2011-12 Fundraising and Funds Dissemination process/Wikimedia’s culture of sharing

In other languages: العربية (ar) Deutsch (de) English (en) español (es) français (fr) português (pt) русский (ru) [edit]

Wikimedia’s culture of sharing: Remarks on common goals, localized fundraising and global action

Please find external references in the footnotes to this paper. Additionally, a number of documents, papers and essays from contributors to the Wikimedia movement need to be named in the broader context of our argumentation. You’ll find further reading in the appendix. For a summary, see the talk page.

---

by Pavel Richter, Executive Director of Wikimedia Deutschland e.V.

Introduction:

The purpose of this document is to support and expand upon crucial observations from the draft “Recommendations to the Wikimedia Foundation's Board of Trustees” regarding the international Wikimedia movement. In the present document, we endorse a number of concerns from this draft about our movement’s development. Likewise, we agree on the need for determining and pursuing a path of action to address these concerns. We base all our conclusions on factual analysis, research data and close adherence to the Wikimedia mission statement. Our conclusions echo the Wikimedia Foundation’s call for more efficient, more powerful and fully accountable contributions to the Wikimedia movement around the world. They must be met through professional, scalable endeavours and enhanced collaboration. We all have to improve.

In the following analysis, Wikimedia Deutschland demonstrates that a decentralized chapter model, incorporating a set of key improvements, will best enable the whole Wikimedia movement to be on par with the most successful Non-Governmental Organisations in the world. What sets those organisations apart? A unique level of trust from donors, volunteers, and partner organisations. They achieve this special kind of trust by not taking any of those groups as a means to an end. They commit to letting them partake in a common mission. Sharing resources, expertise, and passion are the cornerstones of this approach.

The means: fundraising & funds dissemination

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)

The importance of localized fundraising

Payment processing is about donations, fundraising is about donors. In Germany, we have seen a decline in the number of people willing to donate to NGOs in recent years. At the same time we have seen an increase in fluctuation of donors among organizations. With the proliferation of NGOs in Germany, people have become choosy. This, in turn, leads to a need for professionalized fundraising. Today, NGOs find themselves in a highly competitive situation. So do we. Therefore, Wikimedia Deutschland has adopted a fundraising strategy which addresses the needs and wants of donors. We have been very successful at this, having increased our donation income by over 70 % compared to the 2010/2011 fundraiser. We also more than doubled the number of donors compared to last year (120 %). Our cultivation strategy enabled us to record recurring gifts from more than 10.000 supporters. This is crucial because gaining a new donor is infinitely more difficult than retaining one - even for Wikimedia.

Wikimedia Deutschland is embedded in a specific German donation culture. Consequently, the reason for our success is that we have taken local particularities into account. Throughout the last fundraiser our local testing and evaluation revealed which communication means work best in Germany. The fundraiser was highly localized in terms of appeals, wording and landing pages - one main reason why we did so well locally.

Knowing what donors want and expect is central for localizing fundraising. According to the principle of donor-centrism, service is key. Donating must be as easy as possible. Therefore, local proximity is crucial as well. Emails and phone calls need to be answered promptly. Communication in the native language is taken as a matter of course. Inquiries regarding charity status and how donations are used must be answered instantly. Donation receipts need to be issued in a fast manner. A highly sensitive point: mistaken donation sums or cancellations of donations need to be handled quickly. Building long-term relationships with donors demands an especially high standard of service. It can be inferred from our own experience from the last two years that maintaining a similar quality level of donor management would be impossible under the centralized arrangement proposed in the Wikimedia Foundation staff’s draft recommendations.

Local service is not the only reason in favoring localised over centralised fundraising. Gaining and keeping donors’ trust is the second, even more important factor. Trust is probably the most important prerequisite for making a donation. What elements are favourable to developing trust? To name the most important: charity status, external auditing, donation receipts, transparency, data security, easy contact options, transparent donation usage and visible impact. Out of these, recognition of charity status by local tax authorities is of highest importance: Two of the most important charity-monitoring bodies in Germany, “Deutsches Zentralinstitut für Soziale Fragen” (DZI) and the “Deutscher Spendenrat”, as well as “Stiftung Warentest” (a consumer advocacy group) list charity status as one of the things a donor should check before giving money to an organization. Accordingly, being acknowledged as a trustworthy charity significantly increases credibility.

