2011-12 Fundraising and Funds Dissemination process/Recommendations/Q and A/en

The questions and answers below are intended primarily to relate to Sue's recommendations to the Board of Trustees around fundraising and funds dissemination, but they may provide insight into the process as a whole. In order to keep the discussion from becoming fragmented, please ask any questions on the talk page for the recommendations. Please do not edit this page directly.

Questions and Answers

Future of fundraising discussions - Index edit
Guiding Principles discussion Introduction Fundraising principles Funds distribution principles Fundraising models/future discussion Introduction, timeline & faq Goals Zack's observations on online fundraising How long will the Fundraiser keep growing? Wikimedia Foundation staff memo and analysis Recommendations Final recommendations from Sue Editable recommendations based on Sue's final recommendations Draft Recommendations from Sue Draft Recommendations discussion Draft Recommendations Q&A Brainstorming about Recommendation 4 Pros and cons Questions flowchart Fundraising options Alternative recommendations and philosophies Alternative recommendations (Open to all contributions) Recommendations by Tango Wikimedia Foundation resolutions Resolution: Wikimedia fundraising principles (10-9-2010) WMF Board of Trustees letter regarding fundraising accountability (8-5-2011) Resolution: Developing Scenarios for future of fundraising (1-18-2012) Draft Board resolution (2-9-12) Final Board resolutions (3-30-12) FAQ Discussion Wikimedia chapter statements Wikimedia’s culture of sharing (Wikimedia DE) Resolution on principles (Wikimedia UK) The importance of being a Wikimedia chapter (Wikimedia IT) Iberocoop joint statement Opinion French chapter Questions for the German chapter Wikimedia UK response to Sue Wikimedia CH response to Sue Wikimedia NL informal statement Overview of relevant data Sign up to participate Initial Thoughts Draft grantmaking survey Funds Dissemination Criteria мой Resource list (for survey preparation) Where the money comes from today Outcomes Final Board resolutions Creation of the Funds Dissemination Committee (FDC)

Where did all this start?

For several years, the Wikimedia Foundation Board of Trustees has been having conversations with others in the Wikimedia movement about what it has been calling “movement roles.” These conversations formally began during the 2009 strategy project and continued in a formal Board-led process called Movement Roles II, which has been ongoing since 2010. The purpose of the Movement Roles discussion is to clarify the roles and responsibilities of different groups working to support the international Wikimedia movement, by developing recommendations designed to improve Wikimedia’s effective functioning as a global network of organizations in pursuit of the Wikimedia mission.

Separately, for more than six months, the Wikimedia Foundation Board of Trustees has been having conversations with the staff of the Wikimedia Foundation, with chapters, and with its Audit Committee and outside auditors, about fundraising issues. At its meeting in Haifa in July 2011, driven by concerns about the quality of chapters’ financial controls, the Board had an extensive internal discussion about chapters’ controls, accountability and transparency. As a result of that discussion, the Board released this letter laying out base principles that would need to be adhered to by any chapter aspiring to act as a payment processor for the 2011 campaign. That letter was controversial, and resulted in only four chapters acting as payment processors for the 2011 annual campaign, compared with 12 chapters acting as payment processors in the 2010 campaign.

At its meeting in October 2011, the Board decided to commission a substantial rethink of how the Wikimedia movement handles fundraising and funds dissemination. On October 17, it announced that it had decided to develop guiding principles for fundraising and funds dissemination, in consultation with community members, and then give the finalized guiding principles to its Executive Director, asking her to develop recommendations for the Board on how to conduct fundraising and funds dissemination in ways that adhere to the principles the Board had laid out.

What is the goal of the rethink?

The goal is to figure out a system for fund-raising and funds dissemination that will work for the Wikimedia movement. The Wikimedia movement should conduct its fundraising activities in a way that fits with its values, and it should disseminate money in ways that fund high-impact work that supports the mission. The Board wanted to step back, develop guiding principles for how we should function, and then design a system for fundraising and funds dissemination that fit with those principles.

