2012-2013 Annual Plan Questions and Answers

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Questions and Answers about the Wikimedia Foundation's 2012-2013 Annual Plan

 Documents:

Total Spending Allocations for the Wikimedia Movement, 2012-13

Contents

Overview

What is the current state of this plan?

The 2012-13 plan was approved by the Board of Trustees at its meeting in Washington, DC, at Wikimania. It has now been published to the staff of the Wikimedia Foundation, and to the community. The 2012-13 fiscal year began 1 July 2012 and ends 30 June 2013.

What's an annual plan?

An annual plan is an organization's financial plan for the fiscal year. This year, as in the two preceding years, the annual plan is rooted in the five-year (2010-15) Wikimedia Foundation strategy, which was developed collaboratively on the Strategy Wiki in 2009-10. That work formed the basis of this plan, which was created by the Wikimedia Foundation's senior leadership based on guidance given to it by the Board of Trustees, with support from the staff of the Wikimedia Foundation.

In addition to reflecting only unrestricted spending, the operating budget is primarily a cash-basis budget, so it doesn't include in-kind revenue and expenses, nor non-cash expenses such as depreciation. This is fairly common for budgeting purposes. Of course, our annual audited financial statements do reflect restricted funding as well as non-cash revenue and expenses, in order to conform to generally accepted accounting principles.

How is this plan different from previous year’s plans?

This year for the first time the annual plan incorporates all revenue and spending for the Wikimedia movement (with the exception of “other chapter revenues”). In past years, not all revenues and spending were captured in the WMF plan. For example, payment processing chapters’ revenues from the annual fundraiser were not visible in the Wikimedia Foundation plan, except for the portion of those revenues that was afterwards transferred to the Wikimedia Foundation.

In 2012, the WMF Board of Trustees approved and published a resolution affirming that all funds given to the Wikimedia movement are given in support of our global projects, in response to the value created by the global Wikimedia movement, and that therefore funds raised via the Wikimedia project sites should be considered to be movement money, not the entitlement of a particular organization or stakeholder. It called for the Wikimedia Foundation to begin to create annual plans setting revenue targets for the entire movement (excepting “other chapter revenues”), and to create an annual plan distinguishing between funding for WMF core operations, funds for other movement spending (including non-core WMF spending) and funds for the operating reserves of the WMF. It also asked the Executive Director to establish a Funds Dissemination Committee (FDC) with the purpose of making recommendations to the Wikimedia Foundation for funding activities and initiatives in support of the mission goals of the Wikimedia movement. All funds raised via the Wikimedia project sites would thereafter be distributed via the recommendations of the FDC, with the exception of Wikimedia Foundation core operating costs and the operating reserve as described above.

To summarize: this year, in response to the Board’s request, the financial component of the plan covers the movement, not solely the Wikimedia Foundation. It accounts for all revenues and spending in the global movement, with the exception of revenue derived from “other chapter sources” and the spending funded by those revenues. The plan describes the planned activities of the Wikimedia Foundation, and captures the financial picture for the entire movement, with the exception of chapters’ “other revenue sources.”

This is the first year in which the WMF annual plan covers all fundraising and related expenditure for the entire movement, which makes it difficult to compare previous years’ revenue and spending with 2012-13 revenue and spending in a user-friendly way. In future years, comparisons will be easier, because the assumptions will not have changed.

What are chapters’ “other revenue sources”?

Chapters’ “other revenue sources” refers to any revenue received by a chapter that does not originate from donations collected from visitors to the Wikimedia projects (whether those visits take place during the annual fundraiser, or a non-fundraiser part of the year). Chapters’ “other revenue sources” includes for example membership dues, conference fees, restricted and unrestricted grants from governments or private foundations, earned income, major gifts, in-kind service revenue and net investment income.

What is the strategic context for this plan?

