Grants talk:APG/Proposals/2013-2014 round2/The Centre for Internet and Society/Staff proposal assessment

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Assessment overlooks some grave concerns[edit]

It is quite shocking to see that the FDC staff has completely ignored some grave concerns raised by the community about Conflict of Interest in the APG Grant in question. Mainly,

  1. Possibility of a present WMF Advisory Board member being a direct/indirect beneficiary of the WMF funds being granted through FDC.
  2. The fact that the same WMF Advisory Board member has been listed as one of the people in the governing body of the APG grant applicant as per their latest annual report, which is a clear Conflict of Interest.
  3. The Karnataka Societies Act, under which the APG grant applicant is registered mandates that 7 members form the governing body] - but the information made available by the APG Grant applicant here says there are only 3 people in the governing body which is in clear violation of the act, assuming that the facts stated are true.

Apart from these, there are not much details about the AGMs held by the non-profit, the annual elections held by the non-profit nor is the bye-law or Memorandum of Association made available to public as they should be, mandated by the law. The number of members for a society to be just 8, as specified by them for all these years is also not quite normal and does not sound much participative or representative at all for the Society model under which it has been registered (Wikimedia India Chapter which has been registered under the same act on the other hand has hundreds of members with voting rights to select the next governing body). With all these loopholes and with several questions lying unanswered, I'm surprised that the FDC staff has gone ahead and stated a Yes to Adherence to legal, regulatory, and policy regulations.

The Staff should have investigated more into this and in a transparent way to address the concerns, for instance by gathering these supporting documents:

  1. Information about the AGMs and elections held by the applicant.
  2. Latest copy of the Memorandum of Association as filed with the Registrar of Societies, Karnataka (as mandated by Clause 13 of the act).
  3. The list of governing body as filed every year so far with the Registrar of Societies, Karnataka.

I'm afraid the assessment *will not be deemed complete* until that is done. Further, the community may be left with no other option than to protest strongly for the way these concerns are being conspicuously overlooked by WMF.

The "Yes" conclusion was not just based on the proposal, but was also informed by our site visit to CIS in February of 2014. At that time, we did a review of their reports and documentation and meet with their advisors and found everything to be in order. In addition, CIS is being held to the same standards as any other movement entity that has or is applying for funds from the FDC.Gbyrd (talk) 00:01, 10 May 2014 (UTC)Reply[reply]
Garfield, Thanks for the note. I think there's more to the local laws that may or may not have been touched during the visit. What I'm trying to say is that given the serious concerns raised, there *has* to be a thorough review, with documentation shared with the public (the law here anyway mandates public review of documents of a non-profit formed under the model 'Society'). Especially in the light of what seems to be a strong Conflict of Interest, the above list I have made - although not complete is a good starting point for reviewing the documentation. Violations if any implies 'No' to Adherance to legal, regulatory and policy regulations which changes everything here and is potentially a huge risk for WMF going through the rest of the grant process ignoring that. --H P Nadig (talk) 03:20, 10 May 2014 (UTC)Reply[reply]

Earlier, my questions about the overall eligibility criteria put across to the WMF staff (and this comment was made before the deadline was over) did not receive any response from the WMF staff.

Hello HPN, I can answer that. The A2K program at CIS has been funded for its first two years directly by the WMF. Why? Because we didn't want to simply kill the India Program after spinning it out of the WMF staff, so we looked for a national NGO that could take it on for a few years while the chapter got underway. In the end we asked CIS to support such a project, helping to integrate that work with the work of the community and chapter as the chapter grew. Now those two years are coming to an end, and the A2K program continues to do interesting work. So an evaluation must be done of whether and how to continue to support it.
In order to make that evaluation more public, and to make it parallel to the evaluation of Wikimedia India's own work, the Board specifically asked the FDC to evaluate the CIS grant; this is what makes it eligible this year. I am glad that this is happening, and I hope you are also, as it has allowed the current discussions to take place. SJ talk  18:14, 14 May 2014 (UTC)Reply[reply]

It is also quite unsettling to see that while majority of the community members seem to have shared several grave concerns about the Proposal, the Staff assessment on the other hand seems to be scoring it pretty high leaving room for suspicions of bias and that it isn't being as open and transparent as it is made out to be. The very fact that the WMF board has allowed FDC recognition through a specific resolution for just the CIS adds more fuel to these suspicions. --H P Nadig (talk) 18:56, 9 May 2014 (UTC)Reply[reply]

