A Mismatch Between Wikimedia's Pledge Drive and Its Cash On Hand?

Andreas Kolbe writes The latest financial statements for the Wikimedia Foundation, the charity behind Wikipedia, show it has assets of $60 million, including $27 million in cash and cash equivalents, and $23 million in investments. Yet its aggressive banner ads suggest disaster may be imminent if people don't donate and imply that Wikipedia may be forced to run commercial advertising to survive. Jimmy Wales counters complaints by saying the Foundation are merely prudent in ensuring they always have a reserve equal to one year's spending, but the fact is that Wikimedia spending has increased by 1,000 percent in the course of a few years. And by a process of circular logic, as spending increases, so the reserve has to increase, meaning that donors are asked to donate millions more each year. Unlike the suggestion made by the fundraising banners, most of these budget increases have nothing to do with keeping Wikipedia online and ad-free, and nothing to do with generating and curating Wikipedia content, a task that is handled entirely by the unpaid volunteer base. The skyrocketing budget increases are instead the result of a massive expansion of paid software engineering staff at the Foundation – whose work in recent years has been heavily criticised by the unpaid volunteer base. The aggressive fundraising banners too are controversial within the Wikimedia community itself.

Comments

Well

[war4peace]

I always thought that transparency should be right there in the banner. "Hey guys, we have 60M worth of assets but we need more because $REASON".

Re:Well

[JMJimmy]

I always thought that transparency should be right there in the banner. "Hey guys, we have 60M worth of assets but we need more because $REASON".

The reason is simple, they over pay their staff significantly. Even for being in silicon valley which is about 29% higher salaries they fail to understand they are a non-profit. Over 20% of WMF staff get paid over $100,000 per year. The executive director makes over $200,000 while the median salary for a non-profit executive director in the US is closer to $60,000.

Re:Well

[TheRaven64]

Sounds like a good reason for money-conscious non-profits to hire people outside of California...

Re:Well

[JMJimmy]

Most of them are management or lawyers, not devs.

Re:Well

[Hussman32]

Non-profit corporations are not allowed to give equity to their employees, and that automatically keeps them at a compensation level below private corporations. If you want talent that can sustain the number 6 site in the world, you'll need to hire them where they are (in CA) and pay them commensurate to the industry practices.

$200,000 is not a lot for an Executive Director, and $100K is needed for a 'good' programmer here.

You can suggest that they move, but why? There is infrastructure and access to local contractors that you wouldn't have anywhere else.

I don't begrudge Wikipedia for making a few bucks, and I will still pay my $5 a year based on how much I use the site.

Re:Well

[TheRaven64]

Nonsense. There are lots of competent people all across the world. Unless you need a hundred or so people in the same office, there's no reason to be offering California salaries. The FreeBSD Foundation has contracted a lot of work to people in the Ukraine this year for that reason: they're competent, but not too expensive.

I understand but I also don't

[i kan reed]

Big software projects need developers. Full time, accountable ones with a paycheck and an office. Mozilla feeds theirs with ad revenue, Linux has some corporate supporters who pay the bills.

MediaWiki, that drives Wikipedia, is really complex. And they need new features to support the site better, especially admin tools and backend tech.

But, at the same time, screaming in desperation when you're doing okay and just need support for your functionality means that when you are in trouble, no one can tell.

I don't think you know what that word means

[sribe]

There is nothing "circular" about higher expenses leading to a need for higher reserves. It would only be circular if in turn the higher reserves led to higher expenses, which is not a point that you have made at all.

Re: I don't think you know what that word means

[bill_mcgonigle]

It's hate posts like TFS that reassure me that Wikipedia is being well-managed. The best he can come up with is "look at this evil financial prudence!"

Re:I don't think you know what that word means

[Anonymous Coward]

Can we stop the favorite /. style of arguing by saying "I don't think you know that the word means", with the implication, "You are such a fucking moron that everything you say should be ignored." It's incredibly arrogant.

I'm pretty sure the submitter knows what the word "circular" means. Higher spending creates a call for more donations, which will lead to higher spending following the pattern of the past several years as discussed in TFS and TFA. It's circular.

It is working for them, though...

[damn_registrars]

Wikipedia is still a very usable web site. By comparison slashdot went commercial some time ago and has become less usable with each passing year. Similarly while the content on wikipedia has continued to improve, the content here has continued to get worse.

Someone could learn something here, I'm pretty sure.

Spending too much, reserves good, SW improves cont

[raymorris]

> Wikimedia spending has increased by 1,000 percent in the course of a few years.

That could be a problem.

