Not all the money is the sameEdit
Our current economic model is pretty simple and clean: a lot of people donates a bit of money; with those funds we run the projects. Compare this to pumping those donations to the financial system and aiming to fund our projects with the dividends obtained. That money just became dirty, a direct financial contribution to some of the biggest problems of our World today. In my humble and personal opinion, this is the worst we could do with the money of our supporters.--QuimGil (talk) 20:18, 14 March 2013 (UTC)
- You don't believe in investing money? Ever? I could see some issues with investing in certain government bonds or in certain companies, perhaps, but you seem to be taking a stand against all investing of any kind. This seems like an untenable position. --MZMcBride (talk) 22:55, 14 March 2013 (UTC)
- This is controversial but not exactly new territory. It's a very relevant issue in the U.S. at least among some pretty well-known and prestigious universities who have millions or billions of dollars in their endowment. Suffice to say that there may be a conflict between social responsibility/ethics and investing, but many have thought deeply about how that can be lessened using a carefully tailored approach with limitations and prohibitions written into the endowment's ethical code and charter. We have a very nice article about this very concept called socially responsible investing. Also, a particularly relevant organization for this discussion may be: The Responsible Endowments Coalition at http://www.endowmentethics.org/.
- It is a bit crazy to think that we're not sure we have funds to operate for the next 5 years even; on the other hand, institutional investing is very different territory than the scrappy non-profit startup mentality we're used to. It would need to be done with Wikimedia style, and it would inevitably run into some controversy some time. Ocaasi (talk) 23:58, 14 March 2013 (UTC)
- One thing is to believe or not in investment, another thing is to base our whole operational model on investments. Direct crowdsourcing vs managed funds might be a pain for long term planning, but is fully aligned with our very essence: direct crowdsourced collaboration vs managed editorial work. And yes, it is an ethical objection (that the so-called ethical investment doesn't solve either). If people feel that we are needed and they understand why we need the money, they will give us money. If not enough people understands the need and responds to it then this will show a root problem that a different financial system might delay but not solve. Running Wikimedia in maintenance mode takes a portion of the budget we are moving nowadays. If people would start donating less then there is plenty of areas to cut before compromising the core activities and switch off the servers.--QuimGil (talk) 17:17, 16 March 2013 (UTC)
- I'm not sure what your point is beyond money and investment = bad. You'd seem to prefer no financial foresight, no planning, no long term goals, structures - just hat in hand every year, using the message we used 5 years ago - to keep us online - which is becoming a distant reality to what the actual spending is about these days. I'm pretty sure everyone commenting here, exercises the same financial management in their personal life - assuming everyone here has a bank account, some form of savings and some form of long term strategy to save and sustain - it's the same argument for the organization, the projects are doing well, there are enough donations and benefactors to support us, but that should be our sole life line of existence? if that goes, so goes wikimedia? Every organization of this sort invests in assets, keeps funds at their discretion and achieves to become financially independent - independence in this case, seems to be what you are arguing against. You are equating small donations with some sort of financial oversight the donors provide - it's debatable if its exists - we can always lie, miscommunicate, project an urgency, make up expenses - donors would have no knowledge over it - what they trust in this situation is the organization they are donating to, and for it to be financially responsible. The argument comes down to let's forgo all that to live year-by-year, based on some misguided sense of ethical prerogative. I don't understand why a financial strategy is looked at some form of corruption. The mismanagement of funds can happen every year, the budget and the waste can keep expanding, and sadly, the largest majority of donor doesn't go in detail to see where each of their dollar is going - they trust the organization to do what's right - and that is what it comes down - for the organization to be financially prudent and plan ahead, plan for contingencies and sustainability, not just "you pay, we keep Wikipedia online" - Without some form of formal planning, the realization that donations can't match up with the demand might come as a rude awakening later. Theo10011 (talk) 21:05, 28 March 2013 (UTC)