Thanks for speaking up HPN. I agree that serious concerns such as these, especially when raised before the end of the comment period, should not remain unaddressed. While I do not follow what HPN is saying as I do not recognize the unnamed individuals he mentions, the complaint is serious and should get a response appropriate with the degree of attention that the evidence and information backing it merits. Blue Rasberry (talk) 20:09, 9 May 2014 (UTC)Reply[reply]
Thank you. The last Annual Report states the WMF Advisory Board Member, Achala Prabhala as being part of the governing body of CIS. The annual regulatory filings if made public, could further shed more light on this.
Further, the CIS also has its office at a premises which is stated as owned by Achala Prabahala's family. The ownership of the property is not however clear without any documentation made public on this. And the rent is being paid for this premises, with part of WMF grant also going for the rent. I really hope that the FDC staff considers these and reviews the required documentation as part of the assessment and also makes those public to retain transparency. --H P Nadig (talk) 03:45, 10 May 2014 (UTC)Reply[reply]
HPN, apart from the issue you brought up I am worried about a possible violation of the Foreign Contribution Regulation Act (FCRA) that governs monies coming into non-profits from outside India. As per my understanding from what WMIN has been advised by its consultant, not more than 40% of foreign funds can be used for admin expenses. Ravi pointed out on the proposal talk page that a lot more than 40% of the requested funding can be considered as admin by law enforcement authorities. Garfield, did WMF hire its own consultants (such as qualified Indian lawyers and charted accountants) to verify weather the proposal confirms with Indian laws? I stress on own because you may have checked with CIS consultants but it is important to get neutral experts not receiving any financial or other benefit from the grantee to check the legal status and give a go ahead. The last thing the movement needs is a legal mess and all this money getting stuck up in red-tape or worse going to fight cases in courts. AroundTheGlobe (talk) 07:27, 10 May 2014 (UTC)Reply[reply]
Many of the points raised here are relevant. The review lacks detail and is too much of a summary to be able to evaluate the depth and care taken by the audit team. Most of the scores and comments in the assessment could do with more amplification - for instance credits to specific members of the team (indicated as say M1, M2, M3) for their statements. The individual scores would also be useful and assuming that a three member team was involved I presume the median score is being reported here. The activities/projects of the organization that were funded by other agencies and reviewed by the WMF for impact and success could also be listed specifically. The relevant checklists used to identify the legal status should also be shared so that the community can see if the depth of verification is appropriate for the country and help the audit teams tailor the checklists for future use. Shyamal (talk) 08:01, 10 May 2014 (UTC)Reply[reply]
Agreeing with HP Nadig, this staff assessment simply coincides with what I said in the wikimediaindia-l mailing list a couple of days ago. These discussions and comments stuffs are mere drama and that WMF has already decided what it has to do with CIS for over a period of time. They are just interested in wasting the community members time and they have been successful so far. WMF have been keep on saying to WMIN that we should focus on work rather than getting into some serious matters which actually disrupts community movement in India. -- ♪Karthik♫ ♪Nadar♫ 06:45, 10 May 2014 (UTC)Reply[reply]
  • Let me say this: being a member of Advisory Board to WMF has absolutely no impact on the FDC's recommendation. In fact, the FDC has not even even officially met with the members of the Advisory Board, and unofficially I myself only know one member of this committee (from my times in Cambridge, MA). All concerns regarding any proposal, however, should be voiced so that the FDC has a better picture, so I strongly encourage comments on the proposals. Pundit (talk) 09:20, 10 May 2014 (UTC)Reply[reply]
Agree with Gbyrd. The grant proposal by CIS is seriously forwarding to a direction that's ultimately raising questions which is not expected. Community members from both India, those involved with Indic language Wikimedia projects and even not associated with Wikimedia movement in India have presented concerns on CIS's grant proposal and their role. What's these comments and concerns by Wikimedians and others if not taken into account by FDC? --Tanweer (talk) 16:24, 10 May 2014 (UTC)Reply[reply]
I assure you that the FDC takes the community review very seriously and does not expect the staff review to include it. These are separate things. Pundit (talk) 18:05, 11 May 2014 (UTC)Reply[reply]

Comments from Ravi[edit]

Hi Gbyrd, Pundit, other members of FDC and staff !

  • Did the community review have any impact on the scoring? //The "Yes" conclusion was not just based on the proposal, but was also informed by our site visit to CIS in February of 2014. // hints that at least part of the assessment had inputs prior to the community review.
  • Calcualting staff salary as a percentage of overall budget is flawed as CIS makes it clear here that not all non-FDC funds generated as in-kind sources may enter CIS's book of records. It is also noteworthy that 100% of staff salary is funded by FDC and there is no external funds / in-kind sources towards this expense. It is not clear how they evaluate the value of in-kind sources and if it should be included in the overall budget which may be give a false / inflated idea of their resourcefulness. For example, even community volunteers get seminar halls and associated equipments for free for outreach. Please note that the goodwill associated with Wikipedia gets you many in-kind donations and should not be confused with the budget / resourcefulness of the FDC applicant. 51.26% of their FDC grant goes to payments towards full time staff, resource persons and consultants (line items 1, 7 and 11.2). 10% of FDC grant goes to institutional development fee. Around 9% goes to travel and stay of staff and all the programs have liberal funding for events and workshops. This is against the guidelines issued to the FDC on rising cost of institutionalization. But, the staff assessment repeatedly notes that the cost is significant only in local context. Does it mean that this money is peanuts for WMF to throw away and experiment?
  • The staff assessment says that deeper due-diligence on the organization's previous track record within the Wikimedia movement will be considered. Yet, crucial questions regarding the MoU between CIS and WMF have not been answered yet. No question has been raised on how CIS became eligible for huge grant in the first year.
  • We are repeatedly told that CIS is being held to the same standards as any other movement entity that has or is applying for funds from the FDC. But, we don't see convincing evidences for that:
    • During WMIN's FDC grant proposal, it was criticised for issues regarding governance. However, this staff assessment overlooks CIS's goveranance structure. CIS, a 6 year old organization registered in 2008 has only 8 members. Of which 3 founding members serve as board members for a term of 3 years without any election process and based on consensus. New members need board approval whereas all current board members are founding members. And these board members decide how the 10% institutional development fee is spent. The current executive director is another founding member. Adding him with two distinguished fellows three founding members are in the organisations's payroll. Another founding member gets rental revenue. In all these 6 years, they have added only 2 new members. FDC should make it clear if it is endorsing such coteries so that other community members can do away with the tedious process of evolving a community led and democratic organizations to be recognized as Wikimedia affiliates. Instead, they can form coteries like this and apply for grants.
    • WMIL, WMHK, WMIN all faced a significant cut in their proposed budget denying a rapid rise in staff costs. But, CIS got a free run with its staffing programs. Is FDC favoring completely staff run programs and asking volunteer organizations to enter an unfair competition with them?
    • None of the Wikimedia affiliates get a 10% institutional development fee but CIS gets. Please note that the absolute value of this 10% amount is larger than the annual budget of many Wikimedia affiliates and events and participations grants awarded.

