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Chapter-wide Financial Trends Report 2013

Executive SummaryEdit

This Wikimedia Chapters Financial Trends report explores the financial data of 36 established chapters around the globe and the Wikimedia Foundation (WMF) for the period of January 1, 2013 through December 31, 2013. We, the Finance Fellows, following extensive research and collaboration with the participating chapters, have created a potential reporting guide for all chapters, thematic organizations, and other movement groups, to report data in a way that is more consistent and comparable across the movement. It is also within this report we highlight some our key findings.

To accomplish this, we gathered data from 36 chapters and WMF[1]. We transformed the 37 original financial statements consisting of over 400 different line items into one standardized guide by consolidating them into broader categories. The 36 chapters had very diverse ways of reporting financial data, e.g. from very limited reporting (only a few different line items covering their expenses) to very detailed reporting (a lot of different line items covering their expenses with further breakdowns for each line item). This guidance report did not leave out any data provided by the chapters, much of it being collected from meta pages, websites of the chapters and via email and social media. After gathering the data from each chapter, then we validated the financial data with nearly every participating chapter.

It is important to disclaim that this trends report cannot be treated like a traditional financial statement, but rather it sets out to achieve the following:

  • Easily analyze financial data and distinguish notable financial trends across the chapters.
  • Prompt questions related to accounting practices, funding methods, general guiding statistics.
  • Start a dialogue between stakeholders of the movement to explore community interest to unify movement accounting practices.

In order to do this, we analyzed the Support & Revenue and Expenses on three levels: Global, North/South and Regional. Next, we elaborated further on these Support & Revenue and Expenses trends and noted important limitations to this report.

Here are some of the key findings we wish to share:

  • In 2013, the Total Support & Revenue of the Wikimedia Chapters amounted to $21,082,633.
    • The majority of Total Support & Revenue was generated by the chapters located in the Global North (98%) and the remaining 2% by the chapters in the Global South.
    • The total sum of Donations received by the chapters was $14,531,232.
    • The total sum of Grants received by the chapters was $5,677,083.
  • The Total Expenses of the chapters amounted to $20,765,557 and, similarly, the Global North represents 98% of Total Expenses.
    • The total sum of Operating Costs of the chapters was $9,089,713.
    • The total sum of Events was $1,303,539.

IntroductionEdit

In 2011, Michał Buczyński [2], Vice-President of the Board of Wikimedia Polska Association, highlighted the importance of meaningful, obtainable and unified data. He expressed the difficulty of such exercise by the complexity of the data, but he did realize that the result could be a very valuable tool for the movement. [3]

Wikimedia Foundation and an international network of movement affiliates with related missions are working together to support the Wikimedia movement, which would be impossible without the dedication of volunteers and staff members from around the world. Movement affiliates include the Wikimedia chapters, thematic organizations, and user groups [4].

The scope of this report focuses on the financials of the Wikimedia chapters and the Wikimedia Foundation; But first, what is a Wikimedia chapter? Wikimedia chapters are:

Independent organizations founded to support and promote the Wikimedia projects in a specified geographical region (in most cases, a country). Like the Wikimedia Foundation, they aim to ‘empower and engage people around the world to collect and develop educational content under a free license or in the public domain, and to disseminate it effectively and globally[5].

The first chapter, Wikimedia Deutschland, was established in 2004 in Berlin, Germany and through the years many chapters have been established. As of May 2015, there are 41 chapters around the globe and one thematic organization, with at least 1 chapter in every continent (except Antarctica). Chapters employ about 100 people in total [6], and approximately half of chapters are entirely run by volunteers without the help of paid staff.

Both chapters and WMF conduct day-to-day business which generates income and expenditures. The chapters organize events and projects, support local volunteer communities and partner with local organizations such as universities, museums, libraries to bring their rich collections of knowledge (e.g. artwork, literature, and data) to all humanity, among other program activities. They raise funds and in-kind resources from donations and grants from both individuals and organizations.

Most chapters have to pay for goods and services - and record these transactions. Which leads us to our key questions: What accounting and financial trends do we observe? What could a standardized reporting format look like? What are the benefits of standardizing reporting across such diverse fiscal entities, and what are the costs?

Although every active chapter has its own operating budget and keeps track of its finances, there exists no overview of all the financial data combined. Moreover, each chapter has its own way of reporting financial data, what makes it difficult to understand the money that is circulating throughout the movement. To address this issue, we created an overview of the financial data in this report that allows for easier comparisons.

MethodsEdit

This section details the three phases by which we conducted our research: Data Gathering Phase, Data Validation Phase and the Data Analysis Phase.

We decided to look at the Wikimedia chapters because they are obliged under the Chapter Agreement to supply “a written activity and financial report in English at least once a year” [7], which means financial data is available, and because most chapters raise funds for support and have expenditures.

 
Research Methodology Stages. Timeline: October 2014 - June 2015


The process of obtaining a standardized financial statement for all the established chapters and WMF was divided into three phases: Data Gathering, Data Validation and Data Analysis.

Phase 1: Data GatheringEdit

In the first phase, our team worked to gather the financial data of 2013. We assigned 10 chapters to four members of the five-person team based on our language skills. We found that chapters tended to produce financial reports in their local languages. We gathered all the data by taking financial reports/data from Meta-Wiki pages, combing through individual chapter websites and reaching out directly to the chapters via email and social media. The goal was to obtain information for the time period January 1 to December 31, 2013 [8]. For all chapters, we looked at the full fiscal year that includes December 31, 2013. We noticed that the fiscal year for some of the established chapters (seven of 36) was different from this time span. For example, if the chapter’s fiscal year is from July to June, we selected the fiscal year that includes Dec 31, 2013 (e.g. July 2013 - June 2014) for this report. For converting the local currencies into US Dollars, we used the exchange rate as of December 31, 2013[9]. The phase of data gathering lasted three months.

