2018 Revenue strategy/Present

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The goal of this document is to analyze the present situation of the Wikimedia Foundation as it relates to its revenue strategy. This analysis is structured by placing the organization in the context of the different typologies and industries it belongs to.

Individual decision-making can be impeded by bounded rationality and selective exposure. An additional concern when discussing specialized topics as a large group is the information deficit of its members and the communal reinforcement built in the group over time. In order to mitigate those limitations, this document attempts to frame each issue by situating the Wikimedia Foundation in its broader landscape, as a way to increase the information available for decision-making.

The document will include a competitive analysis looking at our competitive advantage(s) and unique value to our users, notably around specific functions/facets like knowledge creation, distribution of content, and philanthropy. It will also explore the link between revenue strategy and product strategy.


Where are we today?

  • Who are our competitors? notably in functions like:
    • Knowledge creation
    • Distribution of content
    • Philanthropy
  • What do we know today about the future?
  • How does revenue strategy relate to product strategy?


  • Non-distribution constraint[1]
  • donative financing model[2]
  • contract failure[3]

Landscape of philanthropy[edit]

Typology of nonprofits[edit]

In his seminal work The Role of Nonprofit Enterprise, Hansmann defines a nonprofit organization as "in essence, an organization that is barred from distributing its net earnings, if any, to individuals who exercise control over it, such as members, officers, directors, or trustees."[4]

"nondistribution constraint": "Net earnings, if any, must be retained and devoted in their entirety to financing further production of the services that the organization was formed to provide."[5]

Hansmann categorizes nonprofits along two dimensions: how they are financed and how they are controlled. He distinguishes between "donative" nonprofits that "receive most or all of their income in the form of grants or donations" (like the American Red Cross) and "commercial" non-profits that "receive the bulk of their income from prices charged for their services" (like "most hospitals").[6]

As for control, he distinguishes between "mutual" nonprofits that are "controlled by their patrons" (for example, the board of directors is elected by the membership) and "entrepreneurial" nonprofits "that are largely free from the exercise of formal control by their patrons" (e.g. with a self-appointed or self-perpetuating board of directors. "Patrons" here are defined as "those persons who constitute the ultimate source of a nonprofit's income", whether they're donors or customers.[7]

The financing model of the Wikimedia Foundation to date has been almost entirely donative, and its control model has been a mix of mutual and entrepreneurial governance.

Hansmann immediately tempers those distinctions by adding that "not all nonprofits fit neatly into one or the other of these two categories."[Note 1] Indeed, the financing model of the Wikimedia Foundation to date has been almost entirely donative, and its control model has been a mix of mutual and entrepreneurial governance, with some Board members appointed for their expertise and others appointed from the movement's volunteer communities and organized groups.

Contract failure[edit]

"nonprofit enterprise is a reasonable response to a particular kind of 'market failure,' specifically the inability to police producers by ordinary contractual devices"[8]

Contexts for contract failure:

