2011-12 Fundraising and Funds Dissemination process/Recommendations/Q and A

The questions and answers below are intended primarily to relate to Sue's recommendations to the Board of Trustees around fundraising and funds dissemination, but they may provide insight into the process as a whole. In order to keep the discussion from becoming fragmented, please ask any questions on the talk page for the recommendations. Please do not edit this page directly.

Future of fundraising discussions - Index edit
Guiding Principles discussion Introduction Fundraising principles Funds distribution principles Fundraising models/future discussion Introduction, timeline & faq Goals Zack's observations on online fundraising How long will the Fundraiser keep growing? Wikimedia Foundation staff memo and analysis Recommendations Final recommendations from Sue Editable recommendations based on Sue's final recommendations Draft Recommendations from Sue Draft Recommendations discussion Draft Recommendations Q&A Brainstorming about Recommendation 4 Pros and cons Questions flowchart Fundraising options Alternative recommendations and philosophies Alternative recommendations (Open to all contributions) Recommendations by Tango Wikimedia Foundation resolutions Resolution: Wikimedia fundraising principles (10-9-2010) WMF Board of Trustees letter regarding fundraising accountability (8-5-2011) Resolution: Developing Scenarios for future of fundraising (1-18-2012) Draft Board resolution (2-9-12) Final Board resolutions (3-30-12) FAQ Discussion Wikimedia chapter statements Wikimedia’s culture of sharing (Wikimedia DE) Resolution on principles (Wikimedia UK) The importance of being a Wikimedia chapter (Wikimedia IT) Iberocoop joint statement Opinion French chapter Questions for the German chapter Wikimedia UK response to Sue Wikimedia CH response to Sue Wikimedia NL informal statement Overview of relevant data Sign up to participate Initial Thoughts Draft grantmaking survey Funds Dissemination Criteria мой Resource list (for survey preparation) Where the money comes from today Outcomes Final Board resolutions Creation of the Funds Dissemination Committee (FDC)

Questions and Answers

Who is Sue Gardner, and why is she creating recommendations for the future of fundraising and funds dissemination in the Wikimedia movement?

Sue Gardner is the Executive Director of the Wikimedia Foundation. She is making recommendations about the future of fundraising and funds dissemination at the request of the Wikimedia Foundation Board of Trustees.

What is the goal of this initiative?

For several years, the Wikimedia Foundation Board of Trustees has been having conversations with others in the Wikimedia movement about what it has been calling “movement roles.” These conversations formally began during the 2009 strategy project and continued in a formal Board-led process called Movement Roles II, which has been ongoing since 2010. The purpose of the Movement Roles discussion is to clarify the roles and responsibilities of different groups working to support the international Wikimedia movement, to make it easier for the movement to function effectively as a global network in pursuit of the Wikimedia mission.

Also, for more than six months, the Wikimedia Foundation Board of Trustees has been having conversations with the staff of the Wikimedia Foundation, with chapters and individual volunteers, and with its Audit Committee and outside auditors, about fundraising issues. At its meeting in Haifa in July 2011, driven by concerns about the quality of chapters’ financial controls, the Board had an extensive internal discussion about chapters’ financial controls, accountability and transparency. As a result of that discussion, the Board released this letter laying out base principles that would need to be adhered to by any chapter aspiring to act as a payment processor for the 2011 campaign. That letter was controversial, and resulted in only four chapters acting as payment processors for the 2011 annual campaign, compared with 12 chapters acting as payment processors the previous year.

At its meeting in October 2011, the Board decided to commission a substantial rethink of how the Wikimedia movement handles fundraising and funds dissemination. On October 17, it announced that it had decided to develop guiding principles for fundraising and funds dissemination, in consultation with community members, and then give the finalized guiding principles to its Executive Director, Sue Gardner, asking her to develop recommendations for the Board on how to conduct fundraising and funds dissemination in ways that adhere to the principles the Board had laid out.

The goal is to figure out a system for fund-raising and funds dissemination that fits with our values and enables us to distribute money in ways that will fund high-impact work supporting our mission, around the world.

How does fundraising work today in the Wikimedia movement?

Currently, the Wikimedia Foundation and the Wikimedia chapters raise money from a variety of sources, including donations from individuals, grants from governments and private philanthropic institutions, “earned income” such as conference fees, and membership fees. Most of the money that comes into the Wikimedia movement comes from donations given by visitors to the websites operated by the Wikimedia Foundation during the annual fundraising campaign. In the campaign, the Wikimedia Foundation fundraising staff works with volunteers around the world to create, translate and localize persuasive appeals featuring staff, editors and Jimmy Wales. Today, the Wikimedia Foundation processes all donations that come in via the sites operated by the Wikimedia Foundation, except for donations that come in from Germany, France, the UK and Switzerland. In those countries, when readers click on the donate banners, they are invisibly redirected to have their donations processed by Wikimedia Deutschland, Wikimedia France, Wikimedia UK and Wikimedia CH.