- This is related to another valid objection which is that removing the projects/WMF from being reliant day-to-day on immediate donors removes in a way a layer of accountability: people will stop donating if they don't like what we do, but an endowment takes away some of the immediate pain of that threat. Note that I don't really agree with this objection -- for one thing, we won't be able to have an endowment that covers all expenses for a very long time if ever -- but it's worth discussing. -- phoebe | talk 16:21, 15 March 2013 (UTC)
Does an endowment assume we will be around forever?Edit
An endowment assumes the organization will be around essentially forever, and has good reason to be. Will Wikimedia still be relevant in 20 or 30 years - or longer? If so, why? (question from Wikimedia-l discussion). -- phoebe | talk 20:54, 14 March 2013 (UTC)
- Not necessarily. An endowment fund could merely be a commitment that our products will be preserved for the foreseeable future. An analogy would be the Domesday book, it isn't maintained any more and hasn't been for many centuries. But by creating several very expensive copies and depositing them with institutions that were likely to persist, its creators were able to ensure that it survived the anarchy, the reformation, various civil wars and assorted fires and floods that might otherwise have destroyed it. If we created an endowment with the short term objective that "By 2020 this endowment will be sufficient to ensure the longterm survival of Wikipedia and related databases." and the longterm objective that "By 2030 this endowment will be sufficient to ensure the survival and accessibility of Wikipedia and related databases." Ongoing maintenance of the projects and even continual expansion to cover new events would require sufficient public support to fund that. The cost of keeping copies and migrating them to new media as silicon chips and hard drives go the way of floppy disks, punch cards and paper tape should be minor compared to the cost of maintaining the databases in an editable form; It wouldn't necessarily require much of an organisation, a couple of hundred years after the last edit there would be few people challenging the copyrights or insisting on corrections. WereSpielChequers (talk) 12:43, 6 April 2013 (UTC)
- Similarly, see the Yongle Encyclopedia - some 30,000 person-years were spent writing the encyclopedia. Another ~hundred person-years were spent making 2 copies by hand. Sadly, now most of the original work is destroyed or lost, thanks to lack of broader preservation. –SJ talk 11:01, 22 May 2013 (UTC)
In general, there are good reasons for an endowment or trust even for projects that are not around forever: long-term plans that taper off, long-term projects that will take decades to complete, long-term contingencies that transition to other solutions over decades or centuries. –SJ talk 11:08, 22 May 2013 (UTC)
- Forever is a very long time, and we should be clear that it is not necessary, desirable, or even possible to plan for and fund something forever. There are endowed chairs at Oxford that still fund a part of a professor's salary 300-400 years after they were founded, but only to the tune of a couple hundred pounds a year. (See The Kind Edward VII professorship founded 1911; he's probably lucky enough to get his 800 GBP from the fund. So after 100 years the endowment can be said to be purely nominal) So thinking that far ahead is purely fantasy. I'll suggest the longest we plan for is the expected time that the internet will be the dominant form of public communication - maybe 60 years (?). (That's about the period that television was the dominant form). In reality, we'll have trouble funding even a "keep the lights on" endowment for 20 years - I'll suggest 10 years as being more reasonable. So say we can aim for an endowment of $150 million. That might fund the bare-bones "keep the lights on" functions for 10 years. Note that interest on that (without taking into account the effects of inflation) would only be about $5 million a year, so no way would it cover "forever." Of course the endowment can be topped-up by annual donations from readers, or renewed by an endowment funding drive (say every 5-10 years), but then we'll have to show the donating public that we have something to give society as a whole - which IMHO is fair enough. Smallbones (talk) 19:56, 23 May 2013 (UTC)
- The figure I have for "keep the lights on" is $2.5 million/year. Using this figure (which needs further study and research, to be sure), $150 million could keep the lights on for 60 years. --MZMcBride (talk) 06:37, 24 May 2013 (UTC)
- You obviously have a different idea of keeping the lights on than I do! We should try to get a more concrete understanding of what this means to the various folks discussing it here.