  • "Separation between the purchaser and the recipient of the service"[9] (example: humanitarian relief organizations) "Because of this separation between the purchasers and the recipients of the service, the purchasers are in a poor position to determine whether the service they paid for was in fact ever performed, much less performed adequately."[10]
  • Public goods: "Public goods, in the language of economics, are goods or services that exhibit two particular attributes: first, it costs no more to provide the good to many persons than it does to provide it to one person, because one person's enjoyment of the good does not interfere with the ability of others to enjoy it at the same time; and second, once the good has been provided to one person there is no way to prevent others from consuming it as well."[11]
    • "there is little relationship between the size of an individual's contribution and the amount of the good that he enjoys. Assuming all individuals follow this logic and become "free riders," then little or none of the good will be supplied, even though collective demand for the good is in fact quite high."[12]
    • "in many situations people are willing to contribute toward the production of public goods"[13]
  • Price discrimination: seen in the performing arts industry.
    • "Contributions are, in essence, a form of voluntary price discrimination, or, in other words, a means whereby different customers can be charged different prices for the same service. And in an industry such as the performing arts, in which fixed costs typically account for a large fraction of total costs, the availability of price discrimination can be the key to survival."[14]
    • "Individuals can, however, simply be asked to volunteer to pay an additional sum if the ticket price is lower than the value they place of the performance, and this is, in effect, what the nonprofit performing arts groups do. Of course, it is not entirely effective; most people will volunteer nothing or some amount less than their full valuation of the performances. Yet experience proves that many people will volunteer something."[15]
    • "any increase in the quality of that production is a public good"[16]
    • "the trust engendered by the nondistribution constraint"[17]
    • Other industries: "Museums and libraries provide other examples of industries in which nonprofits have arisen largely because of the need for voluntary price discrimination. A large portion of a museum's costs, for example, are incurred in constructing the museum facility, and in acquiring objects and preparing them for display. Once an exhibit is prepared, the added cost of admitting one more person to see it is extremely low."[18]
  • Implicit loans: education institutions, support from alumni
    • "In essence, the donations received by private colleges and universities are in large part simply a means by which past generations of students help to finance the education of the present generation of students."
    • "the private schools have in effect adopted a loan program with voluntary payback. Schools charge their students through tuition payments less than the full cost of education, but then impress upon their graduates their moral obligation to repay the loan that they have in effect received. Or, put differently, alumni contributions can be seen as essentially a means by which past generations of students help to finance the education of the present generation of students."[19]

Knowledge as a public good

Of these contexts, the one of public goods appears to be the most compelling when considering free knowledge and Wikimedia sites. However, the other contexts still offer some interesting insights in possible avenues to appeal to donors:

  • Implicit loans: Parallel with the contribution/donor life cycle for Wikimedia sites
  • Public by mission: comparison with radio: advertising, listener-supported radios. Contrary to radios, it is not technically infeasible to prevent access to Wikimedia sites. In fact, that's the business model of many subscription-based internet sites

Donative vs. commercial nonprofits and contract failure: "At first glance, commercial nonprofits raise different issues. By definition, the patron of a commercial nonprofit is engaged in a straightforward commercial transaction, purchasing a good or service provided exclusively to him for his personal consumption."[20]

On being "nonprofit": "There is no magic by which a nonprofit firm can produce a service at a lower cost than can a for-profit firm. Rather, the distinction between a nonprofit and a for-profit firm lies, not in how much the services cost, but in who pays and under what conditions they pay."

the "unseemliness of profits". Example: "vital services" like health. "It is also commonly suggested that certain services, such as hospital care, are organized on a nonprofit basis because it would be unthinkable to have people profiting from the misery and ill health of others".[21] It would appear similarly "unseemly" to attempt to profit from the work of volunteers who contribute to Wikimedia sites. But again that's more a choice of values than a moral absolute: many for-profit companies do profit from the work of volunteers.

Parallel with public utilities: "rate-of-return regulation"[22]

"firms subject to rate-of-return regulation are simply special cases of nonprofit enterprise. That is, they operate under legal constraints explicitly designed to prevent those who control the firm from distributing to themselves amounts in excess of reasonable compensation for services and capital contributed to the firm. The difference between such regulated firms and nonprofit corporations lies primarily in the point at which the profit constraint is applied."[23]

Much debate about whether broadband internet should be considered a public utility like water and electricity. In the US: [24] [25] [26]

Is "Knowledge as a service" going even further and suggesting to treat Wikipedia's knowledge infrastructure as public utility? With price discrimination?

Also related: "utility" as main motivation of donors[citation needed] (example: quote from donor,[27] part of fundraising language for many years[28]

Limitation of the contract failure theory: how does it hold up with recent crowdfunding trends?

Market failure theory and multi-sided markets: Hersberger2017[29]

Funding patterns and revenue strategies[edit]

Hansmann1987: donative vs. commercial. "pure" nonprofit


Bridgespan [31] [32]



Opportunities and new frontiers of philanthropy[edit]

Earned income, impact investing, social entrepreneurship, etc.

