Chapters Dialogue/Insights/Fundraising and funds dissemination

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Chapters Dialogue

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Fundraising and funds dissemination

Every interview led, sooner or later, to the money issue

All the unanswered questions inevitably lead to the next topic, which came up sooner or later in most interviews: money. The movement is wholly funded by donations and collects donations all over the world. Donated money needs to be dealt with responsibly, and some of the funds are disseminated to all parts of the world.

The average donation is around 15 USD and millions of people donate to the Wikimedia cause each year. The biggest chunk of money is collected during the annual fundraising campaigns, using banners all over the Wikimedia projects. In 2010, alongside the WMF, 12 Chapters were “payment processing”, doing their own fundraising campaign at the end of the year.

The Haifa letter

At Wikimania in Haifa in 2011, the Board of Trustees announced their decision to revise this fundraising strategy and “take away the fundraiser” from several Chapters. Resulting from that decision and a long and heated debate, the Funds Dissemination Committee (FDC) was set up and with Chapters in Germany, France, Switzerland and the United Kingdom, four Chapters were able to extend their fundraising agreement.

Not all Chapters were happy with this new regulation. The way the “Haifa decision” was communicated had a huge impact on the relationship between the WMF and the Chapters. Chapters were not given the opportunity to comment on the “Haifa letter” prior to its publication and this fuelled the reputation of the WMF board’s decisions as coming out of the blue and being unpredictable. It left many Chapters paralysed, insecure and frightened about what might come next. The term “Haifa trauma” was used frequently in the interviews.

“They took our autonomy!”, members of former payment processing Chapters claim. Payment processing created a sense of being in charge of handling money, of taking decisions and of carrying responsibility. Additionally, autonomous fundraising brought various benefits: Chapters could make use of gift aid or other financial benefits; they could create attention via donation campaigns; they were in direct touch with their donors, and they could attract new members or editors through their donors contact base. With the new regulation, some Chapters claimed, this “buzz” disappeared.

While the WMF and FDC try to communicate the new regulations as being a valuable learning tool, these efforts have only rarely succeeded. The episode has left a raw wound and a lot of effort will be required to rebuild trust. “The change (Haifa) was necessary. But, admittedly, it was communicated in a very poor way. Chapters were right to feel desperate and helpless.” a FDC-member admits.

Funds Dissemination Committee

Instead of processing their own payments, Chapters can now apply to the Funds Dissemination Committee (FDC) in order to receive annual grants.

The goal of the Funds Dissemination Committee (FDC) is to help make decisions about how to effectively allocate movement funds to achieve Wikimedia’s mission, vision, and strategy. The Board of Trustees resolved to create the FDC as a body that would advise the Board on how to divide and disseminate movement funds between the different movement groups on a no entitlement basis. [...] The FDC will strive to be a center of excellence in the movement by holding entities to high standards in the plans they develop and in the implementation of their plans.

— FDC Framework, from Meta
Members of the Funds Dissemination Committee and their supportingBoard liasons and staff (November 2013)

The FDC consists of nine volunteer members and is supported by WMF grantmaking staff. Within less than two years, they established processes and rules and are responsible for distributing $6 million worth of funds per year. 15 out of 40 Chapters have applied for FDC funding in 2013-14.

The work of the FDC receives approval from some Chapters: “FDC is amazing. Before, it was only one person deciding where money goes. Now, it’s a volunteer committee!”, “They do a fantastic job.” Still, all things concerning the topic of “money” seem to be stuck in the past. There are many perceptions and misperceptions about the distribution of money, fairness, independence and transparency. The main conflicts are:

Non-transparent process

How decisions about grants and funds – whether inside WMF or by the FDC – are taken, is not understandable for everyone. While WMF and FDC claim that transparency is unprecedented, the actual decision-making process is described as unpredictable and non-transparent, like a black box.

Chapters complain: “They’re just saying that your proposal is bullshit. But instead, they should educate us. We need to understand what we can do better-” They want to better understand what kind of information and communication the FDC actually needs from them. They want to receive advice for improvement in the course of the application and have the chance to make the necessary adjustments. At the moment they only have the chance to react after decisions have been taken.

The FDC has determined already that there is a major need for their decision-making process to be understandable. “We need to walk Chapters through our process so they can understand”.

Too much bureaucracy

The requirements for receiving funds are perceived as very bureaucratic and too complicated by many Chapters. They complain that the FDC demands a ridiculous level of details in its reports.

According to the FDC, the complaints by applicants about high levels of bureaucracy do not actually correspond to reality however: at other foundations and grant-making institutions, applications demand far more time and resources and don’t provide any guarantee of success. By comparison, the FDC process can even be considered as simple and unbureaucratic. Some of the Chapters who have previously been involved in other grant-making processes agree with the FDC’s judgement here.

Nevertheless, the application and reporting requirements are causing frustration on an emotional level well as on an energy level. The way these new tasks appeared on Chapters’ to-do lists caused thoughts like “We started in joy, now it’s all about fulfilling WMF’s needs.”