What has happened so far? Where are we in the process?

On October 17, Wikimedia Foundation Vice-Chair Jan-Bart de Vreede published draft guiding principles for fundraising and funds dissemination, and asked the community for help refining and improving them. A few days earlier, Wikimedia Foundation Executive Director Sue Gardner had started doing some thinking-out-loud on this meta page, which later evolved into these meta pages. Most of the consultation thus far has happened on-wiki: a little has happened on the internal-l mailing list, but everybody has tried to keep discussion on the wikis.

It’s expected that within a week or so, the Wikimedia Foundation Board of Trustees will release the finalized Guiding Principles for fundraising and funds dissemination, that will guide Sue’s recommendations.

Why is Sue's work being published piecemeal, instead of all at once?

I am actively publishing material as I write it: it's a work-in-progress. There are disadvantages to doing it this way: people may read what's been published so far in isolation, cut off from the bigger context, and find it confusing or incomplete.

But the advantage to doing it this way is that people can see the work as it develops. That feels more transparent and natural to me, and it means that people have options. If they want, they can wait for the whole thing to be completed before they comment. Or, they can start thinking about, and discussing, what I'm writing as I publish it, without needing to wait for a finished product.

What has the Wikimedia Foundation learned from other consultation processes, and how is it applying that to this process?

In the past, the Wikimedia Foundation staff has sometimes taken serious issues to the Board for a decision before discussing them extensively with the Wikimedia community first. That doesn't work well, because an important part of the Board's decision-making process depends on views expressed by community members, and information brought to discussions by community members. When the Wikimedia Foundation Board deliberates and makes an important decision without access to community discussion, it runs the risk of making a poor-quality decision, or of having a hard time achieving community acceptance after-the-fact, even if a good decision is made. So, we are aiming to do lots of consultation up front, before any decisions are made. (This page is not the beginning of the consultation on this issue: there has been ongoing consultation and expression of views in the past six months.)

Also, in the past, Wikimedia community members have sometimes had a hard time accurately divining the Board's intent, when all that is released is a single statement. For example, after the Board published its letter to the chapters in Haifa, some chapter representatives said their members had been confused about the Board's intent. Face-to-face conversations in Haifa helped somewhat, but they are not always possible, and they always exclude some interested people, and don't leave behind a permanent record of what was said. A single text document just isn't seen as explanatory or detailed enough to really convey the Board's message, and face-to-face discussion doesn't entirely close that gap even when it's possible. So, for the purposes of this discussion, the Wikimedia Foundation is aiming to be public and transparent about our thinking as it develops, in hopes that that will help make decisions understandable and contextualized, once they are made.

Also, in the past, Wikimedia community members have wanted to have more transparency into how Wikimedia Foundation decisions are made. Part of the reason we are handling this decision on a wiki, in public, is so that people can see how the decision is arrived at. Actual decisions will be made at Board meetings, but the pre-work will all happen here.

What will this process look like, and where are we in it?

• October: Guiding principles begin to be developed; Sue begins on-wiki deliberations
• November: Sue travels to Europe to meet and talk with some chapters
• January: Board finalizes guiding principles; Sue begins drafting recommendations on-wiki
• February: Sue presents draft recommendations to the Board at its meeting February 3
• March 9: Sue presents final recommendations to the Board
• March 30: Board votes and publishes its decision
• March 31: Wikimedia Foundation staff and chapters begin to work through implementation next steps

What is the history of chapter involvement in fundraising?

Chapters started participating in fundraising activities organized by the Wikimedia Foundation as early as September 2004, when Wikimedia Germany was first advertised as a donation option on the German fundraising page. The relationship between the Wikimedia Foundation and the chapters has been increasingly formalized over time, especially when it comes to fundraising. As an example, an additional legal entity (see Wikimedia Deutschland/Fördergesellschaft was established in Germany in 2010 to ensure legal distribution of funds to the Wikimedia Foundation.

