User:Seb35/summary future funding discussion

WARNING: this is intended to be the more neutral possible, but for exact and accurate discussions, please refer to the original discussion.

This is a (currently) personal summary of the current discussions about future funding model, shared because it could benefit others to synthesize discussions. If there are serious misunderstanding of an intervention, please correct. There are not every interventions, for reason of conciseness (removed very very small or copyediting interventions). And feel free to complete this (try to be a short as possible to obtain a true synthesis). If many people work on this page, it could be moved out of my userspace.

~ Seb35 [^_^]

Abbreviations:

  • centralization,centralisation: c12n
  • Grant Advisory Committee: GAC
  • Wikimedia Movement: WMV
  • Fundraising: FR

FundraisingEdit

----- Content page -----

Current version: (16 November 2011)
- Good faith
- Transparency
- Fundraising in line with our mission and values
- Maximizing efficiency
- Localization (language, culture, project, donation mechanisms)
- Controls (safe from fraud)
- Flexibility
- Easiest international transfers of funds
- Donor diversity (small donations)
- Sustainable donor relations; recognize the donors as an asset for WMV, with future volunteers, editors, and partners
- Avoid unnecessary legal exposure for WM projects

Initial version: (Jan-Bart)
- Transparency
- Maximizing revenue
- Controls (safe from fraud)
- Flexibility
- Easiest international transfers of funds, avoid regulatory hurdles
- Donor diversity (small donations)
- Sustainable donor relations
- Avoid unnecessary legal exposure for WM projects

History:
- Tango completed: "maximizing revenues *without compromizing our mission and values*"
- Zack Exley added a point about "good faith", "Localization" and modified "maximing revenues" into "maximizing efficiency"
- The Land precised: "sustainable donor relations *and recognize the donors as an asset for WMV, with future volunteers, editors, and partners*"
- WereSpielChequers removed the subpoint "avoid regulatory hurdles" (cf discussion on talk page)
- Mike Peel splitted the point "maximizing efficiency" into "fundraising in line with our mission and values" and "maximizing efficiency"
- Mike Peel precised: "localized donation mechanisms"
----- Talk page -----

-> The Land:
   - "Donor diversity" should include corporation, NGOs, trusts, etc.
   - "collaborative work" should be mentionned
--> phoebe:
    - aggree with the first point
-> Tomer A.:
   - "maximizing revenues" should not be applicable in our voluntary sector; we only need money to meet our projects
     - consensus is the opposite of maximization, as demonstrated in Game Theory
   - add to "Controls": "*widely accepted* existing, 3rd party standards"
   - "*easiest* transfers of funds" is exaggerated, "resonnable" is enough
   - who should be in charge of "sustainable donor relations"? no satisfactory in 2011 for the Israeli case
   - "avoid unnecessary legal exposure for WM projects" as a requirement is too much, although interesting to be kept in mind
--> Bishdatta:
    - aggree with the first point: revenue in not an end in itself
---> Zack Exley:
     - changed "maximizing revenue" in "maximizing efficiency of fundraising"; added "good faith" and "localization" points
-> Zack Exley:
   - 
--> Tomer A.:
    - 
---> The Land:
     - 

Donor relationships principlesEdit

----- Content page -----

Current and initial version: (The Land, 30 October 2011-6 November 2011)
- long term relationship
- donors = future contributors, volunteers and partners
- educate donors about our mission
- communication consistent with WM principles
- privacy and data security
- dedup within WM movement
----- Talk page -----

-> phoebe:
   - WMF donor policy: inspired by the Donor’s Bill of Rights
-> Seb35:
   - WMFR donor policy

Fund distributionEdit

----- Content page -----

Current version: (10 December 2011)
- Stable framework, sustainability
- Fund allocated in a mission-aligned fashion, agnostic to the raising
- Transparent guidelines and processes
- Decentralized activities (doesn’t have to mean decentralized fundraising)
- Flexibility
- Security of funds and accountability
- Equality of entities
- Collaborative decision-making and processes; respect of the diverse and international nature of WMV

Initial version: (Jan-Bart)
- Stable framework, sustainability
- Fund allocated in a mission-aligned fashion, agnostic to the raising
- Transparent guidelines and processes
- Decentralized activities (doesn’t have to mean decentralized fundraising)
- Flexibility

