2011-12 Fundraising and Funds Dissemination process/Fundraising options

At this point, I am draft-recommending that the Wikimedia Foundation do all the payment-processing for all sites operated by the Wikimedia Foundation. Many people have commented that they don't like that recommendation. Therefore, I am building this page for people to make a case for what they would like to see happen. Here's how I think we should handle this page:

Please discuss the various options -- you can support, oppose, or comment.
Please feel free to add alternative options, which can also be supported, opposed or commented upon.

I will read this page, and probably comment here as well, and I will take it into account as I revise my recommendations. Thanks Sue Gardner 20:03, 27 January 2012 (UTC)[reply]

Option A: WMF solely payment-processes.[edit]

In this option, only the Wikimedia Foundation would payment-process on sites operated by the Wikimedia Foundation. This is my original recommendation.

Arguments in favour:[edit]

There are significant overheads associated with payment processing. Having one payment processing system reduces costs. — The preceding unsigned comment was added by Filceolaire (talk)
Having a central system makes it easier for the WMF to control the funds and limits the opportunities for funds be diverted or misused. — The preceding unsigned comment was added by Filceolaire (talk)
Any mistake in front of a large enough number of eyes is always fixed. The FMF will focus the maximum number of eyes as possible in the movement.--Gomà 10:09, 29 January 2012 (UTC)[reply]
Avoid negative impact on donors and editors in those countries where there are communities that feel the country as hostile to them. For example Catalans in Spain or perhaps Arabics in Israel. --Gomà 10:09, 29 January 2012 (UTC)[reply]
In many countries of the world there are no chapters and in some will never be. The WMF will always need the mechanisms for collection. This system treats everyone equally.--Gomà 10:09, 29 January 2012 (UTC)[reply]
Domain names, project hosting, and trademarks are assets that the movement put on the hands of WMF to secure the future of the projects. Donations in fundraising campaign are money flows that emerge from those assets. WMF is honoring the responsability the community put in their hands by administraring those assets and their fruits and only distributing or putting in thith party hands part of them after the mandate of securing the future of the projects is reasonably acomplished.--Gomà 10:09, 29 January 2012 (UTC)[reply]
It is neutral regarding the organizational model. I mean we can create local organizations following the volunteers criteria in each project and territory while chapter related fundraising favours administrative divisions.--Gomà 10:09, 29 January 2012 (UTC)[reply]

Arguments against:[edit]

This option goes against the basic principle of decentralisation that has served us so well over the last 11 years, so we should only follow it if there is a very good reason to and I have yet to see such a reason. --Tango 21:11, 27 January 2012 (UTC)[reply]
Having a central system is brittle. It is less likely that the system will go wrong but if it does go wrong (fraud, court action, political interference) it could bring down the whole movement. — The preceding unsigned comment was added by Filceolaire (talk)
If the national chapters are powerless puppets then this will make it harder to recruit people to work with them. — The preceding unsigned comment was added by Filceolaire (talk)
For some chapters this is a change of status that can make them feel unauthorized. --Gomà 10:13, 29 January 2012 (UTC)[reply]
Donors can feel they are donating to a far away institution and feel less inclined to give.--Gomà 10:13, 29 January 2012 (UTC)[reply]
Offline fundraising campaign done by chapters and other organizations and online capmpaign done by WMF will require coordination mechanisms that in some cases will be more complicated than if where cahpters who fundraised.--Gomà 10:13, 29 January 2012 (UTC)[reply]
Being able to provide tax deductions to donors requires a complex system to be developed country by country.--Gomà 10:13, 29 January 2012 (UTC)[reply]

Option B: WMF and some chapters payment-process: money payment-processed is not retained by the chapter.[edit]

In this option, money payment-processed would be put into a pool, which would be disseminated through a different, independent process. Let's assume for the sake of this discussion that the dissemination process would not be run by the Wikimedia Foundation staff; money would be disseminated via an international jury -- some version of the FAC, as is being discussed here and here and here. Please let's not discuss the FAC itself here: we should do that on a separate page.