How does funds dissemination work today in the Wikimedia movement?

Currently, the Wikimedia Foundation controls most of the money spent in the Wikimedia movement today. Most of the money is spent on work that supports the projects globally, and about a million dollars a year is given out in the form of grants to support activities by chapters and individual volunteers. Spending by the Wikimedia Foundation is overseen by the Wikimedia Foundation Board of Trustees, which is accountable to the global Wikimedia community. Of the donations processed in the annual campaign in Germany, France, the UK and Switzerland, roughly 50% is transferred to the Wikimedia Foundation, and the remainder is controlled by those chapters.

What is the history of fundraising in the Wikimedia movement? How long has the movement been collecting donations, and where has the money gone?

Prior to 2003, the Wikimedia movement was solely supported by money from Jimmy Wales.

In 2003, the Wikimedia Foundation fundraised for the first time by putting up a banner appeal on the sites operated by the Wikimedia Foundation. From 2003 to 2006, all money fundraised through the sites operated by the Wikimedia Foundation was given to the Wikimedia Foundation, and stayed with the Wikimedia Foundation.

In 2006, for the first time, during the annual campaign the Wikimedia Foundation began to direct some visitors who originated in some chapter countries, towards the sites operated by those chapters. For example, in 2006 visitors to the German Wikipedia were presented with a page that invited them to donate to their choice of the Wikimedia Foundation, the German chapter or the Swiss chapter. The payments were processed by their recipient, and chapters shared some of the revenues from their country with the Wikimedia Foundation.

In 2010, for the first time, during the annual campaign the Wikimedia Foundation began to point ALL visitors who originated in some chapter countries, towards the sites operated by those chapters. This was done via geo-location. For example, in 2010 the Wikimedia Foundation pointed all UK visitors to sites operated by the Wikimedia Foundation (e.g., enWP, cyWP, paWP, en Wiktionary, etc.) towards the UK chapter’s site. The payments were processed by the chapters, and chapters shared some of the revenues from their country with the Wikimedia Foundation.

In 2011, following the Board's letter to the chapters, only four chapters payment-processed during the annual campaign. Also in 2011, the Wikimedia Foundation formed a business relationship with a firm called Global Collect, which enabled the Wikimedia Foundation to add many more local donation options, including many additional currencies and payment methods.

What is the upshot of Sue's draft recommendations, in summary form?

Sue is recommending that all donations given by visitors to the websites operated by the Wikimedia Foundation be processed by the Wikimedia Foundation. She is recommending no other changes to the annual fundraising campaign. Also, she is recommending that funds dissemination be radically decentralized, such that spending decisions are controlled, to the extent legally possible, by a community decision-making body that is accountable to the international Wikimedia community, and to the Wikimedia Foundation Board of Trustees. This represent a departure from current state, in which spending decisions are made solely by the Wikimedia Foundation as well as a small number of chapters: currently in Germany, France, Switzerland and the UK.

What is the status of the recommendations right now?

Currently, Sue has published a first draft of recommendations, and released them for comment. The recommendations are not yet finalized, and she has not yet submitted them to the Board.

What has the Wikimedia Foundation learned from other consultation processes, and how is it applying that to this process?

In the past, the Wikimedia Foundation staff has sometimes taken serious issues to the Board for a decision before discussing them extensively with the Wikimedia community first. That doesn't work well, because an important part of the Board's decision-making process depends on views expressed by community members, and information brought to discussions by community members. When the Wikimedia Foundation Board deliberates and makes an important decision without access to community discussion, it runs the risk of making a poor-quality decision, or of having a hard time achieving community acceptance after-the-fact, even if a good decision is made. So, we are aiming to do lots of consultation up front, before any decisions are made. (This page is not the beginning of the consultation on this issue: there has been ongoing consultation and expression of views in the past six months.)

Also, in the past, Wikimedia community members have sometimes had a hard time accurately divining the Board's intent, when all that is released is a single statement. For example, after the Board published its letter to the chapters in Haifa, some chapter representatives said their members had been confused about the Board's intent. Face-to-face conversations in Haifa helped somewhat, but they are not always possible, and they always exclude some interested people, and don't leave behind a permanent record of what was said. A single text document just isn't seen as explanatory or detailed enough to really convey the Board's message, and face-to-face discussion doesn't entirely close that gap even when it's possible. So, for the purposes of this discussion, the Wikimedia Foundation is aiming to be public and transparent about our thinking as it develops, in hopes that that will help make decisions understandable and contextualized, once they are made.