This continuing trend od double standards only hints that CIS-A2K is nothing but a B-Team of WMF. At least, please do accept that with honesty so the community can stop wasting its time in participating eye-wash community review processes.--Ravi (talk) 13:55, 10 May 2014 (UTC)Reply[reply]

If this is a final Staff proposal assessment, this a very unfortunate of Indian Wikimedia Volunteer who are wasting their time. I am very much agree with Ravi,s all pint of concerns. Jayantanth (talk) 13:42, 11 May 2014 (UTC)Reply[reply]
A few comments made by HPN, ATG and Ravi really are upsetting. The first is the legal/regulatory compliance. Based on what has been given in the proposal and talk, it is clear that CIS is in some way violating the regulatory structure mandated by the K'taka RoS. One can always pick up a copy of the last filing of governing members from the Registrar's office to verify. Further, the point about the 40% admin costs is again an issue. The Foreign Contribution Regulation Act clearly specifies the upper limit. If this has been overlooked in error, I believe it is high time, it is relooked. As stated, we DO NOT want to end up spending our donated money in fighting a court case against the Government of India. The last is what Garfield said about the 'Yes' comment being made in February. How would one assess an application made in March 2014 in February 2014? Was it already known by then? Then there is the entire CoI issue. Given how many times that phrase has been thrown at us in the last few months, it's really disconcerting that it has been completely ignored here. I'm a little disappointed with how this whole process has gone forward. Tanweer and Pundit, please go thru the entire grant proposal again, and the talk page as well. A lot questions remain unanswered. ----Rsrikanth05 (talk) 18:52, 10 May 2014 (UTC)Reply[reply]
Rsikanth - I think there may be a misunderstanding about the process. The FDC does not answer questions about the proposals - the entities should. We ask our own and also read questions of the community and how they are addressed. Pundit (talk) 18:39, 12 May 2014 (UTC)Reply[reply]
Pandit, when I said a lot of questions remain unanswered, I meant that the WMF and CIS have not answered them. I don't expect the FDC to answer any question, it's not their duty. ----Rsrikanth05 (talk) 16:52, 13 May 2014 (UTC)Reply[reply]

Seeking clarification from CIS[edit]

Hi Vishnu, some of the grave concerns emerged towards the end of the community period giving little time for discussion and clarification. So, I will appreciate if you can provide some clarification now which will help the staff and FDC do a more informed assessment?

  • Could you please respond to regulatory violation concerns that HPN is raising here? Especially about lack of enough members in the board and lack of publicly available documents?
  • According to the major expected revunues presented here, excluding the FDC funding, the 10% amount that you have liberty to spend as you like comes around 5,656,714 INR only. I assume it is highly unlikely that you will spend all this for A2K Wikimedia program. Leaving aside in-kind donations, could you please provide a realistic estimate or theoretical maximum of non-FDC cash you are expecting to raise towards spending on A2K plan for Wikimedia that will enter your book of accounts? What are the funding sources? I consider this clarification as crucial as the staff assessment is calculating the staff salary as a percentage of your total annual proposed budget which includes non-FDC cash and in-kind donations.
  • Could you please provide some examples of the in-kind donations and how you have calculated the monetary value for them? For example, do you include seminar halls, computer labs provided for training in this valuation? For example, your Telugu Wiki plan has in-kind support of 550,000 INR. Could you explain how this is calculated?
  • The money spent on program expenses from FDC grant as you have tabulated here is 5,466,600 INR only. According to this, almost 71% of the FDC grant is going to operating expenses and staff salary. Isn't this a violation of the FCRA regulation that says only 40% can go for admin expenses? I am aware how your consultant advises to calculate program expenses including staff salary as you have explained here. But, the reluctance to reduce staff salary citing commitments of employees like bank loans etc. raises doubts that the programs are designed to justify the current salary structure, proposed budget and not the other way round. A financially sound organization should devise programs in the most cost-effective way and the rigid and inflated salary structure should not justify the inflated program expense which again is used to evade regulators. Please clarify.--Ravi (talk) 05:35, 12 May 2014 (UTC)Reply[reply]
Hi Ravi, responding to your query seeking clarification about the proposed "other sources and in-kind support" in the FDC proposal. First, couple of examples of what we consider "other source and in-kind support" that we intend to mobilize. See this request from the Odia community. As part of supporting this event CIS-A2K has managed to get Accommodation, some local travel and conference hall (for 1 day) to be borne by one of our institutional partners. The Odia community could do the event at Rs. 58,272/- as against the original estimate of Rs. 185,000/-. The support from our institutional partner KISS could be conservatively estimated at Rs. 60,000/-. This is with regard to getting "other sources and in-kind support" for community. Another example is CIS-A2K team mobilizing support for its travel and stay expenses. As recently as March 2014 as part of the International Women's Day celebrations, I participated in two Wiki events (this and this). All my travel expenses (tickets, local travel and food) were borne by one of our institutional partners and were not booked under the existing WMF Grant. I could do so because I added value to one of their events by being part of it just for 1 hour later in the evening (and spent 90% of my time on Telugu Wiki events). As you will note in both the instances CIS-A2K could have gone ahead and spent the money from the WMF grant but we have rather put efforts to mobilize this support from other sources.
Regarding the exact quantum of such support entering CIS's books.... Could be in the range of 30%? We could be only sure about this much later. However, here it is important to understand what is it exactly that we are attempting/thinking to do. CIS could have approached other donors to raise the entire money (as other sources) from a single donor. This is a traditional approach. Rather what we are committing to do is to raise money at a micro/local level (for each of the 21 plans) from different kind of sources, most of which are not traditional donors/grant makers. We expect to mobilize "other sources and in-kind support" from individuals, institutional partners, groups, local government or government bodies and donors. This is much more difficult but we believe would have the following advantages: a) brings a larger buy-in from multiple stakeholders to the open knowledge work we (means all of us) are enabling in Indian languages; b) by involving the community wherever possible, shows the community that they can tap local resources in addition to movement resources; c) could create sustainable support that could last beyond and reduce dependencies on CIS-A2K program/WMF/WMIN; d) failure to mobilize "other sources and in-kind support" will not be absolute, unlike when you approach a single donor agency; e) if successful (even partly), to demonstrate that we, as Wikimedia movement, can look at different modes of funding (in addition to the current fund-raising models of WMF) the open knowledge movement; f) sets a challenge for the language anchor to think of some programs that s/he could continue in collaboration with the respective language community beyond the scope of CIS-A2K program; and g) could potentially enable the communities, if they decide, to sustain the current high touch approach of the language plans beyond WMF support.--Visdaviva (talk) 10:41, 21 May 2014 (UTC)Reply[reply]
Vishnu, thanks for the examples and I appreciate the effort you take to mobilize resources outside the WMF fund both for the CIS-A2K team and the community. My only concern was this being added to the annual budget and percentage allocation of expenses calcualted based on that. For your info, communities do exhibit the same resourcefulness in getting in-kind support. For example, we travel to events on our expense, stay in friends home and go dutch all the time :) Very rarely, we do also get our expenses reimbursed if the outreach organizers have some funds for the speakers. And of course, except for well planned events with grants, almost all the outreach we do is with 100% in-kind support. Even for the events with grants, we don't assign a monetary value to the in-kind resources in the overall budget. The habit of applying for event grants entered the Wikimedia India scenario only around 2011. Until then and after that too, there are numerous outreach efforts undertaken by all communities across India in the same manner as I have explained above. Wikipedia enjoys great goodwill in the society and most of the doors open for Wikipedia. You are selling Wikipedia to Wikipedians :) --Ravi (talk) 14:38, 21 May 2014 (UTC)Reply[reply]
  • Doing something that should have been done as others do, they think they're making a difference!! :D :). Ravi, on a light note; you or someone as experienced as you should be in A2K to spearhead the project if it continues. Just my opinion :) -- ɑηsuмaη «Talk» 07:39, 23 May 2014 (UTC)Reply[reply]

