4 ms·

> We have a deep and stable financial position that will help us grow and protect us from any storm, and the trust in our projects has never been higher. They

by Zababa 6y ago

> We have a deep and stable financial position that will help us grow and protect us from any storm, and the trust in our projects has never been higher. They earned 9 millions more than last year, from 120 millions to 129 millions, and spent 21 millions more, from 91 millions to 112 millions [1], with an increase of 10 millions in "awards and grants". The donations grew by 10 millions. If I read the financial statement correctly (feel free to correct me, I'm not an expert), they currently have 180 millions in assets, which means if donations stop they can't even last two years. I don't see how this is a "deep and stable financial position that will help us grow and protect us from any storm". Edit: as tux3 pointed out in their comment [2] there is a Wikipedia Endowment. I think I can now agree on the "deep and stable financial position". [1]: https://upload.wikimedia.org/wikipedia/foundation/f/f7/Wikimedia_Foundation_FY2019-2020_Audit_Report.pdf https://upload.wikimedia.org/wikipedia/foundation/f/f7/Wikim... [2]: https://news.ycombinator.com/item?id=26028968 https://news.ycombinator.com/item?id=26028968

not2b 6y ago
Most nonprofits can't last long "if donations stop". Why would they stop? I give every year and so do many others.
- mikepurvis 6y ago
  Indeed, and I'm not sure it would be a defensible position to just be stashing your donated funds into a gigantic rainy day war chest— the money is there to spend on growing and fortifying the service in other ways, so it should be spent.
  - tristor 6y ago
    The proper way for non-profits to do this is to start an endowment fund, which provides consistent residual income that can help fund operations. Usually by identifying specific large donors who would wish to be named in the fund.
    - hinkley 6y ago
      I guess we’re “disrupting” foundations too.
      - tristor 6y ago
        I'm not sure I understand your meaning? Endowments and foundations are different things with different objectives. Many foundations may have endowments of their own, and may use them to issue grants to non-profits. From a legal and financial perspective though, there's a difference between a non-profit having an endowment itself which provides restricted funds for specific operational activities vs how foundations typically create and structure endowments for external giving. Both concepts have been around for decades, so I don't think either is particularly disruptive.
    - mikepurvis 6y ago
      It looks as though they do indeed have such a fund: https://www.theguardian.com/technology/2016/jan/15/wikipedia-fund-future https://www.theguardian.com/technology/2016/jan/15/wikipedia...
- Taylor_OD 6y ago
  Something like a global pandemic that removes their job?
- hinkley 6y ago
  I think you do have to ask yourself if the need for the charity can outlast its time in the sun. The Red Cross needs to stay frosty all the time. They get money every time there’s a disaster, but the money to deal with the current disaster needs to have already been spent before the checks clear. If we haven’t had a big disaster in a while, we all know there’s one coming, because they always come, and when that shoe finally drops it might be huge. But donations are down because nothing is blowing up. We still need Wikipedia even if someone cures cancer. Because you don’t cure cancer, you cure a cancer, the moment you’ve cured two or three, an avalanche of money will arrive to fix the others. Money that might have gone to something else like the Red Cross, WWF, PP, Wikipedia, or really all of the above.
  - tptacek 6y ago
    It's funny, because the Red Cross is famously one of the least effective deals in charity.
    - hinkley 6y ago
      I think they are running a charity on hard mode. If I were feeding homeless people (any year except last year), I have a pretty good idea of what I have to accomplish and for how many people. I could run a pretty lean operation. Meanwhile RC “has to” stash supplies 12 hours from everywhere in the world and then let most of them rot. Their overheads are huge, even before you get into any discussion of mismanagement.