"'yin-yang' deals, deals that bring together, as in Chinese thought, seemingly contrary forces that turn out to be uniquely able of producing new life forms when taking advantage of their interdependencies."[35]

a "bewildering array of new instruments and institutions has surfaced to tap not simply traditional charitable resources but also private investment capital."[36]

"loans, loan guarantees, equity-like investments, barter arrangements, social stock exchanges, bonds, secondary markets, investment funds, and many more" "[36]

"leverage is the mechanism that allows limited energy to be translated into greater power" [37] "in the philanthropic world it means finding a way to go beyond the limited flow of charitable resources generated by the earnings on foundation assets or the annual contributions of individuals to catalyze for social and environmental purposes some portion of the far more enormous private investment capital resident in banks, pension funds, insurance companies, mutual funds, and the accounts of high-net-worth individuals". [37]

"the 'bottom of the pyramid,' the base of the world's income scale, where the vast majority of the world's population lives" Prahalad2004 cited on p8

definition of philanthropy used here: "the provision of private resources for social or environmental purposes"[38]

"social-impact investing"[39]

differentiates between investment capital and operating income: "Operating revenue allows an organization to deliver defined outputs or outcomes. It covers day-to-day activities, regular service provision and ongoing projects. It often takes the form of payments for contracted services, grants and donations. Investment capital provides finance to build an organization's long-term capacity to achieve its social mission" [40]

operating revenue: "the income that organizations use to run their ongoing annual operations" [40]

investment capital: "revenue that may contribute to operating income in the future, but fundamentally goes to build long-term organizational capacity and capabilities" [40]

Pallotta: [FIXME: Add quotes; laudable efforts to change society's perception of the "nonprofit ideology". But for now we have to work with the constraints that we have. And, if we can, use our privilege to push those limits where we can (see quote from Novogratz below). ]

"It is only when some people refuse to play that the game has any chance of changing" [41] p241

Patient capital: "not traditional charity, not traditional business investment, but something in-between" "Patient capital is money invested over a longer period of time with the acknowledgment that returns might be below market, but with a wide range of management support services to nurture the company to liftoff and beyond" [41] p229

Social-impact capital aggregators[edit]

"social-impact capital aggregators function as middlemen in the social capital market", reaching out to investors willing to invest their capital in social-purpose activities and in return locating promising social-purpose ventures in which to place it". [42]

"they can assemble capital 'stacks,' or 'structured investment products,' […] with different layers, or 'tranches,' each with its own risk-return characteristics, and therefore each with its own potential class of investors."[42]

impact-first and finance-first social-impact investors [43]

[FIXME: Add discussion of whether the Wikimedia Foundation is a de facto capital aggregator (although maybe not a "social impact investment capital aggregator"). Duality as both an operating charity and a grantmaking foundation. Different from pass-through funding, generally used in the context of government grants to be distributed at a smaller scale. ]

Environmental factors influencing philanthropy[edit]

Philanthropy (and now even for-profit companies) [44]

Tax law in the U.S.

[45] [46] [47] [48] [49] [50] [51] [52] [53]

Reactive giving [54]

"[21% of] US donors who contributed to causes in 2017 did so at least once becase they believed current political events threatened causes or beliefs near and dear to their hearts".[55] "Reactive giving brought in new donors" and "younger donors were much more likely to have given this way".[55] "Reactive giving is an entryway for new and first-time donors to engage with an organization."[55]

"With so many of [reactive] donations made to the cause not the organization, nonprofits need to be more deliberate about what their brand stands for, clear about their mission, and build a connection that doesn't assume familiarity, but works to earn donors' trust."[55]

[56] [57] [58] [59]



Reserves and endowments[edit]

Surplus and operational reserves[edit]

Surplus, profits, operational reserves, stability

Bowman2012[62]: definitions of surplus

Hansmann noted as early as 1980 that "a nonprofit organization is not barred from earning a profit. Many nonprofits in fact consistently show an annual accounting surplus."[63]


Chang and Tuckman investigated the surpluses accumulated by U.S. nonprofits .[64]

"Most existing theories of nonprofit behavior surpluses in one of two ways: (1) yearly surpluses are expected to be zero based on the assumption that all revenues will be expended in pursuit of nonprofit goals, or (2) a residual is explained as the result of the inability of nonprofit managers to accurately predict yearly revenues and expenditures."[64]

"Surpluses are the residual funds that accrue to nonprofits at the end of the year when revenues exceed expenditures."[64]

