-known ways, and so on - and people are surprised when the public perception is that WP
is the non-profit branch of Wikia, or vice versa? I'm also troubled by 
the sharing of costs bit - why is Wikia using WMF resources
(presumably why they are paying WMF) and isn't it awfully convenient how 
the two amounts cancel out? Small potatoes, but still.

Tim answer was pretty straightforward.
We have no share staff. We now share no more office, nor hardware.
When Wikia was only a couple of people, Michael was working in WMF 
office, and paying the rent to WMF. They also had a couple of servers in 
our hosting facility.

There was sharing in the past. Both organizations decided to make the 
separation complete and clear, for the sake of both organizations. What 
else is there to say ?

> 
> ----
> 
> Yeah, so those were my thoughts on the audit. Anyone else?

I'd love to hear someone say something along those lines

"Thank you to the staff and board to have succeeded to have the 
Foundation audited for the 4th time"

There are over 200 000 000 people reading Wikipedia everyday.
It would be very cool even ONE says "thank you". It would go a long way 
to keep us working.

Something like

"for every criticism you voice, provide a thank you on another point"

> --
> gwern
> primers shell mania LHR anarchy JANET ssa RFI Internet Z-200
> 
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