      - tptacek 6y ago
        You can Google to quickly get a bunch of different articles about how ineffective the Red Cross is; we don't need to recapitulate them all here, it's just a little funny that they were your example of an obvious recurring charity donation. If I have a real point here, it's that people all have different definitions of what important charities are.
        hinkley 6y ago
- mistrial9 6y ago
  My Japanese colleague told me with no humor, that I should never work for free, end of sentance. I was at the offices of $Giant_90s_NonProfit when a group from Japan was on tour of the two story office in San Francisco. They were full of energy and had questions, but someone told me the reason they sent a large and important group for the tour, is that they have no "non-profit" in Japan. I suspect that the non-profit goodwill in the USA is changing a lot in the last year.
mhh__ 6y ago
I think a loss of 100% of one's income is probably a risk so deep into the tails that planning for it is by definition a little stupid. Edit: For a company - apart from Welfare you should have a plan as an individual
- reaperducer 6y ago
  Every large company I've worked for has planned for a "zero revenue" scenario. It's hardly stupid.
  - mhh__ 6y ago
    In Wikimedia's case, 0 income basically means they've probably been legally dissolved, what more can they do? I was being a little facetious, but the point was more in response to the PC than as a standalone argument.
deleted 6y ago
[deleted]
macksd 6y ago
If an individual had no desire to ever retire and was able to pay all of their bills for the next 2 years with no further paychecks and no adjustments to their lifestyle, I'd call that a pretty deep level of financial stability. Especially since in this case their income sources are somewhat diversified across people, unlike a single paycheck from an employer.
heavenlyblue 6y ago
Do you know of many businesses which could sustain their operation without any revenue for two straight years? If you do these are really inefficient businesses. If you do however decide to say they non profits should do that, then what’s the point of having that money in non profits if you could just put that money in a savings account and supply the non profit every year?
hinkley 6y ago
When I hear “Foundation” and “stable financial position” I think endowment. They seem to be making the same mistake as the Mozilla foundation. You’re living on your nest egg instead of the interest. Spending 4 times as much as you should.
- tux3 6y ago
  The foundation set up a Wikipedia Endowment some five years ago, which has now reached 90MM of a 100MM goal. https://meta.wikimedia.org/wiki/Wikimedia_Endowment https://meta.wikimedia.org/wiki/Wikimedia_Endowment
  - Zababa 6y ago
    Thanks, I wasn't aware of this project. I have edited my comment to include it.
  - hinkley 6y ago
    Is that enough to pay salaries and hosting costs? Sounds like the dividends will only cover 20% of their current expenses if they stop making grants. At it is it’s less than 10% of their burn rate. That’s a very excellent start but I suspect someone will want to grow that later on. In fact they’re at 90% of their goal and less than 60% of their target date, so they could be looking for $150M as the stretch goal.
- throwaway2245 6y ago
  Why should Wikimedia need a significant nest egg? What do you do with the money, when people have stopped valuing Wikimedia enough that they are no longer paying for it to exist?
  - hinkley 6y ago
    Donations are not a zero sum game but they aren’t terribly elastic either. Try as you might, every dollar you get as a donation is taking some of that money from someone else. There will be times when Wikipedia is not sexy, but taken for granted. That’s when you need the endowment.
leetcrew 6y ago
why did expenses rise by $21mm though? is the organization fortunate that donations rise fast enough to cover an annual increase in necessary spending, or does the spending grow as much as necessary to consume the donations? WMF spent $52mm in FY 2014-2015. it spent $112mm in FY 2019-2020. is the core project really twice as expensive to run as it was five years ago?
