User:Eloquence/Scenario scratchpad

Scratchpad for scenario analysis on funds dissemination.

Key checks

1) Can we apply a fair and socially just process for distributing funds, without entitlements or earmarks?

2) Is the process clear and transparent from a donor's perspective, or is it confusing?

3) Are we maximally effective at raising money?

4) Are we fundraising in a way that brings out the best in our mission and surfaces voices from the community?

5) Are we minimizing legal and reputational risks to the Wikimedia movement overall?

Scenario A: Centralized Payment Processing

Check 1: Yes. We can allocate funds where they are the most needed with relatively few impediments.

Check 2: Yes. There's only one entity involved in fundraising via WMF websites: WMF. This keeps messaging and donor relations simple.

Check 3: No. We're not maximizing benefits of local presence. (Tax deductibility; credibility of local vs. foreign organisations; other specific benefits for local organizations like GiftAid; relationship with the donor that's locally focused and optimized.) We can get some of them (local payment methods) for WMF as demonstrated via Global Collect, but others are much harder to achieve without creating legal vulnerability surfaces.

Check 4: Yes, provided we continually pay attention. We've certainly managed to shorten the fundraiser, increase the presence of editor voices in the campaign, etc.

Check 5: Yes. Because funds transfers go only from WMF and not towards it, there's no benefit in suing a local organization in order to harm WMF. Because there's only one entity managing payment processing, the risk of fraud or accidental compliance issues is overall lowest. (Any single instance of fraud or major compliance issues would likely hurt the whole movement, not just the entity involved.)

Scenario B: Mixed Model

B.1: Entities which meet key criteria payment process on the movement's behalf

Check 1: No. Even if we restrict it to entities that have close-to-zero practical impediments in transferring money (which is a significant restriction), we're still left with the issue that the effort spent in raising money may be seen by those entities as qualifying them for "earmarks" and entitlement of funds. "We brought in $X, so we should get to keep at least $Y." But whether an entity is successful at raising funds doesn't necessarily say anything about whether those funds should be spent on that entity's proposed program work.

Check 2: Yes, if done right (the communication challenges of "you give locally and we give some money to the mothership" aren't inherently worse than "you give globally and we give some money to local program activities").

Check 3: Yes, if we restrict it to entities where the effort of building out fundraising capacity is justified by the expected efficiency gains. Otherwise no.

Check 4: Only if fundraising practices are centrally coordinated and reviewed. Otherwise there's a risk of divergence of practices, and competitive pressure leading to pushing the bar further (in terms of the duration and visibility of the campaign).

Check 5: No. Organizations accumulating large bank balances to transfer to WMF present convenient targets for wealthy litigants which seek to harm WMF. There are many compliance issues involved, especially in the funds transfer management, and the risk of accidental compliance issues is relatively high. The risk of fraud is relatively higher simply due to the larger number of organizations involved.

B.2: Entities which meet key criteria payment process on their own behalf with a cap determined upfront

Check 1: Yes. There are no money transfer issues and fundraising amounts can be negotiated ahead of time.

Check 2: Yes, if done right, however: It's complicated. We'd probably need to have separate fundraising campaigns for payment processing entities vs. WMF. Because it would be very confusing if we had a process where "if you donate in time window A, you're going to give to organization A, if you donate in time window B, you're going to give to organization B."

Check 3: Unknown, but indicators are not good. Generally donors like to give in support of the website(s) they know and love, and it's not clear whether fundraising directly, specifically and exclusively, for e.g. a national chapter's program work would be effective. Tax deductibility benefits etc. would exist, but only for the amount raised and spent by the organization raising it.

Check 4: Only if fundraising practices are centrally coordinated and reviewed, as above, with the additional risk of subjecting prospective donors to a barrage of different campaigns.

Check 5: No, but the risks are more manageable, because there are no funds transfers, and because we'd be very distinctly advertising an affiliated entity's program work. So even if that entity somehow gets into trouble, the reputational damage is a bit more confined.

Overall

• A: Centralized payment processing creates the necessary conditions for just allocation of funds at the possible cost of some donor dollars in high-wealth geographies where locally registered organizations may enjoy benefits.
• B.1: Strictly regulated payment processing by approved organizations in a small set of high-wealth geographies may create an overall higher yield, at the cost of higher legal risk, and constant tension among payment processing entities. That tension would likely distort any process designed to achieve a fair allocation of funds to where they have the most impact.
• B.2: Payment processing to a cap by approved organizations under certain circumstances may be worth trialing as a way to communicate clearly the approved organization's goals and get them funded, with fully maximized local benefits for that purpose. But if the fundraising effectiveness overall is significantly lower than the One Big Campaign model, it's probably not worth doing.