Phase 2: Data ValidationEdit

In phase two, the data validation phase, 36 chapters[10] and WMF were approached to validate the compiled financial data for their respective organizations. 29 out of 36 established chapters and WMF validated their financial information.[11]

Phase 3: Data AnalysisEdit

In phase three, the team engaged fully in data analysis. We first needed to create a consistent and comparable overview of the financial data. During a two month process, we listed all the line items of the 40 organizations and rearranged this into a final reporting guide that forms the body of the data tables. We used the definitions in the glossary (section 8) to help us allocate the revenue item or cost item to a category, and this enabled us to construct the data tables that form the basis of this report.

We did this exercise for every single line item (over 400 in total) of all the chapters for both Support & Revenue and Expenses. We started from the raw dataset and arranged the original line items by categories. Of the over 400 line items, for instance, Communication and promotion was reported in several different ways by the different chapters (promotional materials, advertising, other advertising, communication, public relations, entertainment, merchandise). We kept track of all the line items mentioned in the chapter’s financial statements, asked chapters to clarify what each line item included and rearranged them, according to the definitions in the glossary. This exercise resulted in a datatable with about 30 line items, covering each line item that the chapters reported. The categories we created were mainly defined by the overlapping definitions of the chapters and inspired by International Financial Reporting Standards (IFRS)[12] for the purpose of most comprehensive, international recognition.

For the rest of this report, our findings are discussed based on the data gathered from the chapters. We present the data in tables on 4 levels: Global, Regional, Country, Global North/South[13]. We also include the Wikimedia Foundation in the global analysis, because of its major role the movement. However, we decided to separate its budget from the other chapters to avoid skewing the dataset.

We would like to again emphasize that while we attempted to be as accurate as possible, this preliminary analysis is an experiment and the report demonstrates trends and estimates. This is discussed further under our “Discussion” in the sub-section titled “Limitations”.

FindingsEdit

In this section, we elaborate on the financial trends of the chapters and WMF. The trends we examined were the Support & Revenue and Expenses of the organizations.

We examined variations of Support & Revenue and Expenses of the chapters and WMF. These are the most fundamental items in financial accounting and we were able to obtain this information from all the participating organizations. As a result, we were able to fully aggregate these metrics and demonstrate them to our readers. First, we looked at general financial trends and then we dug deeper into Support & Revenue and Expenses trends. If you would like to see the comprehensive data tables, please see the Download below.

Data Table: Global FiguresEdit

Wikimedia Chapters, as of December 31, 2013

Support & Revenue

US Dollars as of December 31, 2013


Expenses

US Dollars as of December 31, 2013
* Certain chapters reported a general figure for “Operating Costs” or had undetailed line items under Operating Costs
** Some chapters reported “Office Expenses” as a general figure or had undetailed line items under Office Expenses
*** A few chapters reported this number as a general figure, i.e. it was not broken down by specific events

It should be noted that approximately one third of these expenses cover the transactions of funds from Chapters to the WMF, or between Chapters, and are not to be confused with expenditure for the Chapters' own work.

Download the PDF for Global, North/South, Regional and Country data

Global trendsEdit

As noted, the Global financial trends we examined were Support & Revenue and Expenses, broken down by Total, Global North/Global South, and Regional.

Support & RevenueEdit

The established chapters reported a Total Support & Revenue of $21,082,633. As shown in Figure 2 and Figure 3, the majority of Total Support & Revenue was generated by the chapters located in the Global North (98% or $20,642,055) and only 2% by the chapters in the Global South ($440,578).

 
Figure 3. Percentage of Support & Revenue for chapters based in the Global North-South. This pie chart illustrates the large percentage of Total Support & Revenue that was generated by chapters in the Global North. The established chapters reported a Total Support & Revenue of $21,082,633: 98% generated by the chapters in the Global North ($20,642,055) and 2% by the chapters in the Global South ($440,578).

 



ExpensesEdit

As shown in Figure 4 and Figure 5, this trend was similar for the Total Expenses. The Total Expenses of the chapters amounted to $20,765,557 and the Global North represented 98% ($20,297,664) while the Global South represented 2% ($467,893) of Total Expenses.

 
Figure 5. Percentage of Total Expenses for chapters based in the Global North-South. This pie chart illustrates the large percentage of Total Expenses allocated to chapters in the Global North. The Total Expenses of the chapters amounted to $20,765,557: Global North represented 98% ($20,297,664) and Global South represented 2% ($467,893).

 


Net Surplus/DeficitEdit

The Net Surplus/Deficit is the amount of money the chapter takes in minus the money it spends. If the chapter takes in more money than it spends, the result is called a Net Surplus (Total Support & Revenue is greater than the Total Expenses). If the chapter spends more money than it takes in, the result is a Net Deficit (Total Expenses are greater than the Total Support & Revenue).

  • When looking at the chapters, the difference between Total Support & Revenue ($21,082,633) and Total Expenses ($20,765,557) resulted in a Net Surplus of $317,076. WMF had a surplus of $6,903,501.
  • When looking at the regions, as illustrated in Figure 6, Europe ($330,287); South/Latin America ($32,407), Africa ($19,137) and North America ($12,684) were indicated to be in Surplus, while CIS-Region[14] ($-2,031); and Asia & Pacific ($-75,409) were in Deficit. Figure 9 makes it easier to identify which chapters within a region are driving the surplus-deficit trends. On a chapter-specific scale, 27 out of 36 chapters and WMF reported a surplus; 8 reported a deficit and 1 chapter “broke even”, which means that Support & Revenue equals Expenses. Although Wikimedia Deutschland had the highest Support & Revenue and Expenses as shown on Figure 7, the surplus-deficit relation broke even at $0.
 