In general, the Wikimedia projects are doing very well. Readership continues to grow. The Wikimedia Foundation has successfully overhauled our mobile experience (increasing mobile page views to 2.08 billion in April 2012, up 187% from 726 million in March 2011) and has established the first "Wikipedia Zero" partnerships to enable mobile access without data charges for millions of people in the Global South. The number of Wikipedia articles also continues to grow: it reached 22.3 million in March 2012, up from 18.8 million articles in March 2011. And, the Wikimedia Foundation’s Global Education Program is now the largest-ever systematic effort in the Wikimedia movement to boost high quality content creation, with a projected addition of 19 million characters to Wikipedia through student assignments in 2011-12. The one area in which our projects are not flourishing is participation. Through 2011-12, the number of editors contributing text on a regular basis (>=5 edits/month) has continued to decline slightly, from 89K (all projects except Commons) in March 2011 to 85K in March 2012. And, we do not yet have any indicators that editor diversity has begun to improve: the proportion of editors who are female and/or from the Global South is flat. Number-of-editors and editor diversity is the movement’s single biggest challenge. The one ray of light at the moment is multimedia contributions. Usability improvements (the “upload wizard,” deployed in May 2011) helped achieve sustained participation growth (18.7K uploaders in April 2012, up 27% from 14.6K in April 2011), and the Wiki Loves Monuments project (not a WMF initiative) achieved very high multimedia participation in spike months (22K uploaders in September 2011, when WLM took place, returning to normal levels immediately afterwards). Overall, however, the number of people who regularly contribute text (>= 5 edits/month) continues to slowly decline by about 1.5% year-over-year. Wikimedia’s most important strategic challenge therefore remains to reverse this trend and to increase retention and engagement of new contributors.

The Wikimedia Foundation’s 2012-13 planned activities can be divided into the following five areas, reflecting this overall strategic context:

  • User Experience: The Visual Editor will become the new default editing environment for Wikimedia sites, making it unnecessary to learn wiki markup in order to make a contribution to Wikimedia sites. We will implement a notification and messaging system to enable an engaging, responsive site experience, and work on multimedia contribution and review to recognize rich media contributors as first class citizens. We will also make language selection and language features more intuitive to reduce barriers. Finally, we will make a larger investment in site performance to reduce slow load times.
  • Mobile: In 2011-12 we modernized the mobile reader experience with a redesigned mobile site and mobile apps for Android and iOS. In 2012-13, we will continue that work, but shift our focus to mobile contributions. Our goal is to cultivate mobile photo uploaders as the first group of mobile contributors, and to experiment with various micro-tasks (e.g. page patrolling, categorizing) and simple editing features on mobile devices. We will also expand the Wikipedia Zero pilots, offering millions of people in the Global South mobile access to Wikipedia without data charges.
  • Editor Engagement: Providing an engaging experience goes beyond usability improvements and extends into the social experience and the fundamental workflows associated with contributing to Wikimedia projects. To this end, we will run experiments throughout the year, examining how small changes (e.g. suggesting topics to edit, thanking and recognizing good contributors) can make the editing experience more welcoming and inviting.
  • Global Education Program: The Wikipedia Education Program represents the end of throwaway assignments and the beginning of real-world impact for students. In 2011-12, thousands of students in 79 classes contributed more than 19 million characters of text to Wikipedia through course assignments. In 2012-13, we will continue to expand the program, with a goal of 150 classes and at least 25 million characters of newly contributed content.
  • Building the global movement: Wikimedia is an amazing global community, and our job is to support and catalyze bottom-up work by volunteers around the world to increase Wikimedia’s impact. We will continue our catalyst programs in India, Brazil and the Arabic language region, and our fellowships program, which gives remarkable, passionate individuals opportunities to pursue ideas related to our mission. We will award grants and reimbursements both to individuals and organizations doing relevant work, and we’re establishing the Funds Dissemination Committee to support programmatic work through larger organizational efforts like the international network of Wikimedia chapter organizations.

By doing this, the Wikimedia Foundation intends to stabilize the number of active editors overall while increasing contributor numbers in some key areas. We will also double mobile page views (after more than doubling them in 2011-12).

To get this done, we plan to grow the staff by 46% from 119 to 174, and expenses will increase from $27.2 million to $42.1 million. (Please note the spending increase includes an allocation for the FDC of $11.2 million. In general, it is necessary to exercise significant caution in making comparisons between the 2011-12 and 2012-13 plans, because movement-wide fundraising and funds dissemination practices have significantly changed in 2012-13 compared with 2011-12.) We plan to increase revenues 32% to $46.1 million, thereby putting $4 million in cash into our operating reserves.

What are the 2012-13 plan targets?

1) Stabilize number of active editors (all projects except Commons) to 86,000 by July 1, 2013 from 85,000 in March 2012.