- To me keeping the lights on means:
- Paying for all the effectively legally required positions to keep the foundation running, the board of trustees (and their meetings and expenses), the ED, some legal staff, at least one staff accountant and the outside auditor
- internet hosting
- computer staff needed to fix any broken software, do routine maintenance, required (by our license) data dumps, some minor updating of the software so that over time people can still access the site (as standard internet software changes)
- So in short the law won't close down the foundation and people can still edit and read articles, but no outreach, grants, FDC funding, or bells-and-whistles not strictly needed to keep the current sites running. With inflation and as the number of articles increases, some of these expenses would increase.
- How much in actual dollars would keeping the lights on cost? I can only make the roughest estimates (and folks should correct these), but from the Annual Plan (last column - the others are 6 month figures) the WMF planned to spend $42.1 million total last year (all figures in millions from now on). I'll guess at the following figures to keep the lights on:
- The figure I have for "keep the lights on" is $2.5 million/year. Using this figure (which needs further study and research, to be sure), $150 million could keep the lights on for 60 years. --MZMcBride (talk) 06:37, 24 May 2013 (UTC)
- Internet hosting $3.3 (100% of the figure in last years plan)
- Salaries $1.9 (a tenth of the total in last years plan)
- Facilities, equipment and capital expenditures $0.3 (one-tenth of the plan)
- Outside contractors $1.6 (half of plan, likely auditors, lawyers, and programmers)
- Bank fees and other $0.8 (about 30% of plan)
- Travel and meetings $0.8 (half of plan)
for a grand total estimated annual expenses of $8.7 million (about 20% of the totally planned in the link above). Making a very convenient assumption that interest earned on an endowment would equal the annual percentage cost increases (say both are 5%), to cover these costs we'd need an endowment of $87 million to cover 10 years of keeping the lights on, or $130 million to cover 15 years. I'll double check these later, but please understand that these are only very rough ballpark figures. (Wrigley Field or Yankee Stadium?) Smallbones (talk) 14:04, 24 May 2013 (UTC)
Right... I think a chart may help. Feel free to expand/edit it. I'll leave budget info out for now, but including it may be nice to have eventually. Basically, allocating $1.9 million for "keep the lights on" staff when the Wikimedia Foundation and Wikipedia had only four full-time staff members until 2006 is a bit insane. As for travel, it's the Internet age, so I'm not sure why you'd need $800,000 for it. This is a related post from Erik about minimal operating costs. --MZMcBride (talk) 18:56, 24 May 2013 (UTC)
|January 15, 2001||Wikipedia|
|June 20, 2003||Wikimedia Foundation|
|July 2006||Four full-time employees|
|May 2013||161 employees|
- OK Eric is in the same ballpark as me with $10 annual KTLO costs (just a bit higher). I disagree with his "fund the mission in perpetuity" for 3 reasons.
- For just KTLO costs of $10 million annually, in perpetuity means living just on interest (or capital gains and dividends) of the endowment. If we could possibly get a return of 3% over inflation, that implies a $300 million endowment - could we possibly raise that much? I suggested above aiming for $150 million, but I'd be pretty happy getting $100 million :-)
- Funding the entire mission (i.e. the whole budget) would imply the endowment be 5 times higher - $1.5 billion
- I do think that institutions need to go back to society every once in a while (10-15 years?) and justify their contribution (while asking for new money). Otherwise, the temptation for tricks and corruption and personal agendas is just too big. One example - a classic armour collection (now in the Art Institute of Chicago) was willed to its own foundation about 1900 with a big endowment to pay for costs and trustees etc. The armour stayed in a warehouse for about 70 years while the trustees collected their fat fees. Smallbones (talk) 21:16, 24 May 2013 (UTC)
- The 4 people from 2006 (as worthy as they were/are), was totally out of whack... I would characterize that period more as: blowing oxygen at a candle. The flame burned intensely, but the end of the candle was rapidly coming into view and there was always the risk of blowing out the flame. We gave those people jobs so they could keep their OWN lights on, it was totally insufficient to keep OUR lights on. That point was reached at the earliest in 2009-2010 in my opinion. In my view, we are still paying the price for our severe amateur'ish beginnings in many significant ways, and although it might seem that we haven't actually changed many things since 2006, any of us participating since then, know that the differences are HUGE. Not only WE have changed, but the internet landscape around us as well (requiring us to react), and the pace with which it changes shows no signs of diminishing. —TheDJ (talk • contribs) 13:52, 4 December 2015 (UTC)
Timescales: will we be relevant in...?Edit
- After 10 years, we're just getting started.
