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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.
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.
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.
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.