Signal’s Annual Operating Costs to Reach $50 Million

According to Whittaker, Signal operates its services with the utmost efficiency, but she also acknowledges that many of its features incur higher costs compared to other communication platforms. This is due to the additional expenses involved in implementing these features in a privacy-preserving manner. For example, Signal’s encryption not only applies to the content of calls and texts, but also extends to users’ contacts, profile names, photos, and even obscure features such as animated GIF searches. Consequently, seemingly simple elements of the app require more time-consuming and expensive engineering due to the encryption.

Initially funded by the US government-supported Open Technology Fund, Signal later relied on donations to sustain its operations. Following the establishment of the Signal Foundation in 2018 and a $50 million donation from WhatsApp cofounder Brian Acton, the growing user base and staff render this contribution inadequate for covering more than a year’s current budget. To offset this, major donors, including Jack Dorsey and undisclosed contributors, continue to support the foundation’s expenses.

Signal aims to increasingly depend on small donations, with contributions as low as $3 facilitated through the app. Monthly donations of $5 or higher are rewarded with a user account badge. These modest donations now account for 25 percent of the operating costs, up from 18 percent last year, following Signal’s implementation of in-app contributions. However, to secure its future without relying solely on wealthy individuals, Whittaker emphasizes the need for a substantial increase in user donations.

With an annual budget nearing $50 million, can Signal sustain itself with these donations? Whittaker asserts, “We have to. Signal needs to find a way to survive indefinitely as it is the tool we have to ensure truly private communications.”

Charging users has never been a viable option for Signal, as it would have hindered its network growth to compete with iMessage or WhatsApp. Additionally, adopting a venture capital-funded business model is not feasible, as it could subject the service to investor or shareholder demands for profitability, potentially jeopardizing its mission. Whittaker stresses the importance of remaining focused on the mission without succumbing to external pressures, citing Elon Musk’s impact on Twitter as a cautionary example.

From a privacy-focused standpoint, disclosing Signal’s costs not only aids in fundraising to safeguard users’ communications but also sheds light on the anti-privacy practices prevalent in the tech industry. Whittaker hopes that transparency regarding these expenses prompts a reevaluation of other tech organizations and fosters a better understanding of the pervasive surveillance model dominating the industry.

Updated at 11:45 am, November 20, 2023, to clarify that the Open Technology Fund is funded by the US government but is a separate entity.

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