Serious FCRA violations?[edit]

Administrative Expenses cited breaks the FCRA compliance[edit]

Exploring more around the facts that Ravi, AroundTheGlobe have thrown more light upon (about the proposal's non-compliance with the Foreign Contribution Regulation Act of India), I found this from the FCRA document of Union Ministry of Law and Justice:

8. (1) Every person, who is registered and granted a certificate or given prior permission under this Act and receives any foreign contribution,- (a) shall utilise such contribution for the purposes for which the contribution has been received: Provided that any foreign contribution or any income arising out of it shall not be used for speculative business: Provided further that the Central Government shall, by rules, specify the activities or business which shall be construed as speculative business for the purpose of this section; (b) shall not defray as far as possible such sum, not exceeding fifty per cent. of such contribution, received in a financial year, to meet administrative expenses: Provided that administrative expenses exceeding fifty per cent. of such contribution may be defrayed with prior approval of the Central Government.

(emphasis mine)


(2) The Central Government may prescribe the elements which shall be included in the administrative expenses and the manner in which the administrative expenses referred to in sub-section (I) shall be calculated.

A snippet from a Taxmann's explanation of this clause is here:

10.2 This amendment may cause hardship in interpreting the Rule 5 constituted in this regard. The definition of Administrative Expenditure briefly is as under :

- Remuneration and other expenditure to Board Members and Trustees

- Remuneration and other expenditure to persons managing activity

- Expenses at the office of the NGO

- Cost of accounting and administration

- Expenses towards running and maintenance of vehicle

- Cost of writing and filing reports

- Legal and professional charges

- Rent and repairs to premises

(emphasis mine) However, the administrative expenses as stated by the CIS-A2K team on a response here (which is listed in detail here) clearly violates that limit.

This and the other observations by various community members on this talk page (including mine) clearly shows that the staff assessment has overlooked multiple things when reviewing compliance to local laws, many of those that have the potential of being *very serious* in nature. Another reason as to why the entire documentation should be thoroughly reviewed and shared publicly on meta to check for compliance with local laws. In case the documentation related to compliance with local laws were reviewed on FDC Staff's visit to Bangalore prior to the community feedback as shared by Garfield above, there are more reasons to do a thorough review of these without further delay.

More FCRA violations?[edit]

As of my knowledge, at least one of the present paid members (Dr U B Pavanaja - a regular columnist on Prajavani) of CIS-A2K already is a columnist on a NewsPaper which does not comply with the following clause of FCRA:

3. (1) No foreign contribution shall be accepted by any- (g) association or company engaged in the production or broadcast of audio news or audio visual news or current affairs programmes through any electronic mode, or any other electronic form as defined in clause ® of sub-section (I) of section 2 of the Information Technology Act, 2000 or any other mode of mass communication; (h) correspondent or columnist, cartoonist, editor, owner of the association or company referred to in clause (g).
(b) No person, resident in India, shall deliver any currency, whether Indian or foreign, which has been accepted from any foreign source, to any person if he knows or has reasonable cause to believe that such other person intends, or is likely, to deliver such currency to any political party or any person referred to in sub-section (1), or both.

(emphasis mine).

I urge the FDC Staff and the WMF board to consider a thorough review before proceeding forward with the rest of the FDC process and I urge that the documentation reviewed should be shared on meta in order to invite feedback from the Community. - --H P Nadig (talk) 11:35, 12 May 2014 (UTC)Reply[reply]

Clarification on Statutory Aspects - KSRA and FCRA[edit]

Thanks for seeking clarifications from CIS on these statutory matters. Some of these are pertinent for the movement funding within the Indian context and we deeply appreciate the effort put in by a few of the community members to throw light on these aspects. These merit a detailed response from a professional who has been dealing with these matters (i.e. advising not-for-profit entities, like CIS, in India). Primarily because, often in India an act or law is often read in conjunction with other acts or laws and interpreted within a context. It is important to recognize that aspects like these are not always black and white and there is a lot of grey. This is where years of professional experience in interpretation and application of acts in practical contexts weighs significantly. CIS has never compromised in getting the best available professional expertise in complying with the various statutory requirements. So at the outset we need to state that CIS has always complied with the statutory advice received from our legal adviser and whenever required also sought second opinion. Thus to our current understanding we are in the best possible compliance with the statutory requirements for the not-for-profits in India. However, because a few of the community members, in the interest of continuing support to Wikimedia movement in India, expressed serious concerns, CIS will take every effort to share these with our legal advisers for their professional opinion. This could take some days, but we are certainly committed to sharing our legal advisers' opinion on these matters with the community and FDC at the earliest. This exercise is also important for CIS as it will help us to put ourselves in much better compliance, if required.--Visdaviva (talk) 10:35, 13 May 2014 (UTC)Reply[reply]

Some observations on the concerns raised[edit]

I would like to share below, my two cents, in my individual capacity (i.e. not representing CIS in what-so-ever manner) on some of the statutory matters raised above. I am taking this liberty as I have been a tiny part of the Indian not-for-profit sector both as a Donor and Donee over the past decade, did a desk review of institutional and financial documents of at least 100 not-for-profits and I feel it is good to share some of that knowledge and information that I have acquired. Let me state at the outset that I am open to be corrected in the way I understand the statutory aspects and I see this as a learning opportunity to further my understanding on these aspects.