Figure 6. Regional Surplus-Deficit. This diagram shows a net surplus for Europe, South/Latin America, Africa and North America; and a net deficit for CIS-region and Asia & Pacific.
 
Figure 7. Allocation of Surplus-Deficit by chapters in 2013. This diagram shows net surpluses or net deficits for each organization. Wikimedia Philippines and Wikimedia Germany broke even. 4 chapters have missing data (India, Macau, Macedonia, and Portugal).

Solely based on the data in this report, we are unable to fully explain why Net Surpluses/Deficits exist. There are more aspects to take into consideration (e.g. age of the chapter, types of activities, one time or recurring costs/revenue, local environment, etc.). However, in sections 4.2 and 4.3 we look into more detail about what has been reported as Support & Revenue and Expenses of the chapters to provide us with more insight on what has contributed to the Net Surplus/Deficit.

It is important to keep in mind how complex it was to analyze unified data from organizations with very different cultural contexts, civil codes and available resources. The 36 chapters have multiple variables that influence their financial results: few/many years of operation, the presence/absence of paid staff, the small/large scope of the activities, the presence/absence of financial support from WMF, etc. The organizations also have very different ways of reporting data. We noticed that some organizations did not report on Events separately in their financial statements, but allocated the Event costs to the Various Operating Costs without a further breakdown. Some also allocated costs related to events to other line items without a specific breakdown (e.g. to organizational development, travel, staff costs). This influences both the figures for Events, Operating Costs and the concerning line items. Again, this is also the reason why we highlight to perceive the results as being trends, not actual figures.

Another issue with generalizing the data is the possibility of a single dataset skewing results, thus impacting the overall analysis. This is the reason why WMF was excluded for the in-depth analysis and we repeatedly note throughout the report how Europe is a dominant driver of Support & Revenue and Expenses, mainly through Wikimedia Deutschland. A large amount of revenues and "expenses" for WMDE cannot be counted as "activities" but are rather financial transactions between WMDE and the WMF. We could have left out the outliers from the analysis, but that would not have given us an accurate picture of the overall financial position of the chapters. To deal with this issue, we attached datatables under the graphs of each regional analysis and altered the analysis when the overall trend was skewed, so we are not ignoring the different scope of activities between different regions. We also excluded WMDE when they skew the overall trend for chapters in Europe and globally.

Support & RevenueEdit

The Support & Revenue trends we examined are broken down into Total and Regional level.

In 2013, the Total Support & Revenue of the local chapters amounted to $21,082,633. If we look at how the Support & Revenue is distributed across the chapters, we clearly see Europe as the main driver, as illustrated in Table 1. Therefore, when comparing the Support & Revenue of the chapters across regions, we looked at the relation between Support & Revenue categories and the Total Support & Revenue in the region (Regional Support & Revenue).

Table 1: Regional Support & Revenue as a percentage of Total Support & Revenue. This table shows the large percentage of Total Support & Revenue allocated to the European chapters (approximately 97%).


As illustrated in Figure 8, Global Support & Revenue originated from 5 sources: Donations[15] ($14,531,232), Grants[16] ($5,677,083), Membership Fees[17] ($496,012), Other Support & Revenue[18] ($297,812) and Interest[19] ($80,494).

 
Figure 8a. Components of Total Support & Revenue. This pie chart illustrates the different sources of the Total Support & Revenue of all chapters in 2013. In total, $21,082,633 was generated by the Wikimedia chapters.
 
Figure 8b. Components of Total Support & Revenue. This pie chart illustrates the different sources of the Total Support & Revenue of all chapters excluding Wikimedia Deutschland in 2013. In total, $5,099,698 was generated by the Wikimedia chapters excluding Wikimedia Deutschland.























On a global level, as shown in Figure 8, approximately 69% of the Total Support & Revenue came from Donations ($14,531,232) and 27% of Total Support & Revenue was generated by Grants ($5,677,083). Membership fees made 2.4% ($496,012) of Total Support & Revenue. If we exclude Wikimedia Deutschland in this global picture, Grants ($2,142,000) contributed to 69% of Total Support & Revenue and Donations ($1,262,508) contributed to 27% of Total Support & Revenue.

 
Figure 9. Components of Regional Support & Revenue. This bar chart illustrates the different components of the Support & Revenue of all the chapters by region in 2013. From left to right, regions are arranged by Total Support & Revenue from low to high: CIS-Region ($45,310), Asia & Pacific ($53,130), Africa ($116,791), North America ($121,999), South/Latin America ($193,582) and Europe ($20,551,821). The colors represent the percentage of a single Support & Revenue category related to the total figure of regional Support & Revenue.

If we have a closer look at the Support & Revenue categories for each region, as shown in Figure 9, we notice a clear distinction in how chapters are funded. We immediately notice how the Europe is skewing the global results, mainly through Wikimedia Deutschland.

GrantsEdit

Grants[16] were reported in each region and are the main source of Support & Revenue for all chapters in South/Latin America (>99%), Africa (>99%), CIS-region (93%) and North America (86%). It is the main source of Support & Revenue for 3 chapters in Asia Pacific. Looking at all chapters in Asia & Pacific, 56% of Total Support & Revenue in the region was allocated to Grants. In Europe, 10 chapters have grants as the main source of Support & Revenue, but when looking at all chapters, Grants only took in 25% of Total Support & Revenue in the region. If we exclude Wikimedia Deutschland, Grants took in 67% of Total Support & Revenue in the region.

 
Figure 10. Grants allocated from WMF and Other Sources. The bar chart indicates which percentage of the regional grants was generated by WMF (dark red) and other sources (light red).

