Fundraising Structure

Questions:

Should Wikimedia Chapters fundraise?
How should the money raised be distributed between and amongst the Wikimedia Foundation and the Chapters?

Assuming that running this thing we call the Wikimedia Movement costs money, lots of money, the question follows – where does that money come from? The Wikimedia Foundation has three main streams of income (in increasing order of importance):

  1. business development;
  2. major gifts/grants;
  3. community giving a.k.a donations

Furthermore, community giving can be broken down into a) money donated to the Foundation directly and b) money donated to one of the Wikimedia Chapters around the world. This money does not stay only with the organisation that it was donated to but can (and should) be redistributed back and forth. How to do that equitably and for the greatest benefit to the mission is the key.

Should Wikimedia Chapters fundraise?
In my opinion it is part of the core business of Wikimedia Chapters to engage in fundraising. They exist to help grow and develop the Wikimedia movement in their country and collecting money is a key part of that. This does not mean every chapter will be able to raise funds, as it may be especially difficult when a chapter is very new or in a developing nation, but that if it is possible then it should be a priority. There should be other ways to identify with the movement (as Brianna is attempting to map out) and these other forms of “Wikimedia Interest Groups” need not be legal entities or engage in fundraising. That’s not what they’re for and that’s fair enough. But this only increases the importance of the administrative function of Chapters. Fundraising should be central to what Chapters are. Currently the overwhelming majority of money is donated by Americans to the Foundation directly. I would hope that one day donations from other nations constitute a more representative proportionate of the total (and that the total increases). Achieving this requires Chapter engagement in fundraising. I also hope that there will one day be a USA Chapter (with WM-NYC et al as branch organisations) to take care of the fundraising in America that is currently run by the Foundation directly.

How should the money raised be distributed between and amongst the Wikimedia Foundation and the Chapters?

Section 1 – The donation website:

There are at least three ways of setting up the donation website to differentiate between Chapter and Foundation:

  • Language edition;
  • Location;
  • Globally.

Last year it was differentiated by language. For example, the French donation page gave the option to donate to Wikimedia France or Wikimedia Switzerland or the Foundation directly. It looked like this:

donate

This system meant that only if you were looking at the French edition would you be be able to see the French chapter. To my mind this approach is limiting as it assumes language and nation are tied and has the curious effect that some Chapters appear on multiple language links (the Swiss chapter appears four times) but only a very few Chapters would ever be linked from the English edition.

Another proposed option is to provide links to Chapters based on the location of the reader. This requires using the IP address of readers to give a rough estimate of their location and then displaying the donation of the nearest Chapter. Whilst this might seem more nuanced than the language approach it does imply that you would only donate to the Chapter to which you are physically closest. Wikimedia Israel points out that most of the donations to the Israeli Red Cross/Crescent/Crystal actually come from America, not Israel. Equally, most Chapters with large expatriate communities would expect a large proportion of donations from overseas. The Indian Chapter is another example. For this reason I don’t think the location-based system is equitable either.

The third main option is to simply show everyone! And I suggest this is best. In short, have an interactive version of the map that appears at the Wikimedia Foundation page listing all chapters. Perhaps add an alphabetical list of Chapters and some zoom functionality for Europe where there are a lot of chapters in a smaller area:

Section 2 – the money flow:

[caveat: this is just my thinking and a first draft proposal. If you don’t like parts of it, that’s fine, it’s not like this is set in stone. But please don’t bite my head off.]

So, how do we make the most utility out of the money that is given to the Wikimedia Movement and how do we make those donors as happy as possible? I suggest that the answer is a multi-stage process and each Chapter will need to find the stage that is most suited to its level of organisational maturity. The underlying principles of my proposal are:

  • Different Chapters have different levels of capacity and therefore they should be treated as such. Different rights and responsibilities should be accorded to Chapters as they grow;
  • The amount of money that is currently raised is barely scratching the surface of what can be achieved and should be achieved if we ever hope to fulfill our mission;
  • The Wikimedia movement will remain in flux for a long time to come and so there can be no set/fixed/universally-applied solution. Power relationships will change and so too will the makeup of the movement.
  • Irrespective of the stage that a Chapter is at, it should still appear at the donation website and on the map. The reason for this is that donors should not have to wade through all of the minutiae of Chapter/Foundation relations – they just want to donate. So, we should make a nice neat and consistent website and the Wikimedia community can work out all the fiddly bits behind the scenes (with appropriate disclosure and documentation if donors really want to know, of course).
  • These ‘stages’ only really apply to the central donation website as Chapters are still able to undertake their own independent fundraising on other websites (or shake a bucket at people in the street!) if they want to.

