Answers: Difference between revisions

From Wikimedia Foundation Governance Wiki
Content deleted Content added
MZMcBride (talk | contribs)
various fixes
financially sustainable?
Line 111: Line 111:


To put it briefly, your money pays for staff salaries, technology (servers, bandwidth and Internet hosting), the legal defense of the Foundation, and program activities around the world. For the 2011-2012 [[:en:fiscal year|fiscal year]], the Wikimedia Foundation expects to spend $28,281,000. The pie chart to the right shows planned expenditures for that year, based on pages 34 and 35 of the annual plan pdf. (The math and all work are my own, as are any errors.) Of course, in the real world (where prices vary and unexpected situations may arise), plans don't always pan out. On that same page range, you can see the difference between last year's plans and the final, actual expenditures. For one example, the biggest variance was in the project staff salaries, which were 20% less than anticipated. Rather than push to meet the plan, the Wikimedia Foundation decided to slow hiring in order to ensure that the staff members added were right for their roles. --[[User:Mdennis|Maggie Dennis]] 20:03, 15 September 2011 (UTC)
To put it briefly, your money pays for staff salaries, technology (servers, bandwidth and Internet hosting), the legal defense of the Foundation, and program activities around the world. For the 2011-2012 [[:en:fiscal year|fiscal year]], the Wikimedia Foundation expects to spend $28,281,000. The pie chart to the right shows planned expenditures for that year, based on pages 34 and 35 of the annual plan pdf. (The math and all work are my own, as are any errors.) Of course, in the real world (where prices vary and unexpected situations may arise), plans don't always pan out. On that same page range, you can see the difference between last year's plans and the final, actual expenditures. For one example, the biggest variance was in the project staff salaries, which were 20% less than anticipated. Rather than push to meet the plan, the Wikimedia Foundation decided to slow hiring in order to ensure that the staff members added were right for their roles. --[[User:Mdennis|Maggie Dennis]] 20:03, 15 September 2011 (UTC)

===Foundation: Is the Wikimedia Foundation financially sustainable?===

The community of donors (both individual and organizational) have been incredibly generous in helping to support the Wikimedia Foundation's work over the years. In the 2009-2010 [[:en:fiscal year|fiscal year]], donors contributed nearly $14.5 million in unrestricted donations (see [http://upload.wikimedia.org/wikipedia/foundation/c/cc/FINAL_09_10From_KPMG.pdf pg. 3]). In the 2010-2011 fiscal year, that number rose to over $17.5 million in the first six months alone ([http://upload.wikimedia.org/wikipedia/foundation/d/d5/Jul-Dec%2710_Mid-year_financials.pdf pg. 1]). The Wikimedia Foundation does not, however, immediately ''spend'' all it gets. To be financially sustainable, a nonprofit organization must retain enough [[:en:Working capital|working capital]] to meet its program goals over the long term.

Responsible nonprofit organizations must weigh current program demands against the need to maintain enough capital to deal with unexpected future financial difficulties - whether from unanticipated expenses or reduced donations. The Wikimedia Foundation maintains a healthy cash reserve, enough as of September 2011 to sustain planned spending for seven months. (The balance of cash reserve maintained by nonprofits varies widely, with young or small nonprofits often having no more than a few months, while some large organizations may maintain several years. The Wikimedia Foundation feels the amount it holds in reserve is healthy and sustainable given its size and age.) It earns interest income on some of its cash balances, although it adopts an investment philosophy that favors preservation of capital and liquidity over higher yields, which come with more risks. For instance, in 2009-2010, cash reserves were invested in [[:en:money market|money market]] accounts, [[:en:U.S. Treasury bills|U.S. Treasury bills]] and [[:en:certificate of deposit|certificates of deposit]], all low-risk investment options.

It's important to recognize (and the Wikimedia Foundation does) that sustainability is a state: it is something to be ''maintained'', not something to be ''achieved''. Just as it is poor practice to "borrow from tomorrow to pay for today" - which happens when a nonprofit pushes all of its revenue into current program activities and fails to achieve long-term goals - it is irresponsible stewardship to reserve too much. The Wikimedia Foundation regularly assesses its financial health, ensuring that it puts appropriate funds into meeting healthy and realistic short-term goals to drive forward its mission while reserving an appropriate amount for future costs. --[[User:Mdennis|Maggie Dennis]] 12:31, 23 September 2011 (UTC)

Revision as of 12:31, 23 September 2011

Template:Answers header

Wikimedia Foundation – Answers