Talk:Fundraising and Funds Dissemination/Recommendations 2

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Social justice and impact focus in a chapter-centric fundraising model[edit]

The fundamental question that Sue's set of recommendations is trying to address, and which this document side-steps, is this: How can we ensure both social justice, and the highest possible impact, in a fundraising model that awards a high degree of influence to geography-based chapter organizations a priori?

Let me be clearer. On Talk:Fundraising and Funds Dissemination/Recommendations, Schiste wrote: "WM FR cannot transfer more than 50% to WMF, but on top of those 50% we could give grants. So let's say that above 50% of our donations it goes to grants. This is a viable solution. There might be others."

This is a big deal, so let me emphasize it. Wikimedia France cannot transfer more than 50% of money raised in France to the Wikimedia Foundation. This means, a priori, that Wikimedia France retains organizational control over at least 50% of money raised in France.

What entitles Wikimedia France's Board, membership, and executive to make decisions about this particular chunk of money that is donated in support of the Wikimedia movement, other than a quirk in its specific jurisdictional regulations about the governance of charities?

What if Wikimedia France turns out to be ineffective in its programmatic work, or biased towards some types of programs but not others? What if the larger movement believes that only a relatively small amount of money should be invested in France, but the WM-FR Board insists that a large amount of money needs to be invested there, or consistent with its specific bylaws?

Now multiply this problem times the number of chapters who payment process, because each jurisdiction comes with its own quirks and governance issues that need to be taken into account when allocating or disbursing funds.

Centralized payment processing resolves this, because it allows WMF to simply disburse funds only to activities/budgets that meet some type of fair, movement-wide approval and allocation process (easier said than done, I know).

It is not the only way to resolve this. If we believe that localized payment processing is desirable under the right conditions of organizational maturity and scale, there's a different way to achieve it: 1) Have the FAC allocate how much each payment processing organization is permitted to raise. 2) Treat WMF as the primary entity to disburse funds, with the exception of specific grantmaking activities that it's less qualified to operate, 3) Once a payment processing entity has raised its allocated amount, override whichever mechanism is used to send donors there (e.g. geolocation) and send them to WMF instead.

In that model, a FAC would only permit e.g. WM-FR to payment process if it performed effective program work, and it would cap its overall fundraising according to guidelines which it would develop (how much money should be spent in France vs. India?). There would be no issue with transfer of funds to WMF, because there would be no transfer of funds to WMF. We'd also have a nice before/after comparison which would allow us to evaluate whether the local payment processing is indeed effective.

This could be communicated to donors as follows: We've raised enough $ for local programs, but we still need your continued support for X, Y and Z. It wouldn't be ideal from a donor communications perspective, a bit confusing (especially because you'd have different donors in time window A vs. time window B), but manageable.

Would you consider such a model acceptable and worthwhile? I'm not sure I would, but I wanted to try to crystallize the key issues with a chapter-centric approach. It's not just about who raises the most money, but how we can disburse money fairly to where the need and impact is going to be highest, regardless of where donors are geographically based.--Eloquence 03:08, 9 January 2012 (UTC)