- xyzzyz 6y ago
  No, core project costs less than $5M/year to run. They spend more on processing donations (credit card fees etc) than they do on web hosting.
BugsJustFindMe 6y ago
No law of physics says they must continue pouring tens of millions into outreach programs if all revenue ceases. Hosting wikipedia is their one true cost and is relatively tiny compared to everything else they spend money on.
- doc_gunthrop 6y ago
  Hosting wikipedia accounts for roughly 2% of their total expenses. I've been donating annually, but it would be nice to have the option for the entirety of my donations go only to running wikipedia and none of it going to wikimedia's discretionary spending.
  - kemayo 6y ago
    I do think it's hard to draw the line there, just because "running wikipedia" is kinda fuzzy and could mean different things to different people. There's pure hosting costs (servers and bandwidth), then there's staff to maintain those servers, staff to handle legal issues around a large community-contributed project, staff to do moderation and other community-relations work, staff to improve the mediawiki software that wikipedia runs on, staff to manage administrative stuff for those other staff, etc. There's room to debate which of these are necessary to "run wikipedia", and how much of each of them is needed, but it's a lot more complicated than just keeping the servers turned on. (And if you do think that the Foundation could be just-paying-for-hosting, you're implicitly hoping that some people are going to be donating their skilled-work for maintenance.)
  - cameldrv 6y ago
    Why don't you just donate to to something else then? Wikipedia obviously has more than enough money to keep the website running.
reaperducer 6y ago
if donations stop they can't even last two years. I don't see how this is a "deep and stable financial position that will help us grow and protect us from any storm". It depends on the company and the industry. One industry I worked in, six months was considered the minimum cushion. In a post-COVID world, though, I bet a lot of those industries will increase their padding.
xyzzyz 6y ago
That’s okay, if they go bankrupt, someone more competent could take over, and easily run Wikipedia on less than a tenth of their current budget. Look at their financials: Wikimedia Foundation is part jobs program, part grift.
- Jonnax 6y ago
  Everytime Wikipedia comes up on hacker news there's always comments about how they're wasteful and incompetent. What is this self righteous anger for? They're incompetent but somehow Wikipedia exists. Is it jealousy?
  - xyzzyz 6y ago
    It is anger at the collapse of every institution of our society, most of which have transformed away from their original purpose, and into sinecures for well-educated and well-connected professionals, who, under false pretenses, skim the surplus by lying about what they do, and shaming the productive masses into supporting them. I admit that I'm also full of wishful thinking. I said that once they go bankrupt, someone more competent will take over, but there's no guarantee of that -- instead, it is highly likely that some other skilled and well-connected grifter will assume control, will keep the "crying Jimbo Wales" ads to shame people into giving them money they spend on salaries and travel expenses of people doing things that do not need to be done, and often things that Wikipedia community doesn't even want done.
    - Hallucinaut 6y ago
      I have to admit I was unaware until this thread that the call for urgent donations was despite this endowment and their expenses other than directly operating wikipedia.org. Thanks for that eye-opener.
- lancesells 6y ago
  I don't know why you're calling it grift. According to the definition a non-profit is not conducted or maintained to make a profit. I'm guessing most of us agree that Wikipedia is an asset to society and I'm hoping the people that work there get paid well. Why would I not want more people working at Wikimedia compared to something more detrimental to society like Facebook?

