User:Sue Gardner/scratchpad/Movement Fund-raising and Fund-disseminating
This page is really just scratch pad notes to myself: I am using it as a place to organize my thoughts on the issue of fund-raising and fund-disseminating for 2012 and beyond. I used to have this page on the office wiki, but decided there's no reason not to have it on meta. You're welcome to read it, and you're welcome to comment on the talk page if you want. I used to ask people not to edit these pages while I was just getting started, but now I think it's fine -- please feel free to edit directly. Please also see this page, which will eventually supersede this one. Sue Gardner 21:52, 13 October 2011 (UTC)
- Here is where you can sign up to participate: Movement fundraising and fund-disseminating Participation page
Background and assumptions
Background: The Board is likely going to ask me to run/lead/facilitate a process aimed at coming up with potential models for the Wikimedia movement for fund-raising and fund-disseminating.
I am titling this project "2012 And Beyond." It's got nothing to do with the 2011 fundraising campaign, which we are just going to need to muddle through as best we all can. This project is aimed at creating recommendations for the Board for 2012 and afterwards, likely to be in effect by the beginning of the 2012 campaign.
- I'm assuming the models will be intended to reflect an ideal future state, not a compromise between 'what is ideal' and 'what is possible today.' (So, for example, if chapters payment processing is the right way to handle bringing in cash, then that's the model we'd move towards, despite any capacity or capability challenges that chapters currently face.) So: we are aiming to imagine the ideal future state, and then we'll develop an action plan for getting there. Elaborating this a little further: An old boss of mine used to have a really useful saying: imagine that we turned the lights off and imagined the kind of system (or structure, or process) we wanted to have, and then we turned the lights back on. What would it look like? That's what I'm thinking here: we are going to aim to design something perfect, and then we are going to develop an action plan for getting ourselves there. As Bishakha noted on the talk page, it would likely be several years of evolution to get where we want to go.
- I am assuming there are two key questions at play here:
- How does the movement bring in money
- How does the movement distribute the money it brings in
- I am assuming that the first question is relatively straightforward to answer, and the second question is much harder. "How we bring in money" doesn't need to be complicated, but "how we disseminate money" surely will be. (For one thing, the number of countries involved in 'fundraising' is likely fewer than in 'funds receiving.' 68% of the movement's money is generated inside the United States; 88% inside the United States and Germany; 94% inside the United States, Germany and Canada ... whereas twenty entities currently receive funds.)
- I am assuming that this will be a consultative process, although I don't at this moment know exactly what that will look like. Key stakeholders will likely include i) all existing chapters that currently spend money on programmatic activities, or aspire to spend money on programmatic activities.... ii) the Wikimedia Foundation.... iii) donors and other funders........ and iv) geographies/language versions that would benefit from investment and aren't currently getting it. More TC.
- I am beginning to think it might make sense to tackle the second question first. The main purpose of this exercise, and the challenging part, I think is to figure out how money gets disseminated. The question of how it gets raised is secondary and subsidiary, I think. And, I think that internal cohesion on the second question might lead to easier conversations about the first question.
HOW DOES THE MOVEMENT BRING IN MONEY
Focus statement (assumed/proposed):
Wikimedia fundraises in whatever fashion most efficiently enables us to bring in the largest possible amount of money, and move it around with the maximum possible amount of freedom in pursuit of our common mission, while adhering to high standards of ethics and transparency.
- Why efficiency. We don't want to waste donors' dollars. We want our fundraising to be as efficient as possible, because we want to spend as much of it as possible on programmatic activities.
- Among the assumed implications: i) We'll fundraise more actively in rich countries compared with poor countries: this means translation work, payment options, crafting of messaging etc. will be optimized for wealthy countries, with a lesser or zero emphasis elsewhere. ii)
- Why largest possible amount. We want to make the largest possible amount of money so that we have the most money possible to dedicate to programmatic purposes.
- Among the assumed implications: This argues for such things as i) offering lots of payment options, ii) offering inventives such as tax deductibility etc., iii) knowing what potential donors want and creating messaging that will appeal to them.
- Why freedom to move it around. The Wikimedia movement wants to make its own decisions about where money will be most useful. As much as possible, we want to avoid being constrained by impediments such as regulatory hurdles.
- Among the implications: i) We will bring in the largest amount of money in rich countries, and we will want a not-inconsiderable amount of it to go to the United States (to support core functioning of the sites, etc.), and to developing countries (to support the Global South strategy). There probably is no situation in which we will want all the money to remain in its country of origin. Therefore, the work here is to research the top revenue-generating countries, and see what's the path to easiest transfer.
