points by idorosen 8 years ago

Reproducing the table from the article with one extra column, the ratio of expenses to revenue for clarity, it looks like they're still operating with a very comfortable margin. Yes, the 19% margin is tighter than a 50% margin 12 years ago, and their existence depends on donations now more than ever ($23,463/yr is sustainable by a single engineer's salary, $65,947,465/yr is...not), but Wikipedia and other Wikimedia projects also serve a much wider audience and broader purpose. This isn't scary in and of itself, especially if they've got cash reserves to give them time to tighten the belt later on if it becomes a problem and someone in a leadership position is monitoring their finances to act if their burn rate gets too high... I've seen plenty of nonprofits with tighter margins survive and succeed.

  Year      Revenue      Expenses      Net Assets    Expense Ratio (1-margin)
  2003/2004     $80,129       $23,463       $56,666   29%
  2004/2005    $379,088      $177,670      $268,084   47%
  2005/2006  $1,508,039      $791,907    $1,004,216   53%
  2006/2007  $2,734,909    $2,077,843    $1,658,282   76%
  2007/2008  $5,032,981    $3,540,724    $5,178,168   70%
  2008/2009  $8,658,006    $5,617,236    $8,231,767   65%
  2009/2010 $17,979,312   $10,266,793   $14,542,731   57%
  2010/2011 $24,785,092   $17,889,794   $24,192,144   72%
  2011/2012 $38,479,665   $29,260,652   $34,929,058   76%
  2012/2013 $48,635,408   $35,704,796   $45,189,124   73%
  2013/2014 $52,465,287   $45,900,745   $53,475,021   87%
  2014/2015 $75,797,223   $52,596,782   $77,820,298   69%
  2015/2016 $81,862,724   $65,947,465   $91,782,795   81%

How sure are we that these numbers are accurate, anyhow?

rawland 8 years ago

It seems op-ed followed Wikimedia's Financial Statements [1]

Expenses (2016/2015)

                                 2016       2015
  Salaries and wages             31,713,961 26,049,224
  Awards and grants              11,354,612 4,522,689
  Internet hosting               2,069,572  1,997,521
  In-kind service expenses       1,065,523  235,570
  Donations processing expenses  3,604,682  2,484,765
  Professional service expenses  6,033,172  7,645,105
  Other operating expenses       4,777,203  4,449,764
  Travel and conferences         2,296,592  2,289,489
  Depreciation and amortization  2,720,835  2,656,103
  Special event expense,         311,313    266,552
  
  Total expenses                 65,947,465 52,596,782

--

Sources: [1]: https://upload.wikimedia.org/wikipedia/foundation/4/43/Wikim...

  • cuchoi 8 years ago

    11 million in awards and grants seems like something that you can cut easily in bad times. Also, they are still generating more income than expenses, and the margin is big enough to adapt if there is a sudden decrease.

masklinn 8 years ago

> it looks like they're still operating with a very comfortable margin.

That's not the essay's concern, the essay's concern is that expenses grow much faster than the site's load.

  • yomly 8 years ago

    The biggest ticket in the expenses is salaries. I wonder how much of the growing expenses is linked to growing developer salaries

  • Whitestrake 8 years ago

    I thought the essay's concern was that funding is growing too fast, allowing expenses to expand to fill the gap in a way that is unsustainable (because eventually the funding growth must come to an end).