For all chapters, grants brought $5,677,083 of Support & Revenue, of which 82% through WMF grants ($4,669,860) and 18% Grants from other sources ($1,007,223). As shown in Figure 10, grants received by chapters mainly consisted of WMF grants (78% or more of Total Grants received). Grants received by Asia & Pacific consisted for 100% of WMF grants, followed by North America' (98%). Grants received by South/Latin America, Africa and Europe consisted for a majority of WMF grants.

DonationsEdit

Donations[15] were reported in each region, but were the main sources of Support & Revenue for nine European chapters. For all European chapters, 80% of Support & Revenue in the region originated from Donations. It is important to note how Wikimedia Deutschland is driving the Europe figure. If we exclude Wikimedia Deutschland’s income from Donations and Grants, the income from Donations for Europe was $1,227,775 and the income from Grants was $3,050,727. This implies that for European chapters in total, the main source of Support & Revenue were Grants, and more specifically, Grants from WMF. Also three chapters in Asia & Pacific reported Donations as their main source of Support & Revenue. For all chapters in Asia & Pacific, 35% of Support & Revenue in the region originated from Donations, which make Donations the second biggest source of Support & Revenue. Donations were also the second biggest source of Support & Revenue for North America (11% of Regional Support & Revenue) and CIS-region (7% of Regional Support & Revenue).

ExpensesEdit

The Expenses trends are discussed on Total and Regional levels.

If we look at the Global Expenses, $20,765,557 was spent in total by the Wikimedia chapters in 2013. Also here it is important to note that Europe had a much higher amount of expenses than the other regions (approximately 97% of Total Expenses), as illustrated in Table 2. Approximately $6.4 million out of the Global and European Expenses were not an actual expenses but forwarded by Wikimedia Deutschland as unrestricted funds to the WMF for their own and the whole movement’s programmatic work. Since chapters report those costs under Expenses, similar transfers between chapters were also included under the Global Expenses. If we exclude Wikimedia Deutschland, chapters in Europe were still having the largest expenses (89% of Total Expenses). Similar to Support & Revenue, we compared the expenses of the chapters across regions by looking at the relation between cost categories and what they spent in total, broken down by region.

Table 2: Regional Expenses as a percentage of Total Expenses. This table shows the large percentage of Total Expenses allocated to the European chapters (approximately 97%).

As illustrated in Figure 11, Global Expenses were classified into 5 components: Other Expenses[20] ($10,239,152, which include transfers of donations from WMDE to the WMF and transfers between chapters.), Operating Costs[21] ($9,089,713), Events[22] ($1,303,539), Organizational Development[23] ($112,625), and Taxes[24] ($20,529).

 
Figure 11a. Components of Total Expenses. This stacked bar chart illustrates the different components of the Total Expenses of all chapters in 2013. In total, $20,765,557 was spent by the Wikimedia chapters.
 
Figure 11b. Components of Total Expenses. This stacked bar chart illustrates the different components of the Total Expenses of all chapters excluding Wikimedia Deutschland in 2013. In total, $4,782,622 was spent by the Wikimedia chapters excluding Wikimedia Deutschland in 2013.


Within each region, as shown in Figure 12, there was a clear difference in the allocation of the Total Expenses.

  • Total expenditure for Europe amounted up to $20,221,534. 14 European chapters reported Operating Costs as their main expense, 4 chapters reported Event Costs as their main expense and 1 chapter reported Other Expenses as their main expense. 51% of the Total Expenses in the region was allocated to Other Expenses ($10,227,003), 44% to Operating Costs ($8,949,029) and only 4% to Event costs ($924,524). As noted before, Other Expenses include transfers of donations from WMDE to the WMF. Excluding Wikimedia Deutschland, Operating Costs were the main expense (72% of Total Expenses in the region) in Europe, followed by Events (22% of Total Expenses in the region).
  • Chapters in South/Latin America reported $161,175 in Total Expenses. Three chapters reported Operating Costs as main expense, for two chapters the main cost were Events. This aligns with the finding that 54% of the Total Expenses in the region fell into Operating Costs ($86,559) and 45% was allocated to Events ($72,478).
  • The chapters of the CIS region reported Total Expenses of $47,341. All chapters reported Event Costs as their main expense, which explains that 95% of Total Expenses in the region were driven by Events ($44,871) and 3% by Operating Costs ($1,589).
  • Total Expenses for North America amounted up to $109,315 and all chapters reported Event Costs as their highest expense. As a result, 90% of their Total Expenses was allocated to Events ($98,011) and 7% to Operating Costs ($7,392).
  • Total Expenses reported for the Asia & Pacific region were $128,539. Five chapters reported Event Costs as main expense and 1 chapter reported Operating Costs as main expense. 80% was allocated to Events ($102,520) and 14% allocated to Operating Costs ($18,378).
  • The South African chapter, representing the region Africa, allocated 63% of their Total Expenses ($97,654) to Events ($61,134) and 27% of their Total Expenses to Operating Costs ($26,767).

Overall, it is notable that Operating Costs[21] were the main expense in 19 chapters (14 in Europe, 3 in South/Latin America, 1 in Asia & Pacific and 1 in North America). Event Costs[22] were the main expense in 16 chapters (5 in Asia/Pacific, 4 in Europe, 2 in CIS, 2 in North America, 2 in South/Latin America and 1 in Africa). Only one chapter in Europe allocated most of their expenses to what we designated as Other Expenses[20], which explains the high percentage of Other Expenses in the global Total Expenses (49%). All regions reported only a small cost on Organizational development[23] (7% or less of Total Expenses). Taxes[24] took the least portion of Total Expenses in all regions (less than 1%).

In the next part, we have a closer look at Other Expenses, Operating Costs, Event Expenses and Organizational Development.