Note: This is not just about payment-processing. Currently the bulk of the Wikimedia movement's cash comes in via payment processing many small donations, but it is possible that in time other revenue sources may grow in importance (particularly, likely, foundation grants). And even today there are multiple non-payment-processing revenue streams -- ie., the German chapter and the Indonesian chapter have received grants from foundations, the French chapter has a merchandise shop, I believe the Polish chapter has some kind of fundraising activity outside the annual campaign. So therefore -- we shouldn't assume we are talking solely about payment-processing, nor should we assume even that we are talking solely about the annual campaign. Whatever we decide to do WRT fundraising needs to encompass all forms of revenue generation.
Data we would ideally want to gather
- What brings in the largest amount of money that can be freely be moved around the world?
Based on the information we currently have a available, a well designed annual global annual fundraising campaign brings in the largest amount of money that can be moved freely around the world, as money raised in the annual fundraising campaign is currently unrestricted money which can be used as needed, wherever it is needed.
- What is the cost of fundraising out of San Francisco?
The total cost of fundraising out of San Francisco was $2,142,217 for all type of fundraising including grants and major gifts. For the fiscal ending June 30, 2011 this was a fundraising cost of 9% of money raised.
- What is the cost of fundraising out of the country-of-origin?
The current estimate for fundraising cost for a chapter is 10% of the money raised by the chapter. For the fiscal year ending June 30, 2011 the estimated cost of chapter fundraising was $640,663. This a combination of Paypal (payment processing fees are estimated at 3.8% based on the Wikimedia UK chapter fundraising report for 2010-2011 with the balance being for administrative cost. We will need actual fundraising cost for each payment processing chapter to verify this number.
- Is the cost lower for a model of "only SF payment processes" or "only chapters payment process"?
Based on the 10% cost of fundraising for chapters, it cost less to fund raise only in San Francisco. The Foundation will be fundraising in 2011 for the all other countries except for Germany, the United Kingdom, France and Switzerland and the only additional cost to add other countries is the cost of payment processing by the Foundation which is currently at 1.9%. The current calculated variance is that it cost 9% of money raised if both the chapter and the Foundation fund raise and 7% of money raised if the Foundation were to do all the payment processing for the annual fundraiser. The estimated cost savings of having the Foundation do all the fund raising was $518,937 for the fiscal year ending June 30, 2011. This cost savings is due to allocating the same fixed cost over a larger amount raised even after including the incremental cost. Having only chapters payment process is the most expensive model based on the higher transaction cost and extra staffing cost of having fundraising and payment processing staff in each chapter.
- Is the most expensive model a mixed one, where both the chapters and SF payment-process?
No. The most expensive model is one where all payment processing is done by the chapters. There are two main reasons for this. The first, is that the Wikimedia Foundation is able to get better transaction rates for payment processing than chapters due to higher volume. For example, 1.9% for the Foundation versus 3.8% for the UK chapter for Paypal fees. The second, for the annual fundraiser the more money you can raise with the same cost structure, lowers the cost of the fundraiser.
- What does it cost to transfer money from chapters to the Wikimedia Foundation (administration, legal costs, etc.)?
This is currently included is the 10% cost of fundraising by the chapters. We will need the actual cost from each payment processing chapter to get an exact amount.
- What does it cost to transfer money from the Wikimedia Foundation to chapters (administration, legal costs, etc.)?
The actual transfer of money from the Foundation to chapters is free to the Foundation, as our bank does not charge us any fees for these services. Estimated cost per transfer for all other cost is $15.00 per transfer.
- Are there countries that cannot transfer money from the country-of-origin to the Wikimedia Foundation?
Under the laws of the United States, Burma(Myanmar), Syria, Cuba, Iran and Sudan cannot send money to the United States. With Russia we have found that due to tax issues it is difficult to transfer money from Russia to the United States.
- Are there countries to which the Wikimedia Foundation cannot transfer money?
Under the laws of the United States, the Wikimedia Foundation cannot transfer money to Burma(Myanmar), Syria, Cuba, Iran and Sudan. The Wikimedia Foundation has had difficulties in sending money to organizations in India, as under Indian law only authorized organizations are able to receive funds from outside India.