- The great reference works of the past: the OED, Britannica, etc., work on a timescale of many decades: for initial production, and then for updates. Even most major contemporary subject encyclopedias take around 5-10 years to produce; and they are working on only a slim slice of topics. (One of my very favorite modern subject encyclopedias, the acclaimed 28-volume Dictionary of Scientific Biography, took 10 years for initial production, plus a few more for some updates; it has something on the order of less than .1% of the # of articles in the English Wikipedia. Great reference works take time).
- We've produced some 25M articles on Wikipedia already, but they all need improvements and constant updating (our great strength, compared to print works of the past); there are 200 languages to work in; there are many missing topics, and other areas of knowledge in the sister projects. We are far (far!) from being close to finished (which might not be immediately apparent to a casual user of the English Wikipedia, but is very, very apparent to those of us working on the thing). We need the assurance of stability to continue this work.
- Wikipedia was born in a historical moment: roughly at the first time when such a thing was possible, due to the expanded reach of the internet and the development of supporting technologies. But at this point, it is not going anywhere. It is a public good.
- An endowment supports this long-term development. We're not working on a start-up timescale. An endowment would support the platform to make the projects available to the world for use and improvement, regardless of the other vicissitudes of the Foundation.
we will be needed more than ever in the futureEdit
There is no reason to believe that need for knowledge -- in an increasingly populated, internet-connected world -- will decrease as the years go on. The role Wikimedia projects fill will not go away, or be technologically superseded -- though our base technology will (hopefully) change and improve, the idea of a reference work or an encyclopedia being useful has been around for hundreds of years for a very good reason: people continue to want to learn about the world. -- phoebe | talk 00:17, 6 April 2013 (UTC)
- Both these subsections are well reasoned, and more importantly will likely be shown to be correct as time passes. I don't think there is anybody who works much with Wikimedia who believes the movement will become less important in the next ten years. I have no doubts that the movement will still be very important after 20 or even 30 years - though that far in the future I wouldn't want to say whether it will be more or less important than it is now. That should be more than enough to justify raising an endowment. To do what we need to do today requires some guarantee that we will still be around in 10 years (that's the next section). Smallbones (talk) 21:15, 23 May 2013 (UTC)
"public trust" argumentEdit
- This is one area that has developed over time as the projects have developed. We now have projects at a stage where part of our responsibility as a community is simply maintaining them and even more basically keeping them in existence, I'd suggest the hierarchy is something like:
- Keep the projects in existence
- Keep the projects available to the Public
- Keep the Projects up-to-date
- Continue to improve the Projects
- Continue to open new projects
- Current annual funding is sufficient for all five, but an endowment would be reassuring even if after a couple of years it could only fund the first point. Hopefully after a decade or two the endowment would reach the stage where it could at least cover the first three. I'm not sure it would be right to ever have an endowment so large that we could use it to continue to open new projects. An organisation that no longer had the public support to fund such expansions should probably not be expanding. WereSpielChequers (talk) 09:33, 25 March 2013 (UTC)
- we are also a public trust in that we are used by millions; most of whom don't have the means to contribute. We are increasingly important in our readers' lives -- we are starting to see the first generation of college students now who grew up using Wikipedia -- and thus we have the responsibility to provide the best service we possibly can. -- phoebe | talk 00:28, 6 April 2013 (UTC)