Other ExpensesEdit

Although Other Expenses[20] ($10,239,152) were reported as the largest component of Global Expenses ($20,765,557), the European chapters together had it as their main component of Regional Expenses (51%). Excluding Wikimedia Deutschland, all regions have only reported Other Expenses between' 0 - 4% of their Regional Expenses, as shown in Table 3.

Table 3: Other Expenses as a percentage of Regional Expenses. This table shows the percentage of Regional Expenses that was allocated to Other Expenses in each region.

Based on Table 3 and Figure 12, Other Expenses were the main expense for 1 chapter in Europe, Wikimedia Deutschland ($10,101,625). This included donations collected in Germany via the annual WMDE fundraiser and transferred to the WMF ($6.4M). These “expenses” are not spent by WMDE but forwarded by WMDE as unrestricted funds to the WMF for their own and the whole movement’s programmatic work. If we look at Wikimedia Deutschland’s actual expenses, Operating Costs was reported as their main expense.

Excluding WMDE, Other Expenses still amounted to $125,378 for the other European chapters, which remained to be significantly higher than all other regions. This was partly due to the higher number of chapters concentrated in Europe. Without WMDE, Other Expenses would take less than 1% of Total Expenses in the region. As a result, both on a regional and global level Other Expenses shifted to the third biggest Expense item, preceded by Operating Costs and Event Costs.

Operating CostsEdit

In contrast to Other Expenses, the Operating Costs[21] were a significant portion of the Total Expenses for 4 out of 6 regions, see Table 4. In total, the Operating Costs amounted up to $9,089,713. For some chapters, especially in Europe, the line item Operating Costs means both expenditures for their programmatic work (incl. event expenses), for organizational development as well as their infrastructure.

Table 4: Operating Costs as a percentage of Regional Expenses. This table shows the percentage of Regional Expenses allocated to Operating Costs in each region.

If we look at the components of Operating Costs on a global level, we clearly see that the Labor Expenses ($5,139,131) took in the largest percentage of the Operating Costs (57%), followed by Various Operating Costs ($2,046,911, or 23% of Operating Costs), Office Expenses ($664,348, or 7% of Operating Costs) and Transportation, Travel and Accommodation Expenses ($580,360, or 6% of Operating Costs). This is illustrated in Figure 13. Also note that we were unable to allocate 4% of the reported Operating Costs to an underlying cost category. This means that chapters reported a total figure for Operating Costs, but did not specify what the figure represents (Undetailed Operating Costs). Wikimedia Deutschland is not skewing the global and regional trends for Operating Costs.

 
Figure 13. Components of Operating Costs. This stacked bar chart illustrates the different components of the Operating Costs of all chapters in 2013. In total, the Operating Costs were $9,089,713.
 
Figure 14. Components of Operating Costs by Region. This bar chart illustrates the different components of the Operating Costs of all the chapters by region in 2013. From left to right, regions are arranged by Operating Expenses from low to high: CIS-Region ($1,589), North America ($7,392), Asia & Pacific ($18,378), Africa ($26,767), South/Latin America ($86,559) and Europe ($8,949,029). The colors represent the percentage of a single cost category related to the total figure of regional Operating Costs.


Similarly to the Total Expenses, the allocation of the Operating Costs per region slightly varied for each region, as shown in Figure 14, and did not necessarily correspond to the global trend.

  • Operating Costs for Europe amounted up to $8,949,029. The main drivers of Operating Costs: Labor Costs for 12 chapters, Various Operating Costs for 1 chapter, Office Costs for 3 chapters and Transportation, Travel and Accommodation for 3 chapters. Chapters from Europe allocated more than the majority of Operating Costs to Labor Expenses.
  • Chapters in South/Latin America reported $161,175 in Operating Costs. Main Operating Costs were: Labor Costs for one chapter, Office Costs for two chapters, Transportation, Travel and Accommodation costs for one chapter and Communication and Promotion for another. Nearly 75% of the Total Operating Costs in South/Latin America were undetailed to a cost category. This might have given a skewed representation of the other cost categories. CIS region followed by Asia & Pacific also had a significant percentage of their Operating Costs under the Undetailed Cost[25] category.
  • The chapters of the CIS region reported Total Operating Costs of $47,341. One chapter reported Office Costs as their main Operating Cost, whereas the other noted Communication and Promotion as the main Operating Cost. The Operating Costs of the CIS region were allocated almost evenly to Communication and Promotion, Banking Costs, Interests and Undetailed Operating Costs.
  • Total Operating Costs for North America amounted up to $109,315. The main Operating Cost was Labor Costs for one chapter, and Office Costs for the other. North America was the only region with more than half of chapter Operating Costs allocated to Office Expenses. Labor Expenses in this region accounted for almost one third of the Operating Costs.
  • Total Operating Costs reported for the Asia & Pacific region were $128,539. Labor Costs were reported as the main Operating Cost for one chapter, same for Office Costs. Transportation, Travel and Accommodation was reported as main the main Operating Cost for 2 chapters. The chapters from Asia & Pacific had a more even distribution of their Operating Costs to Labor Costs, Office, Undetailed Operating Costs and Transport, Travel and Accommodation costs.
  • The South African chapter, representing the region Africa, reported $161,175 in Total Operating Costs. This chapter allocated more than the majority of Operating Costs to Labor Expenses.

Overall, the four prominent Operating Costs line items were Labor Expenses[26] ($5,139,131), Various Operating Costs[27] ($2,046,911), Office[28] ($664,348) and Transportation/Accommodation expenses[29] ($580,360). For some chapters, especially in Europe, the line item Operating Costs means both expenditures for their programmatic work (incl. event expenses), for organizational development as well as their infrastructure.

