Wikipedia’s nonprofit group gets a huge boost: $3M from Alfred P. Sloan Foundation

The nonprofit group behind Wikipedia, the mammoth Internet encyclopedia built by volunteers, is getting its largest donation ever – $3 million from the Alfred P. Sloan Foundation.

The award, to come in $1 million installments over each of the next three years, will help the Wikimedia Foundation become more financially secure as it hires more staff and seeks to improve the quality and reach of Wikipedia content, foundation leaders said.

“We think it will pave the way towards more donations as it is a signal that a major foundation sees good in what we are doing,” said Jimmy Wales, the project’s leader and a board member of the Wikimedia Foundation. “And it should take away a lot of the questions people have had about whether we will need advertising to survive.”

Founded in 2001, Wikipedia is now the seventh-most popular Web site in the U.S., according to comScore Inc. More than half the Wikimedia Foundation’s $4.6 million budget covers the servers and Internet bandwidth to handle all that traffic. It also supports Wikipedias in dozens of other languages and affiliated free projects such as dictionaries and news sites.

The San Francisco-based Wikimedia Foundation said it would use the Sloan grant for software enhancements, including one that make it easier for Wikipedia editors to grade article quality. Wikimedia leaders also envision doing more outreach to new contributors and creating educational content for people without computers.

Doron Weber, a Sloan Foundation representative, said in a statement that Wikipedia “represents a quantum leap” in the collection and organization of knowledge.

Relying largely on small, individual donations, The Wikimedia Foundation saw cash contributions jump to $2.2 million last year from $1.3 million in the prior year. But foundation leaders have been looking for sturdier mechanisms of support to ensure the group’s long-term survival. It does not have an endowment fund.

The group also recently lined up $1 million in gifts from anonymous sources. Those donors were introduced to the group by Roger McNamee, a prominent venture capitalist who himself has given at least $300,000, which raised questions about whether investors might try to capitalize on Wikipedia’s brand name in a for-profit side business. Wales has said no such venture is planned.