Local means of securing trust may include donation receipts, as in Germany. Let us take this example as a case model for a number of local issues any attempt at international fundraising will face. Last year, Wikimedia Deutschland distributed donation receipts to nearly 35,000 people. This year the number will rise to 80,000. A well-known fundraising company conducted a report for Wikimedia Germany about the relevancy of donation receipts for donation motivation. The result is clear: in Germany, donation receipts make a difference. They are very important for higher donations, donations from companies, and generating trust, in particular. In fact, there is data on the number of donation receipts handed in at German tax offices. In 2006, the grand total of all donations receipts submitted as part of annual tax returns accounted for more than 60% of total donations made within Germany that year. Moreover, only charities that are recognised by the German tax office are allowed to issue these donation receipts. An international organization collecting donations in Germany would not be able to do so.

But this is not about Germany. Again, donation receipts are a local peculiarity. But international fundraising needs to react to countless local issues. Any global fundraising model is nothing but the sum of national fundraising peculiarities. Additionally, fundraising is embedded in a cultural and social framework that differs from country to country. For good measure, no large international non-profit organisations in Germany have centralized funds management. Centralized donor management runs contrary to the goal of making a donation as easy and transparent as possible. In fact, centralization would not only constitute an obstacle to local relationship-building but also strain already established relationships. Wikimedia needs to ensure that we treat donors appropriately, if we want to show them that they are an important part of our movement. This will ensure their sustained support. Effective and efficient fundraising in terms of relationship-building, cultivation and trust-building works best at a local level. Therefore, we strongly support a decentralized model for fundraising and funds dissemination.

The challenges for localized fundraising

Fundraising needs to meet specific legal and financial regulations. We share the concern that financial mismanagement will lead to reputation loss. Thus, meeting the respective legal requirements is crucial for any chapter doing fundraising. In order to set a common framework for all Wikimedia chapters, we propose to ask an established advisory firm (such as KPMG) to help our movement work out an international catalogue of financial and legal requirements for chapters that want to participate in Wikimedia fundraising. This catalogue should be the prerequisite for chapter fundraising. We propose that it be implemented in fundraising agreements, starting with the earliest possible date: July 1, 2012.

Without anticipating the recommendations of KPMG or others, we think it is clear that a protocol needs to be followed in the future, which certainly ought to take the following principles into account:

1. Fundraising is not a goal in itself, but a means to an end.
2. Any chapter should focus on developing and executing programs and projects that support our common global goals with local means.
3. To do so, chapters will receive sufficient funds from the WMF and / or other chapters
4. With bigger programs and projects the need for financial accountability increases, making it necessary to build up local expertise and to implement solid standards regarding the handling of larger funds.
5. With these standards in place, chapters are presented with two possible ways to further support their programmatic work. They need to evaluate which one to pursue:

Due to local prerequisites or local community decisions, many chapters will preferably continue to receive grants from the Wikimedia Foundation and / or chapters. For other chapters - and we do not expect these to be the majority of all chapters in the foreseeable future - conducting local fundraising will turn out to be the better solution, based on the local donation environment, legal or financial requirements, and the overall interest of the Wikimedia movement. To prove that this is indeed the case, prospective fundraising chapters need to convince an independent movement body. They need to show that by fundraising locally, they are acting in the best interest of the Wikimedia movement.

While setting clear standards is one thing, controlling and enforcing them is equally important. We propose to use the planned Chapters Council to fulfill this task. All chapters that deal with large amounts of money, regardless of the source of these funds, would be required to report on how they follow the agreed standards and procedures to the Chapters Council. The council should have the power to intervene when it is necessary to protect and safeguard other chapters and the movement as a whole. It would actively provide guidance and oversight for chapter affairs and hold them responsible for their actions. To use such a self-governing body would be in line with our core values as a movement, where communities are mostly allowed to organize and guide themselves rather than setting up a top-down hierarchy.