Questions that could potentially be asked of chapters in revenue-generating countries
- What are some potential solutions for fundraising, for the movement? (ie brainstorming notions)
- What are some potential solutions for funds disseminating, for the movement? (ie brainstorming notions)
- Is it possible for your chapter to nominate one person to participate in this discussion on behalf of the entire chapter and its board. (I don't mean that one person would participate to the exclusion of others. But I think it makes sense for there to be one person who's committed to making the discussion a priority, and who will plan to set aside the time to do it. I think it would be hard to reach agreement if that doesn't happen.)
- What revenue sources do you think would be most fruitful to pursue in your geography
- What incentives can you offer that donors could not get if the fundraising happened from San Francisco (this should include all incentives -- ie, tax deductibility where appropriate, localized messaging, etc.) (this question would not be asking what they offer today, but what they in theory could or would offer -- ie, the UK chapter does not offer tax deductibility yet, but in theory it could, and it wants to.)
- What incentives do you think the Wikimedia Foundation can offer, that you cannot?
- What revenue sources would you be willing to put into a central pot for dissemination (e.g., presumably not restricted grants)
- What would you be willing to transfer into a central pot for dissemination (to the Wikimedia Foundation, and to programmatic activities outside your geography)
- What funding would you need to reserve for your own operations, to ensure viability (meaning, not for programmatic activities, but for purposes of fundraising, accounting, regulatory compliance and so forth. In effect this would be the cost of fundraising.)
- Assessment of whether you think active participation in fundraising would hinder your programmatic growth and organizational development, or help it (I'm not asking whether having cash would hurt or help, I'm asking whether actively working on fundraising would hurt or help)
- What conditions would need to be in place for you to be willing to put revenues into a central pot
- Assuming one of those conditions would be that the entity making decisions about funds dissemination is required to have moral legitimacy -- what would create moral legitimacy, in your view?
- Is your fiscal year January-December, July-June, or something different?
- What is your planning cycle? (when are program plans developed, approved, assessed)
- Are you able to move money out of your country without impediment? Please describe any impediments or restrictions you're aware of.
- Would your chapter be legally able to transfer money received via online donations to a central pot for reallocation? Please describe any impediments or restrictions you think might exist.
- When you think about the process of figuring out how the Wikimedia movement should handle fundraising and funds-dissemination, what's most important to you? And what are you most worried about?
- Can you put forward one person from your chapter to be your primary representative on this issue?
What are the potential or actual revenue sources
- On-site fundraising (many small donors model)
- Off-site fundraising (many small donors model)
- Unrestricted/operating grants from foundations or governments
- Restricted grants from foundations or governments
- Major gifts
- Business development/earned income (including merchandise, shops, etc.)
Factors that drive donations
- how much money people have
- their level of charitable inclination
- their receptivity to online fundraising
- skill of messaging (ie how persuasively it is done)
- substance of messaging (ie how compelling the program plans are)
- how famous is the cause
- how beloved is the cause
- ease of giving (ie do we offer the right payment methods, is the giving process easy to complete)
- any additional factors such as tax deductibility
- Note: do we have info from the Readers Survey about why our donors say they give?
- Chapters in revenue-generating countries
- Wikimedia Foundation
Relevant research and data
List of top revenue-generating countries
This is a list that ranks total movement donations (WMF+chapters) from July 1, 2010 - June 30, 2011, ordered by country-of-origin.
- United States (64.19%) no national chapter: sub-national chapter
- Germany (10.02%) chapter, has payment processed
- United Kingdom (3.74%) chapter, has payment processed
- Canada (2.91%) chapter
- France (2.03%) chapter, has payment processed
- Japan (1.59%) no chapter
- Netherlands (1.34%) chapter, has payment processed
- Italy (1.26%) chapter, has payment processed
- Spain (1.05%) chapter
- Australia (1.02%) chapter, has payment processed
- Switzerland (0.91%) chapter, has payment processed
- India (0.63%) chapter
- Belgium (0.52%) no chapter
- Brazil (0.51%) no chapter
- Russia (0.37%) chapter, has payment processed
- Denmark(0.34%) chapter, has payment processed
- Austria (0.29%) chapter, has payment processed
- Israel (0.26%) chapter, has payment processed
- Poland (0.20%) chapter
- Sweden (0.12%) chapter, has payment processed
- Hungary (0.08%)chapter, has payment processed
- Other Countries (6.64%)
HOW DOES THE MOVEMENT SPEND MONEY
Focus statement (assumed/proposed):
The Wikimedia movement determines where the money goes based on where it will be most effective at executing our strategy in pursuit of the mission.