Let's see, what definition of social justice are you subscribing to when a single non-profit organization based San francisco is in-charge of every single cent raised in the entire movement. Forget about ideas of social justice, equality, and equitable dissemination of funds, when not even another organization besides the one you are in-charge of, can raise or handle a single cent. This is not about re-distribution of wealth from chapters in developed countries to developing countries, but one organization in a developed country controlling it all. First, It is one organization's decisions to re-distribute funds, then its definition of global south, then it's terms.
You are trying to use governance issues to somehow paint WMFR or a chapter as limited in their dispensation, you are bound by the same rules as them. If donations are raised in the name of the local organization, then yes, the chapter is entitled to decide how it wants to use them. You might want to have a chat with WMDE about this particular point.
Depending on which definition you go by, WMF has already turned out ineffective at programmatic work and biased towards certain programs and geographies (research and global south).
Centralized payment only satisfies WMF's need for control. To define criteria and areas at its discretion.
I love how you keep using "the movement" to be in opposition of chapters constantly and complete supports and agreement of WMF. By all means, do put this up for a vote. I suppose it is convenient to point to it constantly, but harder to actually look at last year and get a sense of what the community thinks. Theo10011 03:49, 9 January 2012 (UTC)
Actually, no, the goal is to move away from any central bureaucracy (WMF or a wealthy chapter) controlling the allocation of funds. That's what recommendation 4 is about (which this fork of the original proposal adopts). Therefore the rest of your argument is moot.--Eloquence 03:53, 9 January 2012 (UTC)
Actually recommendation 4 is an abstract suggestion at this point. A suggestion even some board members have doubts about. [1]. It seems like a convenient solution, a panacea to fix all fundraising woes. The only issue is, the first mention of this idea or committee is coming with the recommendations to kill all non-WMF form of fundraising, trust is not a huge commodity WMF is currently sitting on. BTW you were the one who mentioned central payment processing as a solution, if you are making the distinction between central bureaucracy and central payment processing, then your argument is moot before even starting, suggesting to collect all the payments centrally by one organization, while all the messy issues of accountability and responsibility are moved away to another one, won't that be convenient. Can chapters get that deal, collect payments, and another organization handle all the bureaucracy? Theo10011 03:57, 9 January 2012 (UTC)
Sue's recommendations are exactly that: recommendations. We're not at the implementation stage. That said, the specific issues of an annual funds allocation process are being further elucidated here.
As I noted in my original comment, the fundamental problem with delegating payment processing to some geography-based organizations is that it distorts the distribution of funds, potentially unfairly. I've also proposed, above, an alternative to fully centralized payment processing, for further discussion.
As for your last point, I'm not sure you're fully understanding what I'm suggesting, or I'm fully understanding what you're responding. How am I suggesting to move "all the messy issues of accountability and responsibility" conveniently away to another organization?
To be honest, I have the impression that you're responding very quickly without even bothering to read everything that's said above. I'd appreciate if you could take the time to compose more substantive and coherent analysis. Thanks, --Eloquence 04:10, 9 January 2012 (UTC)
What if Wikimedia France turns out to be ineffective in its programmatic work, or biased towards some types of programs but not others? What if the larger movement believes that only a relatively small amount of money should be invested in France, but the WM-FR Board insists that a large amount of money needs to be invested there, or consistent with its specific bylaws?
Of course. But It's exactly the same problem with the foundation ...
The problem is more important if WMF centralize all. If WMF centralize all, and if she is ineffective, so there are impacts on all Wikimedia movement. Not in one country. So it's really an argument against centralized payment processing by the Wikimedia Foundation. Ludo29 10:06, 9 January 2012 (UTC)
Dear Ludo,
yes, every organization in the movement is at risk of spending money unwisely, including WMF.
At issue is not the question whether we should "centralize it all", however. At issue is the question whether there should be money spent by some entities that isn't subject to shared review. An entity that can't raise money because its geography is too poor has to apply for a grant, execute on program work, submit a report, and re-apply next year. Why should a chapter be immune from the same requirements just because it is in a wealthy geography?
What's being discussed at Fundraising and Funds Dissemination/Funds allocation brainstorming is the development of an annual planning cycle that's community-driven through a movement-wide group and process, and where any WMF spending that's not essential would be subject to the same review as any other organization's spending.
To mitigate the risks of centralized planning, that process would have to be tempered by focusing on annual operating grants, with a lot of flexibility towards changes in spending, and renewed funding generally tied to overall past programmatic success. The annual budget would be developed in the local context, and approved by each organization's Board and membership as it is today.
If implemented carefully and well, this is self-evidently a more socially just approach than to privilege countries with what would effectively amount to earmarks for local spending, simply because they have restrictions on sending money out of the country.--Eloquence 09:14, 10 January 2012 (UTC)
I don't see a connection between chapters fundraising and some funds being spent without review. This year, the fundraising chapters were required to submit an annual plan for review and I haven't seen anyone propose that that should stop. There is no reason why the annual plan of a fundraising chapter can't go through the same review process as the annual plan of a grant-receiving chapter. The decision being made at the end would be different ("Yes, you can fundraise" vs "Yes, here's a cheque") but the decision making process can be the same. --Tango 12:40, 10 January 2012 (UTC)