History:
- Tango added: "equality of entities"
- Tomer A. changed in the point "decentralized activities": "WMF movement commitment to a decentralized method of furthering our mission";
                     and added the points "collaborative decision-making", "wisdom of the masses", "internationality/no ethnocentric biais"
- Mike Peel rephrased
- phoebe condensed Tomer A.’s points into one point "Collaborative decision-making and processes; respect of the diverse and international nature of WMV"
- Sue Gardner added: "security of funds and accountability"
----- Talk page -----

Impact (Incentives and c12n)
-> The Land:
    - is there a link between self-funding from other orgs and money received from common pot?
--> sebmol:
    - fundraising is never decorrelated from fund-dissemination ('no free money')
      (cf also §Geographical agnosticism)
    - question of incentives
---> Sue Gardner:
     - donor expectations vs endorsed mission
----> sebmol:
      - why decision-making by one org? -> different ones
-----> Sue Gardner:
       - efficiency in funds dissemination (grants)
       - specialization of constituents
       - simplification of grant-asking
       - decision-makinf of rich vs poor countries
       - WMF is currently more capable at handling grants
------> sebmol:
        - Chapters aspire at becoming grant-makers
        - grant-making is an important skill for Chapters
        - duplication vs resilience/redundancy
        - no SPOF neither single opinion about a grant
        - rich/poor isn’t the problem: priorities -> share of the foreign aid
------> Tango:
        - rich/poor: arrangement between Chapters
        - WMF is doing the same

Should rich Wikimedians tell poor ones what to do?
-> Tango:
   - protection of Chapters autonomy
   - duty of WMF on funds raised by their ressources (WP)
   - people join Boards to be able to decide on their own
     - remove ability of mastering money could reduce motivation

The governance problem
-> Fæ:
   - if c12n was The Solution: no debate, but, so (reductio ad absurdum)
   - c12n also has constraints: demonstration of funds use, processes…
     - so governance issue is not going to be solved easily
   - financial accountability with PQASSO and inter-chapters solidarity
   - inter-chapters peer review probably a good idea; to be experimented
   - central Knowledge Base

Fund dissemination and Global South (balance between c12n and dec12n
-> Theo:
   - Do GS is a Mouvement goal or a WMF goal? If WMV, do Chapters aggree?
   - grants to GS can be either directly given either transit through WMF
     - transit add complexity and create dependancy to WMF
     - dec12n adds the possibility of specialization
--> notafish:
    - GS: WMV or WMF?
      - don’t have to explicitely figure in Chapters bylaws
      - different entities in a same country. experience in India
      - share between GS and GN: should growth in GN be slow down?
        - do knowledge in GN is less valuable than in GS?
    - against a fulltitude of grant-makers for GS; should be examinated on a case by case basis
      - e.g. WMES with South America countries
---> Roger Bamkin:
     - both funds flying accross countries and c12n are problematic
     - buddying countries (chapters)
     - possible problem of influence between the "father" and the "son"
----> notafish:
      - Spain/Argentina: Argentina is the "father"
      - don’t think there should be a "father"
-----> Osmar Valdebenito:
       - Iberocoop: working on common projects
       - different chapters have different strenghts: money, expertise, volunteers, contacts
       - nobody "in charge" of nobody
------> rupert:
        - WLM and TS model: WMNL and WMDE ask for support, same for Wikimania, CM, etc.
        - money, hands and expertise
        - bad weather there then
-------> Theo:
         - didn’t know in the 2nd argument of Delphine (c12n of grant-makers)
           - transfers accross countries = jurisdictions + charges
           - 2 transfers increases global charges
           - don’t see a problem about 10 grant-makers, which are inherently different
         - concern: one source of funding = one deliberation
           - one source of funding: possible personal problems with the jury, language, etc.
           - many sources of funding = many deliberations
         - GAC: right way, but no real power
--------> Ilario:
          - GS is an outdated vision
          - real question is about training countries/chapters to fundraise
          - grant from WMF = WMF decides, not the GA -> could lead to a loose of NGO status
---------> notafish:
           - is afraid about multiple grant-makers: many doors to knock, many (different) reports
           - c12n is problematic if no interest from the parties
           - AGF of GAC, so same problems (cf Theo) apart language
             - else it is a problem in the GAC
----------> Jimmy Wales:
            - aggree with everybody :)
            - balance is needed
----------> Seb35:
            - comparison with funding of research: application to one or many funding agencies
              - more chances to obtain a funding but possibly a lot of work to write applications
              - but research is typically long, although our projects are quite short
-> Seddon:
   - some projects (e.g. conferences) can be funded both by Chapters and Foundation
   - complex projects with 12 chapters could have no responsible of the global oversight
     - chapters are independantly responsible of their money
     - grant forum-shoping shouldn’t be encouraged
   - similar grant requirements accross orgs
   - large projects by one entity
   - other ressources are manpower and WMF could help setting guidelines and frameworks
   - don’t see obstacles to pooling of orgs to fund large projects, like red cross agencies