> Jimmy Wales counters complaints by saying the Foundation are merely prudent in ensuring they always have a reserve equal to one year's spending

Yes, a one year reserve on the low end of normal. You don't want Wikipedia to disappear when something bad happens, and SHIT HAPPENS. It's a top 10 web site, meaning it's in the big leagues with Google, Microsoft etc., except it's nonprofit. They may have to deal with stuff like Google is dealing with in Europe - disputes with multiple governments on the other side. You don't want Wikipedia to go bankrupt when some government or some company somewhere doe something stupid that costs the foundation $5 million to deal with and repair the damage.

> nothing to do with generating and curating Wikipedia content, a task that is handled entirely by the unpaid volunteer base.'

False. A large chunk of the budget is developing software for "generating and curating Wikipedia content". It's disingenuous to claim that developing tools for generating and curating content "have nothing to do" with generating and curating content.

Not sure there's a problem...

[nine-times]

...but the fact is that Wikimedia spending has increased by 1,000 percent in the course of a few years... most of these budget increases have nothing to do with keeping Wikipedia online and ad-free, and nothing to do with generating and curating Wikipedia content...The skyrocketing budget increases are instead the result of a massive expansion of paid software engineering staff...

So from this information alone, I'm not sure I see the problem. You have a very large website that I'm sure gets unimaginable amounts of traffic, operating for free and supported by voluntary donations, and their budget is increasing because they've hired engineers to keep the thing running. That all sounds reasonable enough.

I think if you want to raise a red flag here, you have to show that the software engineering staff is unwarranted, or that they're working on things that the donors don't want to see done. So how many engineers do they have, and what are they working on? It seems to me that they're doing a competent job, since you have a relatively large, complex, and popular website that doesn't seem to have a lot of serious technical trouble, as far as I can tell. I'm sure they've had to scale up their capabilities over recent years, which requires some development in making the site scale and handle large, sudden increases in traffic. It looks to me like they're doing more than just maintain the Wikipedia-- they have the Wiktionary, Wikiquote, something called "Wikidata", and a bunch of other projects that all seem like they're probably legitimate, even if I don't know what they are. In that context, I can imagine them needing to keep a fair number of engineers on staff.

So what's the complaint here? Do you think someone is embezzling money, or that they're just stockpiling money for no reason? Do you think that they're spending money in the wrong places, and if so, where you do think they're spending money, and where do you think they should be spending money? I think you need to give me something before I can figure out how to be outraged at all of this.

Re:Not sure there's a problem...

[nine-times]

That's because this is Slashdot and you haven't bothered to actually read TFA.

I actually skimmed them, but there are 5 articles, including what seems to be Wikimedia's budget report. I'm not going to read all of that in detail unless someone can explain what the real problem is.

It seems like your complaints (and these were also in the various articles) boil down to two things:

A) They don't spend all of their money on content: Well, I wouldn't expect them to. My understanding was the the Wikipedia has always relied on volunteer contributions, and the idea was that it always would. I'm not familiar with the inner politics of the thing, but it seems like they're largely providing the platforms for volunteers to create content on, and obviously those platforms will cost money. If you had asked me yesterday (before I heard about this controversy) to guess what Wikimedia spent their money on, I would have guessed "Mostly hosting, web/software development, and administrative overhead." I wouldn't have guess they spent very much on content at all.
B) They released some tools for editing content and viewing media, and some people (perhaps "a lot of people" or even "most people") didn't like these tools: It's not clear to me what the real problem here is. Do you think that they should not have programmers attempt to improve their platform? Do you think that they shouldn't pay those programmers? Do you think that it's fine to try to improve the platform and pay programmers, but they just did a bad job? If it's the last one, then it seems like the issue isn't a complaint about the budget as much as "I'm just not happy with the output of the developers." Maybe they should get new developers or something, I don't know.

And then there's this:

Less than 6% of the WMF budget is spent on Internet hosting even though most people probably believe it’s their biggest expense. Meanwhile, they spend almost as much money (about $2 million) on travel and conferences. There is also a huge bucket for “other operating expenses” totaling nearly $12.5 million — some of which certainly pays for expensive downtown office space in San Francisco.

Ok, so that seems like a lot of money to spend on traveling and conferences, what what was the effect of that? Were those conferences things that they shouldn't have gone to or presented at? If you want me to be angry, I think you need to paint me a picture. Did they spend so much money because they were flying a single guy around in a private jet, or were they flying around a lot of important people to important conferences, paying for conference materials and placement, in a way that resulted in some improvement to Wikimedia? You say they spent money on office space in San Francisco-- is that unusual and unreasonable for a company in their position? Did they spend too much? Or is the problem simply that they've thrown so much money into "other operating expenses" without breaking it down to allow us to determine whether those expenses are valid?

I just feel like I'm supposed to be outraged, but I don't really see what the problem is, other than a vague sense of "They're spending lots of money, and we don't think that it should cost that much." Having run a business, I know that a lot of things end up costing more than you'd suppose that they would.