On fundraising costs I don’t think you can make that comparison in good faith. We were not charged for placing a very prominent an advert on one of the top 5 websites in the world. Using the apparent expenditure here is totally inappropriate. The market value of the (advertising) gift we received from Wikimedia is the amount they could have generated from the same advertising area. Effectively they gave us that much money, then we bought the advertising space off them. So our fundraising costs to revenue ratio is likely to be very close to 100%. Indeed it may be higher than 100% if people were discouraged from giving to us because our donation site was less professional than Wikimedia’s, or because we’re a less well known brand. (It seems quite plausible to me that these effects outweigh the “trusting a local organisation” effect.)
All I’m trying to encourage the board to do is to seriously consider how they can best add value to what the foundation is already doing. A large bulky organisation duplicating many of the foundation’s functions may not be the answer.
From: wikimediauk-l-bounces@lists.wikimedia.org [mailto:wikimediauk-l-bounces@lists.wikimedia.org] On Behalf Of Chris Keating
Sent: 27 February 2011 19:43
To: wikimediauk-l@lists.wikimedia.org
Subject: Re: [Wikimediauk-l] job descriptions
Quite agree about the risks of large balances; hence we need a plan to increase expenditure, which is what we have got.
> On the 20% thing, I accept that some of the stuff the staff do will be non-admin. But you still have to think about our relative efficiency compared to the WMF. Suppose for the simplicity that we were giving all our money to the WMF. Then clearly spending 20% on staff wouldn't be acceptable as the WMF could run their fundraiser themselves for almost zero marginal cost (they're already doing it) and get the same income. Once you take out the chunk we're giving to the WMF the ratio isn't very good even if the chapter manager is entirely non administrative.
Well, indeed - yet more reasons why the ratio isn't a particularly good figure :-)
Fundamentally, people give money to our fundraisers because they want to keep Wikipedia free to use and free from adverts. The cost of doing so, even if you include development work and the support of all the other less-well-known projects, is about $10M. The Foundation's total income is $20M. Giving them more money direct does not increase the core project costs which people give money to support.
Both the Foundation and Wikimedia UK are in the position of needing to find medium-to-long term projects which will achieve worthwhile things while spending the large amount of donations they receive. That entails setting up an infrastructure, recruiting staff and looking for opportunities, all of which incur costs but will only yield long-term benefits.
If you're looking at WMUK's efficiency, do bear in mind its fundraising costs. These amounted to £20k out of nearly £600k raised. This is 3% absolutely remarkable for a charity which is entirely dependent on small individual donations. The RNLI, for instance, spent £23M to generate £52M of income in the year to end 2009....