Task force/Recommendations/Financial sustainability 4

This is a recommendation as submitted by the financial sustainability task force. Please provide input and suggestions on Talk:Task force/Recommendations/Financial sustainability 1

Longer term stability

Question

Should an endowment for Wikimedia be created and if so, for what purpose?

Strategy

An endowment fund would seem to have some advantages to the longer term financial stability of the WMF. Lessening the risks of sudden and unpredicted changes in other fund raising activities.

It should be pursued for a specific purpose (i.e. an endowment for supporting the annual bandwidth costs, or an endowment to support the development of Wikipedias in specific languages or areas of the world). Having an endowment with a specific purpose rather than simply contributing to WMF running costs will be less controversial and is likely to make it easier to collect funds for.

The impact of creating such a large endowment on other areas of fund raising, particularly efforts by local Wikipedia Chapters and small donations by individuals and institutions, should be investigated.

(N.B: normally only the earnings of the endowment fund are “spent” each year (a ballpark amount for earnings is 5%. So in order to have $5MM available each year, the endowment would need to be about $100MM), the endowment fund itself remains untouched, only accessible under very specific and probably grave situations.)