Wikipedia:Wikipedia Signpost/2022-06-26/Special report

"Wikipedia's independence" or "Wikimedia's pile of dosh"?: A review of Wikipedia's fundraising messages and financial status.

Andreas Kolbe is a former co-editor-in-chief of the Signpost, and has been a Wikipedia contributor since 2006. The views expressed in this opinion article are those of the author and do not necessarily reflect the views of the Signpost. Responses and critical commentary are invited in the comments section.J
WMF Support and Revenue, Expenses and Net Assets at Year End.jpg
Financial development of the Wikimedia Foundation (in US$), 2003–2021
Black: Net assets (excluding the Wikimedia Endowment, which passed $100m in June 2021)
Green: Revenue (excluding third-party donations to Wikimedia Endowment)
Red: Expenses (including WMF payments to Wikimedia Endowment, typically $5 million per year)

This month, the Wikimedia Foundation (WMF) has been fundraising in the Global South. It has also published finance updates in its quarterly reviews. This seems, therefore, a good time to review the Foundation's fundraising messages against the background of its increasing wealth.

A vast surplus

The Wikimedia Foundation has been doing very well in recent years. In 2020/2021 (the WMF's fiscal year runs from July to June), the Foundation reported an increase in net assets of over $50 million while the Wikimedia Endowment – which is held by the Tides Foundation and organizationally separate from the Wikimedia Foundation – increased in value from $62.9 million to over $100 million. Altogether, then, the work of WMF fundraisers last year brought in about $90 million more in revenue than the Foundation spent, bringing total Wikimedia assets to over $330 million.

How are things shaping up in the current financial year, due to end on June 30? The Finance & Administration department's third-quarter review, put online this month, states that in the first three quarters of the 2021/2022 financial year the Wikimedia Foundation already exceeded its annual target of $150 million, taking $153.6 million in revenue while spending less than it budgeted for.

As a result, Foundation assets rose by another $51.9 million. Together with this year's increase in the value of the Endowment and the Foundation's as yet unreported fourth-quarter revenue, this means that the WMF will now have a very comfortable cushion of about $400 million. Almost all of this is in cash and investments.

Historical perspective

It is worth remembering that the influx of such substantial amounts of money, raised mostly through email campaigns and fundraising banners placed on Wikipedia, has completely transformed the WMF as well as its assumptions about what kind of organization it is – or should be.

In 2013 – less than a decade ago – Erik Möller (the WMF's VP of Engineeering and Product Development at the time) thought the Wikimedia mission would be sustainable on "$10M+/year". Indeed, 2010 marked the first time annual WMF expenses exceeded $10 million – three years after Wikipedia first became a global top-ten website. Today, the WMF is an organization with around 600 staff and contractors, rising compensation for its top executives (eight of whom saw compensation for their roles increase to more than $300,000 by 2020) and annual salary costs estimated at around $200,000 for each full-time employee – more than twice as much as the 501(c)(3) nonprofit Internet Archive, for example, judging by a comparison of the most recent Form 990 for each.

Money is also changing the very nature of the movement: an increasing number of decisions are no longer made on-wiki, by a community of unpaid volunteers, but by functionaries and paid staff of the WMF and its affiliates. In days past, the contributors that built Wikipedia were only bound by a shared interest in free knowledge; but money has increasingly become part of the glue that ties the movement together. And the WMF holds the purse strings, controlling the unprecedented wealth that results from its fundraising success.

Fundraising messages

The WMF mainly uses a two-pronged approach in its fundraising: it sends emails to past donors, inviting them to continue their support, and it places fundraising banners on Wikipedia. According to the most recent Fundraising report, 35% of WMF revenue is brought in by emails, 29% by desktop banners, 25% by mobile banners and 11% by other sources. The timing of the email and banner campaigns varies by country. This month, emails and banner campaigns ran in India, Latin America and South Africa.

The WMF makes sample email texts and designs available for review (see Meta). Below are six key phrases from the first of the three India emails shared on Meta that caught my eye – and, I am sure, that of many recipients. Emphases (bold text) are mine.

"A subscription fee"

(1) We choose not to charge a subscription fee, but that doesn't mean we don't need support from our readers

(2) kindly consider giving again, or even increasing your gift, to keep Wikipedia free and independent.

The email's authors are first introducing the notion of a subscription fee – by commenting on its absence – and then go on to say that people should give again to keep Wikipedia free – which in the context of the previous passage can only mean they should give to avoid a subscription fee being charged in the future.

What the reader is not told is that the very WMF mission is "to make and keep useful information from its projects available on the internet free of charge, in perpetuity."

It is only because of this commitment that the volunteers who actually write Wikipedia – a task in which the Wikimedia Foundation plays no part – are prepared to do it for free.

There is also an obvious logical contradiction in begging people – especially people in developing countries – for money "to keep Wikipedia free".

"Keep Wikipedia online, ad-free and growing"

(3) About a year ago, you donated Rs. 313 to keep Wikipedia online for yourself and millions of people around the world. Each year, fewer than 2% of Wikipedia readers choose to support our work.

(4) please renew your gift to ensure that Wikipedia remains independent, ad-free, and growing for years to come

(5) can we count on you to renew your solidarity with a small donation? It will keep Wikipedia online, ad-free, and growing for years to come

References to keeping Wikipedia "online and ad-free" were commonly used on fundraising banners in the mid-2010s, and were discontinued after significant controversy (see the 2015 Signpost report). It is somewhat surprising, therefore, to see them used in emails sent to donors in India today. The WMF has confirmed that it has no intention of retiring these stock phrases – which would have been far more justified fifteen or twenty years ago, when the Foundation was finding its feet financially, but seem very out-of-step with current financial realities.

The above quotes also refer to Wikipedia's "independence" – a theme that has been used on the Wikipedia banners as well (in phrases like "This Sunday, we request you to sustain Wikipedia's independence" or "protect Wikipedia's independence").

But if this independence is to be measured by the WMF's money reserves – which are now over ten times greater than they were ten years ago, and about three times greater than they were as recently as five years ago – it is surely under far less threat than ever before.

"To support the volunteers"

(6) 31% of your gift will be used to support the volunteers who share their knowledge with you for free every day.

This is another interesting phrase. 31% of 2020–2021 donations revenue would have been about $50 million. The WMF says the 31% figure comes from the annual report (where it is called "Direct support to communities" and refers to 31% of spending, which is of course much less than 31% of revenue). But even so, it is somewhat unclear what specifically this amount refers to. It is an order of magnitude greater than the WMF's grants to the community in 2020–2021. And those who write our articles, take our photos, and maintain our armadas of bots and modules and templates are doing it for free.

What do you think? We'd love to hear from you below.