  • Labor expenses[26] ($5,139,131) were reported in each region and were the main Operating Cost for 16 chapters (12 in Europe, 1 in Asia & Pacific, 1 in North America, 1 in South/Latin America and 1 in Africa). .
  • Various Operating Costs[27] ($2,046,911) were only reported by North America ($904) and Europe ($2,046,007) and were the main Operating Cost for only one European Chapter. For a number of organizations in Europe, the Event Costs were not specifically mentioned in their financial statement. We noticed that some organizations reported the costs related to events under this line item, which would explain the high figure specifically for Europe.
  • Office Costs[28] ($664,348) were reported in each region and were the main expense item under the Operating Cost category for 8 chapters (3 chapters in Europe, 2 in South/Latin America, 1 in CIS, 1 in Asia & Pacific and 1 in North America).
  • Transportation, Travel and Accommodation Costs[29] ($580,360) did not belong to the biggest cost categories of each region, but were the main Operating Cost for 6 chapters (3 in Europe, 2 in Asia & Pacific and 1 in South/Latin America). .

It is possible to assume that an increase in Labour Expenses might have lead to an increase in Transport/accommodation expenses. In order to test this hypothesis, other variables such as number of staff and volunteers may need to be taken into account. Another relationship worth looking into would be Office Expenses and number of staff or chapter activity.

Event ExpensesEdit

With reference to Figure 12, Event Expenses[22] ($1,303,539) was the main cost category for 5 out of 6 regions. Only Europe was an exception, whose Event Expenses was only 5% of Total Regional Expenses, as seen in Table 5.

Table 5: Events Expenses as a percentage of Regional Expenses. This table shows the percentage of Regional Expenses allocated to Event Expenses in each region.

Due to the few chapters represented, it was not possible to make accurate visualizations and conclusive observations on Event Costs that are reflective of the movement. An observed reason for lack of substantial data is that certain event expenses were included in financial statement under another expense and could not be filtered out. For example, some chapters reported costs related to events as a total figure under an Operating Cost category (staff, travel and accommodation costs). A possible reason for this may be due to the fact that some chapters define programs different from events while others consider event and program expenses as the same category.

Table 6: Event Expenses as a percentage of Reporting Chapters. This table shows the percentage of chapters out of 36 that reported Event Expenses in each region.

Based on the financial statements, about five to eight out of thirty-six chapters reported on Global Events (e.g. events held/observed by all chapters within the movement); with the exception of 18 chapters which reported on Wiki Loves Monuments and 23 chapters reported figures within Regional/domestic Events (i.e. events held only in the country or region Table 6).

It is likely that event costs will vary from year to year due to the irregularity of Event Costs which tends to vary from year to year. For example, the Wikimania expense may vary due to the location of the conference, the hosting chapter and other logistical requirements, e.g. visa requirement.

Organizational DevelopmentEdit

Organizational Development[23] ($112,625) was only a small component of Global Expenses (1%), as shown in Figure 14. In Table 7, Africa (7%) was the leading region in which this trend had been reported significantly. Board Meetings, Business Development and Training are a few lines items that fall under this category.

Table 7: Organizational Development as a percentage of Regional Expenses. This table shows the percentage of Regional Expenses that was allocated to Organizational Development in each region.

It is important to note here that we were sometimes unable to separate Organizational Development costs from the Operating Costs, especially for some larger organizations in Europe. This might also explain why Operating Costs is the second largest global expenditure (44%).

DiscussionEdit

This report showed a net surplus for all chapters and WMF of $317,076 and $6,903,501, respectively. Region-oriented results showed that Europe, South/Latin America, North America, and Africa (which only includes South Africa) had a net surplus, in contrast CIS (region) and Asia presented a net deficit. We found that 98% of the Total Revenue and Total Expenses is allocated in the Global North, with only 2% in Global South.

Looking at the Support & Revenue categories for each region we noticed that Grants[16] were the main source of Support & Revenue for 24 chapters (all chapters in South/Latin America, Africa, CIS-region, North America, 3 chapters in Asia Pacific and 10 chapters in Europe). Overall, grants were 82% from WMF grants and 18% Grants from other sources. Donations[15] were the main sources of Support & Revenue for the remaining 12 chapters (9 chapters from Europe and 3 chapters from Asia & Pacific).

When looking at the Expenses, it is notable that 16 chapters (5 in Asia & Pacific, 4 in Europe, 2 in North America, 2 in South/Latin America, 2 in CIS-region and 1 in Africa) recorded Events[22] as their highest expenditure. The total amount spent on Events is $1,303,539. Operating costs[21] were reported as highest expense by 20 chapters (15 in Europe, 3 in South/Latin America, 1 in Asia & Pacific and 1 in North America) and amounted to $9,089,713. All regions reported only a small cost on Organizational development (7% or less of Total Expenses) and Taxes took the least portion of Total Expenses (less than 1%).

As for Operating Costs, Labor expenses[26] were the main Operating Cost for 16 chapters (12 in Europe, 1 in Asia & Pacific, 1 in North America, 1 in South/Latin America and 1 in Africa). Various Operating Costs[27] were only reported by North America and Europe and the main Operating Cost for only one European Chapter. A number of organizations in Europe reported costs related to events under this line item. Office Costs[28] were the main Operating Cost for 8 chapters (3 chapters in Europe, 2 in South/Latin America, 1 in CIS, 1 in Asia & Pacific and 1 in North America). Transportation, Travel and Accommodation Costs[29] were the main Operating Cost for 6 chapters (3 in Europe, 2 in Asia & Pacific and 1 in South/Latin America).

As the results illustrate, it is not accurate to assume that the figures reported for the entire chapters is truly representative of each chapter. When the data is observed from a global or regional perspective, it is easier to have an overall idea of the financial position of the chapters. However, when the data is broken down further, the financial representation becomes more diverse among countries.