Hello,

What entitles Wikimedia France's Board, membership, and executive to make decisions about this particular chunk of money that is donated in support of the Wikimedia movement, other than a quirk in its specific jurisdictional regulations about the governance of charities? What if Wikimedia France turns out to be ineffective in its programmatic work, or biased towards some types of programs but not others? What if the larger movement believes that only a relatively small amount of money should be invested in France, but the WM-FR Board insists that a large amount of money needs to be invested there, or consistent with its specific bylaws? (Eloquence)

Eloquence, in France we have very strict process of control for charities. We are controlled every year by an "auditor" who makes a strict control over:
  • Our accounts
  • Our decision-making process
  • How we spend money from donors
If the auditor believes that we do not operate well, it may not certify our accounts and ask us not to ask for money again. This can happen if:
  • We do not spend money, we keep in the bank
  • We spend the money for other projects as those incurred during the call for donations
  • If our internal procedures are not good.
This is a very effective and strict control procedure for all charities that have more € 190 000 in donations. We have made enormous progress in our functioning since we are controlled that way. And we know what would happen if we are not certified. Do the Wikimedia Foundation have the same process of control ?
I hope this can clarify about the responsibility of the chapter. This does not answer the question of whether only the WMF is able to decide for which projects the money goes, however. Because you speak about "the movement", but in fact this mean "the Wikimedia Foundation". Serein 10:20, 9 January 2012 (UTC)
Dear Serein,
I am not criticizing Wikimedia France. For the purpose of this discussion, Wikimedia France is a placeholder. I am raising a general issue, which happens to apply to Wikimedia France: legal limitations on funds transfers.
Legal limitations on funds transfer, and other impediments to moving money around, create social injustice. This is a deep and important fact. In order for any proposal like the one discussed here to be acceptable, we must either find a workaround, or exclude any organizations from payment processing that are subject to severe legal limitations.
The fact that legal limitations create social injustice does not automatically mean that the removal of those limitations creates social justice. It is a necessary, but not sufficient precondition for the just and fair distribution of funds.
But it is absolutely unacceptable for funds to be earmarked for one specific purpose, or for one specific entity to control, simply because they were raised in a country which has restrictions on transfers. If that's the condition we're faced with, we're much better off managing donations through a central entity (at least for those geographies which are so affected) and then disbursing them as needed.--Eloquence 09:32, 10 January 2012 (UTC)
Erik, I understand your concern with a chapter not able to transfer some money, but you cannot focus on just one example to make general policies; Wikimedia CH has never had any trouble sending money to the WMF; as long as one chapter can do this, the point is moot. As for the argument that "What if Wikimedia Xxxx turns out to be ineffective in its programmatic work, or biased towards some types of programs but not others?", it surprised me: this year, fundraising chapters had to submit a plan explaining what they wanted to do with the money they raise, and this plan had to be approved by the WMF. In this sense, what you propose seem very close to the current fundraising agreement: a specified amount stays in the chapters (no difference with a grant-based system), and the rest goes to another body that will redistribute it as needed. With, of course, other specified constraints (accountability, transparency, nothing new here !).
I am, however, not entirely convinced when you write "What if the larger movement believes that only a relatively small amount of money should be invested in France". Firstly, because I think that a chapter who performs really well in the fundraiser, should be allowed to benefit from it (we would need metrics here, of course). It is clear that volunteers within a chapter may be ready to spend hours helping for the fundraiser if their chapter is part of it (because they are responsible for it), and that the WMF will not get as much help otherwise. Also, what the donors thinks remains important; I am glad you mention above the idea of being transparent (telling the donors "we have raised enough money locally, what you give now will be used in this and that country"), although I would really, really like to see figures about the behaviour of donors in this situation: if we lose many of the donors (which I think we would), then it makes more sense to continue raising money that will partily be used in France, rather than not raising anything. Schutz 10:31, 9 January 2012 (UTC)
Dear Frederic,
as long as one chapter can do this, the point is moot
I agree this is not a general point about all payment processing under all circumstances. Perhaps the chapters that are mentioned in this proposal can weigh in and clarify the restrictions that apply under their local laws as they understand them.
IMO, for this proposal to be fair and honest, rather than just a defense of the status quo, it would have to remove any chapter from the proposed list of countries which has serious impediments to transfer of funds. (This may just be France among the currently listed ones, or it may include others as well.)
Firstly, because I think that a chapter who performs really well in the fundraiser, should be allowed to benefit from it
Augh! Sorry, but this is exactly the kind of thing that I absolutely disagree with. No entitlements, no earmarks. Good fundraising work doesn't entitle an organization to high spending. Being good at raising money may correlate with being good at spending it, but it doesn't always, and it certainly doesn't inherently justify prioritizing that spending over other spending.
You may think that's a minor point, but it will become increasingly the main issue of contention. Our fundraising revenue is not going to grow indefinitely at the current pace, so an ever-larger number of program-conducting organizations (not all of them national chapters) will compete for a pie of spending which may only increase by relatively small percentages compared with prior years.
What should determine the allocation of that pie is the impact and importance of program work, not the amount of volunteer or staff sweat and blood that's spent raising money. If a chapter is great at organizing program work, then of course its program work will continue to get funded. But we can't treat this as an entitlement.
This is a major, major argument against any payment processing by chapters. If chapters feel that payment processing creates entitlements to spending, then it's better to centralize payment processing, regardless of any arguments around financial effectiveness.
