Thanks Veronique & Eugene for your comprehensive & thoughtful replies re: this issue. It seems clear that an endowment (if there is ever one developed) and good fundraising is not an either/or proposition.
There is also additional discussion going on about related topics on this talk page: http://strategy.wikimedia.org/wiki/Talk:Strategic_Plan/Role_of_the_WMF best, Phoebe On Wed, Jun 30, 2010 at 1:53 PM, Veronique Kessler <vkess...@wikimedia.org> wrote: > Thanks everyone for your comments thus far (and for the thank yous too :)). > > As we progress through accomplishing the goals of the strategic plan, we > will have a better idea of what level our operating budget will need to > be to make everything happen and be sustainable. We will have done some > experimentation with initiatives like geographic investments and the > addition of more roles to support chapters. We don't know what our > optimal operating level will be and what fundraising level we can > sustain. We have made some predictions based on a lot of factors and we > will be able to respond appropriately to new information, changes in > circumstances, etc. as we progress through this fiscal year and future > years. > > For the endowment, Eugene really summed up the endowment issue well. I > want to point out that typically endowments do not fund the ongoing > annual expenses of an organization. A portion of the annual earnings on > the endowment may be allocated to help support operations but it is > usually a small percentage. In the past, one could estimate 8-10% > earnings each year and then allocate some to operations and roll the > rest back to the endowment to continue to grow it. Alas, these days, > 8-10% returns are hard to come by. Just to put it into perspective, if > we were to support a $20 million budget with 5% earnings from an > endowment, we would need $400 million dollars. Endowments can be very > useful and we will continue to analyze this option for the future but it > is unlikely that an endowment would ever provide our entire operating > budget each year. > > Veronique > > susanpgard...@gmail.com wrote: >> Thanks Eugene! This is essentially what I would've written, had I gotten >> there first. So thank you. >> >> I will just add: everyone wants an endowment campaign -- the issue is not >> whether to do it; the issue is when to do it. We're still developing our >> pool of donors (especially the chapters, who are with the exception of the >> German chapter very new to fundraising), and we are still finding our voice >> when it comes to fundraising. Given that --and given that we have lots of >> work to do improving our service to readers, and donors are typically more >> motivated to fund necessary work, before they'll fund permanence -- that's >> why we're currently focusing on growing the number of donors. Walking >> before running. >> >> And yes, Ziko, thanks for calling out the new revenue strategy: it's >> significant. I am really grateful that hundreds of thousands of ordinary >> people are willing to fund the work we do: it's by far the best model for us >> from an ideological standpoint. Most non-profits are in two completely >> unrelated businesses: the business of mission activity, and the business of >> revenue generation ----- we are lucky that for us, mission activity and >> revenue generation can be 100 per cent aligned. >> >> I am proud and happy about our new revenue strategy. We're in an enviable >> position, in that we don't need to make unhappy compromises -- instead, we >> have the luxury of being able to focus on the actual mission work we're >> trying to get done :-) >> >> Thanks, >> Sue >> >> >> -----Original Message----- >> From: Eugene Eric Kim <ee...@blueoxen.com> >> Sender: foundation-l-boun...@lists.wikimedia.org >> Date: Wed, 30 Jun 2010 09:45:49 >> To: Wikimedia Foundation Mailing List<foundation-l@lists.wikimedia.org> >> Reply-To: Wikimedia Foundation Mailing List >> <foundation-l@lists.wikimedia.org> >> Subject: Re: [Foundation-l] 2010-11 Annual Plan Now Posted to Foundation >> Website >> >> On Wed, Jun 30, 2010 at 8:38 AM, phoebe ayers <phoebe.w...@gmail.com> wrote: >> >>> A small point -- I don't know who the "you" refers to here -- me? -- >>> but when *I* ask for an endowment, it is not because I think the >>> current levels of support suffice; that's a different question. It's >>> because I don't want the long-term support for Wikimedia to be >>> dependent on our ability to fundraise increasingly large amounts from >>> year to year. Fundraising above and beyond such an endowment is fine >>> and good and necessary as well. I have heard that raising an endowment >>> was rejected by the strategy process because it was hard; I don't know >>> what that means, exactly, but raising an extra $20M in a recession is >>> hard, too. >>> >> >> That was from me, and I obviously oversimplified my explanation in an >> attempt to be concise. Gerard and Ziko have already raised critical >> points that entered into the decision to focus on many small donors as >> an ongoing strategy. To expand on this, see this thread started by Sue >> a few weeks ago on strategy wiki: >> >> http://strategy.wikimedia.org/wiki/Talk:Strategic_Plan/Movement_Priorities#Revenue_sources_5703 >> >> In regards to the endowment question, as you note, the motivation for >> an endowment drive is long-term sustainability and some level of >> protection from recession. The cost of doing an endowment drive is >> enormous. There is usually an 18 months ramp up time simply to start >> the drive, and you need a huge staff to manage it. That work comes at >> the expense of other work. Furthermore, endowment drives also >> typically court high wealth donors aggressively. We do that now, but >> that's not our focus, and I think that a lot of good things emerge >> from prioritizing many small donors. >> >> What the Financial Sustainability Task Force (with help from the >> Bridgespan Group) found was that: >> >> 1. Our revenue has grown significantly over the past few years, >> despite the recession and a tiny fundraising team that has not grown. >> This is because we aren't close to tapping our potential, and it also >> speaks to the fundraising team continually getting smarter in how it >> works. >> >> 2. When we compare Wikimedia Foundation to other similar nonprofits, >> it's clear that our potential revenue is much larger, again despite >> the recession. >> >> 3. In particular, our potential is huge in other countries besides the >> U.S., which several people have already pointed out in this thread. >> Courting donations in other countries has a lot of positive benefits. >> It helps strengthen our chapters, and it increases international >> participation and ownership into our projects. >> >> In summary, it's not clear that an endowment drive is a more effective >> sustainability strategy than our current model, and the opportunity >> cost would be much higher. >> >> If you look at the targets at: >> >> http://strategy.wikimedia.org/wiki/Strategic_Plan/Movement_Priorities#Goal:_Stabilize_the_Infrastructure >> >> you'll notice that the proposed financial goal is listed as the number >> of donors, not as a revenue figure. That speaks to the importance of >> getting many people to contribute, which I think jives well with our >> community's philosophy in general. >> >> =Eugene >> >> > > _______________________________________________ > foundation-l mailing list > foundation-l@lists.wikimedia.org > Unsubscribe: https://lists.wikimedia.org/mailman/listinfo/foundation-l > -- * I use this address for lists; send personal messages to phoebe.ayers <at> gmail.com * _______________________________________________ foundation-l mailing list foundation-l@lists.wikimedia.org Unsubscribe: https://lists.wikimedia.org/mailman/listinfo/foundation-l