This report is not an evaluation, but aims to facilitate the sharing of comparable data. We highlight to perceive the results as being trends, not actual figures. We gathered, validated and unified the data, in order to provide a starting point for questions and reflections. There are various ways to interpret the data and more factors to take into consideration, and we want to stimulate everyone to bring various points of views into discussion in order to increase the effectiveness of the movement as a whole.

LimitationsEdit

There are important reasons why we emphasize that this report is not to be treated as an official financial document.

Throughout the three phases of the project (data gathering, validation and analysis), we faced significant limitations in our work, such as:

  • Report Translations - some reports were in the local language of chapter. Translations were needed in order to comprehend the reports and an inquiry was conducted to seek clarification of line items in each local context (what costs they were accounting for, are these categories aligned with local civil code, etc.).
  • Differences in fiscal year - Seven chapters used a different fiscal year than the fiscal year selected for this report. We selected the fiscal year that included December 31 2013 (e.g. fiscal year July 2013 - June 2014).
  • Missing data - The 2013 data for most chapters were easily accessible but for some chapters information had to be directly provided from chapter contacts or sources from impact reports. Only one chapter did not provide us with data.
  • Currency exchange rate - A majority of the reports were in the local currency hence needed to converted to US Dollars for analysis. There were two scenarios we encountered: 1) as mentioned, most financial reports were in local currency. Therefore, we converted the local currencies into US dollars with exchange rates given by Oanda as of December 31, 2013. 2) some reports were reported in US dollars but we could not verify the day or forex service used.
  • Inactive chapters - Three inactive chapters were left out.
  • No data validation - Seven chapters did not respond back to our attempts at validating the data. Therefore, we could not verify the accuracy of the given data.
  • Variance in reporting style - There was a large variance in the reporting style of chapters, ranging from very detailed to very brief. Hence, consolidation of line items took a considerable amount of time and not every line item was reported to the same extent.

Overview per chapterEdit

Download the PDF for more detailed information on Global, North/South, Regional and Country data

Closing RemarksEdit

In this report, we had a closer look at the Support & Revenue and Expenses of 36 chapters and WMF on three levels: Global, North/South and Regional level. The results presented in this report are not entirely new. The report showed the operating differences between Global South and Global North: the skewed concentration of Support & Revenue/Expenses is partly due to the disparity of numbers of chapters present in the Global South/North and the Regions. Looking at averages for Global North and Global South chapters, there is still a funding and spending disparity in addition to this.

This report showed that reporting revenues and expenses in a consistent way can bring various insights to the movement and support chapters to benchmark their current activities.

We would like to thank all chapters for providing us with data for this project. Without their help and willingness to provide explanations on the financial statements, this report would not have been possible.

Especially thanks to:

  • Amical Wikimedia - Carles Paredes Lanau
  • Wikimedia Argentina - Galileo Vidoni, Anna Torres
  • Wikimedia Armenia - Lilit Tarkhanyan
  • Wikimedia Australia - Michael Billington
  • Wikimedia Austria - Claudia Garád
  • Wikimedia Bangladesh - Ali Haidar Khan
  • Wikimedia Canada - Alan Walker
  • Wikimedia Chile - Eduardo Testart
  • Centre for Internet and Society - Vishnu Vardhan T
  • Wikimedia Czech Republic - Vojtech Dostal
  • Wikimedia Danmark - Simon Van Studinski & Ole Palnatoke Andersen
  • Wikimedia D.C., Washington - James Hare
  • Wikimedia Eesti - Mari Vallik
  • Wikimedia Suomi - Tommi Kovala
  • Wikimédia France - Benoît Evellin & Guillaume Goursat
  • Wikimedia Deutschland - Stephan Rost, Kasia Odrozek, Wenke Storn & Nicole Ebber
  • Wikimedia Hong Kong - Tango Chan & Wong Rover
  • Wikimedia Magyarország - Balázs Viczián
  • Wikimedia Indonesia - Isabella Apriyana & Indra Utama
  • Wikimedia Israel - Chen Davidi & Itzik Edri
  • Wikimedia Italia - Cristian Consonni
  • Wikimedia Macedonia - Bojan Jankuloski
  • Wikimedia México - Salvador Alcántar
  • Wikimedia Nederland - Jan Anton Brouwer
  • Wikimedia New York City - Peter (User: Becksguy)
  • Wikimedia Norge - Astrid Carlsen
  • Wikimedia Philippines - Jose Roel Balingit
  • Wikimedia Polska - Tomasz Ganicz
  • Wikimedia Portugal - Manuel de Sousa
  • Wikimedia Russia - Linar Khalitov
  • Wikimedia Serbia - Filip Maljkovic & Ivan Nikčević
  • Wikimedia South Africa - Theresa Hume & Douglas Ian Scott
  • Wikimedia España - Miguel García
  • Wikimedia Sverige - Jan Ainali
  • Wikimedia CH - Bagawathram Maheswaran
  • Wikimedia Taiwan - Liang-chih Shang Kuan & Reke Wang
  • Wikimedia Ukraine - Mykola Kozlenko
  • Wikimedia UK - Richard Symonds
  • Wikimedia Uruguay - Fernando Da Rosa Morena & Andrea (User: Ganímides)
  • Wikimedia Venezuela - Oscar Costero