- Yes. I would hope we could continue to find all five for a long time to come. But as an editor I would be reassured to know that my edits were going to be protected by an endowment fund that would continue to fund the first two of these. If it also funded keeping the projects up to date then I would assume that I as a volunteer would still be able to edit. But the "continue to improve the Projects bit" is something that I am not so convinced that an endowment should be raised for, despite the fact that my WMUK salary would fall into those costs. I would hope that we would only be "continuing to improve the projects" if they were sufficiently relevant and popular that our readers were still willing to fund that part of our operations. WereSpielChequers (talk) 12:52, 6 April 2013 (UTC)
- It's not just readers and current editors that we need to assure a continuing existence (say points 1-3), but potential partners and new editors. Potential partners might be museums, universities, and national archives who want to make their collections available through Wikimedia. This goes beyond the usual definition of GLAMs. There are many institutions that have a lot of information currently locked away in places inaccessible to the internet. Our model likely offers many of them the best way to fulfill their missions and make the information available to the public. But if they think we might disappear after 5 years because of shaky funding or bad management, they'll likely pass on us. Note that this is about what happens to us *TODAY*, it's not really about what happens 5 years from now. Similarly will new editors put in their effort here if they think that Wikipedia is an institution that's dying or will disappear in a few years? There's a guy uploading his photos to Commons now, who has been taking photos for 50 years, and he has been almost everywhere around the world. He's a bit clumsy on the upload and this will take several more months, possibly years to complete. Would he bother if he thought that Commons won't be around in a few years? An endowment is even more about what we accomplish today than it is about what we accomplish years down the road. Given the choice, would you send your kid today to Harvard or to Fantastic New U? Which has the largest endowment? Which will be worth more in to have on the kid's diploma in 20 years? What choice would you make today? Smallbones (talk) 21:38, 23 May 2013 (UTC)
Report to the Audit Committee in summer (June - August 2013)Edit
Hi. According to this post by Garfield Byrd, the Wikimedia Foundation's Chief of Finance and Administration, we can expect to see a report about the endowment issue sometime this summer. --MZMcBride (talk) 07:06, 26 March 2013 (UTC)
- Yes. At the last audit committee meeting, we discussed the pros and cons of an endowment specifically, and long-term investment in general. It was suggested that in the near term we might consider shifting some % of our reserve to long-term investments, and might consider what an endowment campaign could look like. It was agreed that it would be helpful to have specific options and comparative examples to discuss. –SJ talk 11:08, 22 May 2013 (UTC)
What would raising a perpetuity endowment with sustained traditional fundraising look like?Edit
Assuming that the trend from this July's experiment reflected on https://frdata.wikimedia.org/ (which shows the result of offering one banner per cookie to 5% of logged-out enwiki page views) continues to fall off along the same curve, it seems reasonable to say that total sustained fundraising capacity is now at least $30 million per month. Suppose we wanted to fund an endowment to pay Foundation expenses at current levels in perpetuity from investment income alone. With a assumption of 5% investment income returns (high-yield bond funds have been paying over 12% during the 2008- downturn) that suggests it would take less than three years of sustained fundraising to get to the point where no further fundraising would ever be necessary. (After that, if growth is necessary, then it could be funded on a per-campaign basis, for example.)
Presumably it would also be possible to raise endowment donations from other foundations and wealthy individuals, but if we could do it all from small donors, would that be preferable? 188.8.131.52 21:19, 16 July 2013 (UTC)
Board resolution passed, but not publishedEdit
Apparently, in its December 9, 2015 meeting, the Board of Trustees passed a resolution related to the an endowment. This was published in the minutes in March 2016. However, the link to the resolution itself is broken, and there does not appear to be any such resolution (yet?) on the Foundation Wiki. See here: Wikimedia Foundation board meeting notes, 2015-12 Lgruwell-WMF, do you know where the snag is? -Pete F (talk) 17:17, 8 March 2016 (UTC)
Re Endowment#Proposal, $100 million seems too small for a perpetuity goal. If you can earn around 2.5% then you would need $3 billion to pay $75 million per year. EllenCT (talk) 16:48, 3 June 2016 (UTC)
Please see also .