2) Increase the number of contributors who make at least one upload to Wikimedia Commons from 18.6K in March 2012 to 25K in June 2013, including 1K mobile uploaders per month (from 0).

3) Continue to expand participation in the Global Education Program from 79 to 150 classes with at least 50% female participation, leading to an increase in quality content added by students from 19M characters in 2011-12 to at least 25M characters in 2012-13.

4) Increase active editors in priority geographies (India, Brazil and Arabic language region) by 800 active editors with focus on quality contributors that can help build small-to-medium sized projects and add diversity to larger projects rather than pure quantity.

5) Reach 4 billion mobile page views per month by June 2013 with at least 15% from the Global South. Serve 200 million page views/month at no charge via Wikipedia Zero partners in the Global South.

Comparison with the previous year

What did the Wikimedia Foundation accomplish in 2011-12?

A recap of activities and performance can be found in section 1 of the annual plan.

How did 2011-12 play out from a financial perspective?

From a financial perspective, 2011-12 was an excellent year for the Wikimedia Foundation. The 2011-12 plan called for us to increase revenue 24% from 2010-11, to $29.5 million, and to increase spending 53% from 2010-11, to $28.3 million. In fact, we significantly over-achieved from a revenue perspective, and we also slightly underspent, resulting in a larger reserve than planned. We're projecting today that 2011-12 revenue will have actually increased 47% from 2010-11 actuals, to $34.8 million. Spending is projected to have increased 36% from 2010-11 actuals, to $27.2 million. This means we added $9.9 million to the reserve, for a projected end-of-year total of $27.7 million which represents 12 months of reserves at the 2011-12 spending level.

How did 2011-12 play out from a revenue perspective?

The 2011 WMF fundraiser was our shortest and most successful to date, raising $20 million (up 25% from 2010's $15 million) in 46 days (8% fewer than 2010's 50 days). We achieved that revenue growth by doing significant A/B testing of messaging, as well as via a new relationship with Global Collect, which enabled us to offer 80+ new currencies, local bank transfer in 50+ new countries, an additional new credit card, six new online direct debit options, direct debit in 12 new countries, two new e-wallet products and two new cash products, compared with 2010.

The WMF ran a shorter and less annoying fundraiser in 2011 compared with previous years — the fundraiser ran 46 days down from 50 in the previous year, and featured a wide array of messages featuring editors and staff from around the world, rather than relying as strongly on appeals from the founder as we have in the past. (Jimmy appeals ran for 12 days in 2011, down from 36 in 2010.) In 2010, the Wikimedia Foundation had observed the fundraiser being gently mocked by media and the general public: we believe we saw less of that in 2011. We believe the 2011 fundraiser struck a good balance: it raised sufficient funds to do our work, while minimizing annoyance for readers.

How much did the Wikimedia Foundation staff grow in 2011-12?

During 2011-12, the Wikimedia Foundation planned to hire 43 staff, an increase of 58% over 2010-11. Staff count as of June 2011 was 74. The planned total increase was to 117. The year-end projected staff headcount will be 119, which represents an increase over 2010-11 of 53%, and two positions more than originally anticipated.

How is the decision process for funds allocation within the Wikimedia movement going to change in 2012-13?

On March 30, 2012, the Wikimedia Foundation Board of Trustees resolved that the Wikimedia Foundation would create a Funds Dissemination Committee, whose sole purpose will be to make recommendations to the Wikimedia Foundation Board of Trustees for funding activities and initiatives in support of the mission goals of the Wikimedia movement. The purpose of this new process is to support a broader and more inclusive decision-making process for funds distribution, consistent with the Board’s guiding principles for funds distribution: to protect core operations, assess impact, promote transparency and stability, support decentralized programs, promote responsibility and accountability, and make decisions openly and collaboratively.

All funds raised via the Wikimedia project sites will be distributed via the recommendations of the FDC, with the exception of Wikimedia Foundation core operating costs and the operating reserve.

The purpose of the FDC process is to make allocations to FDC-eligible Wikimedia entities, based on an assessment of the extent to which requested funding will enable those entities to have an impact towards realizing the mission goals of the Wikimedia movement. This assessment will be a function of both how much impact their proposed activities are likely to have and how well the entities are situated to execute their plans responsibly and well.

