Charity Navigator rates WMF

[thekohser]

Greetings.

The Charity Navigator site has evaluated and rated the Wikimedia Foundation:

http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=11212

Despite an overall three-star rating (out of four), WMF was only rated two
stars for Organization Efficency.  This is described by Charity Navigator as
"Meets or nearly meets industry standards but underperforms most charities
in its Cause".  The Charity Navigator site further states:

"Our data shows that 7 out of 10 charities we've evaluated spend at least
75% of their budget on the programs and services they exist to provide. And
9 out of 10 spend at least 65%. We believe that those spending less than a
third of their budget on program expenses are simply not living up to their
missions. Charities demonstrating such gross inefficiency receive zero
points for their overall organizational efficiency score."

While the WMF seemed to be narrowly meeting these guidelines (according to
the site's "Revenue/Expenses Trend" histogram) in perhaps 2007, it appears
that in 2008, the trend got decidedly worse.  Perhaps I am misinterpreting
the criteria and/or the graphic.  But, the 2-out-of-4 stars rating is
decidedly clear.

For comparison, witness an organization cited by Charity Navigator as
"similar" to the WMF -- the Reason Foundation -- and see how their Expenses
are a much larger portion of revenue for them, and thus obtain a 3-star
rating:
http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=7481

I am wondering (and I suppose others may be, too) whether the staff and
board feel that Charity Navigator is a reputable and credible measurement
service, and if so, are you satisfied with receiving two out of four stars
in this area, and if not what do you plan to change to improve the rating
next year?
Gregory Kohs
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[Thomas Dalton]

2009/10/8 Gregory Kohs <[hidden email]>:
> Despite an overall three-star rating (out of four), WMF was only rated two
> stars for Organization Efficency.  This is described by Charity Navigator as
> "Meets or nearly meets industry standards but underperforms most charities
> in its Cause".  The Charity Navigator site further states:

The WMF is unique in being so massively volunteer driven. The WMF
exists to run the servers and handle the admin, almost everything else
is done by volunteers and doesn't appear on the income statement. It's
inevitable that the WMF will spend a lot of its money on admin. If you
include volunteer time on the income statement, even at a nominal rate
of $1/hr or something, then we would be spending almost all our
resources on programmes.

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[George William Herbert]

On Thu, Oct 8, 2009 at 10:47 AM, Thomas Dalton <[hidden email]> wrote:

> 2009/10/8 Gregory Kohs <[hidden email]>:
>> Despite an overall three-star rating (out of four), WMF was only rated two
>> stars for Organization Efficency.  This is described by Charity Navigator as
>> "Meets or nearly meets industry standards but underperforms most charities
>> in its Cause".  The Charity Navigator site further states:
>
> The WMF is unique in being so massively volunteer driven. The WMF
> exists to run the servers and handle the admin, almost everything else
> is done by volunteers and doesn't appear on the income statement. It's
> inevitable that the WMF will spend a lot of its money on admin. If you
> include volunteer time on the income statement, even at a nominal rate
> of $1/hr or something, then we would be spending almost all our
> resources on programmes.

The WMF is not entirely unique in that regard; many other charities
are largely volunteer (cf Red Cross).

However, the "Foundation as professionally organized core around which
a much larger volunteer activity rotates" is fairly rare.


--
-george william herbert
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[Andrew Gray-3]

2009/10/8 Gregory Kohs <[hidden email]>:

> "Our data shows that 7 out of 10 charities we've evaluated spend at least
> 75% of their budget on the programs and services they exist to provide. And
> 9 out of 10 spend at least 65%. We believe that those spending less than a
> third of their budget on program expenses are simply not living up to their
> missions. Charities demonstrating such gross inefficiency receive zero
> points for their overall organizational efficiency score."
>
> While the WMF seemed to be narrowly meeting these guidelines (according to
> the site's "Revenue/Expenses Trend" histogram) in perhaps 2007, it appears
> that in 2008, the trend got decidedly worse.  Perhaps I am misinterpreting
> the criteria and/or the graphic.  But, the 2-out-of-4 stars rating is
> decidedly clear.

As far as I can see, the "...at least 75% ... at least 65% ... less
than a third" relates to the proportion of program expenses to overall
expenditure, which as the table and pie-chart shows is ~66% for the
WMF.