The fact that you're stating this here suggests to me strongly that any proposal which enables local payment processing must make absolutely clear that this does not create entitlements to spending.-Eloquence 09:50, 10 January 2012 (UTC)
Of course, I am not saying that a chapter should be entitled to a larger part of the pie just because it is fundraising, and I generally agree with what you write. But there are two problems I see: firstly, if chapters follow Sue's second recommandation and start fundraising for themselves, there will be no time left for local volunteers to support the WMF fundraiser (I spent counteless hours talking to the medias, replying to emails about the fundraiser, etc -- tasks that directly help bringing more money in. If WM CH was fundraising independently, as a board member, I would spend my time there, obviously, and it is likely that no one else would do this work. This can't possibly be a win for the global fundraiser). And, clearly, there would be less money raised by the WMF. So some kind of middle ground would probably make sense.
Secondly, I still think that donor's opinion should be taken into account. "With great transparency comes great responsability", I could say: if donors are told clearly that their money will not be used locally (or in a way that benefit the version of Wikipedia they use), there is a chance (far from negligible) that they will donate less/stop donating. If that happens (it remains to be seen how it could be measured, of course), then it would make sense to let the local chapter continue to fundraise and attract money (especially since it would not divert money from another Wikimedia entity, as in the example in my previous paragraph).
Are these important problems ? I don't know, but I suspect that at least the second is quite important (hey, I still have this latent belief that most of our fundraising system is based on a lie: how many donations would we lose if our donation page contained a warning saying "Please note that your donations will not directly pay for people editing and improving the pages you love reading" ?). At least, important enough that we should not just set a general principle that says that fundraising should in no way mean more money for the chapter.
But otherwise, it still seems to me that your proposal above is more or less what happenend during the fundraiser this year, and is a reasonable model to start from, without centralizing everything. Schutz 12:58, 10 January 2012 (UTC)
How big is this problem? At the moment, the only example is WMFR. I know the UK has had some issues, but they have been dealt with (legally, WMUK decides whether or not to donate any money to the WMF after the fundraiser and, if so, how much, but WMUK could only decide to keep an unreasonable amount once - after that, it wouldn't be allowed to fundraise any more, so I don't really think we have a problem there). I know WMDE has had to come up with some complicated system for giving money to the WMF, but it's managed to find a way. Is there any chapter other than WMFR that still has a problem? --Tango 12:49, 9 January 2012 (UTC)
Like I said above, I don't think that's a fundamental argument against local PP, but we should be clear that it's a significant issue. Any counterproposal that incorporates local PP needs to offer solutions to this issue.
It would be great if we could consolidate the information somewhere. In the UK, is there any limit, as far as you know, i.e. could the grant be as high as the amount raised?--Eloquence 09:54, 10 January 2012 (UTC)
I don't believe there is any fixed limit. WMUK has to make sure it is raising money for its own purposes rather than for someone else, otherwise the tax-deductibility doesn't apply, but the trustees have a lot of freedom in deciding how best to further the charity's goals. If they felt donating all the money to the WMF was the best way to further WMUK's goals, I guess they could do so, although it would be a difficult decision to justify and the Charity Commission would probably ask a lot of awkward questions. --Tango 12:37, 10 January 2012 (UTC)
Hi Erik, I do agree social justice and fund sharing are really important questions. And we know that french fiscal laws present some limitation on how much transfer we can transfer abroad. As I said, it is 50% (that's the spirit of the law. But, as always, there are workarounds. I gave one, through grants, but I'm pretty sure there are others. Like in 2009 when we spent our money due to WMF in the organization of a 3 days workshop around multimedia tools. My point being, if money isn't gave to WMF it doesn't mean it will be spent for the chapter directly. Other example, we gave grants to some other chapters.
So issue is real, and I acknowledge that, but centralization isn't the only solution. Money can be used for the movement in many other ways. We could see it, for WMFR, as following 50% of the fund raised are given back to WMF and in WMFr share some is dedicated to either grants or project that benefits everyone.
Regarding the right of WMFr to decide what is being done with the money. My first answer would be trust. At some point we have to trust each other we're all working toward our goals (and trust doesn't prevent control of course!). Second, I would say, the FAC. In my opinion, this also is the role of the FAC to approve those kind of things.
What if WMFR is inneffective in its programmatic work ? Well it happens. It happenned to every Wikimedia organization to launch a project that wasn't as effective as planned. But, what would be troublesome if a Wikimedia organization is always innefective. Again as the FAC would the oversseing body, that would be detected. But not only for fundraising, but also regarding grants. Wherever the money comes/goes you have to be sure it's used effectively.
Regarding your proposal for FAC. First I'm happy as it's based on a mix structure ! Some more days, and you'll support it :D. Jokes appart, I mainly agree with you. If a donation processing organization isn't effective, it shouldn't be donation processing next year. I'm more than ok with that. That is the right way to go, if we succeed in defining what "effective" is.
Regarding the caping, I do not totally agree. I still think, as nearly 60% of our donors asks for fiscal deduction, it would lead us to 1/ less money 2/ annoyed donors that would that they had the right to get the final deduction. But again, caping could also mean that "Everything raised abova XXX€ has to be used for the global movement". No transfering issues, the use of the money is FAC approved and no angry donors.
So to finaly end my answer, I would say this model is 90% what I'd want. To finish, I'm 100% in favor of strong accountability criteria, 100% supporting a fair funding sharing system, 100% sanctionning innefective organizations (innefective regarding our goals), but not ok with changing who the donor give money to in the middle of the fundraising. Hope I answered your questions, but the more I read your question the more I'm frustrated as we seem to agree on 3/4 of the questions, the only one we don't is who process donations :) Schiste 20:23, 10 January 2012 (UTC)