Questions that will need to be resolved via this process
- Who will make decisions about resource allocation
- How can decisions be made without undercutting existing governance structures (eg chapter boards, WMF board)
- What mechanisms can be created for preventing deadlock/gridlock
- How to decouple fundraising authority from funds dissemination authority [*]
- How to disentangle geography from language
[*] This is important because it's not legitimate for wealthy countries to be decision-makers for poorer countries.
Data we would ideally want to gather
- Why do donors give us money
- Who do they think they are giving money to
- What are they giving it for
- How do other organizations distribute their money
- What are the pros and cons of the various models
- What befits a decentralized movement like ours: how does money move around with as little friction as possible
- Readers and prospective readers (probably primary?)
- Chapters and entities that aspire to spend money in pursuit of programmatic activities
- Wikimedia Foundation
Questions we might ask of stakeholders
(Preface: we would want to make it clear in any survey that we are talking about ideal-world future state, not today. So, the question wouldn't be eg 'if you had to pick today, who do you think should make decisions' but, 'in a perfect world, who do you think would ideally make decisions.')
- "The Wikimedia movement determines where the money goes based on where it will be most effective at executing our strategy in pursuit of the mission." Do you agree that this is how money should be spent in the Wikimedia movement? Do you have any proposed refinements or revisions?
- Who do you think should decide how funds are disseminated in the Wikimedia movement? (options would be something like: the Wikimedia Foundation, chapters, some new entity)
- When it comes to disseminating funds, what values or guiding principles do you think are most important?
- When it comes to disseminating funds, what's your nightmare scenario? (What risks or dangers do you see?)
If you don't aspire to spend money, you may not be a stakeholder for this process.
For example, I believe the Macedonian chapter has, thus far, neither raised money nor spent money. This might be an evolutionary question (if for example it is just too young) -- but assuming the Macedonian chapter doesn't aspire to spend money, it is likely not a stakeholder for the money dissemination conversation. (Or at least, not a primary stakeholder.) (Strikethrough because I was wrong about Macedonia, which does aspire to spend money on programmatic activities. Leaving the original text so people reading the talk page aren't perplexed by FlavrSavr's comment there.)
How money should be spent
(thinking out loud...)
- on activities that support all projects and language-versions (e.g., costs of bandwidth, legal defence, etc.)
- on activities that support priority geographies, where there is potential to reach large numbers of readers (ie a gap between potential and reality) -- ie India, Brazil, MENA
- on activities that support priority languages, where there is potential to recruit large numbers of editors (ie a gap between potential and reality) --- ie Hindi, Turkish
- on activities that support priority languages, where editor numbers are in decline --- ie German, English
- on activities supporting projects that require extra support because they are troubled
All projects and language versions
- e.g., bandwidth supports all projects
Priority geographies, where there is potential for reader recruitment
- Saudi Arabia
- South Korea
- Czech Republic
- Hong Kong
- United Arab Emirates
(Source: Analysis done by the Wikimedia Foundation in support of the strategy project, 2010. Analysis rank-ordered all countries according to a total score that attempted to assess potential for growing readership, based on the country's total number of internet users, internet users per 100 inhabitants, total population, per capita GDP, mobile subscribers per 100 inhabitants, total number of mobile subscribers, current market size, potential for market growth, current Wikimedia penetration, and access to a mature Wikipedia. Analysis did not exclude geographies for reasons related to the country's political situation -- ie access to a free press, presence of internet censorship, etc.)
Priority languages, where there is recruitment potential
This is a list of languages with 50m+ primary speakers, reverse-ordered by number of editors per million speakers. Data are from Wikistats here; I did the analysis. Simple English has been excluded.)
- Punjabi (104m primary speakers, 0.0% editors per million)
- Wu (77m, 0.0%)
- Hindi (550m, 0.1%)
- Western Panjabi (60m, 0.1)
- Bengali (230m, 0.2%)
- Egyptian Arabic (76m, 0.2%)
- Swahili (50m, 0.2%)
- Malay (300m, 0.3%)
- Marathi (90m, 0.3%)
- Cantonese (71m, 0.3%)
- Urdu (60m, 0.3%)
- Burmese (52m, 0.3%)
- Tagalog (90m, 0.4%)
- Telugu (80m, 0.4%)
- Javanese (80m, 0.5%)
- Chinese (1300m, 1%)
- Arabic (530m, 1%)
- Indonesian (250m, 1%)
- Tamil (66m, 1%)
- Vietnamese (80m, 4%)
- Portuguese (290m, 6%)
- Persian (107m, 6%)
- Turkish (70m, 7%)
- Spanish (500m, 8%)
- Korean (78m, 9%)
Priority languages, where editor numbers are in decline
Below is a list of language-versions, ordered by decline in number of active editors between August 2011 and August 2010. (Source is Wikistats; I did the analysis. The list here is the 14 most-in-decline, of the 35 most-popular language-versions. Most popular = largest number of pageviews hourly.)
