I have heard just the opposite: that having a decade-length endowment is generally a sign of hording by the non-profit, and unlikely to be contributing to the mission. What scenario is there where Wikipedia is still providing value and fulfilling its mission but can't raise funds for a decade?
Re: "I have heard just the opposite: that having a decade-length endowment is generally a sign of hording by the non-profit, and unlikely to be contributing to the mission."
That's only true of charities where there is no natural limit on how much they can spend. If you are feeding orphans you can always do more until every orphan is fed. The WMF isn't like that, They have one job; keep Wikipedia and the sister projects like Wictionary online. That doesn't require ever-increasing spending other than to cover actual increases in hosting expenses and essential employees.
Imagine a future Wikipedia that is 100% funded by the endowment, which will always be there even if nobody donates, and which has no fundraising banners, just a small "donate" link. I think that is a goal worth pursuing.
As evidence I point to Boys Town, a philanthropy that quite literally exists to take care of orphans. It amassed a large fortune that exceeded anything justifiable by their core mission. In the 1970s, a tip from Warren Buffett on this won The Omaha Sun (which he owned at the time) a Pulitzer for reporting on the resulting scandal. (He was also an investor in The Washington Post which won a Pulitzer in the same year for reporting on Watergate.)
Your reference to boys town missed the point. Boys town didn't run out of orphans to spend money on. They simply failed to spend a large amount of it on orphans.
A better charity to compare with Wikipedia would be the the Washington Monument Restoration Project.
Once the Washington Monument is completely restored you can't spend any more money restoring the Washington Monument. If donations keep coming in, you shouldn't spend them on giving executives of the charity free ski vacations (yes, the WMF actually did that) You should instead build up an endowment that is eventually big enough that the interest covers all Washington Monument maintenance forever. Then and only then should you tell donors "look, we don't need any more money for restoring the Washington Monument. If you give us a donation we will use it for other things, starting with restoring the Lincoln Memorial".
Your reference to boys town missed the point. Boys town didn't run out of orphans to spend money on. They simply failed to spend a large amount of it on orphans.
Do you have a source for that?
My understanding is that boys town did run out of orphans who met their requirements. There simply aren't enough orphans in the USA with no family to take care of them who slip through the cracks of the adoption system.
But that fact didn't slow their appeals for more money.
That said, my understanding is based on my memories of a book that I don't presently have a copy of.
Ah. I had no idea that they ran out of orphans. If they did, then it would be a perfect analogy. Boys town takes care of all the orphans that it is their mission to take care of, keeps collecting donations and spending on other stuff. The Wikimedia Foundation does everything needed to put an encyclopedia -- the thing that it is their mission to take care of -- keeps collecting donations and spending on other stuff. Thanks for the great analogy, and I apologize for misunderstanding and assuming that there would always be plenty more orphans to take care of.
I am going to think about this, do some research, and see if I can turn it into an essay on Wikipedia about collecting money after the job is done. Thanks!
Didn't the march of dimes also keep taking in donations after polio was eradicated?
Full disclosure: I am the author of the Wikipedia essay "Wikipedia has cancer"
First, you didn't answer my question. You may find the abstract idea of a Wikipedia that is perpetually endowed comforting, but you didn't actually describe a scenario where it was well functioning but ran out of money. I think the far-fetched-ness of such scenarios makes that abstract idea less enticing.
Second, the hoarding worry with charities still applies to those with limited possible scope. The idea is that such charities should not acquire perpetual funds because they become unaccountable; this doesn't rely on there always being more available orphans.
Third, why did you limit things to Wikipedia and Wiktionary? There are a bunch of other similar projects, extant and hypothetical, that the WMF would arguably be the best organization to run.
Full disclosure: I am the author of the Wikipedia essay "Wikipedia has cancer".
I believe that I did "actually describe a scenario where it was well functioning but ran out of money."
From my essay:
"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. It might even be a lawsuit that forces the WMF to pay out a judgement that is larger than the reserve. 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."
My comment was a response to your comment, not the essay. If you want to debate that paragraph:
* The recession hypothetical is highly unrealistic, as already explored in this thread.
* A lawsuit is exactly the sort of thing that is exacerbated by giving the organization a huge endowment. You want fewer assets to be exposed. Non-profits have bankruptcy protection just like for-profits (in fact, greater), so WMF can resume operations with new donations following closing of the bankruptcy proceedings. The only thing a pile of cash helps with is staving off bankruptcy in the first place, but making WMF a juicy target is not a strategic method of doing this.
* A "scandal" that causes the WMF to lose donor support is exactly the sort of thing that should cause it to lose donor support! Why would you especially, as a critic of WMF, think that the organization should be protected in scenarios where it experiences a scandal so severe that it undermines its ability to raise the minimum funds necessary to maintain operations?
* There is no reasonable political position WMF could take that would cut off donations so severely that operations couldn't be maintained. It's donor base is huge, vastly better than other open-source non-profits, and it only needs a tiny fraction to agree with it.
The distributional impacts of major downturns and their effects on the groups donating to any particular charity aren't identical downturn to downtun; the fact that a particular major downturn didn't hurt WMF donations doesn't mean that would be true of the next one.
What historical downturn are you thinking of, and how much did the revenue of any charity lower purely as a result of that downturn (and not, e.g., because the charity's mission was no longer relevant)?
It sounds like some here are of the opinion that Wikipedia's revenue will never take a nosedive for any reason and that the bubble will never burst. Now where have I heard that kind of talk before?
Full disclosure: I am the author of the Wikipedia essay "Wikipedia has cancer"
What your describing is not just an economic downturn, because no historical downturn has ever come close to lowering donations sufficiently to starve Wikipedia. Rather, it's an end-of-the-world scenario, and Wikipedia's expenses would require a hell of a lot more than just paying AWS fees....