The hypothesis underpinning the FDC is that a global body of committed, experienced Wikimedians, supported by a well-designed process and dedicated staff, can make decisions about where the Wikimedia movement should spend its money that will i) create better alignment between the Wikimedia movement's strategy and its spending, resulting in ii) greater impact and greater progress towards achieving our shared goals than would otherwise be the case, and iii) enabling us to get smarter faster about how to achieve our shared goals than we otherwise might have. A secondary hypothesis is that the FDC process will be seen by the global Wikimedia community (including but not limited to fund-seeking entities) as more fair, transparent and accountable than the funds dissemination practices that predated it.

What's the total budget in this year's annual plan and how does it compare with previous years?

The total operating budget for the 2012-13 plan calls for $42.1 million in spending, including $11.5 million in spending allocated for the FDC. In comparison, 2011-12 projected spending is $31.6 million (including $4.4 million in chapter-retained funding from payment-processing). In general, the Wikimedia movement’s spending has increased every year, as the projects, the organizations supporting them, and readership, have grown.

What are the main increases in spending for 2012-13?

The total increase in spending in 2012-13 compared with 2011-12 (including the $4.4 million retained by chapters from payment-processing in the annual fundraiser) is $10.5 million, representing an increase of 33%.

The single largest increase in spending is the establishment of the FDC with a budget of $11.5 million. Of that $11.5 million, $4.3 million is an increase compared with 2011-12, because in 2011-12 the payment-processing chapters retained $4.4 million of fundraiser revenues for their own spending, and the Wikimedia Foundation spent $2.8 million on what we are characterizing as “non-core” work.

The second largest increase in spending in 2012-13 is increased funding for WMF engineering, which will increase by $5.7 million, from $11.9 million in 2011-12 projections, to $17.6 million in planned spending for 2012-13. This will fund an increased allocation for core site operations, mobile engineering, code review and tech community building, and the visual editor. For more detail please see slide 58.

The projected budget for the 2011-12 annual plan was $28.3 million: what were the actuals?

Fiscal year 2012-13 results won't be final until end of July 2012, but we are projecting to spend $27.2 million in the operating budget (this does not include things like depreciation). When the audited financial statements are available in fall of 2012, the total expenses reflected there will be higher because they will reflect items such as depreciation which we don't include in plan or projections.

Why is 2011-12's projected spending lower than plan?

Spending was somewhat lower than plan partly because of delays in hiring, and partly because some Global Development projects took longer to get underway than planned. For more detail see slides 58-60.

Future revenues

What's the revenue target for 2012-13, and how does it compare to previous years?

The 2012-13 plan posits revenue of $46.1 million, a 32% increase over projected revenue of $34.8 million for 2011-12. These are our highest-ever revenue targets, but represent only a $7.2 million increase in revenue, which is conservative compared with the $8.1 million increase we achieved last year.

Is that target realistic?

Yes, we think so. It proposes to achieve a smaller increase than was achieved in 2011-12.

However, it is worth noting that in 2012-13 for the first time all chapter spending will be visible to readers and donors, rather than just Wikimedia Foundation spending. This could increase the risk that we are being perceived as less “shoestring” than we have been in the past, which could hurt people’s willingness to give.

What is the strategy for achieving the revenue increase?

We plan to continue to focus our efforts on community giving. We like this model because it has proven to be very effective, and because it correctly aligns fundraising activities with our mission goals. It is global and empowers ordinary people, it ensures we stay focused on our mission and our strategy, it keeps us accountable and responsive to readers and editors, and it is stable, scalable, and efficient. In addition to seeking increased support from community donations, we will also continue to raise funds from foundations and major donors.

In order to achieve the revenue increase, and to avoid over-exposure of our founder Jimmy Wales, we intend to continue our path of creating and testing a variety of appeals featuring a wide range of Wikimedians, with the goal of optimizing appeals to increase donations. We will also continue to localize the donor experience, to make it possible for people to give in ways that suit them and are easy for them (e.g., additional payment methods).

Which movement groups will participate in the 2012 annual fundraiser, and what will happen to the money they raise?

At this point, it looks like Wikimedia France, Germany, Switzerland, and UK will act as payment processors during the 2012 campaign. As per the Board’s resolution, all funds raised via the Wikimedia project sites would thereafter be distributed via the recommendations of the FDC, with the exception of Wikimedia Foundation core operating costs and the WMF operating reserve.

What will you do if there is a revenue shortfall?