Principles need expansion
-> Mike Peel:
   - flexibility in spending funds?
   - efficiency and effectiveness of the mission work
   - effect of a "combinaison of solutions"?
   - representativeness of the decisions, if done by "people who show up"

Geographical agnosticism
-> Ziko:
   - is unhappy with the fact it is assumed there is no relationship between raising and spending
     (cf §Impact: first comment by sebmol)

who makes decisions
-> phoebe:
   - combined and rephrased some points

Different entities have different needs and capabilities
-> Sue Gardner:
   - find differences in treatment should be mission-driven rather than differences in needs and capabilities

Accountability and responsibility
-> Sue Gardner:
   - lack of accountability and responsibility to donors; added

Goals of the processEdit

----- Content page -----

Feeling, hopes, fears of participants about the process and future funding model

- Sue Gardner:
  - well-working funding model
  - raise efficiently large amounts
  - fit our values and ethics
  - assume good faith, set aside personal fears, biases, self-interest, think for the WMV as a whole
  - sane and reasonable debate
- Fæ:
  - we should guatantee timely reporting and appropriately detailed process transparency
  - reassure donors, volunteers and other stakeholders
  - high value of the outcomes
  - effectively and efficiently management of funds
- Theo10011:
  - Wikpedian heavily involved in SP and movement roles, well-wisher for the chapters
  - hopes:
    - decentralized model with redundancies
    - accountability
    - performance linked incentives
    - decentralized chapter-based fundraising
    - model for chapter growth
    - general avoidance of catch-22 of tax-deductibility
    - continued support for outreach and GLAM
    - independance of chapters
  - fears:
    - no more continued projects like Toolserver
    - no more annual programs like WLM
    - one funding czar at WMF
    - grand-dependant existence
- Jimbo Wales:
  - exact inverse of hopes and fears of Theo10011
  - fears:
    - "decentralized model with redundancies": irrational overlap and misallocation of funds due to no coherent guiding authority
    - "decentralized model with redundancies": lack of accountability, longterm rise in unjust "entitlement" attitude towards funding
    - No central authority at Wikimedia with a guiding vision -> leading to lower support for outreach in the developing world, complete lack of outreach for GLAM activities in the developing world
  - hopes:
    - model which reduces potential problems of large chapters in wealthy countries feeling entitled to funds without measurable objectives and achievements
    - both centralized vision to eliminate irrational overlaps/gaps while encouraging local decision-making on details (grant model with coherent metrics and objectives)
- Stu:
  - WMF Treasurer and CFO in day job
  - spend time thinking about the two issues
  - fundraising hopes:
    - that raise enough funds to achieve our vision
    - that build enough reserves for the next few years
    - that build some kind of endowmnent
    - that attract engineering talent
    - that leverage our success engaging 500,000 donors into recruiting more editors (spring "editing drive" vs fall "fundraising drive")
    - that raise enough money to make every good idea can be funded
    - that decentralized capabilities to raise money with as few single points of failure as possible
  - fundraising fears:
    - that attract fewer volunteers because we are successful raising money
    - that some regulatory of PR mess forces us to miss an annual fundraiser
    - that increased financial reserves will make us more of a target for litigation
    - that our fundraising capabilities grow so much faster than our funds management capabilities
      - and we do something that alienates donors and editors
    - that we as a movement will somehow let all this money screw things up
  - funds dissemination hopes:
    - that we as a movement can really reach "every single human being," all 7 billion of them
    - that we can use our financial resources to seed new healthy volunteer communities in places they haven't yet developed on their own
    - that we can fill in the gaps of our volunteers' incredible efforts with paid resources
    - that we develop good funds dissemination processes so that any really good idea from within our movement gets funded quickly and efficiently
    - that we can help all organizations in the movement develop the right level of financial controls and leadership proceses to respect our donors contributions
    - that we eventually build decentralized capabilities to pursue the vision with as few single points of failure as possible
    - that we can start funding other like-minded organizations (e.g. Creative Commons) that are critical to our work but are less consumer-facing so might, relatively, have difficult raising money
    - that we succeed in building a software platform that can truly take our pursuit of vision to the next level, with native mobile capabilities and an editing interface that is as easy as contributing to Facebook
    - that we develop a movement-wide culture of performance/accountability to drive the highest-impact use of donor funds