The histogram doesn't seem to directly relate to those numbers or that
criteria; it shows absolute program expenses against absolute overall
*income*, not expenditure. I think interpreting the proportions of the
histogram using the rules applied to a different ratio is going to get
confusing. (The reason it seems to have got "substantially worse" is a
$4.3m increase in income against a $800k increase in expenses,
compared to an increase of $1m in income versus $800k in expenses from
2006-2007. I do not know to what extent this will continue in 09.)

WMF could no doubt spend a lot more in program expenses, though
defining exactly what those are is a pretty fun game. But it's
certainly not spending as inefficiently as the histogram might seem to
suggest.

> For comparison, witness an organization cited by Charity Navigator as
> "similar" to the WMF -- the Reason Foundation -- and see how their Expenses
> are a much larger portion of revenue for them, and thus obtain a 3-star
> rating:
> http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=7481

Again, expenses/revenue isn't where the rating comes from; it's
program expenses/total expenses. Reason are indeed doing better at
this than WMF - 87% versus 65% - but it's important to distinguish
between the two ratios.

It's interesting to note that Reason show the same expenses pattern as
WMF; they have program expenses increasing at a fairly linear
$1m/year, but unlike WMF their income is plateauing - they'll be
exceeding their income this year at that rate!

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[Michael Snow-3]

Thomas Dalton wrote:

> 2009/10/8 Gregory Kohs <[hidden email]>:
>  
>> Despite an overall three-star rating (out of four), WMF was only rated two
>> stars for Organization Efficency.  This is described by Charity Navigator as
>> "Meets or nearly meets industry standards but underperforms most charities
>> in its Cause".  The Charity Navigator site further states:
>>    
> The WMF is unique in being so massively volunteer driven. The WMF
> exists to run the servers and handle the admin, almost everything else
> is done by volunteers and doesn't appear on the income statement. It's
> inevitable that the WMF will spend a lot of its money on admin. If you
> include volunteer time on the income statement, even at a nominal rate
> of $1/hr or something, then we would be spending almost all our
> resources on programmes.
>  

This is true enough in general, though as mentioned there are other
nonprofits that also benefit from volunteer resources on a large scale.
But that's often not something a ratings site will consider in
determining "similarity" of organizations, when it even gets beyond
evaluation with one-size-fits-all formulas. Not that these issues are
easily reduced to formulas, as we have already found in various settings
where it's a challenge to adequately express the scope of what Wikimedia
volunteers do.

We do pay attention to the efficiency of operations and how funds are
spent, not merely for the sake of appearances but as something valuable
in its own right. With that in mind, it's more useful to look directly
at ways of achieving greater efficiency than to debate how important it
is for us to meet arbitrary standards. So in that sense I'd actually
consider arguing over the propriety of covering meal expenses, even with
the possible cultural insensitivity involved, a more valuable discussion.

--Michael Snow

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[Thomas Dalton]

2009/10/8 George Herbert <[hidden email]>:
> The WMF is not entirely unique in that regard; many other charities
> are largely volunteer (cf Red Cross).

According to http://en.wikipedia.org/wiki/Red_Cross#Activities:

"Altogether, there are about 97 million people worldwide who serve
with the ICRC, the International Federation, and the National
Societies. And there are about 12,000 total full time staff members."

That is a ratio of about 8,000 volunteers per staff member.

The Wikimedia movement has perhaps 40 staff including the WMF and
chapters. At the same ratio, that would give us 320,000 volunteers. I
don't know how many volunteers we have, but I think it is rather more
than that. Obviously, just counting volunteers doesn't give the whole
picture, but it's the best I can do without lots more research. So,
perhaps we aren't quite unique, but we are more extreme that any other
similar charity movement I know of.

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[George William Herbert]

On Thu, Oct 8, 2009 at 11:28 AM, Thomas Dalton <[hidden email]> wrote:

> 2009/10/8 George Herbert <[hidden email]>:
>> The WMF is not entirely unique in that regard; many other charities
>> are largely volunteer (cf Red Cross).
>
> According to http://en.wikipedia.org/wiki/Red_Cross#Activities:
>
> "Altogether, there are about 97 million people worldwide who serve
> with the ICRC, the International Federation, and the National
> Societies. And there are about 12,000 total full time staff members."
>
> That is a ratio of about 8,000 volunteers per staff member.
>
> The Wikimedia movement has perhaps 40 staff including the WMF and
> chapters. At the same ratio, that would give us 320,000 volunteers. I
> don't know how many volunteers we have, but I think it is rather more
> than that. Obviously, just counting volunteers doesn't give the whole
> picture, but it's the best I can do without lots more research. So,
> perhaps we aren't quite unique, but we are more extreme that any other
> similar charity movement I know of.