ReferencesEdit

  1. For a full list of the Established Wikimedia Chapters in this report, see PDF download below. The established chapters that are not included in this report are Wikimedia India (missing data), Wikimedia Macedonia (inactive), Wikimedia Macau (inactive) and Wikimedia Portugal (inactive in 2013).
  2. Quantitative analysis of Wikimedia Chapters and Thematic Organizations
  3. http://wikimediafoundation.org/wiki/Mission_statement
  4. https://meta.wikimedia.org/wiki/Movement_affiliates_Portal
  5. https://meta.wikimedia.org/wiki/Wikimedia_chapters
  6. Obtained from chapter’s annual report 2013 and contact persons
  7. http://meta.wikimedia.org/wiki/Chapter_Agreements/2007_template
  8. The fiscal year of 27 established chapters is according to the gregorian year (Jan-Dec 2013), seven chapters (Wikimedia Australia, Danmark, France, District of Columbia, New York City, South Africa, UK) had a differing fiscal year.
  9. Converting the currencies was done through Oanda
  10. The established chapters that are not included in this report are Wikimedia India (missing data), Wikimedia Macedonia (inactive), Wikimedia Macau (inactive) and Wikimedia Portugal (inactive in 2013).
  11. The 7 chapters that did not validate their data are Wikimedia Canada, Wikimedia Chile, Wikimedia Suomi, Wikimédia France, Wikimedia Magyarország, Wikimedia México and Wikimedia New York City.
  12. https://en.wikipedia.org/wiki/International_Financial_Reporting_Standards
  13. The chapters were allocated to a certain region based on the definitions used by Community Engagement, Learning & Evaluation
  14. CIS (Commonwealth of Independent States): this includes Wikimedia Armenia and Wikimedia Ukraine (Вікімедіа Україна).
  15. a b c Donations include every type of donation, whether it is internal (from members) or external (partnerships with other organizations, government donations), public fundraising, sponsorships and gifts. We have included in-kind donations also within here, where reported.
  16. a b c Grants are classified into two sub items, these are grants coming directly from Wikimedia Foundation, Inc. (e.g. Annual Plan Grants allocated by the Funds Dissemination Committee or Project and Event Grants), or grants from other sources. These other sources could be other chapters or any other source that is not the Foundation (e.g. local government grants, EU grants).
  17. Membership fees cover all membership payments for chapters. It’s one of many methods of financing. Fees and types of memberships vary across the movement (E.g. Wikimedia South Africa has lifetime memberships and, therefore, did not have any membership fees in their report of 2013.).
  18. Other Support & Revenue includes revenue from events (i.e. money coming from participating in events). These would be goods or services that can be valued and the counterpart does not expect anything in return. Investment income also falls within this category. Income from royalties were reported by a number of chapters but not enough to become its own line item or subitem in the final draft; income due to exchange rate differences; sales of good/services; unused grants from previous years; income from restricted net assets and tax offers. Given the low repetition of certain items and uniqueness of categorizing them, they were placed here.
  19. Interest includes income earned by deposited funds in a bank. This varies significantly between chapters based on interest rates and type of accounts.
  20. a b c Other Expenses consist of: other expenses, costs related to forwarded funding cost, fixed assets disposal, asset loss, other expenses, exchange rate difference, transfers to community and other organizations (money transferred to WMF from the local annual fundraiser, unused grant money returned to WMF, reimbursement of expenses to members and non-members, transfers to other non-profit entities, community budget, literary scholarship), awards and grants (given by WMF), affiliations, CAV Fees, volunteer reimbursements, outlays, in-kind services and special event expenses. Given the low repetition of these line items and not belonging to any of the above categories, they were placed here.
  21. a b c d Operating Costs are composed by the following subitems: Transportation, travel and accommodation; communication and promotion; labor expenses, which is subcategorized into staff salaries and wages (gross) and contractors & external services; depreciation; office expenses, which breakdown is explained below; insurance; IT costs; baking costs and interests; and various operating costs, which explanation is next. For some chapters, especially in Europe since events were not always reported seperately, the line item Operating Costs means both expenditures for their programmatic work (incl. event expenses), for organizational development as well as their infrastructure.
  22. a b c d This line item consists of two subcategories: 1) Global events: every cost related to Wikimania, Wiki Loves Monuments, Wikimedia Conference, GLAM, Edit-a-thon; 2) Regional/domestic events: Wikiconference, Iberocoop,  all other events.
  23. a b c Organizational Development Costs represent every cost category that is related to improving as an organization as a whole, such as meetings, trainings, conferences, program infrastructure and programming, board meetings, member assemblies, studies and services and general business management and development.
  24. a b Taxes represent expenses that pertain to contributions to state revenue via corporate tax, capital gains tax, withholding tax, lease tax et al.
  25. Undetailed costs are stand alone costs that do not have underlying cost categories and for which we are unable to determine what they consist of (e.g. A chapter reports administrative costs without providing details on what it includes. Since this could be a combination of Labor Costs, Office Costs, Transportation, we decided to treat them separately from any specific cost category).
  26. a b c Labor Expenses consist of staff expenses including social security taxes (internal), and external services hired such as contractors and outsourcing (e.g. freelancers, lawyers, translators, consultants, bookkeeping, accounting services, representative expenses).
  27. a b c Various Operating Costs represent expenses that defined as other operating costs (without a breakdown) in the financial statements of chapters. For various chapters without an event breakdown, some event costs will be included here.
  28. a b c Office Costs are split up into several categories: 1) Consumables: food/snacks in the office, catering; 2) Maintenance: janitorial services, plumbing services, etc.; 3) Office utilities and services: telephone bills, internet, telecommunication, electrical energy bills, gas expenses, courier services, shipping costs, postage and mailing, and miscellaneous costs; 4) Office supplies and equipment: stationery, business cards, folders, purchase small inventories, purchase of tangible goods, furniture, equipment lease, materials for volunteer support; 5) Rent: renting of office space
  29. a b c Transportation, Travel and Accomodation costs include all expenses that have to do with travelling internationally and domestically, transporting volunteers, accommodation, rental cars, and board trips. Some chapters who did not have event costs as a seperate cost, have also included Transport, Travel and Accomodation Costs related to events here.