The ends: global projects & networking

Flexibility, visibility, empathy: why local agents matter

The geographical perspective is, as explained in the draft recommendations, “a filter” through which to perceive our environment. It is also a necessary precondition for developing strong ties with local institutions (be it the GLAM sector, public schools or the administration). The recommendation paper mentions some advantages of local entities acting as agents for a broader movement. Take the stance on advocacy work: political advocacy for free knowledge (e.g. copyright or net neutrality) has to respond to local legislative and administrative processes. It, therefore, requires an enormous flexibility to (re-)act. Take the stance on cultural institutions: the development of strong long-term relationships to the GLAM sector is an often difficult and uncertain process. In most cases, we experience an enormous degree of inflexibility on the side of GLAM institutions. This is due to their public funding and the bureaucratic procedures that go with it. By conducting the work with GLAMs via a centralized grant-system, we would build the same degree of inflexibility and uncertainty into our own system.

Contextuality: why form follows function

Wikimedia outreach projects are always contextual: they address specific needs, are conducted by individuals with particular interests and take place in a defined physical space. The big success of “Wiki Loves Monuments” in 2011 resulted from the efforts of thousands of volunteers who swarmed their local communities. In order to enhance outreach and public visibility, we need even more personal contact management, local networks and easy access to government bodies. All this is best managed by local entities. Form follows function, as the theory of design suggests, and we should also apply this principle to the structure of our global movement. This does not mean that local chapters are the only possible institutional form of our movement. It does imply, however, that the final decision about which form of cooperation to initiate, what amount of money to spend and which staff to hire accordingly, needs to be made by an entity which is embedded in the context of specific cultures, mentalities and power relations. A shared understanding of problems and challenges is necessary for identifying requirements, needs and priorities. It is not only about efficiency, it is also about empathy.

Collective self-empowerment: how to bridge the Digital Divide

One of the Wikimedia Foundation’s basic concerns is the disproportionate amount of funds raised in wealthy countries. Especially in Europe, we indeed observe the strongest allocation of financial resources in countries with the greatest political power and economic wealth. We believe that a more balanced distribution of resources must be our goal and that the role of individual chapters should not be determined by their country’s economic power. The question is, however, which strategy is most likely to achieve this goal? The draft recommendations by the WMF management propose a vertical approach, in which redistribution is conducted in a hierarchical manner. Yet, not only our own experience but also that of global development cooperation tells us that strengthening horizontal cooperation between our various agents promises to be a more successful approach. Considering the available evidence, we submit that in the long run this will not only be more consistent with the values of our movement but also more suitable with regards to overcoming global inequalities.

More effective and accepted: why subsidiarity matters

Organisations centralising resource control and dissemination may need to be protected from overstretching their actual capacities. The Wikimedia Foundation does not and cannot hold local expertise for almost 200 countries. Centralisation of fundraising and distribution of funds will put the WMF or any centralised movement body in a position where they will have to take unilateral decisions for all of them. But if an organisation such as Wikimedia ignores the fundamental advantages of subsidiarity, it takes the risk of being ineffective. As Sebastian Moleski put it elsewhere, central solutions tend to be ineffective because they treat major challenges - let’s say the problem of author retention - as one single problem, rather than a multitude of problems. These problems result from and are influenced by highly varied local circumstances. If situations are different at different places, you have to treat things in a very context-sensitive manner. As a result, priorities about what to do “right now” might differ from country to country, from region to region, from city to city.

Nobody wants the Wikimedia Foundation to suffer from less transparency or less effectiveness in the long run, while holding unmitigated power over the rest of the movement. This is about aggravating disparities. Today there is an obvious imbalance between several well-resourced chapters and many lesser resourced ones. The imbalance between a single entity in control of almost all resources and the almost powerless rest of the movement, however, would be far more severe than anything we see today. Inevitably, this scenario would raise questions about political legitimacy because it is inconsistent with our values of diversity, democracy and solidarity.

WE NEED TO ACT: six propositions

The discussion about the performance of the Wikimedia Foundation and the national chapters has been going on for years. Just recently, Foundation trustee Stu West published a thought experiment that summarized various shortcomings of our movement’s development. Had we been as experienced in the early days of Wikimedia as we are today, we would have achieved even more than we already have. From today’s perspective, there is reason enough to search for more successful models of cooperation and a better division of tasks. We need to act.