There are two statutory aspects that are being discussed: a) The Karnataka Societies Registration Act 1960 (KSRA); and b) The Foreign Contribution (Regulation) Act, 2010 (FCRA).

Comments on the concerns about KSRA violations[edit]

Under this there are two issues that are flagged.

First, that CIS is possibly violating KSRA as one of the members of the Society is receiving compensation for renting out a space to CIS (the property belongs to his family). There is a possibility that he is also a Governing Body member of CIS. In addition to this there is a COI layer to this. I will not get into the aspect of COI as this has been extensively discussed here already and will limit my observations to what the KSRA says. For now, let's work with the assumption that the member in question whose family property is let out to CIS is in fact a Governing Body member of CIS. Even then as per KSRA this is not a violation in what-so-ever manner. Simply because CIS is paying rent for the premises, which incidentally belongs to one of the members, and not AT ALL to have him as a Member of the CIS/CIS's Governing Body. I have seen many not-for-profits where the member of the Governing Body have also been employees of the entity and their salary/wage/remuneration for the duties performed as employees cannot be equated with their role in the Governing Body.
While legally as per KSRA there may not be a violation, however, I would like to see, in this specific instance, if there is any mis-appropriation of donor funds through this rental arrangement. Such a mis-appropriation could be done “legally” by simply renting out the premises at a much higher cost than the market price in that area in Bangalore. To determine this one should see, if is CIS paying a much higher rent for the building (that is rented from the member) than the market price? I would like to personally determine this and will let know my observations here.

Second concern is that CIS is not in compliance with the Society's governance structure as prescribed in the KSRA. Typically all Society's have 7 members in the Governing Body. It should be noted that the Governing Body is referred with different names. Some call it "Board", some "Executive Committee", some "Management Committee", etc. In essence as per the KSRA no society can be formed without having minimum 7 members (also called as General Body) and each society should have a minimum of 7 members in the Governing Body at the time of registration. I have come across instances where the General Body and the Governing Body of a Society is same (that is the same 7 members of the General Body constitute the Governing Body). As per KSRA, I believe, the current membership strength of CIS's Society is not a violation.
As pointed out above CIS claims to have only a 3 member Board (or Governing Body) instead of the typical size of 7 members. Is this a violation? In my view it could be a potential violation. However, before I come to a conclusion, it is important to see what the Memorandum of Association (MOA) of CIS says. If CIS were to have amended their bye-laws (contained in the MOA) and amended the governing body structure and if this has been filed and approved by the Registrar of Societies then CIS is in no violation of KSRA. Because the Registrar is the competent authority to rightly interpret the KSRA and approve amendments. CIS should adhere to the bye-laws as approved and stated in its current MOA. I believe that CIS is in compliance with the MOA in terms of its Governing Body structure currently in practice. There is a possibility that CIS MOA could be wrong and we should approach the Registrar of Societies with the MOA and to cross-check if its governing body structure should be revised and do so if the Registrar recommends. I would escalate this matter to Sunil (ED of CIS) to look into it on priority upon his return to India next week.

On a general note, typically the Registrar of Societies is considered to be the mother hen which tries to protect the registered societies under it. In my experience, I have come across Societies that have not complied with various KSRA regulations and they did so retrospectively (some times after many years) and the Registrar of Societies has been often considerate. During my interactions with various legal advisers to not-for-profits, I was told that unless and until there is a threat to national interests and sovereignty of India by a Society, it is never the intention of the Registrar to shut down an entity. If there is a real national threat, even if the Society has done the best compliance, the Registrar can close down a Society.--Visdaviva (talk) 11:21, 13 May 2014 (UTC)Reply[reply]

Comments on the concerns about FCRA violations[edit]

Firstly, it is important to recognize that the FCRA is equivalent to the Article 66A of the Information Technology Act. If every word of it is implemented literally by the state majority of the not-for-profits receiving foreign money will be shut down. For instance, if we were to conservatively interpret the FCRA then any Indian not-for-profit receiving foreign funding cannot even publish a website. Now to return to the two concerns.

Administrative Expenses should not cross more than 50%: Yes this is very much part of the FCRA as pointed above. However, we should be careful, when we interpret this clause. As stated here in points 10.3 and 10.4 foreign money received by a not-for-profit for a specified program is not covered under this clause. Basically almost all of the grants received by CIS are for specific programs and are not general purpose donations. In other words CIS has to treat all donor money received as grants as specified income, which is different from the income that it could earn through consultancy services. To clarify in some more detail, when a donor is making a grant to CIS for a particular program the money is specified to be used for a particular purpose and CIS is custodian of that money as per the Grant agreement. It cannot use this income in any manner it pleases. For instance, when we revised the WMF Grant budget we took explicit permission as CIS cannot for itself decide how it will spend the grant. Of course there could be components of that Grant that could be unspecified (like the institutional development fund we put in every grant proposal). Such income (unspecified) is treated differently and is used to compute income tax.

