Strategic Planning

Task force/Financial Sustainability/2009-12-18

< Task force | Financial Sustainability

Financial Sustainability Task Force Call

10am PT, December 18, 2009

Participants

Key themes

  • Consensus that donations should continue into future; it is likely that larger fundraising team is needed to explore/test ideas in fundraising as financial needs scale up.
  • Any efforts to increase revenue of Foundation/movement must have a strong and well-communicated value proposition for both donors and donee (the Foundation and the movement).
  • The community of editors is most likely open to new avenues of funding, but they must fully understand why this money is needed and how this money will advance the cause. Fundraising should embrace the transparency embedded in the Wikimedia community.

Notes

We've outlined five key areas:

  • Donation
  • Ad revenue
  • Endowment
  • Business Relationships
  • Government funding

What would these mean from a cost perspective?

How can we imagine these things being implemented?

Other issues?

Donations

Specifically, individual donors.

Should donations be the dominant source of revenue going forward?

We need to know what's required.

Should we be a charity or should we be run as a business?

Donations uncontroversial. Let's strengthen this.

$50-100 million seems overly ambitious. Would need to ramp things up.

We don't really understand the impact of the alternatives, so it's difficult to make an informed decision otherwise.

Common thread: Need for experimentation to see impact of different funding models. Experiments in the donation realm outside of scaling it up?

Can't experiment with scaling. Have to raise money and built a team. General concern that we'll discuss these ideas and not do anything.

Possible experiments:

  • Targeted donation messages.
  • Campaigns beyond annual campaign
  • Grassroots fundraising -- engaging the community to take a more active role in fundraising

Obama campaign as model for grassroots fundraising.

How much does Foundation target high net worth donors? Rebecca Handler does this. We don't really target them through the major fundraising pitch. Big potential in this area. Require different approach and concentrated effort in a different way.

Tension between individual (small < $100) donations vs high net worth + foundations. Lots of value going after broader pool of donors. Foundation not beholden to any one constituency.

Foundation currently looking for a Chief Development Officer. Expect to see a difference when there's a person dedicated to overall strategy.

How much do we intend to pay this person? Need a high-power person. Foundation may not be used to the kind of salaries for the kind of people we're looking for. We're learning that you get what you pay for. Sandy suggested we need someone north of $200K a year. How do you get talent while respecting the mission-driven focus?

Summary:

  • Donations uncontroversial. Likely large percentage of revenue moving forward. Haven't reached full potential yet.
  • Need larger fundraising team to test new ideas -- messaging, segmentation, etc.

Ad Revenues

Is this an option worth exploring, knowing that there are a lot of open questions?

A few years ago, things seemed to be stated in no uncertain terms that Wikimedia would not sell anything. Board needs to decide if this is true moving forward.

Well-organized movement opposed to advertising. Also a "don't change anything" group. How would you loop in the voice of those who support advertising?

Must be shades between donations and advertisements. In Wikipedia, there are projects. Having sponsors for those projects. May not be very high potential. The word "advertisement" is causing conflict. Public radio has sponsorships. Doesn't call it advertising. (See User:JohnF's comments about his interview with NPR.) An example of potential experimentation. Take little steps to see if it works.

If you experiment, how do you build support?

WikiHow has opt-out advertising model. When you watch TV, you press a button to opt-out.

Having ads may change ethos of contributing -- the feel-good factor. Need to be careful about this.

NPR is used to develop content. With us, people have already created the content for us for free.

Potentially designate a specific use for revenues coming in from advertising -- things that editors care about.

Summary:

  • Experimentation is very valuable.
  • How advertising is framed is critical. Maybe "advertising" is the wrong term.
  • Consider the feedback loop of "advertising" and community contributions.

Business Relationships

Potential partnerships with the corporate world?

For example: Possibility of Google or Cisco paying for data center. Had interest for a long time from potential corporate partners. Fell apart because they wanted recognition for this, and there's backlash about "advertising."

In-kind contributions. Outlay is less than equivalent amount of money. Have been successful with bandwidth and legal work. Not so much with servers.

What have they expected in exchange? Happy with a name mention.

Wikimedia has a culture of transparency. When things pop up that are not transparent, raises suspicion.

Financial sustainability is a function of what we need the money before. If we had a good enough reason, if it aligned with the mission, if people understood that, they would support it. This Task Force is relying on other Task Forces to come up with those good ideas. If so, we can find ways to fund them.

This Task Force might make a recommendation for a tiered sustainability model based on different scenarios.

Summary:

  • Successful business relationships (as defined by sponsoring/underwriting work) depend on successfully creating value for these businesses. This could look like a "This page sponsored by..." or "This project sponsored by.." banner.
  • These relationships also rely on the community of editors fully understanding how/why these relationships are made. It is important to have transparency--i.e., show exactly why/how a relationship helps the community.

Government Funding

Big differences between U.S. and European community. In European community, it's common to have government funding of different things. This would have to go through the Wikimedia Chapters.

Any issues of government interference?

How might this process work?

For example:

  • Wikimedia Sweden work. Anders, could you provide a link?
  • Hypothetical:England might have a pot of money for information resources in different African languages. Sponsoring different things. Could we tap into that?

Could get a Task Force together from different chapters to explore this.

Summary:

  • There’s an issue here about roles: What do chapters do with the funding? How could government money support the work of the movement more broadly?
  • Should feed this issue into the Movement Roles Task Force.

Endowment

General thoughts around the idea of an endowment?

Community concerns about creating a lot of power for the Foundation. Again, to address power issue, could be specific in describing what the endowment covers: Infrastructure, etc.

Wikimedia projects are so big and important, demands some sort of stability. We shouldn't be scraping around every year. Need to be more systematic in planning.

Where would the money come from? What's the right timing?

As you spread around sources of funds, less of an issue. If your sources are dependent on the economy doing well, need an endowment to back you up. Requires huge resources.

Would an endowment be more attractive to certain donors? Endowment ask is an adjunct to a donation for a specific purpose, rather than a single ask.

Summary:

  • Lot of questions, but potential. Diversifies risk in tough economic times.

Next Steps

Next call in January in 2010 (exact date to be confirmed by Veronique). Veronique to draft emerging recommendations based on past discussions; will post on strategy wiki.

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