Executive Directors Group/Discussion document on grantmaking processes and procedures

Grantmaking process and procedures

March, 2024

The following document was drafted in a collaborative process by the ED group but does not necessarily reflect the views of all members of the group. This is a working document meant to act as input in a dialogue with WMF – and for discussions during e.g. the Wikimedia Summit – concerning the future of grant making processes within the Wikimedia movement.

Introduction and overview

• Whilst the Wikimedia Foundation’s overall income has continued to increase over several years (with total donations of $169.6 million USD in 2022/23 compared to $165.2 million in 2021/22), we acknowledge that revenue in the movement is not limitless.
• We agree that as a movement we should work towards a more equitable distribution of funds, and acknowledge that this may affect the amount of funding allocated to existing affiliates, and/or the amount of funding that WMF makes available for its own operations.
• We assume that the Global Council (GC) will play an important role in resource distribution, but are conscious that the Council is not likely to be established and fully operational within the next year or more.
• As affiliates, we want to be able to prepare ourselves for our future role in the movement, based on Movement Strategy recommendations.
• We respect the good intentions of WMF, but the practice is that WMF has not been able to provide clarity and certainty about the financial prospects of affiliates over the past six years. This makes multi-year planning and program development almost impossible and creates uncertainty for staff and partners.
• We wish to be part of a partnership-based funds distribution process, together with the WMF and the wider movement. The distribution of resources must be decided by and with all partners. We are committed to creating a functional system under any future conditions.

In the following text, we outline the problems we are facing as a result of the current grant-making process and suggest solutions to be implemented in the period before the GC becomes operational.

Scope

• The focus of our proposals is specifically geared towards affiliates receiving what used to be called ‘annual plan grants’. These are usually chapters with formal governance structures, staff teams, ongoing programs, and financial commitments.
• The proposals we make are just for the upcoming grantmaking rounds, until the GC (or any similar permanent structure) is established, to assure continuity and facilitate a smooth transition to the new situation.

Analyzing the problem

• We don’t have a predictable and stable financial situation related to grants. The process of setting the overall grant budget and dividing it between regions is centralized, and not transparent. It is unclear on which data or models the WMF regional grant budgets are based and distributed, and there is no community involvement in/review of this process.
• For years, we have received crucial budgeting information at the last minute (e.g. in December when programs start in January), often with major, unannounced changes that could potentially jeopardize staffing and program delivery. This is not a situation in which responsible and effective management of affiliates is possible. It also puts at risk many years of investment of movement resources in programs and partnerships that may have to be abruptly abandoned.
• We consider affiliates to be absolutely central to the successful delivery of any global Wikimedia movement strategy and strongly believe that the investment by the movement into national chapters is highly cost-effective.
• To effectively implement a movement strategy, affiliates need to be able to plan for the future based on realistic information about likely resources.
• The current power dynamic between WMF and grant recipients does not reflect our understanding of trust-based resource distribution, but instead is rooted in an outdated funder/grant recipient model that is particularly inappropriate for a movement like Wikimedia.
• The current situation erodes trust between affiliates and WMF and is damaging the Wikimedia brand with partners and communities.

Concerns

• WMF's long-term financial planning does not sufficiently reflect the global development of its subsidiaries. The development of new affiliates and the growth of existing groups does not seem to be sufficiently reflected in WMF’s financial plans, e.g. it appears that there are insufficient resources for new applications in some regions.
• WMF grantmaking is not based on a clear analysis or understanding of the role of affiliates, and the work carried out in support of the mission and the movement.
• The lack of information and forward planning puts us as EDs, and the affiliates we represent, in a place that compromises our position as partners, employers, and representatives of the Wikimedia Movement to our community and partners.

Concrete suggestions for improvements

We acknowledge that the establishment of the GC will have a major impact on the objectives, resources, and processes of grant making. However, this may take several years to be established. We propose the development of a clear and evidence-based framework/policy for grant making in the interim.

• Base grant budgets for the coming three years (starting 24/25) on solid data on expected costs of affiliates/number of affiliates applying via a transparent process. The process of setting grant budgets should include a consideration of the needs and requirements of affiliates, rather than a strictly top-down approach. To facilitate this, established affiliates could be asked to provide different financial scenarios (e.g. minimum requirements; stable; growth) for the next three years.
• Multi-year grants must be a funding option for all stable affiliates, with a commitment to free up resources (including unrestricted reserves) to safeguard movement affiliate operations if annual revenue falls short of targets.
• We request that any fundamental changes in grant making (e.g. the amount of funding available, the process for grant making, or the regional distribution of funds) are communicated to affiliates at least two years in advance, to allow a suitable lead-in time for any necessary changes in staffing, partnerships, office space etc.
• We ask that even relatively minor changes related to annual grants be communicated at least three months (one business quarter) before the start of the next financial year.
• Whilst we recognize the good intentions behind setting up regional grants committees, we are concerned about passing the burden of distributing budgets that are not adequate for purpose to volunteers, when they have no say in determining either the overall grants budget as a proportion of WMF revenue, or of the distribution of funds between regions. We propose the creation of an interim body, representing various stakeholders in the grant making process, to ensure direct movement involvement in the distribution of movement funds.
• We would like to work with WMF and other stakeholders on the development of a strategy for affiliate funding, that is grounded in movement strategy, sets a clear vision for delivery, and provides clarity on funding requirements and resource allocation.

We realize that the changes we are proposing will put an extra administrative burden on affiliates. We are committed to supporting this process, e.g.

• affiliate budget prediction - we are able to share 2-3 years in advance a fixed cost outlook (even without projected growth) as well as an estimate of the marginal and ideal budget
• assumption of development - we know the situation of others - we can estimate who is in the process of preparing for a new application - and/or Hubs can collect and share this information be part of a decision-making process - for:
  • total (fix) budget prediction (at least 2 years ahead) & regional redistribution
  • regional decisions
  • letters of intent