@Lgruwell-WMF: has anyone said what their expectations are for rates of return on endowment investments? Has the Foundation been operating a higher yield investment account to measure such performance? EllenCT (talk) 22:08, 5 June 2016 (UTC)
- Thanks for the question, EllenCT. We set the strategic goal of this endowment campaign as preserving the projects, essentially keeping the servers running. The endowment will not replace annual fundraising for WMF. It will provide support for basics needed to keep the site online. That said, this is the first endowment campaign. There could be others in the future that set other strategic goals. With regard to how the endowment is invested, we are just beginning that work. The first step is recruiting a Endowment board who have investment and fundraising expertise. We added Annette Campbell White to the board last month and will be adding other members over the next few months to create group with diverse expertise. You can read about her here. Also, I just wanted to make sure you knew about this talk page too . . . I have been putting a lot of updates there. Thank you! --Lgruwell-WMF (talk) 16:48, 7 June 2016 (UTC)
Relevant in the futureEdit
Just some thoughts provoked by the (admittedly) old question above, "Will Wikimedia still be relevant in 20 or 30 years - or longer? If so, why?"
First, one constant we can be sure of is that in 20+ technology will have changed. Maybe for the better (more effective use of communications & resources), maybe for the worse (censorship, decreased living standards for the majority of mankind). But in any case, will the scribblings of thousands of nobodies matter in 30+ years?
Since someone else raised the issue of television (which was the dominant media 60 years ago), let's use an example from that: let's imagine that someone preserved for common & free use an entire season of a tv program (pick one, any one). Would anyone bother to watch that program? In my experience, there are people who would watch that archived program, in all of its imperfections. Some would watch it to learn about how technology has changed, some for cultural clues (which would make any commercials or station identification bumpers particularly valuable), & some would watch it just for entertainment purposes. So there is value there. And when you consider just how ephemeral the Internet is as a medium -- there are websites from 20 years ago that can no longer be accessed, unless they happened to be captured in the Internet Archive. (And having a copy there does not guarantee preservation; there are many ways to remove content there.)
One issue is cost. Returning to my hypothetical example, at first it would be costly to provide for free -- or a nominal cost -- copies of this archived season of a tv program. Television technology 60 years ago was expensive, both for media & mechanisms for viewing it. However, this cost gradually decreased over the years until now it would involve either providing DVDs of the show for free, or maintaining a server on the Internet where the episodes could be downloaded for free. In either case, the cost of sharing has dropped to the point where providing one copy for free now would fund an entire year of providing it for free. We could expect the same dynamic working here: what we imagine will cost $10 millions a year to provide may, in 60 years, cost only a few thousand dollars. (Hopefully that decline in cost will outpace the effect of inflation, & several million set aside today will prove more than adequate.)
And there is the issue whether Wikimedia as an active project will be relevant. That is, an online community that has joined together to provide a source of information available to all for free. I'll admit I hope this does not become obsolete, that at least some information will remain free, & that people are allowed to share it. Nevertheless, the implementation of this ideal may become obsolete; someone may come up with a better method for creating an encyclopedia than Wikipedia. (And I'll admit that I'm not afraid that this might happen; provide a better tool, & I'll be happy to use it.) Still, anyone who reinvents the encyclopedia (or image/sound repository, or collection of digitized written works, etc.) will first need to use what has gone before, much as Wikipedia used EB 1911. Thus Wikimedia does have a future -- just not in the way we might imagine.
Lastly, there is an obligation here that needs to be met. Thousands of people have donated time & labor to providing content, & expect it to be available for free (in all senses of that word) indefinitely. Unless this donated content is made available indefintely (or at least as long as possible -- nuclear winter, zombie apocalypse, or another asteroid striking the planet & making survival iffy are reasonable excuses to permit failure) WMF & all who assist will have reneged on that obligation. Then again, this obligation is not explicitly part of this proposal for creating an endowment. And it should be. -- Llywrch (talk) 18:29, 6 June 2016 (UTC)
Measuring the cost of countering paid advocacy editing?Edit
Is it reasonable to assess how much paid advocacy editing has occurred in the past, how much is likely actually occurring, the rate at which it is growing, the extent to which it inhibits community progress towards improvements, the extent to which it causes animosity and instruction creep, and the amount of money it would reasonably require if professionals were to supplement the efforts of volunteers to counter it when setting the endowment goal? EllenCT (talk) 17:40, 29 July 2016 (UTC)