What is the rest of the mix?[edit]

I have a few questions:

  • In your proposed scenario, what happens to any payment processing organization that does not meet the accountability criteria in another year? If a chapter that processes payments in 2011 because it meets eligibility criteria does not meet these criteria in 2012, what then?
  • Where do the other 33 chapters - apart from the 5 that featured in the fundraiser in 2011 - figure in your 'mixed' plan? Do they process payments? Do they get grants? What do they do? And how is this decided?
  • How would you view a non-payment processing chapter that does not demonstrate financial accountability? Would it be entitled to any funding at all, in your scenario, either through grants or anything else? How would this be decided? How would this be dealt with?
  • Some, and I say some, chapters seem to feel they are 'entitled' to a certain level of privilege, including payment processing, just because they are chapters. Any thoughts?
  • Finally, while much of the discussion is about fundsharing, I have a question about programs - how do you understand program effectiveness? After all, funding - through any mechanism - is a means to an end - which is to do something with that funding. How can this be made effective?
  • And, going a little beyond, what happens to chapters that are not shaping up as they should programmatically, or are defunct, or doing nothing?
  • What about the issue of extra funds floating around with a chapter that can't absorb them or spend them? I think this is a serious issue. In a system of grant making, organizations usually write a plan or a proposal that spells out their need - they get that and no more. So from an institutional donor's point of view, 'wastage of resources' is minimized. Now, in the case of the wikimedia sites, hundreds of thousands of small donors contribute money to the projects. You and I both know that none of them want their money to just be sitting around without a plan or a program of action - that's not why someone contributes $10 or $100, right? The donor wants his or her contribution used towards the projects. (Agreed, all organizations need some reserves - which are usually planned in advance). But how about unspent donor money that goes above and beyond these reserves, and resides with an organization within the movement? How would one handle that?