Also, in the past, Wikimedia community members have wanted to have more transparency into how Wikimedia Foundation decisions are made. Part of the reason we are handling this decision on a wiki, in public, is so that people can see how the decision is arrived at. Actual decisions will be made at Board meetings, but the pre-work will all happen here.

What will this process look like, and where are we in it?

On October 17, Wikimedia Foundation Vice-Chair Jan-Bart de Vreede published draft guiding principles for fundraising and funds dissemination, and asked the community for help refining and improving them. A few days earlier, Sue had started doing some thinking-out-loud on this meta page, which later evolved into these meta pages. Most of the consultation thus far has happened on-wiki: a little has happened on the internal-l mailing list, but everybody has tried to keep discussion on the wikis.

It’s expected that within a week or so, the Wikimedia Foundation Board of Trustees will release the finalized Guiding Principles for fundraising and funds dissemination, that will guide Sue’s recommendations.

Here is the draft timeline. It may change.

• October: Guiding principles begin to be developed; Sue begins on-wiki deliberations
• November: Sue travels to Europe to meet and talk with some chapters
• January: Board finalizes guiding principles; Sue begins drafting recommendations on-wiki
• February: Sue presents draft recommendations to the Board at its meeting February 3, for discussion
• March 9: Sue presents final recommendations to the Board
• March 30: Board votes and publishes its decision
• March 31: Wikimedia Foundation staff and chapters begin to work through implementation next steps

Questions About Fundraising

What is the meaning of the term “payment processor”?

The term "payment processor" literally means the processing of donations. Many chapters process donations on their own websites, and some chapters have processed payments during the annual campaign, from visitors to the sites operated by the Wikimedia Foundation.

Payment processing is separate from the development of messaging (banners, appeals) and translations. Many volunteers around the world support the annual campaign by creating, translating or localizing appeals: that is completely distinct from payment-processing.

In the Wikimedia movement's conversations about fundraising, the term is normally used to mean acting as the direct recipient of funds that come in from donors during the annual fundraising campaign. (When you see the phrase payment processing used in Wikimedia conversations, you should always assume there's a silent "as part of the annual fundraising campaign" appended.) When chapters payment process, it means that the Wikimedia Foundation has pointed donors who've clicked on the fundraising banners, towards the chapter website to have the donation processed.

Payment-processing is a role with special responsibilities and obligations. Payment processors need to:

• Appropriately and securely safeguard donor privacy
• Ensure money is safeguarded and appropriately accounted for at every step (requires accountants, treasurers, audit committees, and good governance)
• Ensure marketing used to secure the money is accurate and responsible, and that donors are appropriately informed about what happens to their money after the fact
• Ensure that money is used for a purpose that's consistent with their mission, vision, goals, values and so forth, and consistent with what donors were told would happen
• Put in place good legal support to ensure compliance with fundraising law, privacy law, regulations governing non-profit organizations, and other relevant law, in their geographies
• Put in place mechanisms for testing compliance, and the ability to fix problems when they occur

What is the actual work involved in payment processing?

In order to payment process, here is what needs to happen. The payment processing entity needs to:

• develop an understanding of the relevant laws regulating fundraising activities and ensure compliance with those laws;
• create, and adhere to, policies such as gift policies and donor privacy policies;
• create a website for donors as well as implement an online payment system and a donor database;
• maintain site uptime during the campaign so donations are not lost;
• create systems for privacy safeguards, fraud protections and security measures preventing data theft and phishing;
• create systems for answering donor inquiries and processing refunds;
• create systems for thanking and sending receipts;
• create systems for managing payment subscriptions;
• create annual plans and annual reports (documenting what the money will be used for, and explaining after-the-fact how it was actually used;
• create donor-friendly (marketing) materials out of the plans and reports;
• create financial accounting procedures, controls and auditing practices sufficient to ensure adherence to appropriate standards and all relevant laws and regulations;
• purchase insurance portfolios to manage potential risks.

Please note this is not all the work that goes into running the annual fundraising campaign. It also involves, for example, the development of appeal material and the creation of banners and appeal text (currently done mostly by the Wikimedia Foundation), translation and localization work (currently done mostly by volunteers), etc. The bulleted list above contains solely the work that is necessarily attached to the payment processing role.

What is Global Collect?