  - funds dissemination fears:
    - that all of us in the movement somehow lose sight of the reality that there's plenty of money and instead let our egos and fears and suspicions lead us to spend our time fighting over money rather than inspiring new editors, doing things like WLM and GLAM, and otherwise pursuing the vision
    - that we let the same financial bickering which plagues the Olympic Committee, the U.N., FIFA, and other international organizations seep into our movement
    - that distraction over how funds get disseminated demotivates volunteers
    - that we won't scale the financial controls and financial management experience fast enough across our movement and have a financial crisis that hurts donor confidence and our global reputation
- Craig Franklin:
  - great hope:
    - funds distribution process where everybody can live with
  - fears:
    - that while financial accountability and transparency are extremely important, that it will be used as a stick to further centralise control or prevent discussion of what the real issues might be
    - that we will sight of the fact that nobody in the movement has an overwhelming moral right to funding
    - that the WMF, which holds most of the cards in the game, will use their financial and legal muscle to impose a "solution" upon other parties without their consent
    - same controls for WMF as for Chapters (e.g. approval of budget and programmes); no real machinery for the community if WMF make poor decisions on how to spend the funds
    - if all eggs into the WMF basket, fear of a scandal which tarnish the reputation of everybody
    - that any arrangement does not allow for new or smaller chapters to receive money to professionalise, until they have professionalised
    - much as Stu has outlined, that arguing about money becomes a preoccupation instead of doing programme work
      - any future solution should be equitable, transparent, but also move quickly and be predictable in its operation
      - this way we can concentrate on the important stuff that we're all here for
- Gomà:
  - fundraising hopes:
    - other models of fundraising than central sitenotices
    - get rid of banners one day
    - vital expenses covered by a capitalization fund
    - that each year that fund be increased to cover for the future costs we are causing by growing the database
    - processing-payment entities offers donors the best treatment and conditions
    - that donors could choose where their money is spent and through whom is collected
  - fundraising fears:
    - that the structure of the WMF and other groups grow generating fixed costs that are not guaranteed with recurring revenue
    - methods of fundraising we use make us to lose editors
    - efforts to raise funds divert time from editing
    - negative feelings like envy selfish or greed among different organizations based on different fundraising capacity
  - funds dissemination hopes:
    - be able to share financial resources with the same generosity with which we share knowledge
    - find mechanisms to align expenses with the priorities to invest the money where it is most needed, regardless of where it is collected
    - find mechanisms allowing each one feel heard in defining priorities
    - be able to release the initiative and creativity of community members by providing them funding for innovative activities
  - funds dissemination fears:
    - not enough transparency and control of funds
    - in order to have transparency and control we impose too heavy a bureaucracy
    - negative dynamics between paid staff and volunteer editors
- Tomer A.:
  - fundraising hopes:
    - be able to collect all needed funds
  - fundraising fears:
    - that while talking about fund-raising and fund-dissemination, we loose sight of the real goal
    - that we do not pursue new fundraising models
    - lesser and lesser decentralized fundraising
    - that while collecting more money, we undermine the pillars the movement is built upon
  - funds dissemination hopes:
    - find a model everyone can live with
  - funds dissemination fears: (note: it is written "fundraising fears" but I assume it is a bad copy-paste, given the context)
    - that we cannot find such a model
    - that we’ll end up with a model that most players aren’t happy with
----- Talk page -----

Replying to Jimmy
-> Theo10011:
   - fears of decentralization: related to systemic efficiency and efficiency of management
     - first (irrational overlap and misallocation):
       - the trade-off for this one seem negligible in comparison to the perceived benefits
       - more as a problem based solely in poor inter-coordination between chapters
       - on his POV, there are concerns but not enough to abandon the model
     - second, first part (lack of accountability):
       - accountability is a decorrelated problem on his POV
     - second, second part (unjust entitlement toward fundraising):
       - indeed a problem
       - suggests performance linked incentives
   - aggree the need of a strong central org
   - he would like to avoid conflict, overlap and hierarchy between central org and others
   - aggree with the last hope (both a centralized vision to avoid overlap/gaps while encoraging local decision-making of details)

