[Wikimedia-l] Mid-Year Financial Statements

[Thomas Dalton]

On 18 March 2013 20:00, Garfield Byrd <gbyrd at wikimedia.org> wrote:
> Thomas:
>
> The Wikimedia Foundation is looking at its capacity to hire and is
> reviewing how many positions we can hire next fiscal year.  We are working
> overall to have a good annual plan that matches our outcomes, but with a
> dynamic movement like this one, variance from plan is a part of the process
> as we want to make sure we are spending money prudently and not just to
> meet plan.

In statistics we don't call it "variance" if it is always in the same
direction - we call it "bias". A high variance is often unavoidable,
but bias is generally a bad thing. You'll note, my question wasn't
about changing the spending, it was about changing the planning
process. You shouldn't spend money just to meet your plan, certainly,
but you should plan as accurately as possible. Prudence should be
explicitly allowed for in reserves or a "contingencies" budget, it
shouldn't appear accidentally due to biased planning.

> In addition, since unspent money goes into the Wikimedia Foundation
> reserves, which we are still in process of building, we have some time to
> calibrate the the annual planning process to the needs of the Wikimedia
> Movement and the Wikimedia Foundation.

Can you elaborate on your plans for the reserves? When I search for
"reserves policy" on the foundation wiki, it doesn't find anything.
That is extremely worrying...

Reserves should be built up intentionally, not as a result of
accidental underspends. Either you need the reserves, in which case
you should plan to save the money, or you don't, in which case you
should either spend the money or not raise it in the first place.