- Croatian (down 11.7%)
- Norwegian (down 8.9%)
- Bulgarian (down 8.1%)
- Swedish (down 8%)
- Hungarian (down 7.7%)
- Turkish (down 5.7%)
- Slovak (down 4.7%)
- German (down 4.7%)
- Polish (down 4.4%)
- Catalan (down 4.4%)
- Danish (down 2.4%)
- Portuguese (down 2.2%)
- English (down 1.6%)
- Vietnamese (down 1%)
Projects that require extra support because they are troubled
(in no particular order)
- English: the most popular project, and one of two in the top 10 facing editor decline
- German: the 4th most popular language version, and one of two in the top 10 facing editor decline
- Portuguese: high reader potential, high editors potential, editors in decline
- Vietnamese: high reader potential, high editor potential, editors in decline
- Turkish: high reader potential, high editor potential, editors in decline
Relevant research and data
List of countries/chapters that are currrently spending on activities
Below is a list of chapters that have received funds from the Wikimedia movement, either directly from donors via payment processing, or via a grant from the Wikimedia Foundation. Chapters not listed here may have other funding sources, e.g., grants from grantmaking organizations other than the Wikimedia Foundation.
- New York City
- Hong Kong
List of chapters known to have received grants from outside the Wikimedia movement
(ie., not the Wikimedia Foundation and not another chapter)
List of chapters known to have paid staff
(and therefore spending commitments)
 These numbers are totally wrong and need to be checked.
List of top 10 countries, as ordered by number of active editors
- United States (20%)
- Germany (12%)
- Russia (7%)
- UK (6%)
- Italy (4%)
- India (3%)
- France (3%)
- Poland (3%)
- Spain (3%)
- Canada (3%)
(source: Wikipedia Editors survey, April 2011, page 30 of the PDF version)
What do editors want to spend money on?
In April 2011, the Wikimedia Foundation asked editors what it should spent money on. The question was this: "How would you like the foundation to allocate funds for the following (out of $100)?"
Caveat: this data is of limited usefulness when it comes to supporting resource allocation. 1) We created a fixed list of options for respondents, and all fixed response sets are going to be inherently problematic because people's interpretations will be different, and the fixed set itself has an anchoring effect. 2) Many people would likely assume that the question "how would you like the foundation to allocate funds" refers to movement-wide funds allocation, but we can't know that for sure. 3) These are just editors' top-of-mind opinions, so in general they are going to be of limited utility.
That said, here are the responses we got:
- Technical operations 28 cents
- Technical features development for new editors 15 cents
- Community work aimed at supporting healthy editing culture 12 cents
- Technical features development for experienced editors 12 cents
- community work for attracting/supporting new editors globally 11 cents
- community work for attracting/supporting new editors in the global south 8 cents
- grantmaking to chapters, individuals, etc. 7 cents
- support for chapters 7 cents
(source: Wikipedia Editors survey, April 2011, page 30 of the PDF version)
Q AND A
Q What happens if the relevant chapters and the Wikimedia Foundation can't reach agreement on how funds get raised?
- In that case, I believe the Wikimedia Foundation Board of Trustees will need to determine how the movement fundraises.
- It's possible that the Wikimedia Foundation Board of Trustees would default to the status quo, which would mean that chapters would participate as payment processors in the annual fundraising campaign, assuming they met the necessary conditions and were able to reach agreement with the Wikimedia Foundation WRT a mutually-agreeable revenue share. If the chapter couldn't reach agreement on a revenue-share, or didn't meet the conditions for payment processing, it would be eligible for a grant from the Wikimedia Foundation. In either case, chapters would be free to seek other funding sources as they are today.
- Another possibility is that the Wikimedia Foundation Board of Trustees would pick a different solution , which is not the status quo. The Wikimedia Foundation Board of Trustees might decide, for example, that only the Wikimedia Foundation will payment-process in future and all chapters will be funded by grants. (I am not saying this is likely; I'm using it as an example.)
