Building a secure financial future for Wikipedia
This month, the Wikimedia Foundation celebrated its 18th anniversary. Formed two years after Wikipedia, those early days were financially shaky: two of Wikipedia’s three servers crashed on Christmas Day in 2002 after a year of meteoric growth. The following year, Jimmy Wales launched the Foundation to ensure Wikipedia and other Wikimedia projects would always have the resources they needed to stay free and available. 18 years and over 2200 servers later, Wikipedia has grown exponentially and we have developed a revenue strategy to continue to support this knowledge treasure long into the future.
Fundraising is a central and evolving topic of conversation among nonprofit organizations. Those that achieve and exceed their revenue targets often do so with the support of a handful of major donors and government grants. The Wikimedia Foundation is an outlier in this group. Equal parts technology company and nonprofit, the Wikimedia Foundation, which operates Wikipedia, one of the top ten most visited sites in the world, is supported primarily by millions of donors who give an average of $15 USD.
Last fiscal year, the Foundation raised $86.3 million in donations of amounts under $100USD from over 8.6 million donors. These generous donations allow us to provide the world-class technical engineering that supports 15 billion monthly visits to Wikipedia, protect free knowledge globally through legal and advocacy efforts, and support the incredible volunteer editors that have built 55 million articles across 300 languages.
Though we are different from many nonprofits, there have been lessons learned in the 18 years since the Wikimedia Foundation’s founding that can be important guides for nonprofits and even technology organizations looking to grow and adapt to constant change.
1. Encourage support from individuals to build resiliency
While many nonprofits over-rely on large dollar donors for the bulk of their revenue, a healthy base of individual donors can play an important role in ensuring business continuity, especially in tough times. This past year’s global pandemic has revealed the volatility of depending on any one fundraising model.
We continue to innovate in our approach to retaining the goodwill and generosity of our readers who respond to appeals in banners and email with their average $15 donation. On average, approximately 8 million readers contribute to the Wikimedia Foundation each year, making up around 80 percent of our annual revenue. Donations we receive from our annual reader campaigns support our operating budget for the current fiscal year, and allow us to keep funding in our reserves for emergency circumstances and steady cash flow throughout the year. The remaining revenue is through generous gifts from major donors and foundation grants that are aligned to our mission of free knowledge.
This funding model has allowed the Foundation to grow and increase our capacity to serve billions of readers and to support the volunteer communities that make Wikipedia and other Wikimedia projects possible. Crucially, it also allows us to maintain our role as independent stewards of knowledge. We are beholden to serving our readers throughout the world and ensuring that the Wikimedia projects stay neutral and dedicated to knowledge above all.
2. Invest in future growth and plan for the long-term
There is an old adage that says wise people plant trees under whose shade they will never sit. Convincing people to focus on the future when there are immediate needs is hard, but the benefits are significant if organizations can manage to go beyond living month-to-month or even year-to-year and employ longer-term strategies.
In 2016, we launched the Wikimedia Endowment to create a sustainable future for the Wikimedia projects and invest in their growth. It is a permanent fund that will ensure that we continue to provide free knowledge to the world in times of economic uncertainty or crisis, and will serve as a springboard for innovation during good times. Because of the Wikimedia Endowment, we can focus on growth, making long-term planning decisions, and invest in new initiatives with greater confidence. We are also able to provide our donors and volunteers with the assurance that their investment will be protected for generations to come.
Like the many colleges and universities with endowments, Wikimedia projects will always be in the business of educating people. And we do it for free. To protect our ability to do this long-term, we set out to raise $100 million for the Wikimedia Endowment. Income generated from the investments made by the Wikimedia Endowment will be used as a stable funding source of support for the Wikimedia projects. Our initial $100 million target was set with the goal of creating enough investment income to provide this additional funding in perpetuity, to create a solid financial foundation well into the future. With generous support from people around the world, we are close to reaching this goal sooner than we expected. In addition, over 1200 people have joined the Wikimedia Legacy Society, committing to make a future planned gift to the Wikimedia Endowment. While the Endowment does not replace our need to raise our annual fund, it does give us more resiliency and it is a testament to the value that so many people place on the need for knowledge.
3. Spot trends early and adapt your revenue strategy
The information on Wikipedia and our other projects will always be free and open for anyone to use. However, in recent years Big Tech platforms have leveraged our volunteer-created content for use in their own for-profit products. For example, Wikipedia content is used to power the responses you hear when you ask your voice assistant or smart home device a question. To date, the vast majority of our donations come from people accessing Wikipedia articles on Wikipedia.org. The Internet is changing, though, and it is possible that readers will increasingly read Wikipedia content in other places and we will lose our ability to ask our readers for support. Recognizing the potential scale of these trends, we wanted to protect Wikipedia and create a way for large reusers of our content to support the Wikipedia projects from which they are profiting.
In March of this year, we announced a new API product called Wikimedia Enterprise, where companies can pay to access Wikimedia content in a way that addresses their specific technical needs. The Wikimedia Enterprise API packages existing data from Wikimedia projects in a way that is better for commercial companies to reuse it for their own services, such as voice assistants. We expect earned income from Wikimedia Enterprise to make up a relatively small portion of our annual revenue in the coming years and the generosity of individual donors will continue to be the primary way the Wikimedia projects are supported. Still, Enterprise increases our resilience especially as the Internet continues to change.
4. Recognize who you are not reaching
Donors are a measure of the trust that organizations have in relation to the communities they serve. Those who invest in your mission also have a stake in it. At the Wikimedia Foundation, we feel this acutely. We receive donations from people in nearly 30 countries and talk to donors in 20 languages. Still, we are looking for ways to give more people the opportunity to support Wikipedia, especially as the world changes.
As Wikipedia continues to grow around the world, we are also increasing our efforts to welcome new international donors to join our movement — to learn more about how our projects work and how they can support. We have built a global, multi-lingual fundraising team and expanded payment options to allow different types of payments based on what donors in different regions prefer. We don’t need every reader to donate to the Wikimedia Foundation. We ask those who are financially able and who find Wikipedia useful to donate what they can. We try to give as many people as possible around the world the opportunity to support Wikipedia. We believe that knowledge belongs to everyone, and these steps allow us to expand the global community of supporters with a stake in free knowledge.
5. Be bold
Wikipedia is accessed by 1.5 billion unique devices every month and read more than 15 billion times every month. It has over 55 million articles in over 300 languages. While it is impressive how far Wikipedia has come in 20 years, we look to the future — to the billions of people who still do not have access to Wikipedia. We look to the languages that contain a small fraction of the knowledge we enjoy in English Wikipedia. And we look to the knowledge that is not yet in our encyclopedia — the forgotten women scientists, the African cultural icons.
We have made a bold commitment: By 2030, we will achieve Knowledge Equity, so that the entire world can benefit from the knowledge some of us have at our fingertips every moment of the day and take for granted. The benefits to humanity of Knowledge Equity will be enormous and the financial cost of this commitment are substantial too. As we set out on this path to dramatically grow Wikipedia, we are also growing and diversifying Wikimedia’s financial support to enable us to meet the challenge of Knowledge Equity.
At the Wikimedia Foundation, we believe that knowledge belongs to everyone. We rely on a community of editors, movement organizers, readers, and, of course, donors to support this work. Our projects are governed by values of independence and neutrality, and so too is our fundraising model. The focus we put on growth reinforces our goal to ensure that free knowledge is safeguarded and protected in perpetuity. As nonprofits contemplate their own futures — seeking to build trust and expand their reach — we hope these lessons can help.
Lisa Seitz-Gruwell is the Chief Advancement Officer of the Wikimedia Foundation.