How it currently worksEdit

----- Content page -----

(array so it is quite difficult to synthesize, I try some remarks.)
- Membership dues is generally a small part of the budget both in percentage and in absolute value
  - exept for WMNO: 20% of the total budget
  - exept for WMDE: only 1.7% but 95,000€, quite important
- when a Chapter annual-fundraises, a major part of its budget comes from the fundraiser (say 80%)
- earned income is generally small in percentage
  - except for WMF: 2.6% but 700k$
- major gifts are generally small or inexistant
  - exept for WMF: 7.3% = 2M$
- other sources of funding are generally either inexistant either a small but non-negligeable part (~1%)
  - exept for WMPL which receives 97% from 1% tax deductible donations
- internal or external grants are often inexistant but sometimes a key funding mode (WMDE, WMEE, (WMF))
----- Talk page -----

Recurring donations
-> Mike Peel:
   - there should be a ‘recurring donations’ column

Using the same period + currency
-> Mike Peel:
   - fiscal year should be precised
   - currency should be the native currency, bec. of changing rates
   - percentage is a robust measure

Internal grants
-> Mike Peel:
   - not only grants to/from WMF, also inter-chapters grants

Fundraising and Funds Dissemination/RecommendationsEdit

----- Content page -----

----- Talk page -----

Recommendation 1
-> Kropotkine 113:
   - tax deductability: weak arguments
   - proposition of experience: display banners mentionning non-tax-deductibility in France; this will be transparent
--> Eloquence:
    - bigger experiment done: let the chapters master of their fundraising
      - result: better increase in countries where WMF fundraised in 2011 but not in 2010, even without tax deductibility
        - => more advantages to centralize fundraising
      - of course, if Chapter do everything like WMF with tax deductibility => even better result
        - need large efforts
        - & other disadvantages
---> Schutz:
     - argument already debunked: it’s not a random sample
     - chapters did already well last year, so less increase
     - correct experiment is sending donors randomly to WMF or Chapter
     - no casuation here
----> Kropotkine 113:
      - WMFR: 90% more than last year
---> The Land:
     - asks actual differences in Italy between 2010 and 2011
     - asks why WMDE did so well in 2011
---> Schutz:
     - chapters and WMF had targets:
       - WMCH target is reached
       - WMCH could have raised more if requested
       - so comparing to other figures is meaningless
----> Sj:
      - asks previous discussions
-> Schutz:
   - 
--> Craig Franklin:
    - "no fundraising chapter through WM sites" is far from Haifa letter
-> Seb35:
   - 

Recommendation 2

Recommendation 3

Recommendation 4

About UK figures
-> Mike Peel:
   - WMUK didn’t raised only 21% more than last year
--> Mike Peel:
    - https://uk.wikimedia.org/wiki/Reports_3Jan12#Chris_Keating_.28incl_Fundraiser.29
    - only donations is 41% more than last year, without counting Gift Aid (25%) -> total ~51% more
---> Schutz:
     - asks for accurate figures
----> The Land:
      - correct figure is 81%
-----> Jdforrester:
       - https://docs.google.com/spreadsheet/ccc?key=0AlqyXSQdAbSvdFpPZ2lhVFVvX3A2aEhZOXJuTGpveVE&hl=en_GB#gid=0
       - 
------> Tango:
        - confused about figures
        - total include reccuring donations as sum collected in one year; don’t include next years
        - direct debits can be cancelled during the year
--> Tango:
    - concerted about methodology: not a random sample
      - continuing-fundraising-chapter are most able to do it effectively
      - chapters which fundraised in 2010 but not in 2011 experienced their first fundraising in 2010
        - so no experience
      - don’t invalidate the concept of fundraising chapters
---> The Land:
     - confirms an increase of 81% compared to 2010 (£1,015,000 vs £560k)
     - number of donations increased of 31% (43676 vs 32364)
     - average donation increased
     - direct debit have a very long lifetime (many years)
     - Gift Aid (tax WMUK can reclaim on donations made to them) (£87,000): quite low, but they saw an increase during FR; expect more next year
     - James’ link is thorough but difficult to read