They argue that, even though nonprofit decision makers cannot gain "direct satisfaction from the use of accumulated nonprofit surpluses" (for example by distributing surpluses to shareholders as dividends, as some for-profit organizations do), they still have incentives to seek an accumulation of equity: "as a source of subsidy to those unable to afford program services, as a facilitator of allocations to the future, as a hedge against uncertainty and risk, as a means to increase independence from the marketplace, and as a measure of financial success."[64]

Their review of the finances of nonprofits in 1983 leads them to the conclusion that "over 86 percent of the nonprofit charitable organizations in a representative national sample made surpluses in 1983 […] and that a negligible proportion of nonprofits had zero surplus". They also find that "equity is accumulated in almost all size categories, and for each nonprofit type. […] For some organization categories, […] nonprofits with the most equity were also the organizations accumulating additional profit in 1983 at the greatest rate."[64] Calabrese similarly finds that "in general, [nonprofit organizations] increase retention of unrestricted net assets as they increase in size."[65]

Calabrese2012[65] studies surplus as defined by an increase in "unrestricted net assets"

Calabrese reminds us that "donors evaluate [nonprofit organizations], at least in part, on their spending" and that because "donors and evaluators may not necessarily value the existence of profits", "nonprofit organizations may have an incentive to maximize program spending or outputs in any given year (thereby reducing any potential profit) to attract donations."[65]

Calabrese builds a model and notably finds that: "[nonprofit organizations] in general target unrestricted net asset accumulations and accumulate such resources over time"; "most nonprofit subsectors display behavior compatible with the pecking order capital structure theory" (according to which "[nonprofit organizations] prefer internal financing to external financing because internal financing is less costly to the organization"); and "most nonprofit subsectors seemingly retain unrestricted net assets to reduce financial vulnerability".[65]

Planning for the long term: Endowments[edit]

Bowman2012[62]: definitions of endowment














Returns and stability: [81] [82] [83] [84] [85]

Revenue mixes and hybridity[edit]

Resource dependence and the case for diversification[edit]


resource dependence theory

revenue volatility, goal displacement / mission drift, structural changes

adaptation to who controls resources

explores the constraints of being a "pure" nonprofit (i.e. constraints of donative revenue)

optimization for a specific revenue mix

Sector bending[edit]



Diversification in practice[edit]


Markowitz,[89] portfolio theory, portfolio diversification

stability, revenue volatility

optimization for a specific revenue mix

Wide public benefit: focus on donative revenue

"raised the bulk of their money from a single type of funder such as corporations or government – and not, as conventional wisdom would recommend, by going after diverse sources of funding. Just as importantly, these nonprofits created professional organizations that were tailored to the needs of their primary funding sources."[90]

"the way funding flows to organizations this large is neither completely random nor illogical. On the contrary, we identified three important practices common among nonprofits that succeeded in building large-scale funding models: (1) They developed funding in one concentrated source rather than across diverse sources; (2) they found a funding source that was a natural match to their mission and beneficiaries; and (3) they built a professional organization and structure around this funding model."[91]

"Diversification may seem like a good idea, but in practice most of the organizations that have gotten really big over the past three decades did so by concentrating on one type of funding source, not by diversifying across several sources of funding."[92]

"Of the 110 [organizations studied], roughly 90 percent had a single dominant source of funding – such as government, individual donations, or corporate gifts. And on average, that dominant funding source accounted for just over 90 percent of the organization’s total funding."[93]

"turning point" during growth where the primary source of funding emerges: "as they get larger these organizations increasingly rely on a single funding source[…]. As they reach $50 million or more in size, the concentration of funding from one source increases even more."[94]

"This concentration by funding source does not replace the need for diversification and risk management." "Organizations achieved diversification and mitigated their funding risk by securing multiple payers of the same type to support their work."[95]

"secondary sources are still important. Of the 101 organizations [studied] that have a dominant funding source, more than 20 percent have a secondary source that accounted for 10 percent or more of their revenue."[96]

"There are natural matches between many organizations and particular funding sources."[97]

