2011-12 Fundraising and Funds Dissemination process/WMF staff memo/Appendix B

Some thoughts about the Spendwerk Report

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)

Wikimedia Deutschland (WMD) commissioned the Spendwerk Report, compiled by the fundraising consultancy Spendwerk (http://www.spendwerk.de/), to inform the Board and community on the fundraising and funds-dissemination process in Germany. We find the report interesting and educational, noting it is primarily based on general statements about experiences in Germany. We observe that, as a general principle, the report is not metrics-driven, no doubt because metrics are difficult to establish and control in this area.

Spendwerk acknowledges (p. 2) that the philanthropic culture in Germany is substantively different from that of the rest of the world. We accept this proposition, but we do believe that local fundraising cooperation to ensure a message customized to Germans can address the key core considerations.

Below are some considerations raised in the Spendwerk Report and our responses. In short, while we believe the Spendwerk Report raises important considerations, we believe that these considerations are not by themselves a barrier to WMF payment processing (if that reflects the desire of the Board).

Donation receipts are critical.	There appears to be no explicit metrics-driven evidence supporting this proposition. Our experience in other countries (as set out in the staff note) suggests that a lack of tax deductibility, while relevant, does not hinder WMF’s ability to meet budgetary goals. As Spendwerk recognizes, the effect of donation receipts on smaller donations appears less pronounced.
Germans give “quietly”, seeking no recognition.	WMF payment processing can address this concern. WMF can treat German donors discretely.
German donors are sensitive to what information they reveal.	The Wikimedia community as a whole is privacy conscious. This is true in other countries as well where WMF payment processes successfully (e.g., IT, ES, AU). WMF does not anticipate a need to collect more data than WMDE.
German addresses are difficult to manage.	The Foundation’s systems can adequately manage German addresses. We can fully customize to local languages and addresses.
Data privacy is very strict.	Data privacy is strict in Germany, but other countries have strong issues with privacy (like AU). WMF employs good security and processes around donor data.
Trust is important for individual and corporate donors.	WMF payment processing can guard against corruption or error while minimizing the cost of governance and oversight. The Spendwerk Report mentions the UNICEF scandal as an example (pp. 3, 9). In this case, the German committee of UNICEF lost the approval of the German Central Institute for Social Issues in 2008 after paying excessive fees for fundraising. UNICEF’s headquarters provided support after the scandal to regain public confidence in Germany.

Spendwerk cites the IFAW and its experiences in Germany (p. 3 - 4). IFAW begins sending donation receipts for all donations greater than €20,01 (p. 4). The average size of donations to Wikimedia falls roughly in that area, suggesting that the lack of donation receipts may not affect smaller contributions as significantly.

Indeed, Spendwerk does point out that, with small, reactive donors, donation receipts do not appear to be a significant factor: “Tax reductions are not a reason for normal small donors to increase their donation…they did not donate because of tax relief but they will take advantage of it if they can” (p.7).

Spendwerk does note that donation receipts may come into play with respect to major donors, repeat donors, and corporate donors. As we understand, however, the WMDE donor model is built upon small donations: “The [strategy plan decision] – to emphasize small donors -- is a sound one . . . . . Small donors have by far proven to be the most successful, most strongly growing, and least distorting source of revenue for Wikimedia Deutschland.” As Spendwerk observes: “For online donors, especially younger PayPal donors, it may be that in Germany the donation receipt plays a lesser role” (p.9).

IFAW did report that its fundraising campaigns were best with German messaging. This however is unrelated to local or WMF payment processing. If WMF were to payment process, we anticipate that the German chapter would actively engage in helping in the customization of local messaging. To date, as we understand, the need for local customization has been limited and WMDE has chosen to rely on WMF appeals and messaging for most of the past two fundraisers.

On the whole, the Wikimedia Foundation staff believes that – while there are certainly considerations in the Spendwerk report that must be monitored closely and that require sensitivity to local issues and customs – there are no clear barriers to centralized payment processing if the Board were to choose such an approach.