by Zababa 6y ago

not2b 6y ago

Most nonprofits can't last long "if donations stop". Why would they stop? I give every year and so do many others.

mikepurvis 6y ago
Indeed, and I'm not sure it would be a defensible position to just be stashing your donated funds into a gigantic rainy day war chest— the money is there to spend on growing and fortifying the service in other ways, so it should be spent.
- tristor 6y ago
  The proper way for non-profits to do this is to start an endowment fund, which provides consistent residual income that can help fund operations. Usually by identifying specific large donors who would wish to be named in the fund.
  - hinkley 6y ago
    I guess we’re “disrupting” foundations too.
    - tristor 6y ago
      I'm not sure I understand your meaning? Endowments and foundations are different things with different objectives. Many foundations may have endowments of their own, and may use them to issue grants to non-profits. From a legal and financial perspective though, there's a difference between a non-profit having an endowment itself which provides restricted funds for specific operational activities vs how foundations typically create and structure endowments for external giving. Both concepts have been around for decades, so I don't think either is particularly disruptive.
  - mikepurvis 6y ago
    It looks as though they do indeed have such a fund: https://www.theguardian.com/technology/2016/jan/15/wikipedia-fund-future https://www.theguardian.com/technology/2016/jan/15/wikipedia...
Taylor_OD 6y ago
Something like a global pandemic that removes their job?
hinkley 6y ago
I think you do have to ask yourself if the need for the charity can outlast its time in the sun. The Red Cross needs to stay frosty all the time. They get money every time there’s a disaster, but the money to deal with the current disaster needs to have already been spent before the checks clear. If we haven’t had a big disaster in a while, we all know there’s one coming, because they always come, and when that shoe finally drops it might be huge. But donations are down because nothing is blowing up. We still need Wikipedia even if someone cures cancer. Because you don’t cure cancer, you cure a cancer, the moment you’ve cured two or three, an avalanche of money will arrive to fix the others. Money that might have gone to something else like the Red Cross, WWF, PP, Wikipedia, or really all of the above.
- tptacek 6y ago
  It's funny, because the Red Cross is famously one of the least effective deals in charity.
  - hinkley 6y ago
    I think they are running a charity on hard mode. If I were feeding homeless people (any year except last year), I have a pretty good idea of what I have to accomplish and for how many people. I could run a pretty lean operation. Meanwhile RC “has to” stash supplies 12 hours from everywhere in the world and then let most of them rot. Their overheads are huge, even before you get into any discussion of mismanagement.
    - tptacek 6y ago
      You can Google to quickly get a bunch of different articles about how ineffective the Red Cross is; we don't need to recapitulate them all here, it's just a little funny that they were your example of an obvious recurring charity donation. If I have a real point here, it's that people all have different definitions of what important charities are.
      - hinkley 6y ago
mistrial9 6y ago
My Japanese colleague told me with no humor, that I should never work for free, end of sentance. I was at the offices of $Giant_90s_NonProfit when a group from Japan was on tour of the two story office in San Francisco. They were full of energy and had questions, but someone told me the reason they sent a large and important group for the tour, is that they have no "non-profit" in Japan. I suspect that the non-profit goodwill in the USA is changing a lot in the last year.

mhh__ 6y ago

I think a loss of 100% of one's income is probably a risk so deep into the tails that planning for it is by definition a little stupid. Edit: For a company - apart from Welfare you should have a plan as an individual

reaperducer 6y ago
Every large company I've worked for has planned for a "zero revenue" scenario. It's hardly stupid.
- mhh__ 6y ago
  In Wikimedia's case, 0 income basically means they've probably been legally dissolved, what more can they do? I was being a little facetious, but the point was more in response to the PC than as a standalone argument.

deleted 6y ago

[deleted]

macksd 6y ago

If an individual had no desire to ever retire and was able to pay all of their bills for the next 2 years with no further paychecks and no adjustments to their lifestyle, I'd call that a pretty deep level of financial stability. Especially since in this case their income sources are somewhat diversified across people, unlike a single paycheck from an employer.

heavenlyblue 6y ago

Do you know of many businesses which could sustain their operation without any revenue for two straight years? If you do these are really inefficient businesses. If you do however decide to say they non profits should do that, then what’s the point of having that money in non profits if you could just put that money in a savings account and supply the non profit every year?

hinkley 6y ago

When I hear “Foundation” and “stable financial position” I think endowment. They seem to be making the same mistake as the Mozilla foundation. You’re living on your nest egg instead of the interest. Spending 4 times as much as you should.

tux3 6y ago
The foundation set up a Wikipedia Endowment some five years ago, which has now reached 90MM of a 100MM goal. https://meta.wikimedia.org/wiki/Wikimedia_Endowment https://meta.wikimedia.org/wiki/Wikimedia_Endowment
- Zababa 6y ago
  Thanks, I wasn't aware of this project. I have edited my comment to include it.
- hinkley 6y ago
  Is that enough to pay salaries and hosting costs? Sounds like the dividends will only cover 20% of their current expenses if they stop making grants. At it is it’s less than 10% of their burn rate. That’s a very excellent start but I suspect someone will want to grow that later on. In fact they’re at 90% of their goal and less than 60% of their target date, so they could be looking for $150M as the stretch goal.
throwaway2245 6y ago
Why should Wikimedia need a significant nest egg? What do you do with the money, when people have stopped valuing Wikimedia enough that they are no longer paying for it to exist?
- hinkley 6y ago
  Donations are not a zero sum game but they aren’t terribly elastic either. Try as you might, every dollar you get as a donation is taking some of that money from someone else. There will be times when Wikipedia is not sexy, but taken for granted. That’s when you need the endowment.

