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What's the total budget in this year's annual plan and how does it compare with previous years?
The total budget for 2008-09 annual plan is $5.9 million. By contrast, the 07-08 budget totaled $4.6 million; the actual amount (estimated) that was spent was $2.9 million. In 06-07, the Foundation spent $2.1 million; in 05-06 it spent $800K; in 04-05 it spent $200K. In general, spending has increased every year, as the projects and the organization have grown.
The projected budget for the 07-08 annual plan was $4.6 million: what were the actuals?
Fiscal year 07-08 doesn't end until June 30, so we don't yet know how much was spent in total. However, we can tell you that $2.5 million was spent, as of April 30, 2008. Spending in 07-08 will probably total about $2.9 million.
UPDATE: Audited actuals can be found in the 07-08 Audited Financial Statements.
Why did the actuals turn out to be so much less than the projected spending?
The 07-08 annual plan was constructed with very little historical information, and was really a series of “best guesses.” As it turns out, under-spending in some areas was canceled out by overspending in other areas, resulting in a total underspend of $1.7 million. Because the technical budget was under-spent by $1.7 million, once technical under-spending is factored out, the actuals will turn out to have been within 1% of what was budgeted.
How confident are you this year?
This year, we have one additional year of data that we didn't have last year, so we are in a better position to make accurate predictions. However, 07-08 was not a typical year (we relocated, and there were lots of staffing changes), which means we are still working with projections and estimates, rather than predictable steady state spending.
What's the total expected revenue in 08-09, and how does it compare to previous years?
We project that in 07-08, we will bring in total revenues of $4.6 million. For 08-09, we have set a total revenue target of $7.3 million. We are assuming that we will bring in $3 million via small individual donations, $3 million in large donations (from individuals, corporations and foundations), and $811K from business development initiatives (AKA “earned revenue”), as well as $24K in “other revenue” (mainly interest income) and $500K in in-kind donations. To give some perspective for those numbers: thus far in 2007-08, we have brought in just under $2.2 million in small individual donations, plus $2.1 million in large donations, plus a nominal amount of revenue from business development initiatives.
Are those targets realistic?
We think so, yes. We aim to achieve growth in small individual donations, by optimizing and fine-tuning the annual winter fundraiser, and by beginning some e-mail outreach campaigns. We plan to grow major donations by bringing in a Head of Major Gifts, and we will begin the year knowing we will receive $1 million from the Sloan Foundation. And we expect business development revenues to grow fairly significantly, due to the work the Head of Business Development has begun.
What's the business development target, and how do you plan to reach it?
The business development target is $811K. Up until now, our Head of Business Development has focused on understanding the existing deals, and developing a strategy for new deals. That strategy will begin to pay off this coming year. Really, $811K is an extremely conservative target for Wikimedia. More funds could be generated, but we intend to focus on business deals that help us achieve our mission-related goals (e.g., disseminating Wikimedia's educational materials off-wiki), rather than simply maximizing revenue.
What are your other revenue sources, and how will you ensure that money comes in?
Our primary revenue source is donations from individuals, supplemented by donations from corporations and foundations. We are happy that we have a solid base, via the online fundraiser, of tens of thousands of contributions. The Executive Director and Deputy Director are actively cultivating major individual donors and foundations, and we are also speaking with a few large companies about “in kind” donations of goods or services.
What's the target for the 08-09 online fundraiser?
No specific target has yet been set, but it will probably be roughly $2.5 million. We want to bring in $3 million during 08-09, via the online fundraiser and from ongoing small donations during the rest of the year.
What will you do if you fall short overall?
We plan to spend $5.9 million, but our revenue targets total $7.3 million. That means we can absorb a revenue shortfall of $1.4 million without needing to cut planned spending (which is already budgeted to be fairly conservative). In the event that we fall short of our targets by more than $1.4 million, we have built into the annual plan a fair amount of room to scale back. For example, we have plans to add additional staff throughout the year, but if we are falling short of our targets we could defer the new hires. We can also tighten spending in a number of simple ways: for example, we could defer hardware purchases, cancel our winter all-staff meeting, scale back staff participation at Wikimania, etc.