We believe a revenue shortfall is unlikely. A small revenue shortfall wouldn't cause problems, because the revenue target for 2012-13 exceeds the amount we plan to spend. We think a large revenue shortfall is unlikely, but if it happens, we have a number of ways to ensure stability. At the beginning of the fundraiser (which is the point in the year during which our cash reserves are lowest) we will have six months of total movement spending in the bank. If there is a serious revenue shortfall, the Board of Trustees will immediately be notified, and the Wikimedia Foundation will handle it via a combination of deferring future planned spending, implementing cuts to current spending, and funding the shortfall by utilizing our cash reserves.

What is proposed to happen to the Wikimedia Foundation reserve in 2012-13?

In 2012-13, the WMF reserve is planned to grow $4.0 million from $27.7 million to $31.7 million. This is an increase of 14% as measured in dollars, but a decrease as measured by months-of-spending. At the end of 2012-13, the reserve is planned to represent nine months of spending, whereas at the end of 2011-12, the reserve is projected to represent 12 months of spending.

It is worth noting here that the WMF has consistently over-achieved its revenue targets, and has underspent, every year since it began developing annual plans. That means that every year, the WMF has ended the year making a larger contribution to the reserve than was planned for. For example, in 2011-12, the plan called for the Wikimedia Foundation to make a contribution to the reserve of $1.2 million, and in fact will end the year contributing $9.9 million. It is fairly likely we will exceed our planned contribution to the reserve in 2012-13, as well.

What is the thinking behind adding $4.0 million to the reserve? Isn’t it too much / too little?

It is normal for organizations to plan to have reserve or contingency funds. Reserve funds are critical for an organization in the event of unplanned expenses, emergencies and/or revenue shortfalls. There is a wide range of opinions about what size of reserve fund a healthy non-profit needs, but a best practice is typically believed to be somewhere between three and twelve months of average monthly spending. The Wikimedia Foundation’s reserve is largest after the online fundraising campaign. It gradually diminishes in the months following the campaign, and starts to rise again when the next annual campaign begins.

The Board of Trustees has established a rule of thumb that it would like the WMF reserve to never drop below six months of total spending. The 2012-13 plan therefore calls for the reserve to stay at a minimum of six months of total spending at the low point of the year.

Staffing

How many people are you planning to hire and when?

We plan to grow from 119 to 174, an increase of 46% over the prior fiscal year. This is the last year of this strategic planning cycle that we plan to staff up to capacity to execute the strategic plan, so we anticipate a significant flattening next year. We anticipate two hiring spikes, one in July when we hire people who are in our existing hiring pipeline, and then again in late fall/early winter based on summer/early fall recruiting.

What are the positions you will be hiring for, and what is the general thinking behind it?

The biggest increase in staffing is technology staff, which will grow from 64 to 94 people according to plan. Those new hires will support our key activities: feature development including features focused on editor retention, mobile, the Visual Editor, internationalization, the Wikimedia Labs. This will indeed continue to be a stretch for 2012-13, because there is currently a major shortage of technical talent in the San Francisco Bay Area. Even so, we feel like we're in a pretty good position to hire technology staff right now. In 2012-13, we will be dedicating more resources towards technical recruitment than in past years, and we are very clear about our value proposition: The Wikimedia Foundation is not about monetizing eyeballs, our direction isn't set by VCs, and we're financially stable. We offer a fair, friendly, fun environment for talented engineers who want their individual contribution to result in making the world a better place for hundreds of millions of people. We also hire globally, not just people who are currently located in the Bay Area, or willing to move there. At the end of 2012-13, if we hire according to plan, technology department staff will make up 54% of total staff.

The second-largest increase in staffing is in the “other program” areas (Legal and Community Advocacy, Fundraising, and Global Development departments), which is planned to grow by 16 people to a total of 58; at the end of 2012-13, Other Program staff will make up 33% of total staff if we hire according to plan. These hirings will support our strategic objectives of increasing new editor retention particularly in the Global South, expansion in mobile partnerships, and increased partnerships with educational institutions worldwide.

Will all the jobs be advertised publicly?

Yes. Our general practice, with rare exceptions, is to advertise all jobs on the Wikimedia Foundation website, as well as on relevant job sites. In some cases, we may decide not to post individual positions, but rather to announce general availability of vacancies in a certain area.