Here, it is important to read this in conjunction with the Indian Income Tax Act 12AA exemption. This exemption precisely defines a not-for-profit entity as Charitable in the eyes of the Indian government. Only such entities when receiving grants can say that they have received it for specific (charitable) program purpose. That is to say that even if an entity is registered as a Society (or a not-for-profit) it does not automatically become "charitable" in the eyes of the Indian law. Only after receiving Section 12A exemption certificate the not-for-profit entity will be seen as a charitable. Thus not-for-profits which do not have 12A exemption from the Income Tax department, even if they receive a Grant for specific purpose, they have to show the entire grant as income and the tax will be computed based on the entire unspent grant at the end of the year. For instance, imagine CIS (which has a 12A exemption) gets Rs. 10 million grant from a Donor for an ABC program, it will report to the Income Tax department that this is a specified grant and will not include in the Income while calculating the tax at the end of the financial year. Whereas, imagine WMIN (which does not have 12A exemption) gets the same Rs. 10 million grant from the same Donor for the same ABC program, it will have to report this entire sum as income and any unspent money will be taxable as per the Indian Income Tax Act at the end of the financial year.

I think it is not productive to debate about the definitions of Administrative costs and Programmatic costs, because there is long tradition to the not-for-profit sector in India and how they treat these costs. I believe, that as per this tradition in the proposed FDC budget CIS is only asking for 3.3% of the budget towards administrative costs.

Let me try hard to prove that CIS is violating the 50% limit of Administrative Cost provision of the FCRA. For this specific purpose, let us *hypothetically assume* that the entire US$ 297k FDC request CIS has proposed is for Administrative costs and also add the proposed Operating Expenses of US$ 147k, from this table 8b, and it would sum-up to about US$ 450k. Even then it would be much lesser than 50% of the total foreign currency that CIS expects to receive (i.e. the estimated total revenues of US$ 1,200k) during 2014-15. Because as per the FCRA it is 50% of the entire foreign money received by the organization in a financial year and not as per each grant. Even in this hypothetical extreme scenario I believe that CIS is not violating the FCRA provision of limiting the administrative expenses to 50%.

FCRA prohibition against participation in broadcast and electronic media: While it is important for all of us to read and adhere with Section 3 of the FCRA, we should be careful to read it in conjunction with section 4 of the same FCRA, which has the exemption clause. It clearly states that even those who participate in broadcast and electronic media can receive foreign money, “by way of salary, wages or other remuneration due to him or to any group of persons working under him, from any foreign source or by way of payment in the ordinary course of business transacted in India by such foreign source” (emphasis mine). So as per this, I do not see that there is any violation by either Pavanaja (who is a freelance contributor otherwise) or any other employee of CIS to participate in broadcast and electronic media in whatever capacity.

For a moment let us ignore section 4 of the FCRA. Look at this list of Foreign Funded NGOs. Google any of the heads of these organisations with the word 'columnist'. One will note that none of these organisations have lost their FCRA registration - it is very unlikely that CIS will lose its registration for writing occasional columns in the broadcast and electronic media. I believe that there will always be multiple interpretations. The conservative interpretation is that any Indian not-for-profit receiving foreign funding cannot even publish a website. The liberal interpretation is that as long as media activities are not the main focus on the NGO it is not a violation of the FCRA. For example, Centre for Policy Research (CPR) is a foreign funded NGO. But Pratap Bhanu Mehta of CPR is one of India's most well known columnists. So far we have not heard of any NGO losing FCRA status because they participate in media activities. So many foreign funded NGOs publish books, magazines, appear on television & radio, run websites & portal and write columns, articles and editorials.--Visdaviva (talk) 12:21, 13 May 2014 (UTC)Reply[reply]

Vishnu, May I summarize your lengthy discourse as follows: So long as you are not making bombs to plant in India using foreign money, who cares about regulations which can be adhered to retrospectively anyway? After all, Indian non-profits have their own clever traidition of evading regulators :)
Fun aside :), let us not make any hypothetical assumptions to prove that CIS is not violating FCRA. Your hypothesis of adding whole of FDC grant and operational expenses of CIS is factually incorrect. For argument sake, let me accept your interpretation that as stated here in points 10.3 and 10.4 foreign money received by a not-for-profit for a specified program is not covered under FRCA's 50% admin expense clause. But, it can still be shown that your program expenses for the whole organization for all grants included is well above the 50% mark. Your expected revenues for the coming financial year is approximately 1213K USD. Your proposed program expeses for all programs included as shown here is around 411K USD. This comes around 66% of your total organizational income spent on operational and admin expenses which includes staff salary. Please correct this percentage if any of your expected income sources tabulated here is not foreign.--Ravi (talk) 05:32, 14 May 2014 (UTC)Reply[reply]
Vishnu, once again no one has brought up 66A or 12A here, please stick to the discussion and avoid off topic comments which distract us from the points being raised. Pointing out others who are possibly breaking the law does not help you. The question here is not whether or not laws are followed or retrospective permission can be sought, the question here is whether the current CIS proposal adheres to Indian Laws or not - a question part of the staff assessment of your proposal. I am sure Pundit and the rest of the FDC have understood this and taken note of the fact that WMF has repeatedly been requested to conduct a thorough independent and neutral investigation as to whether or not your proposal adheres to all Indian laws.
Also, on the proposal talk page one of the points you raised whilst defending salaries of your staff was that your contracts unlike other CIS contracts are exclusive and your staff is not allowed to undertake outside assignments. However yesterday on the India Mailing List one of your staff confirmed taking up freelance assignments as a columnist on a weekly basis. Is this in violation of his CIS contract? AroundTheGlobe (talk) 16:24, 14 May 2014 (UTC)Reply[reply]
AroundTheGlobe All CIS contracts (which also includes A2K team) are not exclusive as stated in the discussion here. //However yesterday on the India Mailing List one of your staff confirmed taking up freelance assignments as a columnist on a weekly basis. Is this in violation of his CIS contract?// Pavanaja, whom you are referring to above, has been contributing a weekly column on gadgets in a leading Kannada newspaper since January 2012 (much before he joined the A2K team). Also he has been a contributor to various Kannada newspapers since 2003. We were aware of this at the time of hiring him. In fact Pavanaja has left no stone unturned to get wide publicity and awareness in local media about Kannada Wikipedia. --Visdaviva (talk) 11:54, 19 May 2014 (UTC)Reply[reply]