Judging instead of learning

A major point of criticism has been the fact that Chapters don’t actually know the rules and requirements that are the basis for FDC’s recommendations. The only feedback Chapters receive are in form of % cuts, which has become the new “metric” when talking about annual grants: “They received 60%”, “Last year, we were cut off 50% of our asked budget”.

FDC is aware of the issue and states: “We understand that they are upset. They put so much love into a project and then they don’t get the full funding. Of course, they’re angry. We need to change that”.

Process as learning tool

It has been realised that the FDC process needs to shift more towards a learning dialogue.

Learning and money are closely connected in any organisation and if it is designed properly, the process can be a valuable tool for all parties involved.

WMF admits that the Foundation cannot be an allocation mechanism without being a supportive mechanism. It is very much in their own interests to have trained and professional grantees. The grant making team explains: “Our role is to facilitate and support the work of Chapters with money and learnings. We are here to help grantees to make Chapter’s application worthy. Through grants we support home-grown initiatives rather than doing it ourselves.”

The FDC wishes its procedures to be considered a learning tool. For those who are willing to go down this route, filling out the applications and reports provides an indispensable tool for self-evaluation, improvement and development. FDC clearly states that “Our recommendations are supposed to help”, but there has not yet been a communication process that would have fostered this helping and learning journey to its full potential.

Furthermore, there is the persistent rumor among many people that actually “no one ever reads those boring reports”. While people from WMF and FDC vigorously stated that they do read those reports, this is still perceived differently.

Let’s make better mistakes tomorrow

In addition, a learning process always includes not only successes and best practices, but also mistakes and failures. Movement affiliates are encouraged to report their failures openly and to share what they have learned from their mistakes in order to prevent others from repeating them. However, there is no safe ground for failing (and sharing failures) rooted in the movement. Driven by the fear that admitting mistakes will immediately lead to cutbacks in funding, everyone instead tries to look their very best. “I would never talk openly about my mistakes” - Why? - “You never know how it will come back to you!” “What if we look like losers? We will get even bigger cuts next year!” Keeping failures secret fuels the sense of non-transparency and the black box of funds dissemination.

Besides, when talking about sharing failures, several Chapters wonder when and how the WMF will talk openly about the things they failed with. “If they don’t dare … why should we do it?”.

Poor communication

Overall, communication has been an issue in the relationship of Chapters and the FDC: there is too little interaction; too many things happen behind closed doors and are communicated only afterwards instead of ideas being exchanged constantly.

FDC members emphasised that communication needs to be improved. “People are not informed about us. We need to be more interactive, to be the face of FDC. Otherwise, Chapters are only in contact with FDC staff and therefore think that it’s them making the decisions about funds dissemination.”

In many cases, it’s the WMF who is perceived to have the decision power about annual grants “WMF decides if we will still exist next year.” In fact, it’s only a small part of WMF that deals with money, but it is deeply rooted in the minds of Chapters that the WMF is an organisation that mainly decides about financial “life or death”. Even if the FDC is a community-driven process, and the WMF staff emphasise that they are “even not allowed in the FDC’s meeting room”, many Chapters perceive that the FDC only “does what WMF staff tells them”.

This misperception causes even more irritation. FDC staff wonder: “Why do Chapters attack the WMF for the funds dissemination, if it’s the FDC and the Board of Trustees actually taking the decisions? Both consist of their peers! Are they attacking their own peers?” FDC isn’t happy with this situation either. When hearing complaints and general attacks, it feels to them as if the volunteer work of the committee isn’t as valued as it could be.

Lacking flexibility for the diversity of applicants

Applicants for annual grants differ in terms of age, experience, amount of money requested, type of programmatic work etc. For some small Chapters, the bureaucracy has become a huge burden in comparison to the amount of money they are requesting. At the moment there is no differentiation in procedures according to the different affiliates and some of them are now dealing with “too many reports for too few money”. Some consider the Project and Event Grants being a more suitable option for those Chapters.

Another topic of criticism has been the 20% guardrails rule that allows a maximum of 20% annual growth in terms of the annual budget. Young Chapters claim that “In the starting phase, you need some seed-funding to get going. The guardrails are a growth-break”.

The FDC has confirmed that their framework doesn’t yet address the diversity. “We should re-assess application and reporting requirements for younger chapters” and “I’d like to be our framework more flexible in terms of process, templates, interactions and feedback”. On the other hand, the committee wishes for a more rigid self-assessment by affiliates: “Every contribution from any affiliation to the movement is welcome - you can stay unique! But please be realistic about yourself.”

Outlook on the FDC process

When looking at the FDC, it needs to be considered that the process is quite young and deals with very large amounts of money in an unique and innovative way. After the first two years, the FDC Advisory Group assessed the process and published recommendations for the enhancement of the FDC future in June 2014.

In August 2014, the WMF Executive Director will make a recommendation to the Board of Trustees, containing the possible outcomes of continuing as it is, adopting modifications, or eliminating it.

Please note that the interviews took place in 2013-14, before the AG recommendations were published and enhancements on learning and evaluation in the movement were initiated.

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