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Wikimedia Executives Receive Six-figure Golden Handshakes (theregister.co.uk)

Posted by msmash on from the what's-happening dept.

Andreas Kolbe writes: The Wikimedia Foundation's (WMF) recently released Form 990 shows that the organisation has developed a practice of handing outgoing managers six-figure severance payments, The Register reports. The foundation, which relies entirely on unpaid volunteers to generate the content of its websites, has taken around $300 million dollars over the past five years through fundraising banners placed on Wikipedia. The WMF says it is "committed to communicating with our volunteers, donors, and stakeholders in an open, accountable, and timely manner", but has long been criticised for providing little transparency on the salaries of its executives, limiting itself to the legally required Form 990 disclosures that only become public two years after the event.

14 of 139 comments (clear)

  1. Intentionally misleading fundraising by Anonymous Coward · · Score: 5, Interesting

    I always thought it was interesting that the wikipedia fundraising banners always make it sound like they're running out of money to run servers, but not even 25% of the money raised is even for servers. It's mostly for all these salaries and side projects that are mostly pointless or meaningless.

    1. Re:Intentionally misleading fundraising by Andreas+Kolbe · · Score: 4, Informative

      Actually, internet hosting costs them only $2 million a year. See page no. 3 in this document. Total support and revenue, for comparison, stood at $81.9 million last year. So 2.5% of the fundraising income is spent on hosting.

    2. Re:Intentionally misleading fundraising by bluefoxlucid · · Score: 5, Insightful

      Actually, we can look a bit closer at that.

      WMF spends about 40% of its revenues on engineering. Hosting is just the small cost: I ran a video CDN for over 120 news stations, and the hosting cost was roughly $3,500/month. My salary was over 1.5 times that; and the whole thing was controlled by custom software developed and maintained at costs ranging around $300,000/year. That used a single, non-geographically-distributed database.

      WMF has to engineer an enormous, high-availability network with hundreds of replicated caches, databases, and Web servers. It has to handle security, software upgrades, and basic administrative tasks across this infrastructure. Something as simple as keeping system patches up-to-date is an enormous undertaking in that kind of environment, largely due to the amount of risk carried. They don't have one guy running their databases; they have dozens of DBAs, hundreds of sysadmins in total. People who complain that they can't have a $144k salary because someone might hire an Indian for $85k to replace them.

      Management and Governance is that whole "running a business" thing. It's the thing that lets you accomplish large tasks without expending enormous amounts of effort. Slashdot, Fark, Ubuntu, Debian, and the FSF all have governance; they don't all get paid for it, but they all invest time. For some organizations, like WMF and FSF, governance is a full-time job for several people, and so ... well, we pay them.

      All of this means WMF has HR costs, management costs, and functional costs. It also sends 10% of its money to grants, so some millions are just going out to fund charitable efforts. WMF spends more on grants than on hosting; hell, they spend more on legal than on hosting, because they need to avoid enormous costs from frivolous lawsuits by people like Peter Thiel.

      So it looks like it's actually kind of expensive to run WMF. They also need to float large amounts of cash holdings year-to-year in case of unstable donation-based revenue streams. As WMF grows in activities, that risk reserve needs to enlarge, so their bank accounts and cash holdings get bigger.

      --
      Support my political activism on Patreon.
    3. Re:Intentionally misleading fundraising by Andreas+Kolbe · · Score: 5, Insightful

      In 2007 Wikipedia was a top-10 website with much the same traffic as today and got by on revenue of $5 million. Today it asks for – and gets – 16 times as much. Content creation costs nothing and is done by volunteers, who also retain legal responsibility for the content they contribute. The WMF itself has always been protected from liability by Section 230(c).

      As for the "unstable donation-based revenue stream", revenue has been on the up and up for every year of the foundation's existence. And whenever revenue has increased, spending has increased proportionally. It looks to me the spending is not driven by need, but by the availability of cash, including cash to pay managers the payments disclosed in the Form 990.

      It takes 20,000 people donating $10, in the belief that this money is necessary to "keep Wikipedia online", as Wikipedia fundraising banners have put it, to pay one manager $200,000.

      To me, asking for that kind of payment seems sharply discordant with the generosity of volunteers and donors contributing freely in the belief that they are helping to build a common good.

    4. Re:Intentionally misleading fundraising by bluefoxlucid · · Score: 4, Informative

      Much the same traffic? Does it have much the same content?

