[Wikimedia-l] Wikimedia (Foundation) endowment

[Theo10011]

On Thu, Mar 14, 2013, Erik Moeller <erik at wikimedia.org> wrote:

> Only data-center usage (facilities, bandwidth, power). It does not
> include capital expenditures (servers, storage, network gear, etc.;
> budgeted at $1.9M in 2012-13) nor ops engineering staffing, nor of
> course any software engineering staffing or the basics of an
> organizational support structure (management/administration, legal,
> etc.).
>

I'm not technically inclined, but those numbers sound odd. Maybe I'm
missing something? The traffic ranking didn't go up nearly as substantially
in the last couple of years as the hosting and cap-ex mentioned above. The
total listed revenue for 06/07 is around 2.7 Million, 07/08 is 5 million,
08/09 is 8.6 million from there on it started doubling, but that was the
total revenue at the time, assuming it had to be higher than the actual
hosting cost. I don't think there were any substantial visitor milestones
crossed after that, another argument could be made that the costs
associated with hosting went down in that period. Either way, the two don't
seem to be growing at the same pace.


>
> What's a bare minimum amount? It's a hard question to answer, because
> it depends on what you consider an acceptable bare minimum.
>
> - Is it acceptable for the projects to be without legal defense?
> - Is it acceptable to revert back to a single data center mode of
> operation?
> - Is it acceptable for ops to just barely be able to keep the lights
> on, with minimal effort dedicated to backups/monitoring/maintenance,
> etc.?
> - Is it acceptable for there to be no software engineers to aid with
> reviewing code contributions, and making improvements to the software?
> and so on.


How about door #3. Any idea what amount that would be close to. "Ops
keeping the light on" seems like a good definition of core.


>
> WMF has operated in the past without staffing and with very minimal
> staffing, so clearly it's _possible_ to host a high traffic website on
> an absolute shoestring. But I would argue that an endowment, to
> actually be worthwhile, should aim for a significantly higher base
> level of minimal annual operating expenses, more in the order of
> magnitude of $10M+/year, to ensure not only bare survival, but actual
> sustainability of Wikimedia's mission. The "what's the level required
> for bare survival" question is, IMO, only of marginal interest,
> because it is much more desirable, and should be very much possible,
> to raise funds for sustaining our mission in perpetuity.


In 2011, I calculated that amount to be closer to $6M/year from a
diversified low-to-medium risk portfolio. A fund like that would need to
have a variable yield above a certain set amount to negate any year-on-year
increases. I believe there are companies that can calculate the annual
projected cost over the next 10 years and suggest options.

On Fri, Mar 15, 2013, Lisa Gruwell <lgruwell at wikimedia.org> wrote:

> We also have to consider what these costs will be in 5 years and beyond to
> know really how big an endowment would need to be.  This will require some
> fairly complicated projects, that will most certainly be wrong at some
> point in time.  :)


Actually, that's the benefit of separating the costs between core and
non-core. The projection for the hosting and bare-minimum operations
already has 10 year of past data to draw from. The cost would also remain
the same for every large internet property, things like bandwidth and
datacenter usage would be fairly the same for everyone.

The non-core expenses however are a different story. They depend on
whatever direction the foundation chooses. Those expenses would be nearly
impossible to predict from what I've seen.

Regards
Theo