Arguments in favour:[edit]

This is the status quo, and things are going well (there has been a lot of talk about chapters behaving irresponsibly and recklessly, but nobody has given any actual examples of such, so I have to assume they haven't actually happened), so why change it? This is in keeping with our values and principles, it is fair, it doesn't have a single-point-of-failure, it doesn't result in any individual or small group having an unhealthy amount of power and control over the movement. --Tango 21:11, 27 January 2012 (UTC)[reply]
having lots of people making decisions means lots of things get tried - more chances of failure but also more chances of wild success.— The preceding unsigned comment was added by Filceolaire (talk)
Easier scalability of localization. There can be more volunteers working at local level to localize messages.--Gomà 10:47, 29 January 2012 (UTC)[reply]
In those countries were there is only one local organization it is easier to coordinate offline and online fundraising campaingns.--Gomà 10:47, 29 January 2012 (UTC)[reply]
Donors have a link with local fund-raising organization and this can help to create ties with them and bring other kinds of collaboration.--Gomà 10:47, 29 January 2012 (UTC)[reply]
Easier to provide tax deduction to donors.--Gomà 10:47, 29 January 2012 (UTC)[reply]

Arguments against:[edit]

Higher costs - see option A advantages — The preceding unsigned comment was added by Filceolaire (talk)
Less central control - see option A advantages — The preceding unsigned comment was added by Filceolaire (talk)
This is also a change of status for chapters that are actually fundraising because now they retain an important part of the money raised so they also can feel unauthorized.--Gomà 10:47, 29 January 2012 (UTC)[reply]
There is no economic incentive to perform the work for fundraising. Chapters may feel devoting resources to fundraising is a diversion from other activities that directly promote the projects.--Gomà 10:47, 29 January 2012 (UTC)[reply]
If the priciple that each chapter fundraises for all languages within its territory is mantained we need much more localization than in centralized system. Each chapter has to localize each language. Otherwise people reading arabic wikipedia may land in donation pages written in spanish for example.--Gomà 10:47, 29 January 2012 (UTC)[reply]
If the priciple that each chapter fundraises for all languages within its territory is mantained and some chaptrs are entitled to process payments then we can have a huge negative impact on donors and editors in those countries where there are communities that they feel the country as hostile to them. For example Catalans in Spain or perhaps Arabics in Israel.--Gomà 11:25, 29 January 2012 (UTC)[reply]

Option C: WMF and some chapters payment-process: some/all money payment-processed by the chapter is retained as an entitlement by the payment-processing chapter.[edit]

The remainder is put into a pool, which would be disseminated through a different, independent process, identical to that of Option B. Please let's not discuss the FAC itself here: we should do that on a separate page.

Arguments in favour:[edit]

In medio virtus. If it is adequately determined what percentage is retained, what chapters or other organizations can process payments in which projects and which languages. If it is guaranteed that we first finance the needs for survival of the projects. If we create mechanisms to ensure that no negative impact on editing communities neither because of the nature of fund-raising organizations nor the methods they use to raise funds, If WMF continues oversight its assets.. then this may be the ideal system.
The same advantages that when they do not retain any part of the money and the feeling that raising money is an activity necessary to perform the other activities that directly promote the projects.--Gomà 11:20, 29 January 2012 (UTC)[reply]

Arguments against:[edit]

I believe the intention of this option is that money being "retained" by the chapter means that the chapter would spend it on its own activities. That is clearly a bad idea because it means money isn't being spent where it can do the most good, and therefore the most good isn't done. There is an option of having chapters and the WMF retain control over funds, while not spending it directly - ie. allowing the chapter/WMF to issue grants itself rather than having an FAC make all the decisions about what to fund. I'm not convinced that is a good way to go, but there are some arguments for it so we might want to discuss it. --Tango 21:11, 27 January 2012 (UTC)[reply]
see Arguments for option A. — The preceding unsigned comment was added by Filceolaire (talk)
The ideal be the enemy of the good. Very complicated system.--Gomà 11:20, 29 January 2012 (UTC)[reply]
This can lead to disputes between the organizations that collect and those that not.--Gomà 11:20, 29 January 2012 (UTC)[reply]
If the priciple that each chapter fundraises for all languages within its territory is mantained then we have the same arguments against than if the chapter doesn't retain money: Huge localization efforts = number of chapters x number of languages and negative impact on donors and editting communities that feel the country as hostile to them.--Gomà 11:30, 29 January 2012 (UTC)[reply]

Option D: All chapters payment-process.[edit]

Donor and receiver are in the same jurisdiction (i.e. country). There are rules in place which guarantee the funding of (1) local projects, (2) global initiatives, and (3) international money transfer. There is as well a rule in place who gets the money, should a jurisdiction not (yet) have a chapter. This might be the chapter of a neighboring country, or the WMF. The campaign is done like today so not 200 countries need to employ people for doing this.