      Every article retains its full history, from its creation to present state. Every edit. That means their database must handle an enormous amount of data, ever-growing, edit after edit. It never changes; it adds.

      In 2007, Wikipedia's english site had 1.5 million articles; in 2015 it had 4.6 million. That's three times as many individual articles, with every edit to every article stored forever. The number of pieces and sheer amount of data stored and indexed is a complex, temporal function. For the number of articles, it's (time x rate[article creation]); for the number of pieces of data created, it's (time x rate[edits per article] x articles). Because the number of articles is increasing over time, you're looking at an exponential growth function. Note that it's exponential and not geometric because the rate of edits is related to a polynomial exponent of t, since the number of edits per time increases with time thus (t*(t*r)).

      WMF also runs Wikinews, which carries news articles in dozens of languages. It runs Wikipedia in many languages all over the world. Every time it adds a new language, there's a new regional user base. If each language Wikipedia grows as above, then you have cubic growth until the rate of new Wikipedia languages slows.

      The volume of data managed, the computer power required to manage that data, back-ups, administration costs, all of that is growing. It's growing faster every day.

      As for the "unstable donation-based revenue stream", revenue has been on the up and up for every year of the foundation's existence

      As per IRS NPO rules, the organization must show stability in the face of reasonable risks. Revenue streams from donations are not predictable; a sudden recession can slow the revenue stream while not slowing the expenses. As such, Wikipedia is legally required to maintain cash reserves some degree beyond their yearly expenses. When those expenses increase, they need to carry bigger cash reserves.

      It looks to me the spending is not driven by need, but by the availability of cash, including cash to pay managers the payments disclosed in the Form 990

      Out of $83 million, managers get less than $1 million. Product manager ~$100k, software engineer ~$144k. Management? Executive director $344k; General Counsel (lawyer) $258k; Deputy Director $302k; VP of Engineering $282k; Chief Operating Officer $250k. The executive compensations total about $2 million.

      They also spent $3 on a post-it note pad, because that's included in spending of course.

      whenever revenue has increased, spending has increased proportionally

      From a legal perspective, IRS NPO rules require retention of a certain risk buffer, as well as limits to the amount of cash holding. You can't have revenues that much larger than your expenses.

      That's not why spending increases with revenue, though, is it?

      Revenue comes from donations. WMF gets donations from users. Users only donate so much. More users means more donations--also, more load, more costs in running the service. Being driven entirely on donations from people looking right at your site, revenue would be directly tied to how much load is on your site and, thus, the cost to support that load, wouldn't it?

      --
      Support my political activism on Patreon.
    5. Re: Intentionally misleading fundraising by ShanghaiBill · · Score: 4, Insightful

      They deserve it, honestly.

      Since they are not transparent about what they spend the money on, you don't know if they deserve it or not. All you know for sure is that WMF's foundation thinks it is best to obscure the truth.

      There are several organizations that rate charities. You should do your research before you donate. Many, many non-profits are not what they seem. They divert huge amounts of money into salary, perks, and fund raising, while only a small fraction is spent on the supposed beneficiaries. I once visited the United Way offices in Alexandria VA, and marveled at all the beautiful Italian marble tiling. How many children went hungry to pay for that?

  2. Wish I Could.... by Luthair · · Score: 5, Insightful

    Quit jobs every couple years and get 6-figures.

  3. Yes I have a problem with this... by TWX · · Score: 5, Interesting

    ...and you should too.

    My problem with this stems from the piss-poor job that has been done dealing with the king-of-the-hill mentality among frequent editors, basically those people who have made Wikipedia their hobby and will edit-out other peoples' contributions simply because they do not like them. The upper management of the Foundation is making far too much money for the lack of oversight of what's going on at the edge where the actual action happens. Frankly, from the outside it looks like the wild-west, where there is no oversight and those trolls who camp on articles. For all it looks like from the outside there may as well be one guy with an office outside the datacenter keeping the servers and connection working, and leaving the whole built-architecture alone.

    I don't have a problem with good salaries, but I expect good results for those salaries. I expect management to be poking-in and tweaking things and making things run well if they want donation dollars to pay them to keep their money-sink running. It's rather insulting to be begging for money from the public to then go around pay pay themselves handsomely while doing a poor job of running the entity that the money was given to support.