What is the history of the Wikimedia Foundation's grants program?

In 2009-10, the Wikimedia Foundation first created a grants program to support work of movement entities. The program has grown substantially over the past three years both in total funds available and in the size and scope of individual grants.

Ten months ago, the Wikimedia Foundation first hired dedicated staff to support the program. After that, the Foundation created a new grant program in partnership with Wikimedia Germany to support community member participation in conferences/events. In 2010-11, the Wikimedia Foundation has also for the first time made grants to four chapters to support their annual program plans for the whole of 2012.

The grant making process is done in an open fashion on meta and there are continuous efforts underway to improve the process and be more transparent about decision making. In May 2011, the Grant Advisory Committee was formed to help improve grant review and provide input for applicants on their grants.

Where is the conversation happening about the grants program?

The proposed process for the grant program is currently being discussed at Grants:Annual/Draft.

What is the meaning of the term “payment processor”?

The term “payment processor” is used to mean that a chapter is able to raise money directly through the banners on the site during Wikimedia’s annual fundraiser. In 2011, four chapters (Germany, the United Kingdom, Switzerland, and France) were able to accept the donations directly and handle the donor record keeping and administration. They then return a portion of the money to the Wikimedia Foundation for the ongoing support of the movement. In the rest of the world, donors gave to the Wikimedia Foundation directly, and the chapters request funding through the Foundation. However, none of the chapters are prevented from off-site fundraising on their own, or without using the banners during the fundraiser.

Payment processing is also separate from the development of messaging (banners, appeals) and translations.

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, and 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

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 purpose 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 money entrusted by the donors to the Wikimedia Foundation, regardless of whether it is later planned to be disseminated elsewhere.

Does this mean that chapters and other entities are not able to raise any money at all?

No. Chapters and other entities are encouraged to fundraise on their own, including applying for grants that would be administered by a jury made up of Wikimedia community members, but would not be able to use the Wikimedia Foundation sites to directly receive donations.

What is the actual work involved in payment processing?

In order to payment process, here is what needs to happen. The payment processing entity needs to:

• develop an understanding of the relevant laws regulating fundraising activities and ensure compliance with those laws;
• create, and adhere to, policies such as gift policies and donor privacy policies;
• create a website for donors as well as implement an online payment system and a donor database;
• maintain site uptime during the campaign so donations are not lost;
• create systems for privacy safeguards, fraud protections and security measures preventing data theft and phishing;
• create systems for answering donor inquiries and processing refunds;
• create systems for thanking and sending receipts;
• create systems for managing payment subscriptions;
• create annual plans and annual reports (documenting what the money will be used for, and explaining after-the-fact how it was actually used;
• create donor-friendly (marketing) materials out of the plans and reports;
• create financial accounting procedures, controls and auditing practices sufficient to ensure adherence to appropriate standards and all relevant laws and regulations;
• purchase insurance portfolios to manage potential risks.

Please note this is not all the work that goes into running the annual fundraising campaign. It also involves, for example, the development of appeal material and the creation of banners and appeal text (currently done mostly by the Wikimedia Foundation), translation and localization work (currently done mostly by volunteers), etc. The bulleted list above contains solely the work that is necessarily attached to the payment processing role.

If the chapters do not payment process past 2011, does that mean they will need to lay off staff and halt spending plans because of financial insecurity?

Ideally no, it would not mean that. It's in nobody's interest to have chapters forced to lay off staff, defer planned programmatic activities, or be paralyzed by uncertainty. If we move to a world in which chapters don't payment-process, the timeline for that move would presumably be negotiated between the chapter and the Wikimedia Foundation in a way that worked for both parties. Maybe some chapters would payment process in 2012 but not thereafter. Or, maybe the Wikimedia Foundation would negotiate financial guarantees with chapters, so chapters could plan their work knowing revenues were guaranteed to stay stable for some minimum set period of time (a year, two years, three years, whatever). We would find a way to make it work such that chapters with ongoing spending commitments weren't put into a very unstable position. And, as we built out the grants process, we would likely be looking at similar multi-year guarantees. This is the thinking that underpins this part of Recommendation #1: "This recommendation should be implemented in a staged fashion, on a timeline negotiated in partnership with the chapters that payment-processed in 2011, with the goal of avoiding stress and disruption to those chapters’ operations."

