In biology, the hallmarks of an aggressive cancer include limitless and exponential multiplication of ordinarily beneficial cells, even when the body signals that further multiplication is no longer needed. The Wikipedia page on the wheat and chessboard problem explains that nothing can keep growing exponentially forever. In biology, the unwanted growth usually terminates with the death of the host. Exponential spending increases can often lead to the same undesirable result in organizations.
Consider the following example of runaway spending growth:
||Support and Revenue
||Net Assets at year end
|Based upon a table created by Simplicius on the German Wikipedia.
In 2005, Wikipedia co-founder and Wikimedia Foundation founder Jimmy Wales told a TED audience:
So, we're doing around 1.4 billion page views monthly. So, it's really gotten to be a huge thing. And everything is managed by the volunteers and the total monthly cost for our bandwidth is about US$5,000, and that's essentially our main cost. We could actually do without the employee … We actually hired Brion because he was working part-time for two years and full-time at Wikipedia so we actually hired him so he could get a life and go to the movies sometimes.
According to the WMF, Wikipedia (in all language editions) now receives 16 billion page views per month. The WMF spends roughly US$2 million a year on Internet hosting and employs some 300 staff. The modern Wikipedia hosts 11–12 times as many pages as it did in 2005, but the WMF is spending 33 times as much on hosting, has about 300 times as many employees, and is spending 1,250 times as much overall. WMF's spending has gone up by 85% over the past three years.
Sounds a lot like cancer, doesn't it? For those readers who were around three years ago, did you notice at the time any unmet needs that would have caused you to conclude that the WMF needed to increase spending by $30 million dollars? I certainly didn't.
From 2005 to 2015, annual inflation in the US was between 1% and 3% per year, and cumulative inflation for the entire decade was 21.4%—far less than the increase in WMF spending. We are even metastasizing the cancer by bankrolling local chapters, rewarding them for finding new ways to spend money.
Nothing can grow forever. Sooner or later, something is going to happen that causes the donations to decline instead of increase. It could be a scandal (real or perceived). It could be the WMF taking a political position that offends many donors. Or it could be a recession, leaving people with less money to give. Whatever the reason is, it will happen. It would be naïve to think that the WMF, which up to this point has never seriously considered any sort of spending limits, will suddenly discover fiscal prudence when the revenues start to decline. It is far more likely that the WMF will not react to a drop in donations by decreasing spending, but instead will ramp up fund-raising efforts while burning through our reserves and our endowment.
Although this op-ed focuses on spending, not fundraising, it could be argued that the ever-increasing spending is a direct cause of the kind of fund-raising that has generated a storm of criticism. These complaints have been around for years, leading one member of a major Wikimedia mailing list to automate his yearly complaint about the dishonesty he sees every year in our fundraising banners.
No organization can sustain this sort of spending on a long-term basis. We should have leveled off our spending years ago. Like cancer, WMF spending is growing at an exponential rate. Like cancer, this will kill the patient unless the growth is stopped.
The reason I have so little faith in the WMF's ability to adapt to declining revenues (note that I specified the WMF; I think Wikipedia has shown an excellent ability to adapt to multiple problems) is the horrific track record they have regarding adapting to other kinds of problems.
In particular, their poor handling of software development has been well known for many years. The answer to the WMF's problems with software development has been well known for decades and is extensively documented in books such as The Mythical Man-Month and Peopleware: Productive Projects and Teams, yet I have never seen any evidence that the WMF has been following standard software engineering principles that were well-known when Mythical Man-Month was first published in 1975. If they had, we would be seeing things like requirements documents and schedules with measurable milestones. This failure is almost certainly a systemic problem directly caused by top management, not by the developers doing the actual work.
After we burn through our reserves, it seems likely that the next step for the WMF will be going into debt to support continued runaway spending, followed by bankruptcy. At that point there are several large corporations (Google and Facebook come to mind) that will be more than happy to pay off the debts, take over the encyclopedia, fire the WMF staff, and start running Wikipedia as a profit-making platform. There are a lot of ways to monetize Wikipedia, all undesirable. The new owners could sell banner advertising, allow uneditable "sponsored articles" for those willing to pay for the privilege, or even sell information about editors and users.
If we want to avoid disaster, we need to start shrinking the cancer now, before it is too late. We should make spending transparent, publish a detailed account of what the money is being spent on and answer any reasonable questions asking for more details. We should freeze spending increases to no more than inflation plus a percent or two, build up our endowment, and restructure the endowment so that the WMF cannot dip into the principal when times get bad.
If we do these things now, in a few short years we could be in a position to do everything we are doing now, while living off of the endowment interest, and would have no need for further fundraising.