"Individuals are the primary funders of only 6 percent of the high-growth nonprofits in our study. Interestingly, small gifts power all of the surveyed high-growth nonprofits in this category, even though major gifts account for a large majority of individual giving in the U.S."[98]

" the top reason for their growth is “the purity and simplicity of our message. We cannot muddy it up.” A clear message also helps build a strong brand that resonates with individual donors"[99]

"The organizations that grew the most brought in talent and built organizations that support a high-growth strategy."[100]

"Many high-growth leaders also concluded that “virtuous and poor” was not the best way to fulfill their missions. For organizations built on the passion of committed program people, this represented a real cultural shift. Focusing on dollars and cents was not what brought them into the sector. And with so many problems to address, the idea of reserving money to create financial stability or to fund future capacity was often deeply, even morally, uncomfortable. But they realized that to fulfill their missions they needed to spend as much time, or more, on margins."[101]



[104] [105] [106]

Earned income and commercial revenue in nonprofit organizations[edit]

Foster2005 (HBR):

"earned income accounts for only a small share of funding in most nonprofit domains, and few of the ventures that have been launched actually make money"[107]

"the lion’s share of earned-income ventures do not succeed at generating revenues beyond their costs"[107]

"executives of nonprofits must ask a critical question: “Does this venture contribute to our organization’s core mission?” If a venture furthers a nonprofit’s mission while allowing it to recoup some portion of the costs, the venture could well be attractive even if it never breaks even."[107]

"The lure of potential “profits” not only distorts financial analysis but also thwarts an impartial evaluation of a venture’s mission contribution."[107]

list of questions to make sure that the mission is put first[107]

Trust & asymmetric information



Revenue in the information and knowledge industry[edit]

A look at the journalism and publishing industry

Crisis of the newspaper industry[edit]



Search for a new business model [112]



Going digital, the pursuit of pageviews, low-quality content, social media, the advertising model, privacy: [115] [116] [117] [118]

Book and publishing industry as well[119]


"Because newspapers, television channels, and radio stations controlled access to the audiences, advertisers were strong-armed into ponying up money that funded investigative journalism and educational programming." [121]

"The challenge of supporting uncompromising work is growing greater, for the unbundling of digital media meas the era of cross-subsidies, whereby profits from popular wares are used to support more daring endeavors, is coming to an end." [122]

Stephen Janis on having to shut down the online news site Investigative voice: "People really liked the independence of our coverage. They liked that it was real and were upset when we shut down. It worked as a social model, but the business model was totally broken." [123]

Distinction between "what customers 'want'" and "what they 'should' have[124]

Social contract and engagement with the audience[edit]

News organizations trying to find new ways to engage with their audiences as a way to build trust and loyalty, but also as a business strategy.

Social contract between content creators and content consumers, and how it is evolving: "As the news industry continues to reckon with its ongoing crisis of economics and trust, its practitioners will continue their attempts to find a more meaningful, rich social contract with their audience members. This contract appears likely to continue its transformation away from something wholly transactional (i.e., journalists provide the news, audiences provide the revenue) to something much more collaborative."[125]

"As the world grows more digital, the opportunities for more personal connections between organizations and their users grows as well."[125]

"opportunities to involve people previously considered 'the audience' in the storytelling itself – a radical reconceptualization"[125]

"journalist as conversation leader" [126] "share updates about the stories they're working on with their readers while they're reporting" "demonstrate vulnerability and show readers their process. This inspires discussions and makes the news production process more collaborative and transparent".[125]

(parallel with knowledge creation processes on Wikimedia sites, which is all happening in the open, but isn't necessarily very visible to readers.)

"the collaborative age" [127]

Emerging business and revenue models[edit]

Membership, subscription[edit]

The Guardian: [128] [129]

Donors are already aligned with the mission and engaged with us

Opportunity to build a relationship over time

Less reliant on traffic patterns



[131] [132]

Impact investing, debt, equity, quasi-equity: w:Media Development Investment Fund

"While wealthy individuals from the technology sector have recently been investing in high-profile journalism outlets […], capital has not been flowing to small- and medium-sized efforts, which are sinking. Many now argue that foundation funding is the only option if we want investigative reporting to survive."[133]

Volunteer-generated content creation[edit]

Content creation and volunteer time

Look at why people contribute and determine the unique value offered by Wikimedia in comparison to other possibilities for people to volunteer or spend their time

w:Online participation#Motivations, Research:Codex/Motivations of contributors


Privacy (we're not going to sell user data to third parties), free licenses (meaning content syndication isn't an option that's available to us), no ads.