Bishdatta 18:14, 9 January 2012 (UTC)

Faulty Maths[edit]

"Laws of probability: Sue's argument : "Let’s say for the sake of argument that each organization processing payments in the annual campaign has a 1% chance of experiencing fraud. This means that centralized payment processing, with one payment processor, has a 1% chance of experiencing fraud. The probability of fraud rises with each additional payment processor: with two it is 1.99%, with three it is 2.97%, with ten it is 9.56%, with thirty it is 26.03% and with fifty it is 39.5%." Nope. It remains 1% throughout; it is very definitely not additive. The possibility of fraud is in the donation not the processing of the payment, thus if a putative 1% of donations were fraudulent it matters not where that donation is processed, it is only processed once and would be found to be fraudulent at that point. The increasing percentages given could only apply if the one payment was repeatedly processed which, naturally, it isn't. As a side-bar, fraudulent transactions are most likely to be based on credit card usage and not cheques/checks (though the latter might 'bounce' through inadequate funds that wouldn't be 'fraud' per se) and card use is more prevalent with centralised / remote processing than in-country cheques which are far more common / preferred by donors in many countries. --Alison Wheeler 18:25, 11 January 2012 (UTC)

While it's a simplistic argument and certainly not to be taken literally, I do think you're misunderstanding what she's saying. I believe she's not talking about donation fraud, but about abuses within an organization that lead to money being stolen. And the likelihood of those abuses does raise with the number of organizations you add.--Eloquence 18:32, 11 January 2012 (UTC)
That would be an interesting alternative reading then; that Sue believes the companies providing the payment processing are inherently fraudulent! We aren't talking here about someone handing over a physical credit or debit card and us (WMF, chapter) swiping it through a hand-held machine where we could secretly amend the amount being charged, but where a bank (or similar government-authorised body) is performing the actual transaction and putting the receipts into a local bank account. The possibility that the local Chapter treasurer then engages in fraud is - I trust - zero, but even if there was this possibility it is not solely related to where the inbound transaction happens as fraud can just as easily happen in the spending of a WMF-supplied grant. Indeed, given that there are far more people in the WMF who will have access to the accounting systems (ie, staff) than at each Chapter, you could as easily make an argument that none of the transactions should result in monies going to the Foundation! ie. crazy. On a simple basis, either "we" (the wide movement-as-a-whole) trust the people running the Chapters just as much (but not more) than we do those running the Foundation, or we trust neither at all. So far as I recall, the only fraud within the Wikimedia structures to date has happened in the Foundation. --Alison Wheeler 18:46, 11 January 2012 (UTC)
Hi Alison - I don't see this as an issue of trust. It's a simple matter of a rational risk analysis. You may disagree with the analysis, but it's not founded on any mistrust in any one organization.--Eloquence 20:06, 11 January 2012 (UTC)
So, Erik, this is about trust after-all? You don't trust anyone to handle money if they are not located in San francisco and answering to you or Sue? Everyone can mis-manage the money, engage in fraud, but not anyone at or near WMF? The same checks and balance that you have in place(a board, auditors, treasurer, reports) are not enough when it comes to someone else? Theo10011 19:04, 11 January 2012 (UTC)
I agree with Erik's and Sue's argument. Every organization could be subject to fraud. And that is a very real risk, and the more organizations handling money, the more risk there are to experience fraud. I believe Erik trusts me, and I trust him. But who can say if in 2 years WMF/chapters' acocuntant will not fraud ? This isn't about trusting each other, it's about recognizing a risk. But, as I said somewhere else I think, the risk of fraud create another risk, damages to the movement. There's definitly more frauds risks when you have 10 donation processing organization. But if one is subject to fraud, the damages to the movement could be handled. On the other hand, if only WMF process donation, fraud would become, potentially, a movement killer. By decreasing a risk (fraud) it would increase the other one (damage to the movement). So, it would be, on the long run, safer not to have all the eggs in the same basket. But we must not ignore both risks, they both are real. Schiste 19:46, 11 January 2012 (UTC)