We propose the following six recommendations to be acted on immediately:

One: a coherent strategy

Let us strive towards a much more coordinated process of global planning. The annual Chapters’ Conference and Wikimania ought to remain the most important dates of the year for real-life interaction between chapters and the larger community. Early each year, we usually share experiences from the last year and identify the basic challenges for the future. In the latter half of the year we should aim to identify three to five central goals for next year’s work. Maybe a third opportunity for meeting and exchanging ideas on an international scale would be useful.

We recommend that the Board consider developing a new movement body, maybe an equivalent to Amnesty International’s “International Council Meeting”, which was created as a forum for discussing common tasks and identifying strategic priorities. Every chapter would have to develop its own key projects in line with the identified goals. To assure full compliance with the current strategic plan, there would have to be an adequate method for evaluating the outcomes.

Two: setting common standards

Standards for chapter fundraising as well as movement development ought to be implemented by the end of June 2012. As laid out in detail in section 2 of this document we propose the Wikimedia Foundation commission KPMG to develop auditing guidelines for fundraising eligibility, in order to achieve process safety for the next annual fundraiser. With the Chapters Council, we propose to establish a strong self-governing body that oversees and enforces these standards. Second, we need a set of binding auditing guidelines and standards for general organizational development of Wikimedia chapters. Take this as a code of conduct for Wikimedia-internal development cooperation. In short, we propose the WMF Board of Trustees define cornerstones of the organizational structure for the coming years. Some of the recommendations proposed in the present document (establishing a new movement body, cross-country projects, revenue sharing for global outreach, etc.) can be fine-tuned or modified in the course of this process. To ensure the full commitment of all chapters, we strongly recommend appointing at least one chapter representative to be part of this assignment.

Three: mixed-player teams

The movement will profit from strong incentives for collaboration between chapters. There are tremendous yet hardly used opportunities for creating synergies between the WMF/chapters. Hardly any projects are conceived and conducted jointly by multiple national chapters. To improve scalable collaboration, a certain amount of the total annual fundraiser revenue should be used exclusively for large multi-country projects such as competitions (WLM), research and development (like Wikidata) and campaigns. These international measures ideally should be chosen and implemented by mixed-player teams.

Four: openness to new affiliates

We need to commit ourselves to the great potential of interest groups and individuals affiliated with the Wikimedia movement. Activities with international, multi-stakeholder topics (such as research, GLAM, Gender politics, Lobbying on intellectual property issues) should be dealt with by dedicated entities that invite, activate and amplify input from individual contributors, projects, chapters and the Wikimedia Foundation. Creating such new entities on the basis of single issues will even be helpful for building sustainable donor-relations.

Joining forces with existing organisations such as the Open Knowledge Foundation or Creative Commons ought to be considered as a next-level step: in Berlin, we are just about to inaugurate a “House of Free Knowledge,” which will be an open spot for volunteers and other organisations affiliated with our movement. Crossing (mental) boundaries will presumably become much easier once we are in a position to offer a community space which will allow for more face-to-face-communication.

Five: positive emulation

International projects and capacity-building measures demand to be prioritized throughout the entire movement. While WMF as an international organisation will be the best agent for global projects, it is useful to enable local organisations to freely engage in cooperation with Wikimedia bodies and communities in other countries and to carry out international projects independently. If WMNL chooses to conduct a WLM project with a strong focus on, for instance, Southern Africa, the chapter should be able to freely reallocate a portion of their resources without having to obtain approval from a centralised grant committee. However, it should obtain free, prior and informed consent from the Wikimedia communities in the target countries and ensure local ownership of the action. An increased diversity of Wikimedia players in the international sphere will encourage a culture of friendly competition between chapters/WMF and yield new and interesting initiatives as well as different and valuable solutions. We are convinced that the notion of solidarity will grow even faster if the success of cross-country projects can be attributed to more than one player.

Six: addressing our issues everywhere

As pointed out in the Wikimedia Foundation’s strategic plan, the people who write the Wikimedia projects are not only predominantly male and young but mainly from highly industrialized countries. This is ambiguous. On the one hand, it indicates that we rely heavily on European communities, where editor retention difficulties and the gender gap are most visible. On the other hand, problems can be solved comparatively quickly here. In order to increase participation and outreach in huge, long-time Wikimedia communities, we need to see these tasks as being important for establishing infrastructure and capacity-building in the still-emerging Wikimedia communities. We see undeniable necessities in the Global South as well as undeniable challenges in the Global North. This is not an issue of “either” addressing one set of challenges “or” the other. Both are highly important. Both need to be addressed. It’s simply a matter of allocating resources in the right way.