Arguments in favour:[edit]

As a long term goal, I think this is a good idea (long-term=5-10 years). What Sue is forgetting is that the countries where small amounts are raised are often countries where things cost a lot less than they do in San Francisco. $250K is a massive over-estimate of the costs of fundraising in those countries (I don't think there is any need to spend that much in more expensive countries either, for that matter - I think that number came from an assumption of 5 full-time staff, which clearly isn't necessary, I don't think any of the fundraising chapters had remotely that many people working full-time on the fundraiser and they were still very successful). It is also important to note that 99% of the 2011 revenue came from just 51 countries (which raised $20K and above each) and, even accepting the $250K figure as the cutoff, we would still have raised 91% of our total without fundraising at all anywhere other than those 16 countries. A fundraising system that doesn't work well in countries that are only responsible for 9% of our income isn't really a problem. Even if a country only breaks even on its fundraising, it still gains an enormous amount (confidence, a donor database, organisational maturity, etc.). I'm not sure just breaking even would be worth it, but you don't need to be making much "profit" for it to be worthwhile. (BTW, did the WMF break even in the 43 countries where it raised between $1 and $100? Probably not. Just because fundraising is centralised doesn't mean there aren't variable costs.) --Tango 21:11, 27 January 2012 (UTC)[reply]
a donor is able to take local action according to local law without needing international expertise if something with the donation goes not as expected. It is also easy to explicitely check out another chapter to donate to. an indian living in switzerland might want to donate to the indian chapter directly. somebody who does not like chapters might check out the foundation site. --ThurnerRupert 07:27, 2 February 2012 (UTC)[reply]
a chapter can be easily forced to behave (well) via the trademark and other policies. e.g. forcing them to accept members easy or at low/no cost. This will lead to a "german style" transparency, i.e. tens/hundreds of members questioning every small amount of money spent. --ThurnerRupert 07:27, 2 February 2012 (UTC)[reply]
providing a bank account attached to a paypal account is no work, and the campaign would be done like today. ThurnerRupert 07:27, 2 February 2012 (UTC)[reply]

Arguments against:[edit]

I am striking through this option because I think it would result in the movement fundraising only in a small number of countries, and would bring in less money overall. Why? 1) We would need to develop lots more chapters, 2) they would all need to want to, and be able to, develop payment-processing infrastructure, and 3) even if both those conditions prevailed, the costs of payment-processing, in many many countries, would exceed the revenue they would bring in. (Please see my comment here.) Some data: Currently we receive donations from 213 countries, with 198 of those bringing in less than 250K. So, even if chapters were able to form and successfully develop payment-processing infrastructure to cover all of the 15 countries that do bring in more than 250K, that would still leave 198 countries that currently donate to the movement, where it would never make sense to develop country-specific payment-processing infrastructure because in those countries the costs of fundraising would exceed the amount of money coming in. (Please note that 250K is a spitball number. It actually probably wouldn't make sense to develop payment-processing infrastructure if the country brought in less than 500K or even a million dollars, so what I am saying here is deliberately very conservative and ballpark.) (Also please note that yes, I agree that donations may rise over time, in many countries. Even so, it's clear that there are, and will always be, lots of countries for which developing payment processing infrastructure does not make sense.) To sum up: I am striking through this option because I think it's a total non-starter; however you should comment here if you disagree. (Sue Gardner)

Appendix: some data[edit]

Just in case anybody is curious about the numbers I'm referring to in the comment text following Option D, here it is. From an e-mail to me from Peter Gehres:

"In 2010 we received donations from 209 countries and territories. This increased to 213 in 2011. Of these 98 had more than $1000 in donations in 2010 and 108 had more than $1000 in donations in 2011. We had 11 countries with more than $250,000 in donations in 2010: Germany, United Kingdom, France, Switzerland, Italy, Australia, Netherlands, United States, Canada, Japan, Spain. In 2011, that number increased to 15: Germany, United Kingdom, France, Switzerland, Italy, Australia, Russia, Netherlands, Austria, United States, Canada, Japan, Spain, India, Brazil."

imo, this whole page should not contain "payment processor". PayPal is a payment processor, and not WMF, otherwise WMF would fail its mission. it might be better to use "receives donation" and "campaign". campaigning costs and it should be recognized, but this is something different than having a bank account. of course there are countries which have local specialities attachted to receive a donation, like tax receipts, sending a piece of paper (like we have in switzerland), etc. but if somebody volunteers to do this, why not? --ThurnerRupert 07:37, 2 February 2012 (UTC)[reply]