Vishnu, the discussion also stated one of the reasons that you pay A2K employees more than other CIS employees as unlike other employees was that they could not for whatever reason take on extra freelance or consultancy jobs. Now you contradict yourself by accepting that Pavanaja does have an additional source of income. Whether he helped get publicity etc. is besides the point, please keep to the point of discussion. AroundTheGlobe (talk) 16:53, 20 May 2014 (UTC)Reply[reply]

Additional concern that should be taken on board[edit]

There are some additional concerns that I would like share here vis-a-vis providing movement funds (i.e. foreign funds) to India. Over the past few years we are fortunate to have received movement funds from WMF for various community events like this and also Individual Engagement Grants. As part of these grants individuals from India receive movement funds (i.e. foreign money) directly into their accounts. I wish that such support significantly increases.
It is important to note that not just not-for-profit entities but also individuals receiving foreign money as grants come under the FCRA ambit. In my interpretation of FCRA all India individual volunteers receiving money from WMF are mandated to seek prior permission from the Ministry of Home Affairs. IMHO, we are ignoring this and putting valuable volunteers like Ravi in potential threat of scrutiny and litigation. I would like the WMF and FDC to take serious note of this and probably consider routing such grants through entities. Also there are many aspects of the FCRA (mainly the way the money should be utilized), which could be misused by some unscrupulous elements to harass Indian volunteers receiving money from WMF. In my individual capacity I have always advised volunteers and communities to prefer routing money through either WMIN or CIS to be risk averse and as a pre-emptive best practice.--Visdaviva (talk) 12:50, 13 May 2014 (UTC)Reply[reply]

Vishnu, that is a good alert to completely shut down all grants for volunteers, communities and user groups in India. What a brilliant idea to have a flourishing non-profit business in India for organizations like CIS :) I challenge you to highlight what part of this community grant is violating FCRA rule and I am willing to face the legal consequences. If you have any Tamil friend, please ask them to translate what ஆடு நனையுதேன்னு ஓநாய் அழுத கதை means :)
For your info, I did consult my professional tax advisor and due process was followed in opening a separate joint account along with another Tamil Wikimedian to receive this grant as advised by WMF grants team. This is a current account and has my PAN number tied to it. I have also given a written letter explaining to the bank manager about the way the money will be spent who in turn will have the letter as a record and will produce to authorities if needed. --Ravi (talk) 13:27, 13 May 2014 (UTC)Reply[reply]
It is also worth noting, that the former WMF India programs did not get any financial support from the Wikimedia India Trust. How did the employees of former WMF India programs (some of them are current CIS employees) get their salary and how were programs like India Education program run? Will this come under FCRA violation? --Ravi (talk) 14:01, 13 May 2014 (UTC)Reply[reply]

Vishnu, first of all this whatever your intentions, this is not the right forum to bring this up please stick to the topic of staff assessment of your proposal. Please continue this conversation on an appropriate forum. If you are so worried about alleged breaches, kindly look into the above concerns of community members on your proposal. I once again urge Garfield and Geoff to conduct and independent neutral investigation from the legal, accounting and other perspectives to confirm whether or not CIS is adhering to local laws without further delay. Since KPMG does audit work for WMF possibly their Indian arm could be requested to give a report that can be shared with the FDC and the community. AroundTheGlobe (talk) 15:42, 13 May 2014 (UTC)Reply[reply]
Is receiving money as an individual from a foreign body in violation of the Act? If that is so, won't half of India be violating it? I have a copy of the Act from the Ministry of Law and Justice and it doesn't seem to say so. ----Rsrikanth05 (talk) 19:32, 13 May 2014 (UTC)Reply[reply]
Vishnu, I feel that this is distracting us away from the concerns raised and it doesn't befit you or your position as Program Director to be sending out veiled threats like this to the community member, even if he's conspicuously vehement while speaking out. This is *ugly*. I have also recorded my opinion about this on the mailing list. --H P Nadig (talk) 20:26, 13 May 2014 (UTC)Reply[reply]
H P Nadig I seriously refute the way you are wrongly interpreting my intentions. It was/is never my intention nor style of work to threaten anyone, least of all a Wikimedian friend like Ravi. I was only making a legal point that we as a movement should look into and I have very clearly stated that we should take this concern on board. Please also see my reply on the mailing list. --Visdaviva (talk) 08:48, 14 May 2014 (UTC)Reply[reply]


Let me again flag this, that all the above observations of the KSRA and FCRA are made in my individual capacity (and not as CIS employee) to the best of my knowledge and experience and I am very much open to corrections, should my understanding or interpretation be wrong. I am not a professionally trained lawyer and have little training in accounts and most of my above observations are based on my decade long professional experience of being in the not-for-profit sector. --Visdaviva (talk) 12:59, 13 May 2014 (UTC)Reply[reply]

Vishnu, It is not clear why you had to provide these clarifications as Individual and why no Official comment is being made on the concerns raised. I request you to kindly make available the following documents which will themselves perhaps clarify many of the concerns raised.
Kindly make the following documents public:
  1. Information about the AGMs and elections held by CIS for its governing body for all these years.
  2. Latest copy of the Memorandum of Association as filed with the Registrar of Societies, Karnataka (as mandated by Clause 13 of the Karnataka Societies Registration act).
  3. The annual filings of CIS with the Registrar of Societies, Karnataka for all these years.
  4. The property ownership documents of the premises where CIS office works from.
  5. The MoU signed by CIS with WMF.
  6. The FCRA certification and compliance related documents. --H P Nadig (talk) 08:58, 14 May 2014 (UTC)Reply[reply]
Please see the reply on the India mailing list--Visdaviva (talk) 12:40, 15 May 2014 (UTC)Reply[reply]
About disclosing CIS documents[edit]

CIS has always made available its institutional and financial documents to its donors and various government authorities as per statutory requirements, whenever asked for. CIS has extended the same courtesy to WMF as one of our donors and made available all documents that have been asked by the WMF-FDC visiting team to India during February 2014. We would like to extend this to the FDC also, as some of the community members suggested that this would help in better evaluating our FDC proposal. CIS will make available its institutional and financial documents and contracts (in addition to the documents mentioned above except for no. 4, as we do not have the property ownership documents and could provide copies of the rental agreement and electricity bill) to FDC or an appointed representative of FDC for scrutiny. However, CIS will not be able to make available the current WMF Grant Agreement/contract as we have been explicitly asked by the WMF Grants Team to not do so, as it will set a bad precedent. See this mail. Should the FDC desires to see this Grant Agreement/Contract, we would request them to approach the WMF for the same and CIS (as has been stated numerous times in the past) does not have any objection in WMF sharing it.