When do you expect to stop growing? In other words, how big do you plan to get, in terms of staff headcount?

p. 62

This is a good question. We think it’s likely that Wikimedia Foundation staffing growth will level off beginning next year. (See slide 62 in the plan.) We also think it’s possible that we may decide to course-correct over the course of 2012-13, and choose to hire fewer people than are called for in the plan.

It’s a balancing act. We want the organization to have sufficient resources to get its work done, and we have lots of important work to do. And over the past several years we’ve developed the internal capacity to hire well, and reasonably quickly. But, each new staff person also requires significant effort from HR and from that person’s manager and colleagues, to recruit and onboard and acclimate -- effort that detracts from other work. And, the Wikimedia Foundation is an organization that’s learning quickly, and however talented and smart they are, new people have some degree of inherent “resetting” effect on the organization overall. We are beginning to feel the need to rebalance our efforts away from “fast growth” and towards a focus on consolidation and execution.

Rate of growth

How fast is this growth? Do other organizations generally grow this quickly?

Relative to older, more established organizations, our growth is fast. Relative to successful young tech organizations, our growth is slow. Some comparatives, for what they are worth: Groupon has grown to 10,000 employees from 1,500 a couple of years ago. Over the past couple of years, Twitter has grown to 800 from about 45. LinkedIn increased staff to 2,447 from 600 during 2011. Facebook currently has approximately 3200 employees, up from 1,000 two years ago. Google has approximately 33,000 employees in 2012, up from 10,674 at the end of 2006. So by Silicon Valley standards, our growth is conservative. Outside Silicon Valley and the rest of the tech sector, our growth would probably be considered pretty fast.

What are the risks of fast growth, and how will we mitigate against them?

There are several risks, including hiring poorly, fragmentation without internal integration and building a cohesive, aligned culture, a risk that the Foundation may develop an internal culture (or sub-cultures) that doesn’t fit the culture of the movement, a disjointed experience for job candidates who apply to for jobs, etc.

We are getting better at hiring quickly and well, and we will continue to manage other risks by course-correcting/slowing down as necessary.

Impact

As a reader of the Wikimedia projects, how will my experience change as a result of this plan?

In 2012-13 we're investing in site performance and responsiveness so that the reader experience improves: pages will load faster, the projects will be easier to navigate and search, and multimedia display will be enhanced. We're continuing improvements to our mobile site, and we're partnering with more mobile providers in the Global South to enable access to Wikipedia without data charges. This means that millions of people will be able to access Wikipedia for free in the Global South, from their cellphones. We are also continuing to engage more readers to be an active part of the Wikimedia community, via the further development of feedback and rating mechanisms. For readers in Asia and West Coast US, we will reduce response times by 70ms.

As a volunteer contributing to Wikimedia projects, how will my experience change as a result of this plan?

Editors will notice the same changes as readers. Additionally though, they will benefit from the rollout of the Visual Editor’s more intuitive interface, faster saving of edits (with rendering times for typical featured articles reduced by 75%), new ways to contribute when using mobile devices, and improved multimedia uploading and curating tools. New features (including a new messaging and notifications system) will provide a more responsive and engaging editor experience. Ongoing internationalization efforts are directed at enabling participation in languages which are currently poorly technically supported. Knowledge gained from small editor engagement research projects will inform work to make life easier for inexperienced editors, while the Wikimedia Labs will enable new kinds of community tools from or for “power users”. In 2013, the Foundation will begin operating Wikidata, an entirely new Wikimedia project currently being developed by Wikimedia Germany.

If I am involved with a Wikimedia chapter or other entity contributing to the Wikimedia movement, how will my experience change as a result of this plan?

Eligible chapters as well as some other kinds of groups newly recognized by the Board’s “Recognizing Models of Affiliation” resolution will be able to request funds via the new Funds Dissemination Committee (FDC). But the existing grants program for chapters remains in place. The FDC process and the grants process will have more money in 2012-13 than in previous years to disseminate to movement entities doing programmatic work.

Breakdown by function

What is included in the “Management and Governance” spending in the Annual Plan?

In 2011-12, spending for Management and Governance spending is projected to have been $1,036K; in 2012-13, it is planned to be $902K. Management and Governance includes costs for the Board and the Advisory Board; including the costs of face-to-face Board meetings, other travel costs (e.g., attendance at Wikimedia conferences and other events), an allocation for board development, as well as salaries for the office of the Executive Director and expenses for consultants and contractors supporting the Board.