It's hard to compare volunteer activity levels across different types
of projects - WMF, Habitat for Humanity, the Red Cross, etc.

One could attempt to, grading them by involvement and committment
level (Arbcom, OTRS volunteers, normal admins, active editors,
inactive or intermittent editors, distinct IPs who contributed
something, etc).  There are on and off discussions about those
statistics.

Red Cross volunteers do a little bit of prep work, typically, and a
little training each year.  And then a disaster hits and they drop
everything and respond.

It's hard to compare committment to drop your life and work and go
rush off to a disaster for a few days or week, with the constant low
to moderate involvement of our core volunteer groups.  They're
qualatatively different types of committment.


--
-george william herbert
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[Thomas Dalton]

2009/10/8 George Herbert <[hidden email]>:
> Red Cross volunteers do a little bit of prep work, typically, and a
> little training each year.  And then a disaster hits and they drop
> everything and respond.

Are most Red Cross volunteers directly involved in disaster response?
I would expect most of them to be doing fundraising, education and
publicity, and long term projects.

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[George William Herbert]

On Thu, Oct 8, 2009 at 12:43 PM, Thomas Dalton <[hidden email]> wrote:
> 2009/10/8 George Herbert <[hidden email]>:
>> Red Cross volunteers do a little bit of prep work, typically, and a
>> little training each year.  And then a disaster hits and they drop
>> everything and respond.
>
> Are most Red Cross volunteers directly involved in disaster response?
> I would expect most of them to be doing fundraising, education and
> publicity, and long term projects.

My experience - which may not be typical - is that they have a few
people doing training instruction (first aid / first responder
training, disaster training etc), a lot of people who are actual
disaster responders (with much of the first group, and many  more),
and relatively few doing other stuff.

I don't know what their statistics are, though, so I don't know if my
experience is statistically valid across their volunteer set...


--
-george william herbert
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[Anthony-73]

On Thu, Oct 8, 2009 at 2:28 PM, Thomas Dalton <[hidden email]> wrote:

> 2009/10/8 George Herbert <[hidden email]>:
>> The WMF is not entirely unique in that regard; many other charities
>> are largely volunteer (cf Red Cross).
>
> According to http://en.wikipedia.org/wiki/Red_Cross#Activities:
>
> "Altogether, there are about 97 million people worldwide who serve
> with the ICRC, the International Federation, and the National
> Societies. And there are about 12,000 total full time staff members."
>
> That is a ratio of about 8,000 volunteers per staff member.
>
> The Wikimedia movement has perhaps 40 staff including the WMF and
> chapters. At the same ratio, that would give us 320,000 volunteers. I
> don't know how many volunteers we have, but I think it is rather more
> than that.

Depends how you define "volunteers".  How many people were eligible to
vote in the last board election?  I have no idea the number, but I
guess that's a reasonable definition of "volunteers".

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[Thomas Dalton]

2009/10/8 George Herbert <[hidden email]>:

> On Thu, Oct 8, 2009 at 12:43 PM, Thomas Dalton <[hidden email]> wrote:
>> 2009/10/8 George Herbert <[hidden email]>:
>>> Red Cross volunteers do a little bit of prep work, typically, and a
>>> little training each year.  And then a disaster hits and they drop
>>> everything and respond.
>>
>> Are most Red Cross volunteers directly involved in disaster response?
>> I would expect most of them to be doing fundraising, education and
>> publicity, and long term projects.
>
> My experience - which may not be typical - is that they have a few
> people doing training instruction (first aid / first responder
> training, disaster training etc), a lot of people who are actual
> disaster responders (with much of the first group, and many  more),
> and relatively few doing other stuff.
>
> I don't know what their statistics are, though, so I don't know if my
> experience is statistically valid across their volunteer set...

The British Red Cross has a list of ways to volunteer:

http://www.redcross.org.uk/TLC.asp?id=75777

Emergency response is just one part of one item on that list.

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[Anthony-73]

On Thu, Oct 8, 2009 at 3:49 PM, Thomas Dalton <[hidden email]> wrote:
> The British Red Cross has a list of ways to volunteer:
>
> http://www.redcross.org.uk/TLC.asp?id=75777
>
> Emergency response is just one part of one item on that list.