    --
    Do not look into laser with remaining eye.
    1. Re:Yes I have a problem with this... by retchdog · · Score: 5, Interesting

      hasn't this "king-of-the-hill mentality" been an endemic so-called problem with wikipedia for the past ten-plus years, during which, of course, wikipedia has been functioning well enough for almost everyone (and certainly no worse than it has ever actually functioned; wikipedia is only bad when compared to what might possibly have been in a thought-experiment world)? as long as people like, presumably, you keep fighting, there's enough churn to keep the outskirts from totally locking up and the system will continue.

      i don't know; is WMF even meant to deal with this supposed problem in the first place? maybe they actually do a lot of good work on issues of copyright and censorship, which could at least potentially be existential threats to wikipedia's existence, as opposed to an inevitable side-effect of using an anarchic egoist model to solicit content from people for free.

      WMF declares their purpose (in a large textbox at the head of their front page) to be "... encouraging the growth, development and distribution of free, multilingual, educational content, and to providing the full content of these wiki-based projects to the public free of charge," and further that they "operate... Wikipedia" toward this purpose. In short, their objective is much broader than just micro-managing the edit turf wars which, as much as you dislike them, are business-as-usual for wikipedia, if not its foundational principle. WMF may still be failing at their stated purpose; i don't know anywhere near enough to know whether this is the case, let alone to start assigning blame.

      --
      "They were pure niggers." – Noam Chomsky
    2. Re:Yes I have a problem with this... by swb · · Score: 4, Interesting

      I find it hard to complain about this issue.

      If Wikipedia truly was awful in some general way, the idea that somebody got $xxx,xxx severance while the organization kept pleading for money in a very obnoxious way I might be annoyed.

      But generally speaking, the content is amazing in its depth and breadth on so many topics for the general reader (and possibly even for people who are in-field experts) and the "fund raising" seems so infrequent that it seems hard to complain.

      The very fact that it exists at all with that much good content is pretty astonishing.

      If Wikipedia disappeared tomorrow, I would have to lower the 5 star rating of the entirety of the Internet (content + functionality) by like an entire star due to its loss. At this point, it's literally one of the single highest value sites on the network. No ads, very little obvious bias even on controversial subjects and astonishing breadth and depth of information. For free.

      It's so good that I laughed at myself for being annoyed about something missing. I had been watching a fairly awful movie (The Brad Pitt Jesse James movie) and was distracting myself by reading the Wikipedia entries of the real-life people presented in the movie. A bunch of minor historical characters in the movie all have entries, but the woman who owned a farm/rooming house where the gang hid out in later years doesn't have a page. And then I thought to myself, this is a problem? This woman is kind of a foot note to a foot note of history and there's probably near zero primary sources about her, but Wikipedia is so good that you just expect you can drill down into so much minutia and actually read something.

  4. Just look at Goodwill... by bagofbeans · · Score: 4, Interesting

    Non-profit doesn't mean charity in the Christian sense.

    Goodwill's CEO took over $700k in compensation in 2015, and the eight execs below him took close to $200k each on average.

    https://www.goodwill.org/wp-content/uploads/2016/05/Goodwill-Industries-International-Form-990-2015.pdf/

  5. So... that's where my donation to WikiPedia went by QuietLagoon · · Score: 5, Interesting

    I no longer plan to donate to the project. (this reminds me of the Wounded Warriors fiasco )

  6. Is this number high or low? by bluegutang · · Score: 5, Insightful

    Potential employees at a nonprofit expect to receive salaries, and executives are no exception. If you don't pay them market-competitive salaries, then you are likely to get less talented workers. On the executive level, this means yes, you do have to worry about bonuses. The question is, how much responsibility did these executives have? How do their salaries and bonuses compare to their peers in other organizations? The bonuses could be too high, but they could also be too low. Of course, transparency is needed to know which of these it is.

  7. Re: Is this report as reliable as Wikipedia? by KGIII · · Score: 5, Insightful

    You don't get it, do you? I'm a retired mathematician. I have contributed quite a bit to their site, in time, money, and knowledge. I haven't done so, in a while, but that is for other reasons.

    I volunteered this. I did this expecting nothing in return, not even gratitude. I did it because I wanted to. I did it because I could.

    When I donate, it is a gift. Gifts are given without expectations of recipricocity, or even gratitude. When I gift something, it is a gift without strings. They may do with my gift what they want. They can throw it away, even. They don't even have to like it, or appreciate it.

    I did these things, and more, knowing this. Volunteering is just another form of gifting.

    If I give you something, it belongs to you. Do with it what you will.

    --
    "So long and thanks for all the fish."