The three models I propose below would not be employed universally – each Chapter would need to choose the model that most suits it independently of what the others are doing. The diagrams below represent what would happen if every Chapter was the same. In practice, all three models would be in place simultaneously.

Stage 1: Centralised
[Appropriate for newly formed Chapters, Chapters in very small or developing nations]

The first step, the one that places the least onus on the Chapter, is for the donation system to be centralised into the Wikimedia Foundation and all donors’ money given via the main donation website would be given directly to the Foundation. Then, once the money is raised, distributed back to the Chapter via the grants system to undertake projects/events/local outreach/capacity building. This system would mean that a Chapter would not have to invest its limited time/resources in undertaking a fundraiser (and managing the bureaucracy that comes with that), donors would be assured of being treated professionally and the Chapter could then focus more of its time on being a “free culture service provider”.
fundraising-structure001
Stage 2: Hybrid
[Appropriate for middle-sized/established Chapters with a local presence and some capacity]

This is the stage that effectively mirrors what happened last year for all chapters – the proverbial “50/50 money”. Donors can now give money to the Chapter directly but a proportion of that money must be handed up to the Foundation. Equally, the Foundation grants program is still in place if the Chapter wishes to apply for it. Alongside the added power that comes with being able to take money directly from donors via the main donation website must also come added responsibilities – more stringent financial reporting and donor relationship being the key ones. Of course, it is up for debate what proportion of money is handed up to the Foundation and/or the process for agreeing to spend that money on a Chapter sponsored project.

fundraising-structure002
Stage 3: Distributed
[Appropriate for large, professionalised chapters]

In this final stage, the one that I would hope all chapters – at least in developed nations – should aspire to (especially the mythical USA chapter) is that all donations go directly to the chapter via the main donation website (the inverse of stage 1). Chapters are thereby the primary source of money into the Wikimedia movement and would therefore have commensurately high responsibilities to look after that money. Also, as the core funding would be coming in via the Chapters rather than directly to the Foundation, this would require that a larger proportion of that funding be handed up to the Foundation to maintain and grow its fundamental services. (This will not be a problem until the USA national Chapter starts to compete with the Foundation for donors). The Chapters grant process may be less prominent in this stage as by then the Chapters should be quite self-sustaining. On the other hand, the grants program might become larger as bigger projects are undertaken.

fundraising-structure0031

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10 Responses to Fundraising Structure

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  2. Darkoneko says:

    About the french/swiss links, the point is also that there’s a form of local tax deduction if french gives to Wikimedia France (66%) or if swiss gives to Wikimedia CH (100%) which does not occur if an european gives to an US foundation.

  3. Arne says:

    Thanks for this post! I think it’s very helpful for the ongoing discussion about the roles of the different Wikimedia entities 🙂

    I like the idea of different models (I’d prefer calling them “models” instead of “stages” because IMHO it’s too early to say whether all chapters should end up with the distributed model).

    What I don’t agree with, is putting “everybody” on the fundraising page. This would be worse than the current situation where users already have to decide between WMF and Wikimedia chapters. We need less options to choose from, not more. Because the user – as you put it very well – “just wants to donate”.

    We should be able to come up with an algorithm based on language and location to show the best match (or several good matches in case of doubt) for almost all potential donors. Of course this doesn’t mean that we shouldn’t provide a link to a page/map/list with all chapters.

  4. notafish says:

    You’re my hero.

    I totally agree with your analysis here. The most important being “donors just want to donate”. And my addition to this would be “donors want to donate where it’s easiest/most interesting etc.” for them. I tackled this here last year.

    I don’t agree with Arne, all chapters/organisations that can take donations should be on the front page, algorithms are just complicated. Everyone else is doing it. Why not Wikimedia? Not sure.

