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Huh? From the OP: "After we burn through our reserves, it seems likely that the next step for the WMF will be going into debt to support continued runaway spen

Huh? From the OP: "After we burn through our reserves, it seems likely that the next step for the WMF will be going into debt to support continued runaway spending, followed by bankruptcy." If it was just about wasting donations, they'd never go into debt. It's costs, and specifically costs-to-income ratio he seems perturbed about.

smsm42 9y ago
> If it was just about wasting donations, they'd never go into debt. But there's no debt. The whole argument is pure conjecture based on imagination. Using it as if it were a fact that proves something makes little sense.
- robotresearcher 9y ago
  The author imagines that the funding will not grow forever. That's almost a certainty, as the article describes carefully.
  - narrowrail 9y ago
    While it's a good warning to WMF, it's not currently a problem. With longevity, they are in for some large endowments. I think those giving a certain amount (?) should have a vote on various directions of the org, like shareholders but, for the common good that supports their mission statements, instead of shareholder value. Edit: Punctuation.
    - mst 9y ago
      > While it's a good warning to WMF, it's not currently a problem. I believe the author's thesis is that by the time "it's not currently a problem" is no longer an argument that makes sense, it will also no longer be possible to effectively correct the WMF's course in a way that will solve it. I'm not sure I have any idea how to effectively determine if the author is correct about that, but certainly I don't think "it's not currently a problem" actually contradicts anything he's saying.
      - jawbone3 9y ago
        Ecxept for the correction that it is the authors unsupported assertion, not any actually argued thesis, I think you summarized it nicely.
  - smsm42 9y ago
    Funding will not grow forever, neither would expense. There's no danger it would consume whole world's GDP and would require us to acquire an intergalactic loan from Arcturian Galactic Bank. https://www.xkcd.com/605/ https://www.xkcd.com/605/
JackFr 9y ago
From the table in the OP, reserves have gone up every year. The point isn't that the donations are wasted, its that in spending them, you create an organism that needs to be fed.
caseysoftware 9y ago
In most non-profit organizations, costs never go down. Once a budget is set for programs, staffing, etc, they don't just go away and in fact, they often continue to grow without bound. See any government budget ever for evidence. So if donations don't continue to grow to match or at least keep pace, they could start running a deficit to eat away those reserves in no time. And once a non-profit organization starts running at a deficit, some contributors will question their contributions and they may shrink accordingly. Those reserves could disappear in just a few years.. unless there's a change, two years should show the direction and another couple years, the course will be set one way or another.
- JackFr 9y ago
  > And once a non-profit organization starts running at a deficit, some contributors will question their contributions and they may shrink accordingly. That's backwards though. It's not unusual for a non-profit to run a deficit. A donor will question a non-profit that's running a surplus - why am I giving you money you don't need.
  - mattnewton 9y ago
    Apparently not in the case of WMF.
  - narrowrail 9y ago
    How many people that give to charities look at their balance sheets before hand?
    - caseysoftware 9y ago
      Most don't as long as everyone is getting paid, the galas and events continue, and outward appearances are fine. Once invoices or paychecks are delayed, people stop and question why the leadership is "making so much money" and the ROI on galas and events. And once a few donors see the deficits, the questions get harder and money slows down.. making the next round of invoices a little harder.
- 9y ago
mattnewton 9y ago
He's expected a future where the growth in fundraising declines, but the costs they have committed to are unable to decline at the same rate.
emmelaich 9y ago
> If it was just about wasting money people give you, you'd never go into debt. The point is that costs will continue to rise (or not fall) after the funding inevitably falls (or fails to rise enough)

smsm42 9y ago

> If it was just about wasting donations, they'd never go into debt. But there's no debt. The whole argument is pure conjecture based on imagination. Using it as if it were a fact that proves something makes little sense.

robotresearcher 9y ago
The author imagines that the funding will not grow forever. That's almost a certainty, as the article describes carefully.
- narrowrail 9y ago
  While it's a good warning to WMF, it's not currently a problem. With longevity, they are in for some large endowments. I think those giving a certain amount (?) should have a vote on various directions of the org, like shareholders but, for the common good that supports their mission statements, instead of shareholder value. Edit: Punctuation.
  - mst 9y ago
    > While it's a good warning to WMF, it's not currently a problem. I believe the author's thesis is that by the time "it's not currently a problem" is no longer an argument that makes sense, it will also no longer be possible to effectively correct the WMF's course in a way that will solve it. I'm not sure I have any idea how to effectively determine if the author is correct about that, but certainly I don't think "it's not currently a problem" actually contradicts anything he's saying.
    - jawbone3 9y ago
      Ecxept for the correction that it is the authors unsupported assertion, not any actually argued thesis, I think you summarized it nicely.
- smsm42 9y ago
  Funding will not grow forever, neither would expense. There's no danger it would consume whole world's GDP and would require us to acquire an intergalactic loan from Arcturian Galactic Bank. https://www.xkcd.com/605/ https://www.xkcd.com/605/

JackFr 9y ago

From the table in the OP, reserves have gone up every year. The point isn't that the donations are wasted, its that in spending them, you create an organism that needs to be fed.

caseysoftware 9y ago

In most non-profit organizations, costs never go down. Once a budget is set for programs, staffing, etc, they don't just go away and in fact, they often continue to grow without bound. See any government budget ever for evidence. So if donations don't continue to grow to match or at least keep pace, they could start running a deficit to eat away those reserves in no time. And once a non-profit organization starts running at a deficit, some contributors will question their contributions and they may shrink accordingly. Those reserves could disappear in just a few years.. unless there's a change, two years should show the direction and another couple years, the course will be set one way or another.

JackFr 9y ago
> And once a non-profit organization starts running at a deficit, some contributors will question their contributions and they may shrink accordingly. That's backwards though. It's not unusual for a non-profit to run a deficit. A donor will question a non-profit that's running a surplus - why am I giving you money you don't need.
- mattnewton 9y ago
  Apparently not in the case of WMF.
- narrowrail 9y ago
  How many people that give to charities look at their balance sheets before hand?
  - caseysoftware 9y ago
    Most don't as long as everyone is getting paid, the galas and events continue, and outward appearances are fine. Once invoices or paychecks are delayed, people stop and question why the leadership is "making so much money" and the ROI on galas and events. And once a few donors see the deficits, the questions get harder and money slows down.. making the next round of invoices a little harder.
9y ago

mattnewton 9y ago

He's expected a future where the growth in fundraising declines, but the costs they have committed to are unable to decline at the same rate.

emmelaich 9y ago

> If it was just about wasting money people give you, you'd never go into debt. The point is that costs will continue to rise (or not fall) after the funding inevitably falls (or fails to rise enough)