Charity Navigator has given the Wikimedia Foundation only two out of four stars in the category of organizational efficiency.

And, if you look at the year-by-year graphic of Revenues/Expenses Trend, I think this "rolling average" rating is only going to get worse -- much worse -- in the next couple of years.

Two stars: "Meets or nearly meets industry standards but underperforms most charities in its Cause."

This is one of the reasons why I've never donated any money to the Foundation. I don't understand why they feel the need to be located in an expensive neighborhood in San Francisco. I mean, couldn't an organization whose entire output is online be located anywhere that has access to adequate bandwidth?

Have to agree with you there. Not sure why Tampa-St. Pete wasn't good enough.

Because Tampa is not exactly the kind of place for a lifestyle which allows WMF people to live out their SoMa DotCom 1999 fantasies, never fulfilled in 1999.

Florida's where you go if you have house and family and are looking at a civil suit. Just like O.J. did.

San Francisco, or someplace just south of there in the "Silicon Valley" area, is where you go if you see yourself as an ubergeek who is going to be uberrich and change the cyberworld.

Most foundation and government grantors want administrative expenses to be about 15%, WMF's is at 26.7%. If WMF grows more responsible (a big "if") this will at first get worse, because right now the non-admin expenses are mostly server/technical related and anything relating to quality or accountability is probably now considered "administrative." (office personnel who address "issues" and concerns). If WMF grows more responsible this should be defined as program activity, not administration, and this is where almost all of the growth needs to be directed. A more staff dominated organization is here a good thing.

Actually, that's a good point, and I don't see an easy way to reduce expenses in that area. Moving to Sacramento, Oakland, or Fresno would not necessarily reduce those kind of administrative expenses. If they were located in an area that had a lower cost-of-living, however, wouldn't they be able to offer lower salaries to prospective employees?

I have raised the issue on the Wikimedia Foundation's mailing list service. We'll see how they respond.

All good points. Was the official justification for moving to San Francisco to have close working relationships to cutting-edge software engineers? Frankly, is there a crying need for any kind of top-flight talent other than nonprofit organizational skills for the top jobs (maybe, what, 2-4 really talented people -- at most, a CEO, COO, CIO and a fundraising whiz, but probably just the first and last should be top-flight). Maybe it had to do with fundraising -- to be able to meet big donors interested in tech causes. If that's what you want, the SF/San Jose area would be the place to be, wouldn't it?

Over time, though, Wikipedia's image in terms of some kind of digital-world "glamor" has faded and it's got to fade even more. As it becomes an established institution it's gradually faced with the kind of media scruitiny and public-image environment that most established institutions face: either you don't hear about them much or you hear about them when something goes wrong (which we can expect to happen frequently). You get ratings from places like Charity Navigator, which cast a cool eye over your budget, or scrutiny from other watchdogs. Rich tech people are going to be looking at the bottom line of a maturing organization, and the dazzle won't be there to blind them. Years from now, most of their money is going to be coming from Wikipedia editors responding to fundraising appeals at the top of the web pages. They'll need an endowment by then.

Neither the technology nor web graphics needs (which don't have to be cutting-edge) or the fundraising needs point to high-rent, high-salary San Francisco. Only the self-centered needs of individual Wikipedia poohbahs for self-promotion call for that. If they implemented some kind of system of checking identities of editors, they'd want to hire cheap for that, pointing to a location that didn't have the highest housing costs in the U.S. And shouldn't Wikipedia want a head office that won't be offline the next time a major earthquake hits San Francisco?

I assume they'll be moving.

They get 1 point so far. Your message wasn't bounced by the moderator (David Gerard?) as it often would be... now to the actual substance of discussion...

Normally I would be supportive of a non-profit sustaining itself with an endowment. But I hope that that doesn't happen with WMF, at least until the issues relating to social responsibility are worked out. It is a good thing that foundation grantors have a voice in the workings of WMF. Although not much evidence so far, this will over time push them in a direction of responsible conduct and the best practices, or at normal practices, of non-profits. Not as good, but still of some value, are the voices of rich individual from the tech sector. Worse is a bunch of atomized and easy to ignore individual givers. Worst of all would be a fully endowed WMF that would become all the more insular and irresponsible.

I agree with just about all of that. A young-but maturing organization that is continuing to make mistakes should get as much scrutiny as possible from donors. At the very beginning, I think a nonprofit tends to get a lot of leeway, and that leeway narrows over time. It wouldn't surprise me if Jimbo's push for a better BLP policy a while back was with future donations in mind.

With Wikipedia, I think we can expect multiple scandals on BLPs, child/adult contact, etc., expect them to be widely publicized, and expect fundraising to suffer, including appeals to editors and small donors. Really bad publicity often cuts donations from small donors. You're right that small donors might not notice the ongoing problems much, but this is Wikipedia, so I expect big, flashy, neon-lit scandales du jour. Combine the seriousness of the Siegenthaler incident with the tabloidy Marsden affair. Maybe a bigger financial scandal than what we've seen already. Really, it's only a matter of time.

The WMF has a really easy way to lower its percentage of administrative expenses. Spend a few million on non-administrative expenses. Net assets: $5,178,168. They've saved more than they've spent. Saving money for a rainy day is prudent, but saving two thirds of your revenues?



As much as I don't like you, you're absolutely correct about that. If the WMF no longer had to regularly beg the public for money, you can rest assured that the current relatively minor self-dealing and shady financial practices would explode.

But with 2/3rds of revenue going to savings as it is, it'll be no time before the WMF has saved up enough to give the public the finger.

Well, well, well.

It would appear that this post to Foundation-l has shut down traffic on the list for 8 hours.

Three pending questions that they can't or don't want to answer, all at once: