User talk:Jimbo Wales

Important subjects

I sometimes reflect on comments by you and others that most of the important subjects have been covered on Wikipedia. I thought about that sentiment recently as I was digging into the history of the Huntsville Democrat and its proprietor John Withers Clay. Also his daughters who took over his paper and property after he became incapacitated and ran it and a boarding school in Huntsville. I also reflected on those ideas as I looked into the extant home on what was once their property near downtown Huntsville.

What are the important subjects? Can we understand the history of Huntsville or the U.S. or the world if we don't cover more of these subjects? It continues to be a struggle to add entries on so many subjects including the newspapers, people, buildings, and communities that shaped who we were and who we've become. I thought these subjects were interesting so I thought I'd share them here with you and others. Take care. (I started Draft:The Weekly Democrat) FloridaArmy (talk) 15:16, 15 September 2023 (UTC)

Huntsville Female Seminary was next door to their property. That institution is noted here. FloridaArmy (talk) 15:30, 15 September 2023 (UTC)

I love that draft of The Weekly Democrat. I'm traveling in New York at the moment and won't have time to chip in and help for a week or two, but if I can, I will!--Jimbo Wales (talk) 16:02, 21 September 2023 (UTC)

Thanks for the encouragement, enthusiasm, and for your interest Jimbo. FloridaArmy (talk) 20:45, 29 September 2023 (UTC)

Question regarding Wikimedia Endowment 2023-24 Plan

Jimbo, could you please give us more details about page 11 of the Wikimedia Endowment 2023-24 Plan?

I would like to know who the $2,300,946 ($874,546 + $1,426,400) in personnel expenses, $584,541 ($407,541 + $177,00) in professional services, etc. were paid to, and who the "interns, contractors and fellows" are. Are they on the Tides payroll? Foundation payroll?(Answered. See below.) What, exactly, is a "fellow" and what do these fellows do? --Guy Macon Alternate Account (talk) 22:20, 23 September 2023 (UTC)

OK, anyone who knows my history knows that I've had my pretty legendary scuffles with the WMF (and was vindicated after 7 years), but even I can tell this could be an example in the article loaded question. I'm wondering, what answer would satisfy you? The Blade of the Northern Lights (話して下さい) 00:56, 25 September 2023 (UTC)

Any substantive discussion would satisfy me. An honest "fuck off. I am never going to answer your questions" would satisfy me. Pretty much anything other than a stonewall silence whenever someone asks a reasonable question would satisfy me.

Sure, I would prefer engaging in a polite back and forth discussion as one would hope for among people who are working towards the same goal, but at this point pretty much any response, no matter how rude or evasive, would be a step forward from not responding at all.

I am not the only person asking these sort of questions. See User talk:BilledMammal/2023 Wikimedia RfC#Wikimedia Endowment. --Guy Macon Alternate Account (talk) 03:07, 25 September 2023 (UTC)

This is a straightforward question. This is a serious question. As a Wikipedian of over 15 years, I want a serious answer. Pecopteris (talk) 03:12, 25 September 2023 (UTC)

Another source answered part of the above question. See [1] Still waiting for any response other than silence here. --Guy Macon Alternate Account (talk) 03:02, 27 September 2023 (UTC)

The other question that I see up above is about fellows. The WMF accountants have a budget category for "interns, contractors, and fellows". We do not have any fellows on the endowment. The fellows that I know of are on the legal team (of the WMF), usually law school students who do research for them as needed. There is one hourly employee, who manages the endowment's donor database.--Jimbo Wales (talk) 14:40, 27 September 2023 (UTC)

Thanks! Very clear answer. --Guy Macon Alternate Account (talk) 19:13, 27 September 2023 (UTC)

Endowment financial information

Just as an FYI, there's a discussion going on right now to finalize some details and new information will be released very soon (I think before the week is out, barring anything unforeseen). Jimbo Wales (talk) 10:54, 27 September 2023 (UTC)

Financials have been published for the Wikimedia Endowment for the years 2016-2023. Wikimedia Endowment Financial Statements--Jimbo Wales (talk) 17:24, 28 September 2023 (UTC)

Thank you very much for this!

Comparison to S&P 500

Wikimedia Foundation Endowment Financial Statement comparison to Standard & Poor's 500 stock index performance Fiscal year ending date June 2016 June 2017 June 2018 June 2019 June 2020 June 2021 June 2022 June 2023 Support and revenue: US Dollars Total Contributions 6,607,435 11,590,795 11,737,537 12,000,238 21,194,726 24,093,050 11,549,007 6,547,663 105,320,451 Interest and dividends — 434,002 591,087 991,500 1,041,846 1,052,879 1,484,920 651,991 6,248,224 Realized gains — -6,895 937,287 1,077,257 303,116 4,535,027 -225,081 0 6,620,711 Change in unrealized gains — 536,615 -3,361,489 4,650,940 5,644,620 7,571,504 -21,995,265 9,109,544 2,156,469 Total support and revenue 6,607,435 12,554,518 9,904,422 18,719,935 28,184,308 37,252,460 -9,186,420 16,309,197 120,345,855 Expenses: Grants and awards — — — — — — — 4,527,086 4,527,086 Internal fees 31,425 79,971 145,598 186,364 239,954 329,416 354,192 181,368 1,548,288 Other expenses — 3,168 11,605 13,376 19,863 32,935 33,751 17,533 132,232 Total expenses 31,425 83,139 157,202 199,741 259,816 362,352 387,943 4,725,987 6,207,605 Increase in net assets 6,576,011 12,471,379 9,747,220 18,520,194 27,924,492 36,890,109 -9,574,363 11,583,210 114,138,250 Cumulative net assets before grants and awards 6,576,011 19,047,390 28,794,610 47,314,804 75,239,296 112,129,405 102,555,042 114,138,252 Investment income less fees and expenses 880,583 -1,990,318 6,519,957 6,729,765 12,797,059 -21,123,369 9,562,634 Return on investment 7.12% -7.99% 18.74% 11.62% 14.66% -17.92% 9.44% mean: 5.10% Note well: those percentage returns assume that half of all contributions are realized on the first day of the fiscal year, and the other half on the last day. Median NACUBO endowment returns 12.5% 8.0% 5.1% 1.8% 30.1% -8.7% mean: 8.13% (source) S&P 500 net total return 3,590 4,206 4,783 5,249 5,610 7,861 6,996 8,324 (source) S&P 500 percentage change 17.16% 13.71% 9.75% 6.87% 40.14% -11.01% 18.98% mean: 13.66% Return on investment over S&P 500 -10.04% -21.70% 8.99% 4.75% -25.48% -6.91% -9.54% mean: -8.56%

What are our chances of seeing the historical investment holdings? That spreadsheet table is flawed because it assumes half the year's contributions come in at the beginning of the year and half come in at the end, but if we had historical investment transactions it wouldn't be necessary to make such absurd assumptions. Sandizer (talk) 03:55, 3 October 2023 (UTC)

Interesting. Thanks @Sandizer for posting the chart.

I would also be interested in the historical investment holdings. One might guess that Tides/WMF holds, say, treasury bills, treasury bonds, corporate bonds, and so on, generally adopting a more risk-averse investment strategy than 100% investment in the S&P, but in the S&P's worst year (June 2021-22), the WMF's investments did significantly worse than the S&P. I'd like to know what accounts for that. Pecopteris (talk) 05:05, 3 October 2023 (UTC)

I can't answer you, today, as to whether or not we can release that information, because I don't know. I also note that since it's really only at this point a matter of historical interest, I don't think it's worth a huge amount of staff time. I'll check whether it's something easy but I really don't want anyone mucking around with huge spreadsheets to try to answer the question. Leave it with me. It might well be that the balanced answer will be just to get some "color" on the question: "we were invested more heavily in X sector, which performed worse during Y year" or that sort of thing.

However, I can say that going forward, now that we have our own 501(c)(3) I will advocate for regular and clear transparency much greater than we have been able to provide in the past.--Jimbo Wales (talk) 08:37, 3 October 2023 (UTC)

No problem. Here are some typical endowment asset allocations and returns for nonprofit endowments from NACUBO (the National Association of College and University Business Officers)[2] which you might want to join, if they can do such reports at less cost than in-house. Sandizer (talk) 09:16, 3 October 2023 (UTC)

This should also answer the question pretty well: Wikimedia Endowment Investment Guidelines.--Jimbo Wales (talk) 17:19, 3 October 2023 (UTC)

I guess the big difference between the Endowment's asset allocations (the link Jimbo posted) and typical endowment asset allocations (the link Sandizer posted) might account for the big difference between the Endowment's performance (net loss) and the average endowment performance (net gain).

I'm surprised, Jimbo. The Endowment lost millions of dollars -- it failed to keep pace with inflation -- and yet you don't think it's worth investing staff time to find out why, because it happened in the past and is thus of only historical interest? You know what they say about those who fail to learn from history... Levivich (talk) 22:20, 3 October 2023 (UTC)

I should apologise for any ambiguity, as I of course agree with you. The point is, there already is serious analysis internally and I will tell you what I can, but I'm not going to ask staff to spend days of time on specific requests for spreadsheets for people asking questions on my talk page. See below for some information that I think you will find helpful.--Jimbo Wales (talk) 18:55, 5 October 2023 (UTC)

I think not asking staff to spend a lot of time on specific requests from people on your talk page is very reasonable. One staffer recently discussed some of the challenges facing WMF staff when fielding questions from online volunteers, which I'm sympathetic with.

OK so here comes the "but". But, where do we ask? Who do we ask? More to the point, why do we need to ask at all?

"How do the annual returns of the Wikimedia Endowment compare to the annual returns of similar endowments over the same period of time?" is a question so simple and obvious that neither I nor anyone else should have to ask it. It should already be answered here or here or here or somewhere very easily accessible. You are listed on the Endowment's website as the Chair of the Board of the Endowment. I think it's reasonable to ask you, individually, that question -- to ask you to see to it that a public answer to that question is given every year. And if you have to use up staff time to get an answer... well, let's be honest, you've already done that, you already know what the answer is, because the Endowment obviously has already answered this internally, each year.

So that leaves online volunteers like me knowing that while you know the answer to the obvious question, you haven't made it public. ("You" meaning both the Endowment as an organization, and you individually as Chair of its Board). Why aren't you making it public? I know the answer to that, too: because the answer makes the Endowment look bad. It's easy enough to do the math: 12.5% return over six years (2016-2022) = 12.5/6 = 2.08% average annual return, which is less than inflation (3% average over the same period). From this simple number I can figure out that the Endowment performed worse than similar endowments over the same period of time. I might be wrong about that, and I don't know how much worse, but I'd be interested in an answer to that question. An answer that treats me like an adult who knows how to read a P&L. An answer like the kind of answer that a CEO would give to shareholders if the company's investments were returning 2% per year.

Let me bend your ear a bit more with one more specific example of an obvious and unanswered question. The Endowment's Statement of Activities that was just released has this very obvious question that jumps right off the page. That's the $22 million unrealized loss recorded in 2022. Something like a 20% loss in one year.

"What was the $22 million unrealized loss in 2022?" is another super obvious question. Who do I ask? Why do I even need to ask? There are notes on the document itself explaining other figures, but no note explaining this $22 million loss in one year. No mention of it on the Endowment's website or on WMFwiki that I can see. Communication Strategy 101: get ahead of these things. (And please don't answer by saying something like "accounting adjustment"; explain exactly what the heck went wrong that the Endowment needed to record a previously-unrecorded 20% unrealized loss... either the Endowment was way overinvested in some security that tanked, or it way overvalued some securities in the past... either scenario raises further questions.)

So, takeaways: I just learned the Endowment made average net returns of 2% per year while it was with Tides, including a $22 million unrealized loss in 2022. I hope the WMF issues a public statement disclosing how this performance compares with other similar endowments, and if it's worse (as I suspect), explaining why it was worse, what lessons were learned, what steps were taken to make things better. Obviously, moving the Endowment out of Tides' hands is one of those steps already taken. But there's also the question of how we know we'll do a better job managing the endowment in the future than Tides did in the past.

I really feel that the community would not be so harsh with the WMF if the WMF treated the community like adults -- the way CEOs treat shareholders (forthright answers to tough questions) -- rather than the way teachers treat schoolchildren ("trust us, everything is fine, hush now child"). To be clear, I'm not suggesting that you, personally, treat volunteers like children, but I am saying that is how it feels when the WMF/Tides essentially fails to respond to repeated questions about financial performance specifics for years, and then releases a 6-year summary that shows 2% growth and a 20% unrealized loss in a single year, and then tries to spin it on its website as if these were positives. We all know it's bad news; the WMF should be honest that it's bad news, and be transparent about its understanding of why the bad thing happened and its plan for avoiding it in the future. Levivich (talk) 15:54, 6 October 2023 (UTC)

I believe the Endowment's asset allocations have changed over the years. Let me clarify with this summary table.

Fiscal year ending June	2017	2018	2019	2020	2021	2022	2023	Mean return
WMF Endowment ESTIMATED* return on investment	7.1%	-8.0%	18.7%	11.6%	14.7%	-17.9%	9.4%	5.1%
Median Nat'l Assoc. of College and University Business Officers endowment returns	12.5%	8.0%	5.1%	1.8%	30.1%	-8.7%	TBD	8.1%
S&P 500 net total return	17.1%	13.7%	9.8%	6.9%	40.1%	-11.0%	19.0%	13.7%

 *assuming half of all contributions were realized on the first day of the fiscal year, and the other half on the last day.

I'm not qualified to say whether those returns are outside the typical range for such funds, but I don't think they are. Sandizer (talk) 01:22, 4 October 2023 (UTC)

@Sandizer, thanks for this. I spoke with Lisa Gruwell (who acts as President of the endowment) because I want to be accurate, and she provided me with a clear and simple analysis. A few characteristics of the Wikimedia Endowment make it different from the average Endowment in your data. First, the Endowment’s portfolio has been operating under an ESG mandate while it was housed at the Tides Foundation. ESG funds were especially hard hit in 2022 because fossil fuel stocks were one of the “bright spots” that year and we were not invested in that sector due to our ESG mandate. Now that the Endowment is an independent charity, we will be considering our ESG philosophy and I am sure the discussion will generate a lot of debate. (My own belief is that it is possible to invest ethically with little-to-no impact on returns, but this view is not universally held in finance circles.) Second, the Wikimedia Endowment is only 7 years old and some of the big university endowments in the data you shared have been around for centuries. That means the Wikimedia Endowment has not benefited yet from longer-term strategies. The primary difference between our asset allocations and the data you shared is that the Wikimedia Endowment is not yet invested in alternative investments such as venture capital and private equity. We did not feel these were the right fit for us at this initial stage of our development because they tend to be higher risk and are also longer-term strategies. We needed investments during this initial stage that would provide income and liquidity sooner so that the Endowment could cover its own operational costs faster than returns from alternative investments would typically allow. This strategy has worked well for us as the endowment is already covering its expenses and making grants back to the projects according to our spending policy. As the Endowment grows and matures, we may revisit alternative investments, but they are not right for us in this initial stage. Although the S&P 500 is a ubiquitous reference point, the Endowment’s portfolio was established with its own blended benchmark to measure our more diversified strategy. Historically, the portfolio has tracked the benchmark pretty closely. From inception to June 30, 2023, the Wikimedia Endowment’s return has been 5.38 percent, while the benchmark is at 5.51 percent. Slightly lower than the S&P 500, but in the grand scheme of things, not terrible.--Jimbo Wales (talk) 19:00, 5 October 2023 (UTC)

I agree with you that it is quite possible to beat 12.5% over 6 years while still following ESG investing. As a quick comparison, the S&P 500 (.INX) is up 56% over the past five years, while the S&P 500 ESG Index (SPESG) is up 33% over the last five years. Levivich (talk) 18:22, 6 October 2023 (UTC)

@Levivich I'm replying to your comment above the table on this page here to create a more streamlined reading experience. I am not familiar with the equation you are using to calculate return.  @Sandizer calculated the mean annual rate of return using estimates and arrived at 5.1 percent. He is using a similar method to how we make the calculation.  With actuals, the average annual rate of return for the Wikimedia Endowment from inception to June 30, 2023 is 5.38 percent, as Jimmy shared. CVirtue (WMF) (talk) 20:37, 6 October 2023 (UTC)

@CVirtue (WMF): "During this time, the Wikimedia Endowment had $15 million in investment results (12.5% of total gross revenue that was under management at Tides from inception to June 30, 2023)." [3]

2016-2023 = 7 years, 12.5/7 = 1.8% average per year. Levivich (talk) 21:30, 6 October 2023 (UTC)

You're going to have to expand on what you mean by that, as I have no idea and have tried to figure it out. That's not how the return of a portfolio is calculated over time at all. As far as I can tell, it's a completely meaningless calculation. Jimbo Wales (talk) 09:53, 7 October 2023 (UTC)

The Signpost: 3 October 2023

• News and notes: Wikimedia Endowment financial statement published

• In the media: History is written by whoever can harness the most editors

• Recent research: Readers prefer ChatGPT over Wikipedia; concerns about limiting "anyone can edit" principle "may be overstated"

• Featured content: By your logic,

• Concept: Wikipedia policies from other worlds: WP:NOANTLERS

• Poetry: "The Sight"

• Traffic report: There shall be no slaves in the land of lands, it's a Bollywood jam

* Read this Signpost in full * Single-page * Unsubscribe * MediaWiki message delivery (talk) 20:30, 3 October 2023 (UTC)