What's the upshot here: how much bigger is this year's budget compared with last year's? Where are you spending more, and why?
Planned spending totals $5.9 million, which is an increase of $3 million over the 07-08 projected actuals. The single biggest increase is hardware purchases deferred from 07-08, that total $965K.
The second-largest increase is $510K for fundraising expenses: this includes three new positions (Head of Major Gifts, Head of Community Giving, and a Development Associate), as well as an allocation for fundraising expenses (technical help with the database, design support, usability and A/B testing money, fundraising related travel, an allocation for events, etc.).
Other significant increases include increased hosting costs (+$200K), funding for five new technical staff and contractors (+$375K), strengthening our “program” (mission-related) work by hiring staff for public outreach and partnerships roles, plus a Chief Programs Officer (+$221K), an increase in travel costs (+210K), and a new allocation for staff and volunteer development (+$113K).
When do you expect you will be hiring the new people?
We plan to have the fundraising positions and two of the tech positions filled close to the beginning of the fiscal year. The remaining technical positions will be filled in October and February. The program positions will be filled in January.
Will all the jobs be advertised publicly?
Yes. Our general practice, with a few rare exceptions, is to advertise all jobs on the Wikimedia Foundation website. Normally we also advertise on Craigslist, and other job sites. We expect to advertise for all the positions we have opening up in the coming year.
How much did you spend on travel last year, and how does it compare with the what is budgeted for 08-09?
Travel, which includes a mix of Board, Advisory Board and staff travel, is estimated to be $325K for 07-08, while the budgeted amount for travel in 08-09 is $535K.
Why has travel gone up?
We use lots of non-face-to-face communications methods such as IRC, IM, Skype, etc., but ultimately, we're an international organization, and that is reflected in our travel spending.
Mostly, it is simply because we are growing. For example, we plan to bring the remote staff together twice a year for an all-staff meeting; more staff outside San Francisco means higher travel costs for those meetings. Three new board seats will mean increased travel costs for the 3-4 board meetings per year. The increase in travel also reflects that the organization is more systematically approaching fundraising, business development and partnerships than it ever has before.
As an international organization supported by a growing network of chapter organizations in many countries, we have committed to subsidizing some costs of travel for the annual meeting of the international chapters. The Chapters Coordinator, needs to travel to spend time with the chapters, and to visit the Wikimania site.
It's also important that as many staff members as possible can attend Wikimania: some because it's part of their core job to interact with volunteers, and some because they are new to Wikimedia, and Wikimania can greatly help to orient them to who we are and what we do.
Why is there a discrepancy in the projected and actual legal budget for last year?
Ultimately we found that the overall scope of some of our legal priorities, including an investigation into the use of our trademark, was larger than we originally thought. We also had to invest more time and money into systematizing and professionalizing our employment and labor law compliance. Both of these were critical aspects of the Foundation's overall management.
How much do you plan to spend on Wikimania?
Wikimania is intended to be self-funding through sponsorships, meaning that the amount of money taken in by the conference, and the amount of money spent on it, should be the same. That does not include the costs of staff, board and advisory board travel to Wikimania. The Wikimedia Foundation absorbs those costs itself, and they are represented in the 08-09 annual plan in the amount of $100K.
Jimmy travels a lot. How much of his travel is paid for by the Wikimedia Foundation?
None. Although The Foundation has paid for a very small amount of Jimmy's travel in the past, as part of the upcoming annual plan, he has requested that the Foundation not cover any of his expenses at all.
What do you plan to spend on the advisory board, and how is it spent?
The Wikimedia Foundation offers to pay to send advisory board members to Wikimania, although most of those who attend actually pay for themselves. We also pay for the costs of the facilitator for the annual board and advisory board meeting, which is held at Wikimania, and for any other costs associated with that meeting.
Last year the tech budget was more than half of the overall budget. This year it isn't. Why not?
Last year, technology represented 55% of the total annual plan, at $2.6 million out of $4.6 million. The actual spend turns out to have been an estimated $900K out of $2.9 million, which is 31% of the total spent. In the 08-09 annual plan, tech spending totals $2.7 million out of $5.9 million, which is 46% of the total. That includes the planned hiring of five new technical staff in 08-09, as well as an allocation for technical contractors.