Relationship between revenue strategy and product & program strategy[edit]

Reading: Content distribution and implications on traffic (and by extension revenue)

  • How do we fundraise if traffic to our sites suddenly drops dramatically?
  • What do we do if traffic stays the same?
  • What do we do if traffic is split between people reading our sites and reading content on others sites?

Most websites that offer subscription display the subscription status in the user's interface. Acknowledgement of their contribution. Is that something we should do? Could increase engagement with the site and the brand. Security implications? (access to some of the donation information)

Knowledge as a service & Knowledge equity. New products & programs: who is the audience? What is the best business model for it?


  • There might be opportunities for institutional, corporate, or academic funding for product or programs related to knowledge as a service. [134]
  • There might be opportunities for institutional or philanthropic funding, or impact investing, or venture philanthropy, for programs related to knowledge equity.

We might end up determining that our current revenue streams are still the best way to fund our activities, but that should be intentional and after considering the alternatives.

Look at the Audience research process and results: File:WMF Understanding of Audience Maps v3.pdf, File:Draft Audience-Stakeholder Framework version one.pdf

Landscape of media and technology[edit]

Rosenstiel2011[135]: "The key to media in the 21st century may be who has the most knowledge of audience behavior, not who produces the most popular content."

"While you can have a long tail strategy, you better have a head, because that’s where all the revenue is."[136]


Peer production, cognitive surplus[edit]

ethics: Carr, Ito, Lessig http://www.lessig.org/2006/10/the-ethics-of-web-20-youtube-v/ https://joi.ito.com/weblog/2006/10/22/is-youtube-web.html http://www.roughtype.com/?p=555 http://www.lessig.org/2006/10/stuck-in-the-20th-century-or-t/

"open": "the dichotomy of open versus closed (sometimes presented as freedom versus control) provides the conceptual framework that increasingly underpins much of the current thinking about technology, media, and culture."[137]

"Under the rubric of open versus closed, the paramount concern is access and whether people can utilize a resource or platform without seeking permission first. This is how Google and Wikipedia wind up in the same camp, even though one is a multibillion-dollar advertising-funded business and the other is supported by a nonprofit foundation."[138]

"If communism vs. capitalism was the struggle of the twentieth century, then control vs. freedom will be the debate of the twenty-first century."[139]

"Inequality is not exclusive to closed systems. Networks reflect and exacerbate imbalances of power as much as they improve them."[140]

'If there is […] no distinction between noncommercial and commercial, public and private, independent and mainstream, it is because co-optation has been absolute."[141]

Clay Shirky's "social production", Yochai Benchler's "peer production", Jeff Howe's "crowdsourcing", Don Tapscott and Anthony D. Williams's "wikinomics" [142]

Quote from "Cognitive surplus" via [143]: "Amateurs are sometimes separated from professionals by skill, but always by motivation; the term itself derives from the Latin amare—"to love." The essence of amateurism is intrinsic motivation: to be an amateur is to do something for the love of it."

Critique of Cognitive Surplus:[144]

"Creativity is invoked time and again to justify low wages and job insecurity. Across all sectors of the economy, responsibility for socially valuable work, from journalism to teaching and beyond, is being off-loaded onto individuals as institutions retreat from obligations to support efforts that aren't immediately or immensely profitable."[145]

"The celebration of networked amateurism—and of social production and the cognitive surplus—glosses over the question of who benefits from our uncompensated participation online."[146]

Net neutrality, privacy, filter bubbles[edit]

Filter bubbles, bias in algorithms, personalization[147]

Net neutrality, SOPA[148]


WSJ study[149]

"What we are witnessing is the emergence of a new form of discrimination, one led by companies you can't see, using data you didn't give them permission to access, dictating what you are exposed to and on what terms."[150]