What is included in the “Engineering” spending in the Annual Plan?

In 2011-12, Engineering spending is projected to have been $11.9 million; in 2012-13, it is planned to be $17.6 million, $1.2 million of which will be submitted as a funding request to the FDC. It includes bandwidth and hardware costs, salaries for the Engineering and Product Development department staff, costs for technical contractors and consultants, as well as other miscellaneous costs. Please refer to slide 58 of the Plan for more detail.

What is included in the “Other Programs” spending in the Annual Plan?

”Other Programs” reflects the combined expenses of the Community Advocacy team and the Global Development department, plus the expenses for Grants and Fellowships. In 2012-13, Other Programs is projected to have been $5.9 million; in 2012-13, it is planned to be $6.1 million, $3.2 million of which will be submitted as a funding request via the FDC process. It includes the Community Advocacy staff in the Legal and Community Advocacy department, and the Global Development department including communications staff, Global Education Program staff, staff responsible for mobile partnerships development, research and the Catalyst Projects in the Global South. It also includes funding for community outreach and volunteer convenings, grants to chapters and individuals, as well as other miscellaneous costs. For the timespan until the establishment of the Legal and Community Advocacy department in early 2012, it also includes the expenses of the former Community department minus all fundraising costs.

What is included in the “Fundraising” spending in the Annual Plan?

In 2011-12, Fundraising spending is projected to have been $2.6 million; in 2012-13, it is planned to be $3.0 million. This includes payment processing fees, salaries for fundraising staff, consultant and contractor costs, and other miscellaneous fundraising expenses.

What is included in the “Legal, Human Resources, Finance and Administration” spending in the Annual Plan?

In 2011-12, Legal, Human Resources, Finance and Administration spending is projected to be $5.8 million; in 2012-13, it is planned to be $7.1 million. This includes the staff for legal, HR, finance and accounting, office administration, office IT support, legal fees, and expenses for consultants and contractors. It also includes general operating expenses such as rent and other facilities costs, some staff development and staff meeting expenses, recruiting expenses, fees for the annual audit, and other miscellaneous costs.

What is the impact of the FDC on this plan?

The establishment of the FDC increases the scope of the budget that the plan encompasses, and also requires increasing the amount allocated to the reserve (six months of funding at the low point, which is October, the month before the start of the annual fundraiser). Also, it means that some parts of the WMF budget, i.e. those designated as non-core, will need to be submitted as funding requests via the FDC process.

How are core and non-core defined?

In 2012-13, the WMF will for the first time divide its spending into "core" and "non-core." The purpose of this is to designate some component of the WMF's spending to be allocated by the FDC. This has two purposes: it acknowledges that some WMF spending is highly experimental and would benefit from community review, and it also will help the WMF experience the FDC process from the perspective of a fund-seeker, which will help ensure the process is responsive to fund-seeker needs.

Many discussions have been held about how to define “core” versus “non-core,” and it’s not possible to develop a definition that is satisfying and easy to understand for everyone. That’s okay. The intent is to expose some amount of Wikimedia Foundation spending to community review, and the exact nature of which expenses are exposed is not itself critical. Having said that: in general, "core" is permanent spending required to maintain the sites and organizational infrastructure for as long as the projects are operating. It includes (but is not limited to) servers and bandwidth costs, legal, accounting, HR, management and governance spending, software improvements, fundraising or equivalent revenue management, communications, activities required to ensure our continued operation as a non-profit, and so forth. Core spending does not mean the rock-bottom costs of operating the sites if we were having financial difficulties: it means the normal costs of operating big sites well. Non-core will tend to include initiatives that are time-based, experimental in nature, and intended to extend our ability to better serve the mission. For 2012-13, non-core will include the editor engagement experimentations, the Global Education program, the catalyst projects (editor recruitment activities in India, Brazil, and MENA), as well as the WMF fellowships and grantmaking program. Those activities are shaded green on slides 58 and 59, and funding for them will be requested via the FDC process.

Why is non-core defined the way it is? Doesn’t it make more sense to define core as the rock-bottom costs of operating the projects (e.g., bandwidth and servers), and define everything else as non-core?