What is "staff and volunteer development" funding?
This is a small amount of money set aside for staff and volunteer development. The staff piece includes funding for staff training and attendance at conferences such as the O'Reilly Velocity conference on web performance and scalability. This is the first time the Foundation's budget has included an allocation for staff development.
The "volunteer development" money is an experiment, and if it works we will probably increase the size of allocation in future. It will pay for a variety of small, one-off initiatives - for example, it might be used to pay for printing costs for brochures for a volunteer outreach event. It might subsidize a workshop, or offset small costs for other specific initiatives.
Why so little for volunteer development?
The volunteer development fund primarily relates to volunteer organizational work, such as press work, participation through chapters, technical contributions, and so forth. As we are still in the process of developing policies and best practices around volunteer development, we have deliberately kept the overall amount relatively low in this budget, but we hope to scale up these efforts intelligently in the coming years.
It's not a new idea. The Wikimedia Foundation has always spent small amounts of money to encourage and reward organizational work by volunteers: The very first fundraising campaign by Wikimedia was accompanied by links to the "Brion (Brooke) Vibber notebook fund," to purchase a new laptop for Brooke's technical work. Brooke, who is today our Chief Technology Officer, was at the time a volunteer software developer and administrator.
In general, enabling and empowering the Wikimedia volunteer communities to thrive is the Wikimedia Foundation's core function, and therefore virtually all spending is related to it.
What is included for the Board's budget in the Annual Plan?
The annual plan includes costs for three Board meetings per year (travel and facilitation), other travel costs (e.g., conferences), and an allocation for board development.
What caused the $60K under-spending in the Board budget from last year?
The $60K was an annual allocation for Board development separate from costs associated with Board meetings. For example, a Board member traveling to a conference relating to the Foundation's mission would have been been reimbursed against the $60K. The Board did very little travel/activity outside of the Board meetings so this was under-spent.
What is included in the ED's budget in the Annual Plan?
The budget of the Executive Director includes the salaries for the Executive Director and Deputy Director, as well as miscellaneous costs including travel, some fundraising expenses, the costs of the two annual all-staff meetings and some other staff development costs, and a budget for consultants and contractors.
What is included in the Technology budget in the Annual Plan?
The Technology budget includes salaries for tech staff, an allocation for contractors, and bandwidth and hardware costs. The biggest single allocation (about $1 million) will go to hardware costs such as servers. And $860K will go to hosting costs. The bulk of the remainder is salaries and contractor payments.
What is included in the Finance & Administration budget in the Annual Plan?
The Finance & Administration budget includes salaries for all finance and administrative staff; the Chief Financial and Operating Officer, the Accountant, the fundraising staff, the Head of Business Development, the Office Manager, and the Assistant to the ED and DD. It also includes some staff development and staff meeting expenses, the fees for the annual audit, some consultant costs, and some legal fees related to fundraising and employment law.
What is included in the Programs budget in the Annual Plan?
The Programs budget includes salaries for the programming staff; the Chief Program Officer, partnerships and public outreach staff, the Chapters Coordinator, the Volunteer Coordinator, and the Head of Communications. It also includes an allocation for volunteer development, funding for public outreach such as the Wikipedia Academies, costs for the annual chapters meeting in April and communication materials such as brochures and promotional products.
What is included in the Legal budget in the Annual Plan?
The Legal budget includes the salary expense for our in-house Counsel, business and legal-related costs for business registrations, state-by-state fundraising registrations, domain names, trademark registration and defense, employment and immigration support and external litigation fees.
What is included in the Wikimania budget in the Annual Plan?
As mentioned earlier, the Wikimania budget is intended to be self-funding through sponsorships, meaning that the amount of money taken in and the amount of money spent for the conference should be the same, not including the costs of staff, board and advisory board travel to Wikimania. The type of costs included in the self-balancing portion of Wikimania would include the rental of the conference site (meeting rooms, equipment rental), speaker costs and hotels/dorm room/meal costs for the participants.
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