"Polls have found that the majority of Americans are deeply concerned about online firms selling or sharing their personal data without permission and that they overwhelmingly value privacy and civil liberties over cybersecurity." [151] [FIXME: Find said polls, look into other geographies, notably Europe ]

"Many of the emerging info-monopolies now dabble in hardware, software, and content, building their businesses at every possible level, vertically integrating as in the analog era."[152]


"Unequal uptake"[153]

"The online and off-line world are not separate; the digital is not distinct from 'real life," a realm where analog prejudices are abandoned. While the Internet offers marginalized groups powerful and potentially world-changing opportunities to meet and act together, new technologies also magnify inequality, reinforcing elements of the old order. Networks do not eradicate power: they distribute it in different ways, shuffling hierarchies and producing new mechanisms of exclusion."[154] (See also: Tyranny of structurelessness[155], Research:Codex/Roles of contributors)

Second-Level digital divide: Hargittai 2002[156], 2008[157]

Tufekci 2011[158]

w:Cultural rights

Democracy, informed society[edit]

Taylor on cultural democracy: "Cultural democracy means that a diversity of voices and viewpoints is expressed and accessible; that visibility and notoriety should not be the consequence of cumulative advantage alone; and that influence within the cultural field is achieved by a variety of factors, not simply ceded to those to can afford to pay to be seen and heard. […] True cultural democracy us not a popularity contest at all but entails supporting work that not everyone will like and some may even despise—and ensuring that citizens will occasionally be exposed to things they don't necessarily agree with or want to see. Democracy, in both its cultural and its political incarnations, depends on the contact between conflicting perspectives."[159] See also: creative abrasion[160], Greenstein & Zhu[161][162]

"Appeal for cultural equity" [163][164]

"Given the fact that everyone can voice their opinions online, marginalized voices are often told the solution is to speak more loudly, to make your presence known. […] The problem with this advice is that it shifts responsibility to populations that have historically been disenfranchised while letting the dominant groups off the hooks. […] The onus to nurture cultural diversity should be on those who are closer to the center, not those who are peripheral." [165]

"Opportunity and audience demain deeply stratified along predictable lines: race, class, gender, and national origin. Despite the Web's lowered barrier to entry, not everyone has equal resources or time to devote to the creation or art and culture." [165]

"Democratizing culture means choosing, as a society, to invest in work that is not obviously popular or marketable or easy to understand. It means supporting diverse populations to devote themselves to critical, creative work and then elevating their efforts so they can compete on a platform that is anything but equal."[165]

"If equity is something we value, we have to build it into the system, developing structures that encourage fairness, serendipity, deliberation, and diversity through a process of trial and error."[166]

"A more democratic culture means supporting creative work not because it is viral but because it is important, […] where previously excluded populations are given the material means to fully engage." [167]

More on the "want/should conflict" and decision making:

"The shoulds are not things that people don't want but rather things they want to want."[174]

The commons[edit]

"digital sharecropping" (feudalism): "A small group, positioned to capture the value of the network, benefits disproportionately from a collective effort"[175]

"What’s being concentrated, in other words, is not content but the economic value of content."[176]

"Second enclosure movement" [177]

Copyright, limited monopoly, etc:[178]

"one consequence of Web-based technologies was supposed to be the elimination of middlemen, or 'disintermediation'. […] Instead, it has facilitated the rise of a new generation of mediators that are sometimes difficult to see."[179]

"Those who would protect the cultural commons must see that the challenge is not only copyright, but those who own the platforms and channels trough which culture is increasingly shared. […] What's being hoarded now are the means of delivery, the channels through which the economic value of culture is realized. The commons can be commodified without being enclosed outright."[180]

"The commons has also historically been used as a source of raw materials for colonizers and corporations seeking to profit from traditional lands, assets, and knowledge, which well-capitalized entities are better positioned to take advantage of than comparatively poor locals. […] The commons are accessed asymmetrically. […] Differing circumstances, abilities, assets, and power render some better able to take advantage of a commons than others."[181]

Ostrom & Hess[182], underinvestment in the commons; "The problem of the production of the commons is just as urgent as the problem of access."[183]