In 2011, Pats Pena joined the Wikimedia Foundation as Global Fundraising Operations Manager, and set up a relationship with the firm Global Collect. As a result, Global Collect now provides a large range of international payment methods for the Wikimedia Foundation -- processing all international and national credit and debit card donations and dozens of international payment methods such as direct debits, bank transfers, eWallets, cash payments and bill payments, prepaid payment methods, checks, iDEAL, BPay, and others, and allowing the Wikimedia Foundation to accept donations in local currencies for almost every country in the world.

Global Collect gives the Wikimedia Foundation the ability to offer recurring payments with credit cards, a centralized payment console/reporting system, payment consultancy (with quarterly reviews and advisers on the newest local methods for various countries), and the opportunity to have an always growing list of local methods as well as flexibility of partnering with different vendors for options not available with Global Collect (for instance, as mobile opportunities grow).

If Sue's draft recommendation were given to the Board and accepted by it, how would chapters and other entities receive funding?

There would be two ways for chapters and other entities to continue to receive funding.

1. Chapters and other entities would be free to fundraise on their own, outside of the websites operated by the Wikimedia Foundation. Chapters currently raise money from a variety of sources, including donations from individuals, grants from governments and private philanthropic institutions, “earned income” such as conference fees, and membership fees. Those methods would all remain available to chapters and other organizations.
2. Sue is recommending that the Wikimedia Foundation increase the size of its grants program, to radically increase the amount of funding going to chapters, other organizations, and individual volunteers. She is recommending that the administration of the grants program be decentralized, such that spending decisions are controlled to the extent legally possible by a community decision-making body that is accountable to the international Wikimedia community, and to the Wikimedia Foundation Board of Trustees.

If the chapters do not payment process past 2011, does that mean they will need to lay off staff and halt spending plans because of financial insecurity?

No, it shouldn't mean that. Nobody wants chapters forced to lay off staff, defer planned programmatic activities, or be paralyzed by uncertainty. The Wikimedia Foundation would work with affected chapters to ensure this recommendation would be implemented in a staged fashion, on a timeline that avoided stress and disruption for everyone.

Questions About Funds Dissemination

What is the history of the Wikimedia Foundation's grants program?

In 2009, the Wikimedia Foundation first created a grants program to support work of movement entities. The program has grown substantially over the past several years both in total funds available and in the size and scope of individual grants.

Ten months ago, the Wikimedia Foundation first hired dedicated staff to support the program. After that, the Foundation created a new grant program in partnership with Wikimedia Germany to support community member participation in conferences/events. In 2010-11, the Wikimedia Foundation has also for the first time made grants to four chapters to support their annual program plans for the whole of 2012.

The grant-making process is done in an open fashion on meta and there are continuous efforts underway to improve the process by making it more systematic, predictable and transparent. In May 2011, the Wikimedia Foundation created the Grant Advisory Committee, made up of 16 Wikimedia volunteers from more than a dozen countries, to improve grant review and provide input for applicants on their grants. Since July 2011, 24 grants have been approved funding decentralized programmatic work, totalling USD 690,000. This includes grants to Wikimedia Argentina, Wikimedia Österreich, Wikimedia Sverige and Wikimédia Magyarország. Grants for Wikimedia Australia and Wikimedia Nederland are in the process of being negotiated.

Where is the conversation happening about the future of the grants program?

There are two conversations happening about the future of funds dissemination in the Wikimedia movement. The current grant-making system and ways to improve it is being discussed at this page, and community members are brainstorming at this page about what a radically-decentralized community decision-making body for funds dissemination might look like.

What are some of the open questions about what a radically-decentralized community decision-making body for funds dissemination might look like?

Open questions include ones like these: What would be the criteria for membership? How would members be selected? How could members best be supported in good decision-making? How would planning cycles work? If the body were community-elected, how would we ensure an appropriate representation of voices, interests and expertise that are currently underrepresented in the Wikimedia community? How would we prevent an international body from overrepresenting the interests of people who are proficient in English?

Other General Questions

Do donors want to donate to local organizations or the Wikimedia Foundation?

We don't have data that tells us conclusively what donors' intentions are, because it's extremely hard to construct a survey question that will yield useful results. That's because donors just don't have a good-enough understanding of who the various entities in the Wikimedia movement are, and how they interact, to enable them to give an answer that accurately reflects whatever their wishes might be. Having said that, we do have one data point, which has limited, but not zero, usefulness. A survey of donors run in 2010 showed that 80% of respondents were not aware that they could contribute to a national chapter organization. However, once informed, most indicated that they would prefer to donate directly to the Foundation (though 18% were unsure). About 6% said that they would prefer to donate to a local organization, and 15.5% said they would donate to both equally. Again, this response should be interpreted with caution, for the reasons given above.