[Foundation-l] Relocation announcement

Sat Sep 22 18:54:23 UTC 2007

Thomas Dalton wrote:
> On 22/09/2007, Thomas Dalton <thomas.dalton at gmail.com> wrote:
>   
>>> That's not quite how it works.  The donations that are coming in aren't
>>> going to be changing, so WMF will still be getting most donations in
>>> USD.  Except, because of the poor exchange rate, it is much more
>>> expensive to do just about everything in the UK, including renting
>>> flats, renting office space, buying food, buying bandwidth, etc.  The
>>> donations wouldn't go nearly as far.
>>>       
>> If hosting is staying in the US, that's quite a lot of the expenses
>> that will still be being paid in USD. And it's not that the pound is
>> strong, it's the dollar that's weak, so any non-USD donations can be
>> spent in the UK without problems. I haven't looked at the budgets and
>> donation distributions to see how well it would work, but it shouldn't
>> be too big a problem. Remember, WMF is non-profit - one of the biggest
>> problems for profit making businesses is that they have to report
>> profits in one currency, so even if the actual money isn't being
>> converted, they still have to convert it on paper - the WMF doesn't
>> have to worry about that.
>>     
> I've just looked up the numbers. So far this year, 26% of donations
> have been in something other than USD. In 2006, Salaries and Wages and
> Operation, which are the only two things that would change currency
> (and not all of them, at that), constituted 20% of total expenditure.
> This is not a particularly accurate way of working out how a change of
> currency would affect things, but I think it's close enough - the
> change in currency would not be a serious issue.
Exchange rates alone have their effect over a much longer period of 
time.  The Euro and US$ were last at par in 2002; now the Euro buys 
US$1.36.  At the peak in June 2001 the Euro bought US$0.85.  So what 
would represent 26% of revenues now would have represented 20.3% when 
the U.S. dollar was at its peak.  That 6% difference may not seem like 
much, but that's because other country fundraising is still relatively 
small.  This is a simplified calculation because I have only considered 
Euros, but similar things would happen with other currencies.

Ec