"It's striking, when one pauses to think about it, how essential art and culture remain to the digital economy even as most of the money floating around goes to multibillion-dollar businesses that don't invest much in either. Art and culture are the stuff that ads are sold around, the bait that causes users to divulge their preferences by clicking so their data can be mined." [184]

Knowledge economy[edit]

Productivity lag of complex creative labor and labor-intensive work[edit]

"Baumol's cost disease", "productivity lag" for complex creative labor: "The arts do not benefit from technological advancement in the way other industries do. […] Even with the aid of a computer and access to digital archives, the task of researching and constructing, say, a historical narrative remains obstinately demanding."[185]

parallel with Hansmann's typology of nonprofits and his point about nonprofits taking on responsibilities where little profit is to be made because they're labor-intensive.

"There are really two American economies: one that’s getting more productive and one that’s not. […] Cost disease isn’t anyone’s fault. (That’s why it’s called a disease.) It’s just endemic to businesses that are labor-intensive."[186]

Though the argument is made for government, it translates almost perfectly to the nonprofit sector: "Some of the most important services that the government provides—education, law enforcement, health care—are the hardest to make more productive […] which makes it look as though the public sector, at least compared with the private sector, is inept and bloated."[186]

"Manifesto for sustainable culture" [187]

  • "In stark contrast to the emphasis on newness and nowness of most online platforms, [the frame of sustainable culture] encourages us to this long term. [188]
  • "A vision of sustainability acknowledges the damage incurred by the sole pursuit of wealth while trying to build an equitable system that can enable the production of socially valuable goods." [189]

"Strengthening our cultural commons requires profound changes in policy, animated by the same spirit as the 1965 congressional resolution that established the National Endowment for the Arts." [190]




Benchler 2004[191]

Facets of Wikimedia[edit]

What's unique is the combination of those elements/facts

On Wikipedia's uniqueness: [192] "we're losing"

SWOT & w:Strategic fit


Study of "Centennials" (organizations that have lasted 100 years): "Most businesses focus on serving customers, owning resources, being efficient and growing – but the Centennials don't. Instead, they try to shape society, share experts, create accidents, and focus on getting better not bigger. They're radically traditional – with a stable core, but a disruptive edge."[193]

Donor life cycle[edit]

[194] [195] [196] [197] [198] [199] [200]

Common in the nonprofit industry: Donor cultivation life cycle

Financial support as a way for lapsed contributors to continue to support the mission? Depending on the conditions of their departure (lack of time, interpersonal conflict), they might still be aligned with the mission. Life events might reduce their volunteering capacity (e.g. professional situation, family obligations) but might also afford them opportunities to donate (e.g. transitioning from being a student to being a paid professional). See also Research:Necromancy, strategy:Former Contributors Survey Results

[201] [202] [203]

Other possibility to increase engagement of contributors who might not be able to contribute financially: offer opportunities to participate in fundraising? e.g. peer-to-peer fundraising, events? But also be careful; this should be additive, not take away from existing volunteer time


The privilege of being Wikipedia[edit]

  • traffic, many small donors. Not reliant on larger donors and grants (and the associated risk of mission drift/goal displacement)
  • able to stand up for our values. Privacy. Investment in strategy, long-term thinking: not something that nonprofits are usually able to do
  • we're not as tied to the nonprofit ideology (as described, and deconstructed, by Pallotta[204]) as most nonprofits (but we're not as free as a for-profit either)

Knowledge and culture[edit]


  1. "For example, most universities rely heavily upon donations as well as upon income from the sale of services-i.e., tuition-and thus lie somewhere between the two. Consequently, donative and commercial nonprofits should be considered polar or ideal types rather than mutually exclusive and exhaustive categories."


Mission-driven organizations and philanthropy:

Peer production:


  • Wu, Tim (2011-11-29). The Master Switch: The Rise and Fall of Information Empires (Reprint ed.). New York: Vintage. ISBN 9780307390998. 
  • Wu, Tim (2017-09-19). The Attention Merchants: The Epic Scramble to Get Inside Our Heads (Reprint ed.). New York: Vintage. ISBN 9780804170048. 

The commons:

Knowledge and culture

Future, risk, and strategy


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