CIS has also sought professional opinion in writing from our Statutory Auditor on the statutory concerns raised above by some Wikimedians and we are committed to making it available to the community and the FDC as and when we receive it (we are expecting to do so in couple of days).--Visdaviva (talk) 10:58, 21 May 2014 (UTC)Reply[reply]

Professional Opinion from CIS's Statutory Auditor[edit]

As stated above we have approached CIS's Statutory Auditor seeking professional opinion on the concerns raised pertaining to the potentila violations of the KSRA and FCRA by CIS. Please see this response from the Statutory Auditor. CIS's letter to the Statutory Auditor can also be seen here.--Visdaviva (talk) 05:59, 24 May 2014 (UTC)Reply[reply]

Good assessment[edit]

Given the talk page discussion during the community feedback session, where the staff perhaps seemed to defend the proposal as the proposers, I think this staff assessment is balanced. I do believe the proposal provided a very comprehensive plan for what they say they were trying to achieve and was very well planned. I am not sure if volunteer Wikimedians can plan up to this level of detail but I think there are things to learn from this for every Wikimedian who plans to put together such a proposal in the future. I guess having paid staff gives you that luxury of researching and being thorough in your proposal.

I also see a hint of doubt in the marks given for the ability to execute the programme. This doubt is essential given the concerns raised by the community there and here.

Just wanted to place on record my thanks for this balanced assessment and taking the time to document and note more concerns that have been expressed here which look at more than what the community had eyes on. I do not wish to repeat my concerns as expressed on the proposal talk page stay despite answers placed there. Prad2609 (talk) 04:40, 14 May 2014 (UTC)Reply[reply]

Prad2609, given time and money, volunteers are capable of designing better programs. Even without these resources, they are achieving better results. For example, the successfull Malayalam loves Wikipedia program that has been running for three years with ZERO budget. What matters is the results and the cost-effectiveness not just detailed plans.--Ravi (talk) 05:56, 14 May 2014 (UTC)Reply[reply]
Some volunteers, including me have done far more capable and better projects and have got the desired results with no grant, but our own investment of time and money. If money is the case, why hasn't CIS proposed a WikiConference 2014? Why was the WCI organised by you and the community, the first and the last one? ----Rsrikanth05 (talk) 10:43, 14 May 2014 (UTC)Reply[reply]
Ravi,Rsrikanth05, I agree. Prad2609 (talk) 11:26, 14 May 2014 (UTC)Reply[reply]

Questions from Pradeep[edit]

I had the following questions.

  • Under strengths in the Staff Assessment it was noted, "IS is the first non-Wikimedia organization participating in the FDC process, and brings valuable expertise and perspective, in research, policy, and other areas, to its Wikimedia work. It has the capacity and experience to execute programs, and to measure and report on results." I am aware of CIS' contribution to policy and some of their papers related to Internet and Society. Can we have a few examples of the programs that they have executed that similar to the A2K Programme? It would be helpful if you could also link to reports on these programs.
  • Again under strengths it is noted, "CIS is working in India, a strategic priority for Wikimedia work with high potential for impact and learning on a global scale." This doesn't ring that true. It just translates as CIS is in India and that India has proved to be a good ground for experimenting. I think the community comments point to the fact that the Indian community is tired of being the subjects of such experiments. That is my take, anyway.
  • Under weakness it says, "The long-term impact of CIS’s programs on the priority language communities is still unknown. It is not clear to what extent the communities support CIS’s strategy and whether they will continue to grow as a result of these interventions. CIS’s implementation strategies currently rely intensively on staff time and effort, and may not be scalable in other contexts or sustainable over longer periods of time without significant growth in community leadership and volunteer support." I think this is a valid point. I am interested in knowing how CIS-A2K plans to address this particular issue throughout the year. Are there any learnings from the past year that will benefit them in this regard? I think sharing this knowledge will also help other movement partners and WMF itself.
  • Under "Online focus and potential for global impact commensurate with requested resources" it is stated "e long-term results of CIS’s work with specific language communities are still unknown; it has been less than a year since A2K adopted the language focus strategy. In this sense, funding these activities may be a risk. On the other hand, CIS’s strategy of building capacity in communities based on the results of needs assessments may result in positive long-term results for the Wikimedia communities it seeks to serve." Can you share a few examples of this community capacity building that was done in the last one year?
  • Again under the same head continuing in the same para "It is likely that CIS will be able to effectively measure and report on the outcomes of its work; this will be a significant contribution to movement learning." This seems to imply that WMF prizes measurement and reporting over the actual implementation and work getting done on the Wikimedia projects, no?
  • Under "Online focus and potential for global impact commensurate with requested resources" it says, "CIS’s strategy for its stand-alone projects may not be the most effective for the language communities each project is targeting, given that projects other than Wikipedia (for example, Wikisource or Wiktionary) may be more effective entry-points for working with language communities like Tulu or Santhali." I am sure CIS-A2K will appreciate this piece of advise and consider the same during their work.
  • Under "Financial sustainability and proposed growth" it is noted, "The amount of funding proposed is high given CIS’s local context; this concern has been echoed by many community members. As CIS has explained, the higher-than-usual salary structure is inherited from the former WMF India Program." Does CIS-A2K or WMF have any plan/strategies/ideas to fix this in the current period or later?

Thank you and all the best. Prad2609 (talk) 14:47, 17 May 2014 (UTC)Reply[reply]