Our top priority is to fulfill our commitment to keeping the Wikimedia projects available free of charge for people around the world, in perpetuity. This does not mean just servers and bandwidth. In order to fulfil our commitment, we need to be responsible and competent site owners. A strong and stable Wikimedia Foundation is essential to safeguard the future of the projects: running a tiny shoestring operation would not be a service to the people who depend on us.

The Wikimedia Foundation has designated $4.5 million of the 2012-13 spending as non-core, and is making a request to the FDC to provide funding of that amount. What will happen if the FDC declines to fund non-core spending, or funds it at a lower level that was requested?

We are confident, given the funding guidelines, that the FDC will provide the funding we’re asking for. But in the event that the FDC declines to fund us at the amount requested, we would handle that the same way we handle any revenue shortfall. We would seek other funding sources, reallocate funds from other planned activities, or scale back expenses to fit the money we have available.

What are the implications of the new FDC process for the Wikimedia Grants Program and the Grants Advisory Committee?

Grants to provide financial support to movement groups and individuals for projects, events and travel that advances the movement’s mission and strategy are designated as one of the key activities in the 2012-13. Both the Wikimedia Grants Program and the Grants Advisory Committee (GAC) will remain in place.

Assessment of strategic priorities

In its resolution, the Board requested the ED to carry out an assessment of the Foundation’s programs and strategic priorities. Why did the Board ask for that?

We start developing the annual plan in January, and it isn’t finalized for a full six months afterwards. During the six months in which we developed this plan, the Wikimedia Foundation Board, ED and senior staff began to reflect seriously on where we’re at as an organization.

In general, we believe the organization is doing well. We are in excellent financial shape, we have the support of important funders and partners, and we’re making good progress towards our ambitious programmatic goals. The one significant area in which we’re not making progress is editor retention, which has proved to be more challenging than we had expected or hoped. We have a number of activities underway designed to address editor retention, and to achieve other key priorities. They are all important and necessary, but we are stretched pretty thin trying to accomplish them all. We believe therefore that we need to narrow our focus — increasing resources where that will help, but also halting some activities, in order to concentrate our resources on the highest-priority work. The ED and the Board have been discussing this for several months, during which the ED proposed the idea of a mid-year assessment to the Board, which the Board then accepted and approved.

What will the assessment look like? How will it be conducted?

It won’t be a public process on a wiki: it’ll be an internal Wikimedia Foundation process. Likely, the ED will work with the C-level team and their direct reports, to develop a couple of scenarios. The scenarios will be presented to the Board at its October meeting.

There is no predetermined outcome. (In other words, there is no set dollar amount or staffing number we are trying to hit.) The purpose of the assessment is to thoughtfully review the activities of the Wikimedia Foundation, with the goal of scaling back or shutting down some activities, in order to enable us to narrow our focus and concentrate our resources. This may involve revisiting the 2012-13 and 2015 targets or other commitments. Some changes that result out of the review will likely take place immediately, where that makes sense, but if changes need to happen slowly over time, that’ll be okay too.

We think carrying out a review like this is logical and responsible. The Wikimedia Foundation has been growing quickly, doing lots of experimentation, and learning a lot. We’re now at the mid-year point of the five-year strategic plan. Given that, we think it makes sense for us to build in a period of organizational reflection — to pause and think about where we’re at, and then iterate our plans based on everything we have been learning and experiencing in the past several years.

Risk assessment

What are the biggest risks of this plan, and how will you mitigate against them?

A detailed risk assessment can be found in section two of the Annual Plan.

Glossary of Terms

Annual Fundraiser
The donation drive, customarily at the end of the year, soliciting donations through WMF project sites
Core/non-core
See above
FDC
The new community-led Funds Dissemination Committee, which will help make movement-wide decisions about how to allocate funds to programs and other projects
GAC
The existing Grant Advisory Committee, a group made up of volunteers from the Wikimedia community, whose role is to advise chapters, groups, and the Foundation on improving grants and the grants process
Jimmy Days (slide 21)
Days during the annual fundraiser where the donation banners include personal appeals by Wikipedia founder Jimmy Wales. While these have proven to be among the most effective, the WMF fundraising team has been working to reduce reliance on them, e.g. by personal appeals from other community members.
Other Chapter Revenues
Income not gained from donations via WMF project sites, such as grants to chapters or government funding
Reserve
Cash not needed for operating expenses