Payment processing

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Payment processing, in the Wikimedia world, means the ability of an organization (the Wikimedia Foundation or a local chapter) to process donations directly as part of the annual fundraising campaign.

Background[edit]

The Wikimedia Foundation does most of the payment processing for the Wikimedia movement, but not all of it. In 2010, 12 chapters payment-processed, which meant that about USD 4 million (about 15% of the total money raised) went directly to chapter organizations. At Wikimania 2011, the Board of Trustees raised a warning flag about that, and asked Executive Director Sue Gardner to make sure that no chapters ended up payment-processing in 2011, unless they met a defined set of criteria, which were intended mainly to stand in as markers of maturity/responsibility/dependability. This caused some upset in Haifa: chapters which had expected to be allowed to payment-process in 2011, were suddenly being told they would not, or might not, be allowed to payment process. In 2011, three chapters were approved to payment-process, and it is an open question what will happen in future years.

Specific meaning[edit]

Payment processing, as we use the terms, means acting as the direct recipient of funds that come in from donors during the annual fundraising campaign. (When you see the phrase payment processing used in Wikimedia conversations, you should always assume there's a silent "as part of the annual fundraising campaign" appended.) When chapters payment process, it means that the Wikimedia Foundation has pointed donors who've clicked on the fundraising banners, towards the chapter website to have the donation processed.

It is a role with special responsibilities and obligations:

  • Appropriately and securely safeguard donor privacy
  • Ensure money is safeguarded and appropriately accounted for at every step (requires accountants, treasurers, audit committees, good governance)
  • Ensure marketing used to secure the money is accurate and responsible, and that donors are appropriately informed about what happens to their money after the fact
  • Ensure that money is used for a purpose that's consistent with their mission, vision, goals, values and so forth, and consistent with what donors were told would happen
  • Good legal support to ensure compliance with fundraising law, privacy law, regulations governing non-profit organizations, and other relevant law, in their geographies
  • Mechanisms for testing compliance, and the ability to fix problems when they occur

Think of payment processing as a bit like being a bank, or PayPal.

Last year, chapters that acted as payment processors committed to sending 50% of the money they brought in, to the Wikimedia Foundation. But it could have been 10% or 100% --- it doesn't matter, for the purposes of the question of whether chapters should payment process. The point is that if you payment process, you are being held in a special position of serious trust, because you are acting as custodian of all the money, regardless of whether it is later planned to be disseminated elsewhere.

Related issues[edit]

And finally, just for the sake of precision -- there are lots of roles in the annual campaign that can be, and often are, decoupled from payment processing. They include:

  • writing appeal letters and other marketing-type work.
  • Translating and localizing text for the campaign.
  • Answering donor complaints and questions.
  • Etc.

And, there are lots of fundraising roles outside of the annual campaign, that can also be decoupled from payment processing. They include:

  • applying for grants
  • collecting membership dues
  • soliciting major donors
  • having donor parties
  • etc.

Timeline[edit]