CONCLUSION

On the spirit of teamwork and responsibility

The purpose of this document is to provide input to one of the most significant debates in the history of our movement and to present constructive proposals, addressing a range of issues of vital importance to our common future. It was composed in a short amount of time by a small group of people who believe strongly in the power of collaboration. It is the result of an intense debate, which was open to any suggestion made.

At this point we need to consider that we are still a young movement. We are trying many things out - and we have to. We take it as a common fact that no single entity can have all answers to our problems. No single entity has the mandate to speak for the movement as a whole, either. We need to come to terms with the rapid development of the Wikimedia community. We suggest doing it the wiki way: local communities will keep trying to find solutions according to their local cultural challenges. This is apt, as long as everybody follows the basic principles of our movement: with regard to editing, they are the five pillars; with regard to fundraising, they are accounting standards and accountability in general.

For a broad movement that strives to advance Free Knowledge everywhere on the planet, it is essential to maintain an atmosphere of constructive dialogue. We are deeply concerned that the recent and sometimes heated debate about funds dissemination distracts us from our key priority: the need to reverse the current decline in editors, which is currently the largest threat to the whole Wikimedia movement and its strategic planning. We, therefore, strongly support the goals of the Wikimedia Foundation’s strategic plan but differ from the way the Wikimedia Foundation’s draft recommendations about fundraising and funds dissemination set out to achieve them. Local independence and initiative, empowered by a spirit of collaboration and mutual support, will serve our mission best. So let’s share. Share money, share responsibility, share expertise and share success.

APPENDIX

Further reading

Wikimedia Board of Trustees

On fundraising accountability

• http://meta.wikimedia.org/wiki/Wikimedia_Foundation_Board_of_Trustees_letter_regarding_fundraising_accountability
• http://meta.wikimedia.org/wiki/Fundraising_Discussion

Resolution:Developing Scenarios for future of fundraising

• http://wikimediafoundation.org/wiki/Resolution:Developing_Scenarios_for_future_of_fundraising

Wikimedia Foundation

Strategic Planning

• http://upload.wikimedia.org/wikipedia/foundation/c/c0/WMF_StrategicPlan2011_spreads.pdf
• http://wikimediafoundation.org/wiki/Wikimedia_Movement_Strategic_Plan_Summary

Editor Trends Study

• http://strategy.wikimedia.org/wiki/Editor_Trends_Study

Opinion pieces

Stu West, Notes on the future of fundraising (1/7/12): http://wikistu.org/2012/01/notes-on-future-of-fundraising/

Stu West on geography and Wikimedia (1/4/12): http://wikistu.org/2012/01/rfc-geography-and-wikimedia/

Sebastian Moleski on subsidiarity (7/27/11) http://blog.sebmol.me/2011/07/27/subsidiarity-as-a-fundamental-principle/

Spendwerk fundraising report

Report conducted by well-known fundraising company “Spendwerk” (1/21/12): http://commons.wikimedia.org/wiki/File:Spendwerk-Report.pdf

Resource allocation models of international organizations

Name (founded in, headquarter)	Number of national sections	Responsibility for fundraising (int./nat.)	Budget (all in all/ Germany) in US $	Allocation of resources
Médecins Sans Frontières (1971, Geneva)	19	only national	760/100 Mio.	only nat. Section
WWF International (1961, Gland)	nearly 60	national and international	458/53 Mio.	nat./internat. (transfer)
Greenpeace International (1971, Amsterdam)	40	nat./intern.	299/61,8 Mio.	nat./internat. (transfer, ca. 1/3)
Amnesty International (1961, London)	58	only national	61/20 Mio.	nat./internat. (transfer, ca. ⅓)
IFAW (1969, Yarmouth Port)	15	nat./int.	92 Mio./ -- Mio.	international
Care International (1982, Geneva)	12	nat./int.	804/31 Mio.	nat./internat. (transfer)
UNICEF International (1946, New York City)	36	only national	3,68 Mrd./ 104 Mio.	nat./internat. (transfer)
Intern. Save the Children Alliance (1919, London)	28	int./nat.	1,28 Mrd./ 1,8 Mio.	only nat. section