WordPress Foundation financials, and a separate WordCamp organization

The WordPress Foundation is the legal entity that has ownership of the WordPress trademark, and also acts as a pass through for WordCamp and other WordPress funds. As a 5013c non-profit in the US, the foundation has to submit paperwork that is publicly available. That paperwork is available in the form of a 990, and the 2014 990 is, as of recently, available for the public to view.

Key numbers from report

To spare you from looking, I figured I’d note the significant numbers, and the comparisons to 2013:

Line Item 2013 2014
Contributions & Grants $848,925 $1,181,193
Program Service Revenue $182,081 $518,838
Total Revenue $1,031,269 $1,700,834
Total Expenses $798,880 $1,846,680
Revenue Less Expenses $232,389 -$145,846
End of Year Assets $301,231 $152,888

As you can see, the foundation has taken in a lot more money in 2014 than 2013. The foundation is required to list the “accomplishments for each of its three largest program services” and they WordCamps and WordPress TV as the primary services.

WordPress Foundation provides logistical and financial support to the volunteer organizers of WordCamps, which are educational events focused on WordPress. WordCamp organizers can opt for the foundation to manage their funds, which allows WordCamp organizing teams to use the foundation as their financial and legal backer. This removes the financial barrier to entry for event organizers, protects organizers from being sued, and protects WordCamps from mismanagement of funds and fraud.

The total amount to that endeavor accounted for $1,757,849 of expenses, according to the filing.

WordPress TV provides video camera kits to WordCamps in USA, Europe, and Canada. It’s a wonderful program that ensures all WordCamp sessions, including non-English language content, are published to WordPress TV, providing free educational content about WordPress worldwide.

The total amount to that endeavor accounted for $84,588 of expenses, according to the filing.

Two new members of the WordPress Foundation staff are listed that were not listed in 2014. Previously, Matt Mullenweg was listed as the President & Treasurer and Rose Goldman the Secretary.

Shakeup to Foundation “staff”

2015 Staff list:

  • Jason Hoffman: Board of Director
  • Mark Ghosh: Board of Director
  • Matt Mullenweg: Board of Director
  • Rose Goldman: Chief Financial Officer

The addition of Hoffman and Ghosh came as a surprise to me. Neither works for Automattic, or Matt, though both have a history with Matt Mullenweg.

Mark Ghosh now works at the Sherwin Williams (paint) company, but he ran Weblog Tools Collection for a long time, and WLTC was the earliest and long-standing leader of blogging about WordPress. Matt Mullenweg bought it from him around 2011, as he finally announced in 2013.

Jason Hoffman was the founder of Joyent, one time director of npm, and now is an executive at Ericson. He has a pretty long history with Mullenweg, and his LinkedIn profile says he’s been a WordPress Foundation board member for six years, but that is not listed on any previous paperwork, and I wonder if he’s actually been an Automattic board member but more recently became a member of the Foundation board. He says he’s been a board member since May 2009 on his LinkedIn, and the WordPress Foundation was founded in 2010. I’ve asked for clarification from Rose Goldman.

Joyent, I’ve discovered, was the first hosting partner for WordPress.com (I think it was .com at least, as the author in the linked article said WordPress, but it would make much more sense if she meant WordPress.com). Again, it would make much more sense if he is a long time board member of Automattic and newly minted board member of the Foundation.

Rose Goldman is a long time employee of Matt’s and I would generally call her his right hand; her involvement in the Foundation is relatively unchanged, except in title.

Considering there has been a lot of criticism and handwringing over the years in regard to the makeup of the foundation, it’s strange to me that Ghosh and Hoffman were quietly added to this year’s paperwork, and I certainly wonder what their duties truly entail, if anything.

Revenue and expenses breakdown

Revenue must be categorized as to where it came from in a 990. All $1,181,193 in revenue for the foundation was listed as, “all other contributions, gifts, grants, and similar amounts not included above” (“above” being the normal categories). Basically, it’s safe to presume that all of that money is the money that was raised as WordCamp sponsorships.

All $518,838 of “Program Service Revenue” are allocated to ticket sales.

Expenses were also broken down and categorized:

Category Expense
Assistance to foreign orgs & individuals $136,742
Accounting $3,709
Advertising & Promotion $243,376
Office Expenses $13,346
Occupancy $592,505
Travel $90,267
Insurance $14,703
Food & Bev $426,532
Video Production $84,588
Meetups $71,165
Printing & Signage $64,795
Other $104,952

It’s worth noting that non-US based WordCamps have to go through a roundabout process for funding WordCamps. the WordPress Foundation is restricted in what role it can play out of country, so usually those WordCamp organizers have to fund things differently, and then are reimbursed by the Foundation. There’s a whole list of countries and parts of the world where the Foundation reimbursed individuals or other organizations for organizations there; though I believe those expenditures are still categorized and broken down in the numbers I list above, as they were budgeted the same, but funded differently.

So there you have it, the WordPress Foundation 2014 in review.

However, while the 2015 report (which we won’t see for a while) will look much like this one, the 2016 report will likely be quite a bit different, because WordCamps are likely to receive their own organization this year, which will affect the way WordCamps operate going forward.

A new WordCamp organization

A 5013c non-profit organization has restrictions on what it can and can’t do; and certain types of activities can threaten its classification as a non-profit with the United States Internal Revenue Service. This has been part of the reasoning behind certain sponsorship rules for WordCamps.

Early this year, it’s likely we’ll see a new organization that’s not strictly a non-profit, but a regular company, or a b-corp (commonly called “not just for profit” corporation) — which is a fairly new classification.

Jen Mylo actually teased this in a long post in October.

This shouldn’t have any negative effects — we may lose some non-profit discounts for a few venues, but we’d gain more freedom in how we do other things. Whatever the corporate structure, it would still be run the same, with any extra money put into more programs and event support.

Of course, not being a non-profit has more consequences than this: right now, companies can write off donations in the United States, whereas sponsorships to a for-profit corporation will not be tax deductible, making WordCamp sponsorships significantly more expensive, especially for big multi-camp sponsors (think: the big hosting companies, Automattic, etc).

Then, in an update by Andrea Middleton in December, she noted that the new entity will still likely be a subsidiary or related entity to the Foundation. Also, as she highlights, the new entity (not being a 5013c) will be able to offer sponsors more benefits that previously would’ve put the Foundation on shaky ground with the IRS, namely:

  • The ability for sponsors to include pricing information and savings opportunities
  • Coupons and discount codes in official sponsorship materials (and on WordCamp websites)
  • Calls to action in promotional materials and on the WordCamp sites

I presume other things sponsors or organizers dream up, but these were the new items listed in the global sponsorship doc. And if you don’t decide to click that, pricing ranges between $35,000 and $160,000 to bulk-sponsor camps ($35k for 34 Eastern camps at the bronze level; $160k for 53 Western camps at the Gold level).

The change is a long one coming; sponsors have wanted more freedom and flexibility with messaging and promotions forever. Though it does come at a cost, not being able to be written off as donations.

I’m definitely interested how this will play out in real life. The ideals behind what sponsorships should be aren’t changing, so really this shouldn’t change the way WordCamp sponsorships feel as an attendee, but it will change some of what’s possible for organizers recruiting sponsors and those sponsors looking to financially benefit from WordCamps.

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