I gave blood once.  Am I a Red Cross volunteer?

I once helped out at a blood drive when I was in high school.  Was I a
Red Cross volunteer, and if so, for how long?

The WMF is unique, but I'm not sure that's a good excuse - more like
part of the problem.

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[Thomas Dalton]

2009/10/8 Anthony <[hidden email]>:

> On Thu, Oct 8, 2009 at 2:28 PM, Thomas Dalton <[hidden email]> wrote:
>> 2009/10/8 George Herbert <[hidden email]>:
>>> The WMF is not entirely unique in that regard; many other charities
>>> are largely volunteer (cf Red Cross).
>>
>> According to http://en.wikipedia.org/wiki/Red_Cross#Activities:
>>
>> "Altogether, there are about 97 million people worldwide who serve
>> with the ICRC, the International Federation, and the National
>> Societies. And there are about 12,000 total full time staff members."
>>
>> That is a ratio of about 8,000 volunteers per staff member.
>>
>> The Wikimedia movement has perhaps 40 staff including the WMF and
>> chapters. At the same ratio, that would give us 320,000 volunteers. I
>> don't know how many volunteers we have, but I think it is rather more
>> than that.
>
> Depends how you define "volunteers".  How many people were eligible to
> vote in the last board election?  I have no idea the number, but I
> guess that's a reasonable definition of "volunteers".

Indeed, it is difficult to define fairly. The board election requires
you to be an active volunteer that has already contributed
significantly - I expect the 97 million figure is broader than that.

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[Mark]

George Herbert wrote:

> On Thu, Oct 8, 2009 at 12:43 PM, Thomas Dalton <[hidden email]> wrote:
>  
>> Are most Red Cross volunteers directly involved in disaster response?
>> I would expect most of them to be doing fundraising, education and
>> publicity, and long term projects.
>>    
>
> My experience - which may not be typical - is that they have a few
> people doing training instruction (first aid / first responder
> training, disaster training etc), a lot of people who are actual
> disaster responders (with much of the first group, and many  more),
> and relatively few doing other stuff.
>
> I don't know what their statistics are, though, so I don't know if my
> experience is statistically valid across their volunteer set...
>  

The Red Cross does a lot of things besides disaster response and first
aid. I know a lot of people who've volunteered for them, and not a
single one has ever gone to a disaster location. My experience might
also not be typical, of course, but all the volunteers I know do things
like help out with blood drives, collecting blankets for the homeless,
organizing and staffing fundraisers, etc.

-Mark


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[Anthony-73]

On Thu, Oct 8, 2009 at 3:55 PM, Thomas Dalton <[hidden email]> wrote:

> 2009/10/8 Anthony <[hidden email]>:
>> On Thu, Oct 8, 2009 at 2:28 PM, Thomas Dalton <[hidden email]> wrote:
>>> 2009/10/8 George Herbert <[hidden email]>:
>>>> The WMF is not entirely unique in that regard; many other charities
>>>> are largely volunteer (cf Red Cross).
>>>
>>> According to http://en.wikipedia.org/wiki/Red_Cross#Activities:
>>>
>>> "Altogether, there are about 97 million people worldwide who serve
>>> with the ICRC, the International Federation, and the National
>>> Societies. And there are about 12,000 total full time staff members."
>>>
>>> That is a ratio of about 8,000 volunteers per staff member.
>>>
>>> The Wikimedia movement has perhaps 40 staff including the WMF and
>>> chapters. At the same ratio, that would give us 320,000 volunteers. I
>>> don't know how many volunteers we have, but I think it is rather more
>>> than that.
>>
>> Depends how you define "volunteers".  How many people were eligible to
>> vote in the last board election?  I have no idea the number, but I
>> guess that's a reasonable definition of "volunteers".
>
> Indeed, it is difficult to define fairly. The board election requires
> you to be an active volunteer that has already contributed
> significantly - I expect the 97 million figure is broader than that.

Probably is.  But it's probably easier to narrow down that number than
it is to expand it.  Unless they really are counting every person who
ever gave blood.

And it's not clear what that number means anyway.  Is a high ratio
good or bad?  It could be either, depending on the circumstances.

