Wikimedia CH/Fundraising letter March 2012

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)

Answer to Sue's questions related to donation processing

Dear Sue and members of the Board of Trustees,

please find below our answers to the questions asked by Sue in a recent email.

General questions on the current situation

My understanding is that the Swiss chapter has payment-processed in the past not necessarily because it aspires to payment-process, but because there have been impediments to the Wikimedia Foundation payment-processing donations from Switzerland. In other words, the Swiss chapter has been payment-processing as part of a mutual agreement with the Wikimedia Foundation, because it has been easier from a practical/legal perspective. It's also my understanding is that the Swiss chapter hasn't felt entitled to retain or to control dissemination of the funds it has processed, and that there are no particular legal impediments to the Swiss chapter in transferring money internationally. Is that all more-or-less accurate from your perspective?

Yes, it is true that the Swiss chapter hasn't felt entitled to retain or to control dissemination of the funds it has processed, and that there are no particular legal impediments to the Swiss chapter in transferring money internationally. Wikimedia CH has now proved it for several years in a row.

However, we have not been a payment processor only because it was simpler from a practical/legal perspective. It is true that donation processing was one of the reason that Wikimedia CH was founded, and tax exemption was our first priority from the beginning -- something reflected in our bylaws. We do believe, however, that this has brought (and still brings) advantages to the movement beyond the simple tax and efficiency issues, in particular with regards to our outreach activities.

As a telling example, during the 2010-2011 fundraiser, we spotted the name of a well-known Swiss personality who donated money. He later agreed to be interviewed on television, alongside some of our volunteers and board members, and he testified as to why he thought it was a good idea to donate to the Wikipedia movement. The resulting program is available from http://www.nouvo.ch/2011/01/pour-la-bonne-cause-wikipédia. While we can not quantify its effect financially, we received a lot of very positive reactions following it, and we believe it has been highly efficient from the outreach point of view. This would not have been possible without us fundraising directly.

In 2011-2012, we received donations from some well-known organizations in Switzerland (a university, a newspaper editor, etc); having processed their donation allows us to contact them and to ask them whether they would be interested in going beyond a monetary donation (e.g. outreach or providing content).

So there is definitively more to the local payment processing option that simple convenience.

Increased control of the chapter's internal workings

If you were to payment-process in 2012 and beyond, the Wikimedia Foundation Board of Trustees might want to have increased visibility into your chapter's internal workings, to make sure it's able to uphold its fiduciary responsibilities. Manuel/Rupert/Ilario may remember I spoke about this very briefly in Paris --- the idea that the Wikimedia Foundation might want an assessment or independent audit of your chapter's legal and financial practices and policies, "site visits" to your offices, and/or a seat on your Audit committee or Board of Trustees. In general, can you provide your perspective on possibilities such as those? Are there legal or cultural impediments, and if so, are there alternatives that would be better or more appropriate? (Please bear in mind I'm not necessarily saying that the Wikimedia Foundation would propose any of these: at this point I don't know. Before the Board considers the options, I'd just like to getyour general thinking. A quick reaction is fine.

WM CH is comitted to full transparency, so we support the ideas behind such a request. An independent audit by a Swiss company would we welcome, especially since this would improve the guarantees we offer to our donors (note that we are of course already audited by an external entity). Site visits would be welcome too, although it has to be noted that proposals that involve allowing access to any personal data (e.g. donor data) to entities that are not subject to Swiss data protection laws may be difficult to arrange. As for the seat on the board of trustees, our annual general meeting is the only body that could allow this, and it would require drastic changes to our bylaws. We would clearly not favour this solution, as the work of our board members goes beyond auditing and the simple oversight that the WMF is interested in. It would also cause potential problems with legal responsabilities that should probably be avoided.

Future options

If your chapter were not going to payment-process in 2012 and beyond, what would the reaction of your chapter be? ("Your chapter" could mean you, the Board as a whole, or chapter members.) What problems might stopping payment-processing cause for your chapter, and are there ways the Wikimedia Foundation could help resolve them? What kinds of issues would we need to resolve in a transition period? (The answer to this question might be some version of "We don't care; we're happy to stop any time." If so that's fine, and you can just tell me that.)

As a chapter, we would be very disappointed, because we have provided (and we would like to continue to provide) a very valuable service to both the Wikimedia community, for which we have raised money, and to our donors, who have had access to a local contact point -- providing them with the ability of getting tax deduction, having access to local payment methods, and being able to contact someone in any of the four national languages of Switzerland. Our statistics (donation/capita, donation/GDP, and the number of people who chose to give to WM CH vs WMF in 2010 and before) show that this approach has been extremely successful. We think that in a partnership, one should not change what has proved to be working well -- and everyonce seems to agree that it is the case here, and that none of the proposed improvements would be difficult to implement.

We are not particularly worried about the funding of our projects; regarldless of the decision of the WMF board, we trust that we will be able to fund them, and we are confident that we will be able to work together efficiently.

The most important problem for us is that fundraising is a major outreach tool, as shown in the example above. The fundraiser generally allows us to greatly improve our visibility and we are worried that we would lose contact with a large part of the Swiss community following a negative decision by the WMF board: donors visit a Wikipedia site, want to donate, and then discover the existence of a local association. Some of them become members, some others contribute their time.

We believe that such a relationship with our donors is very important for our movement, even though its effects can not be measured easily, and that it would be very difficult to rebuild if we do not process the donations of Swiss donors. We are not sure how the WMF could help resolving this problem. On our side, one option would be to conduct a completely separate fundraising operation (as we will do anyway for funding agencies and big potential sponsors, regardless of the board's decision), but this would increase the total costs, and would provide a confusing message to donors, so we would rather work together with Foundation.