Do donors want to donate to local organizations or the Wikimedia Foundation?

We don't have data that tells us conclusively what donors' intentions are, because it's extremely hard to construct a survey question that will yield useful results. That's because donors just don't have a good-enough understanding of who the various entities in the Wikimedia movement are, and how they interact, to enable them to give an answer that accurately reflects whatever their wishes might be. Having said that, we do have one data point, which has limited, but not zero, usefulness. A survey of donors run in 2010 showed that 80% of respondents were not aware that they could contribute to a national chapter organization. However, once informed, most indicated that they would prefer to donate directly to the Foundation (though 18% were unsure). About 6% said that they would prefer to donate to a local organization, and 15.5% said they would donate to both equally. Again, this response should be interpreted with caution, for the reasons given above.

What is Global Collect?

Introduced by Global Fundraising Operations Manager Pats Pena to the Wikimedia Foundation in 2011, Global Collect is an online payment processor that provides a large range of international payment methods to Wikimedia donors. After we integrated our systems to work smoothly with Global Collect, we began processing not only all credit card donations, but also dozens of international payment methods (such as Bank Transfer, iDEAL, BPay, and others) through Global Collect. Global Collect provides access to hundreds of payment methods through a single API and customer service interface. Global Collect allows integration of PayPal donations, too, but we opted to leave PayPal out of the Global Collect arrangement and continue to work with PayPal directly.

Below is a list of some local methods offered - please note that different methods are offered in different countries.

• International and national credit and debit cards
• Direct debit
• Real-time bank transfers
• Bank transfers
• Cash payment and bill payment
• eWallets
• Prepaid methods
• Checks

How much money came in through Global Collect

Final numbers are still being tallied, but it's safe to say that the final total processed through Global Collect is between nine and ten million dollars. For the first few weeks, of the fundraiser, we were still processing credit card donations using PayPal's PayFlowPro system. Therefore, the Global Collect totals do not reflect the total amount of money brought in through credit card donations.

What's the main advantage that we got with Global Collection?

Using Global Collect's payment methods, we were able to provide more donors with their preferred donation methods. This helped us to increase the number of donors and the amount of money raised in many countries. Perhaps the best thing gained was the ability to allow donors to donate in their local currency in almost every country in the world. Again, these are tentative numbers, but for the 2010 fundraiser, about 33% of the donors to the Wikimedia Foundation were from outside the US. In 2011, that number goes up to about 52%.

How does Wikimedia Foundation use Global Collect?

On the technical side we have implemented a Hosted MerchantLink integration, which allowed some flexibility and independence while designing our Landing Pages and forms, and provided us a backend support with built-in security.

We are still in the process on implementing additional options (specifically Direct Debit (many countries), Boletos (BR), Yandex (RU), Enets (SG) and Nordea (NO, FI and SE)). These options were not implemented this year due to either a delay on setting up accounts on the local coutries or lack on bandwidth to enable them at our end. They should all be offered for the 2012 fundraiser (considering no changes on local country regulations).

Some of the important additional opportunities that GC provides us:

• Recurring payments with credit cards (which were not a possibility with PayPal).
• A centralized Payment Console/Reporting system were most of our traffic can be tracked and analyzed
• Payment Consultancy (with quarterly reviews and advisers on the newest local methods on various countries)
• Opportunity to have an always growing list of local methods as well as flexibility of partnering with different vendors for options not available with GC (for instance, as our mobile opportunities grow).