leetcrew 6y ago

why did expenses rise by $21mm though? is the organization fortunate that donations rise fast enough to cover an annual increase in necessary spending, or does the spending grow as much as necessary to consume the donations? WMF spent $52mm in FY 2014-2015. it spent $112mm in FY 2019-2020. is the core project really twice as expensive to run as it was five years ago?

xyzzyz 6y ago
No, core project costs less than $5M/year to run. They spend more on processing donations (credit card fees etc) than they do on web hosting.

BugsJustFindMe 6y ago

No law of physics says they must continue pouring tens of millions into outreach programs if all revenue ceases. Hosting wikipedia is their one true cost and is relatively tiny compared to everything else they spend money on.

doc_gunthrop 6y ago
Hosting wikipedia accounts for roughly 2% of their total expenses. I've been donating annually, but it would be nice to have the option for the entirety of my donations go only to running wikipedia and none of it going to wikimedia's discretionary spending.
- kemayo 6y ago
  I do think it's hard to draw the line there, just because "running wikipedia" is kinda fuzzy and could mean different things to different people. There's pure hosting costs (servers and bandwidth), then there's staff to maintain those servers, staff to handle legal issues around a large community-contributed project, staff to do moderation and other community-relations work, staff to improve the mediawiki software that wikipedia runs on, staff to manage administrative stuff for those other staff, etc. There's room to debate which of these are necessary to "run wikipedia", and how much of each of them is needed, but it's a lot more complicated than just keeping the servers turned on. (And if you do think that the Foundation could be just-paying-for-hosting, you're implicitly hoping that some people are going to be donating their skilled-work for maintenance.)
- cameldrv 6y ago
  Why don't you just donate to to something else then? Wikipedia obviously has more than enough money to keep the website running.

reaperducer 6y ago

if donations stop they can't even last two years. I don't see how this is a "deep and stable financial position that will help us grow and protect us from any storm". It depends on the company and the industry. One industry I worked in, six months was considered the minimum cushion. In a post-COVID world, though, I bet a lot of those industries will increase their padding.

xyzzyz 6y ago

That’s okay, if they go bankrupt, someone more competent could take over, and easily run Wikipedia on less than a tenth of their current budget. Look at their financials: Wikimedia Foundation is part jobs program, part grift.

Jonnax 6y ago
Everytime Wikipedia comes up on hacker news there's always comments about how they're wasteful and incompetent. What is this self righteous anger for? They're incompetent but somehow Wikipedia exists. Is it jealousy?
- xyzzyz 6y ago
  It is anger at the collapse of every institution of our society, most of which have transformed away from their original purpose, and into sinecures for well-educated and well-connected professionals, who, under false pretenses, skim the surplus by lying about what they do, and shaming the productive masses into supporting them. I admit that I'm also full of wishful thinking. I said that once they go bankrupt, someone more competent will take over, but there's no guarantee of that -- instead, it is highly likely that some other skilled and well-connected grifter will assume control, will keep the "crying Jimbo Wales" ads to shame people into giving them money they spend on salaries and travel expenses of people doing things that do not need to be done, and often things that Wikipedia community doesn't even want done.
  - Hallucinaut 6y ago
    I have to admit I was unaware until this thread that the call for urgent donations was despite this endowment and their expenses other than directly operating wikipedia.org. Thanks for that eye-opener.
lancesells 6y ago
I don't know why you're calling it grift. According to the definition a non-profit is not conducted or maintained to make a profit. I'm guessing most of us agree that Wikipedia is an asset to society and I'm hoping the people that work there get paid well. Why would I not want more people working at Wikimedia compared to something more detrimental to society like Facebook?