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[Andrew Gray-3]

2009/10/8 Thomas Dalton <[hidden email]>:

> 2009/10/8 George Herbert <[hidden email]>:
>> The WMF is not entirely unique in that regard; many other charities
>> are largely volunteer (cf Red Cross).
>
> According to http://en.wikipedia.org/wiki/Red_Cross#Activities:
>
> "Altogether, there are about 97 million people worldwide who serve
> with the ICRC, the International Federation, and the National
> Societies. And there are about 12,000 total full time staff members."
>
> That is a ratio of about 8,000 volunteers per staff member.

I think before we get too tied up in using the Red Cross as an
example, we should note that it doesn't have ninety-two million
volunteers; it has less than a quarter of that number. Most of them
are not volunteers as we would meaningfully use the term, but are
instead described variously as "members" or "supporters" - in other
words, people who give money.

"The Movement currently has some 97 million members and volunteers
throughout the world, including some 20 million active volunteers"

http://www.ifrc.org/voluntee/index.asp?navid=12

As to the 11,000 staff... well, the American Red Cross alone states
that it has "more than half a million volunteers and 35,000
employees".

I think we're on a bit of a hiding to nothing trying to make a
meaningful comparison here, because we don't know how vaguely
meaningful the source figures are, beyond "at least partly wrong".

As to your second question, a tenth of that figure - about 30,000 -
seems right as a number for "active volunteers"; it's about the order
of magnitude of people active enough to vote for the Board, for
example.

--
- Andrew Gray
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[Thomas Dalton]

2009/10/8 Anthony <[hidden email]>:
> And it's not clear what that number means anyway.  Is a high ratio
> good or bad?  It could be either, depending on the circumstances.

Of course. It isn't a useful metric in itself, it's just a factor that
you need to account for when interpreting proportions of revenue spent
of different areas.

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[thekohser]

And yet, for organizational efficiency, the Red Cross earned three stars
from Charity Navigator, rather than only two.

Also, the CEO of Red Cross was compensated with 0.01% of the expenses.  I'm
not sure of Sue Gardner's total compensation these days, but it was last
reported at a half-year rate of $75,000, wasn't it?  A similar ratio as the
Red Cross would put Wikimedia Foundation expenditures at $1.5 billion per
year, based on CEO compensation.

Something doesn't compute.

The responses thus far trumpet the unusual energy and resources derived from
such a disproportionately large volunteer base.  I have to agree!  Indeed,
in 2007, there were about as many volunteers doing just as much work, but
the staff was only about one-fourth what it is today.  What is substantially
different about the Wikimedia Foundation's mission and accomplishments today
than were already in place in 2007?  My only striking conclusion is how much
more money the Foundation is now drawing in on the revenue side, and that
the GFDL license was altered and swapped.  The encyclopedias seem about the
same as they were in 2007, just bigger.  Commons is about the same.
Wikiquote seems pretty close to the way it was in 2007.  Is it possible that
what we're witnessing is fairly plainly geometrically-increasing
fundraising, which is supporting a geometrically-increasing staff, which
then feeds back into the cycle again?

Not that there's anything wrong with that!
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[Anthony-73]

On Thu, Oct 8, 2009 at 4:17 PM, Thomas Dalton <[hidden email]> wrote:
> 2009/10/8 Anthony <[hidden email]>:
>> And it's not clear what that number means anyway.  Is a high ratio
>> good or bad?  It could be either, depending on the circumstances.
>
> Of course. It isn't a useful metric in itself, it's just a factor that
> you need to account for when interpreting proportions of revenue spent
> of different areas.

Why?  If donor money is spent on administrative expenditures, but
there are lots of volunteers compared to the number of staff, is that
supposed to make donors feel better?  If there's only one staff person
and a million volunteers, does that mean that one staff member can
spend 50% of the revenue on administrative expenses?

Why do you need to account for the paid staff to volunteer ratio when
judging the ratio of administrative to total expenditures?

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[Mike Godwin-2]

Gregory Kohs writes:

>
> For comparison, witness an organization cited by Charity Navigator as
> "similar" to the WMF -- the Reason Foundation -- and see how their Expenses
> are a much larger portion of revenue for them, and thus obtain a 3-star
> rating:
> http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=7481


My long-time friends at the Reason Foundation wish very much that they and
their programs could have the same kind of impact in the world that the
Wikimedia Foundation and its programs have.  Compare, for example, the Alexa
rankings of wikipedia.org and reason.com.

Full disclosure: I'm a contributing editor to Reason magazine.


--Mike
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