    • Arne says:

      “Everyone else is doing it”? Your link to the french amnesty donation page *redirects* me to amnesty.de before I even have a chance to click on their chapters list (where Germany is pre-selected). This goes far beyond what I had in mind. However, let’s stop this discussion here. I think the three models are more interesting than the question of how to implement them on the fundraising page.

  5. notafish says:

    huh, my links are not clear. There is one on “here”, one on “Everyone”, one on “else” and one on “is doing it” 😉

  6. Erik Moeller says:

    Thanks for the summary! I think this is the path we’re on and it makes sense to me. (I think there will always be chapters that will still be in the stage of not doing any fundraising at all.)

    I agree with Arne that a map or list should be easily available on demand, rather than being the first thing a donor sees, in part because ideally chapters will also be able to speak to the mission in ways that appeal to donors in their geographic regions. Forcing an initial choice IMO creates a first wall between the donor and their desire to give.

    Moreover, there are plenty of countries without chapters, or without chapters ready to take on fundraising responsibilities. In those countries, WMF needs to continue to be the first choice, and a map would be confusing.

    I prefer a simple revenue share over spending money on mutually agreed upon specific activities, because it makes it easier for WMF and chapters to plan, and to address the most critical needs first.

    So much for the theory – in practice there’s a huge amount of capacity building to do to help chapters become great fundraisers (even the WMF is just barely growing up in that regard). But I agree with the theory. 🙂

  7. notafish says:

    @Erik. I don’t understand what you mean by “I agree with Arne” and “forcing an initial choice creates a wall”. Arne’s solution (which implies algorithms and IPs and whatnots ;-)) actually does not even give a choice for the donor to give where they want, since it puts them directly on the page in the language/of the country their computer/browser/location decides they should go to. (I do agree about not having a map though, but a dropdown makes sense).

    There’s a huge difference between “forcing a choice” and “giving a choice”. To give a choice to the donor to give where they want in one click is one thing. To have them look for the place they might give by scrolling five pages and looking for the right link is another.

    I am glad you think that we’re on the path to 3. (at least that’s what I understand from your comment), but frankly, I don’t see that happening in the near future if we go on with strange page percentages and funky 50/50 spending schemes.

    To me, we should make sure that we have the BEST possible fundraising scheme available, gather as much money as possible where the money is (ie. each chapter should be allowed fundraise to the max). The money should then be redistributed as follows:
    – WMF has an annual budget that needs to be covered
    – Chapters have a responsibility to see that this budget is covered
    – To do so, they would:
    *Make a budget of their own, entailing fundraising goals
    *Make the funding of WMF’s budget (if it is not reached by WMF’s own fundraising) a priority. It needs to come before their own budget if necessary, the survival of WMF is critical
    *Keep the money necessary to their budget
    *Redistribute (to WMF and/or other chapters) anything that’s above their own planning expenditure +/- x% if they want to be able to grow.

    This is not the way Wikimedia is working right now, as far as I can observe.

  8. Rand says:

    Woo ha! Nice post and good ideas.

    It’s weird that I can simultaneously agree with all of the above yet still feel uncertain how to respond. To me, the core issues are threefold:
    1) How best to get a prospective donor to give via making a case/story that resonates and compels them to give;
    2) Make it as quick, easy, and painless for the prospect to give once they have decided;
    and, most importantly:
    3) How best to manage and cultivate the relationship between the donor and the Wikimedia movement.

    Personally, I’m not super worried about where the money goes and how it is distributed. My primary concern is getting that donor to give again. Our future growth as a fundraising organization lies with our ability to turn one time donors to passionate and repeat donors, donors who will be willing advocates for our cause. The only way that is going to happen is with proper education and cultivation after the first donation is made.

    While the 3 models above are theoretically true, I think the mark is off base and would rather focus on how best to keep donors engaged/cultivated after they have given. In the long term, I believe that a local chapter, given training and compelling story, will be better cultivators than the WMF.

    The best approach for me will always be the one that has the most certainty of continued and proper cultivation and stewardship of current donors.

    As far as the distribution theories…they all seem somewhat right to me right now. We are on a path to make similar things happen (though maybe not this year) and we can evaluate the IP Geolocation model after this fundraiser.

    -Rand

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