The crux of Sue's argument, as I understand it, is that if, say, any one organization hires a criminal who manages to steal a bunch of money as part of the increased responsibilities over money that come with payment processing, given the nature of a global movement, this would likely not be seen as a "Wikimedia so-and-so issue", but a "money stolen from Wikimedia donors" issue. That's because the issues around fraud aren't primarily about the amount of money that's stolen, but about the reputational damage. The typical financial losses of fraud, even in large organizations, are relatively small [2], while the reputational impact can be severe.--Eloquence 20:01, 11 January 2012 (UTC)
Now, I don't mean to point fingers but....do you know of any organization that hired a criminal or had a bunch of money stolen? I am thinking of one. Theo10011 20:12, 11 January 2012 (UTC)
It would be nice if you made at least an attempt at engaging in a rational conversation, otherwise you're just wasting time and adding more heat than light, as you have been all over the place.--Eloquence 20:34, 11 January 2012 (UTC)
I am trying, and light usually comes from heat. I have been trying to point at certain aspects of these decision. There is a fundamental difference between how you and I are viewing things, you are, or have been working from the central premise, that WMF is different than any and all chapters in a structural sense and repeatedly isolated from any mis-handling or abuse, I have not. You are placing WMF out of every discussion related to Movement, organization, entities and chapters. I on the other hand, consider WMF to be the same as any entity, when you repeatedly exalt one over the other, the realities are bound to catch up. WMF performance and standing can fall victim to all those concerns you have brought up for chapters. Aside from my trollish-tone, I was indeed making the same central point as before, WMF is almost as likely to fall victim to those concerns as any other organization, the scale however, would be monumentally higher and concentrated in one place (all eggs in one basket). My tone in this case aside, I previously offered to back up my statements with citations and links if necessary, I thought and still think I am making rational arguments, they are however, more critical of one organization than others. Theo10011 20:50, 11 January 2012 (UTC)
I understand, but Sue's saying the same thing. The likelihood of fraud is certainly not automatically lower in WMF than in any chapter. It's debatable whether it's higher, but even it is, that doesn't negate her point. More legal entities in charge of large amounts of money = higher risk of one of them being immersed in scandal, and any one such scandal would harm us all. We consider that an acceptable risk, obviously, when it comes to giving grants to chapters and other entities, because you can't do more stuff without facing more risks. But it factors into the payment processing consideration. Let me also be clear: If the threshold for payment processing is very high (as it is today), that goes a long way of mitigating the risks.--Eloquence 20:57, 11 January 2012 (UTC)
While there is certainly some truth there, it is greatly diminished once you take into account the single-point-of-failure issue (the WMF getting involved in a scandal when its our sole fundraiser is a really big problem, one of a large number of fundraisers being involved in a scandal is a much smaller problem, although still a large one) and the fact that the chance of the WMF being involved in such a scandal increases the more it fundraises (eg. it needs to hire more staff to handle the fundraiser if it is fundraising in more countries, which means there are more people that could turn out to be dishonest). Because of these points, I think the increased risk from multiple fundraisers is so small that it is completely mitigated by the sensible criteria specified in the Haifa letter. --Tango 20:43, 12 January 2012 (UTC)

Erik, I was going to reply here but I see Thomas has pretty much made the same point I was going to make. Single-point-of-failure and all eggs in one basket analogy. The issue is, for whatever reason, this model was chosen in the beginning. It is actually quiet similar to several large non-profit and charitable organizations like Oxfam and Red cross, they use very similar models, we are now suggesting a move half-way through implementation of the previous model that was chosen years ago, in favor of a very for-profit corporate centralized one. What about the exposure to liability in case of Red cross or Oxfam? This model already works in their and several other cases. The problem I assumed earlier, might have been the choice made before WMF came into existence, whether a top 10 website could succeed with a model used primarily for charities and non-profits, it's a tight rope to walk on between the two, Mozilla had a hard time with this. On one side is a top 10 encyclopedia website based primarily in the US, on the other is a global non-profit, educational/social outreach mission with chapters all over the world. Anyway, we can't stop walking the tight-rope half way through and start jumping. Theo10011 01:41, 17 January 2012 (UTC)