[Foundation-l] Chapters

[Nathan]

Several points in reply to Theo:

1) You don't need to argue the value of having chapters around the world. No
one debating that. It's accepted that effective global outreach requires
effective local partners, and that local chapters are the way to achieve the
best results. I think its generally well known that there are countries
where it is problematic to receive large amounts of money from foreign
organizations, or to send money overseas. But...

2) Organizations that receive money under the aegis of the WMF need to
understand that the WMF has a legal and ethical duty to ensure that the
funds are well spent. This isn't a "US vs. other places" argument - its a
"the WMF has to meet its obligations to the community" argument. As an
organization that strives to be far more accountable and transparent to the
public than a normal non-profit, these obligations greatly exceed the
minimum requirements of law. I'm sure many nations have strict laws
governing the operations of non-profits, and we all hope and expect that all
chapters meet and exceed these minimum requirements... but the chapters must
meet the Foundation's expectations for transparency and fiscal
responsibility, not just the what is required by law.

3) Your point about the nature of non-profit organizations doesn't make
sense as a response to what I said. Perhaps you can re-read what I wrote and
reconsider your response.  Regardless,  I'm not sure I understand exactly
why people opposed to the new requirements of the WMF are ignoring the
obvious fact that chapters can continue to raise funds on their own. Grants,
some sorts of partnerships, direct contributions, etc. The Board letter is
not "You can't raise any funds at all" its "You have to do X, Y and Z in
order to join the WMF fundraiser."


Let's just reiterate the requirements described by the Board letter:

*"* An organization can directly receive donor funds as a payment processor
if
the following criteria are met:
** There is sufficient money raised in the geography to merit the logistical
effort.
** The organization offers tax deductibility or other incentives to local
donors.
** Regulatory issues about any international funds flows are fully resolved.
** The organization's current financial resources are not enough to fund
proposed program work.
** The Foundation can confidently assure donors to the chapter that their
donations will be safeguarded, that our movement's transparency principles
will be met, and that spending will be in line with our mission and with the
messages used to attract donors.
* The donation process should clearly disclose basic facts about the
organization receiving the donation."*

Tax deductibility may be a major challenge or impossible in some
jurisdictions. Which other criteria are so onerous that folks are reacting
like the letter indicts the entire system of chapters? Here's how I
interpret what the Board has written:

(a) Regulatory issues have to be resolved, which was true (in order to
protect local organizations from liability) regardless of this letter.

(b) Having many times more money than planned is a risk obvious to anyone.
The WMF is trying to prevent a situation where chapters have huge bank
accounts but no organizational capacity or financial controls. That means
diligent and clear accounting according to international accounting
standards, controls against the risk of theft, fraud or misappropriation,
and outside independent audits. Such demands are the basic responsibility of
the WMF to donors it refers to chapters.

(c) Chapters who receive money from the WMF should disclose in detail how
much money they've received and how it is being spent, to the WMF and the
movement community. As above, funds should be "safeguarded" by appropriate
financial controls (which may or may not be mandated by law in any
jurisdiction). Money received through the WMF should be spent solely on
movement goals.

(d) Chapters receiving money should disclose to donors the chapters' nature,
history, composition and leadership.

Why anyone should object to these requirements is hard for me to understand.
I can see why chapters would be perturbed about needing to meet them on a
short timeline, but generally speaking they should all have had these as
aims to begin with.

Nathan