- I believe that if the Wikimedia Foundation and the chapters can reach agreement, the Board will accept that recommendation. If they can't, I am assuming that the Board will decide itself.
Q What happens if the Wikimedia Foundation, chapters, and other entities(?) can't reach agreement on how funds ought to be disseminated?
- Same as above.
- We used to have a 50-50 revenue split. We moved away from that model because there was no real justification for it: it was just an initial hack we made in the early days.
- This year (2011) we have a different model, whereby payment-processing chapters are creating revenue targets and program plans, and negotiating revenue shares with the Wikimedia Foundation based on those targets and plans. This model is working poorly, probably for three main reasons. 1) It's the first time we've done it, so it's clunky and awkward and slow and uncomfortable. We don't have good systems and processes, people's assumptions are very different, and so forth. 2) We are doing it in a very compressed timeframe. And 3) the process for reviewing program plans and targets is highly imperfect, due to #1 and #2 above. This means the review process doesn't have moral legitimacy (buy-in) from participants, which makes it extremely uncomfortable for everyone.
- Nobody is happy with the current decision-making process for funds dissemination. I do not know what will happen if the Wikimedia Foundation and the chapters and other stakeholders cannot reach agreement about a good process. Presumably we will default to current state, where individual chapters negotiate directly with Wikimedia Foundation staff to determine a revenue-share that will enable them to act as payment processors. As yet, there are no signed fundraising agreements for 2012, and I'd anticipate us having lots of difficulty in reaching agreement in the absence of a good process for funds dissemination. To me, this is a good argument for everyone to engage constructively in trying to determine a process that would have strong moral legitimacy -- because the alternative --no agreed-upon process-- is likely worse.
Q What is the timeline for aiming to reach an agreement in principle?
- I will need to check this. I think the Board is hoping to make a decision at or before the spring chapters meeting. but I'm not sure.
HOW YOU CAN HELP WITH THIS PAGE
I'm not sure how long this page is going to be useful: it's already getting a little unwieldy. But, here are some things you can do if you want to help. (If you do edit this page, please keep it in document mode, and do any talking on the talk page.)
- Please feel free to add new material to sections 2.2, how to best raise money and [how best to disseminate it]. These sections are lists of data we might want to gather as part of this process.
- Please feel free to add new proposed questions for stakeholders. Here are draft questions related to fund-raising, and here are draft questions related to dissemination of funds.
- Feel free to add questions to the section about questions we will need to resolve as we work towards creating a process for funds dissemination.
- I would welcome your thoughts on the talk page, about any of the stuff I've written here so far. Are there obvious major issues missing? Do you feel optimistic or pessimistic that we can get this figured out in the next several months? Do you have ideas about tools we should be using? (For example, I was initially considering a Google survey because the analysis is automated. But after thinking about it, I think it's probably better that we do this on wikis, even if it makes it a little harder to analyze data.)
Everything below this line is scratch pad
(eg research, data, thinking-out-loud)
- From a maximizing-dollars standpoint, it's possible that it doesn't really matter whether the Wikimedia Foundation payment-processes or chapters payment-process. I am hypothesizing that, with a large number of countries and regulatory contexts and donor expectations& behaviours, it's a wash in the end.
"So far the data is showing that having a single payment processor and fundraising team is better than multiple payment processors and multiple fundraising teams from the point of view of increasing efficiency and reducing cost. The current fundraiser is showing early indications that it also increases the amount of money raised.
- Volunteer-based organizations are never going to be optimized (or even particularly good at) donor management and accountability (e.g., regulatory compliance, audits, thanking, database integrity) -- that's not their core work, not what they're designed for. if true, this would mean that if chapters intend to remain volunteer-driven rather than staff-driven, that's an argument for payment-processing out of SF.
- The benefit to decentralized payment-processing is not large, but the benefit to decentralized mechanisms for dispersing funds is.
Benefits of centralization and decentralization
Benefits of centralization:
- singleness of purpose: resources are focused rather than scattered
- efficiency and cost savings: no duplication, less waste
- reporting (transparency) is easy: there's just one voice
- only one failure point rather than multiple failure points
Benefits of decentralization:
- redundancy if one entity is corrupted or incompetent or compromised
- many eyes make all bugs shallow: decision quality, other quality, goes up
- a thousand flowers bloom: enables experimentation and low-cost failure
- protection from group-think and over-concentration of power
- if you're lucky, decentralized entities have more expertise than any single entity could ever hope to