Funding of decentralized organizational structure - Wikimedia-l

10 Apr 2014


      Hello dear all,
now the second mail
Funding of international operating organizations is a very complicated 
issue. The Wikimedia movement is not the first and not the last one to 
face this topic. There are as many models on how this can be handled as 
there are international organizations.
Currently the Wikimedia movement adapted a strong centralized model with 
the Foundation as the only organization that does the fund distribution. 
In the official text it is said that the Foundation only does "payment 
processing" and the FDC does the fund distribution, I think this is 
misguiding. The part of money that the FDC distribute is at the end 
defined by the annual financial plan of the Foundation, and not by FDC 
itself, in this way FDC doesn't really have financial sovereignty and is 
only distributing a very small part of the whole movement funding.
There is a "long" way for us to come to this model, and yes, every 
critics is correct who says that I am personally responsible for this 
model. The model was introduced and adapted during my chair's personship 
on the Foundation board and I defended this model during this time. I 
remember lively the Wikimania in Haifa and in Washington. But it doesn't 
mean that I cannot rethink this decision. Indeed, today I think that it 
is mea culpa, mea maxima culpa.
As I said earlier there is a history how we got into this result. At the 
beginning, when WMDE was the only partner organization that did fund 
raising beside of WMF there was an agreement between WMDE and WMF that 
the amount of money raised inside of Germany (independent on who raised 
it) will be split 50:50 between the two organizations. In year 2009 this 
model was used to all organizations who wanted to do fund raising.
I won't speak for anyone else, I just want to speak for myself. I was 
worried by the end of 2009. The reason why I was worried was the funding 
of WMF, not that of the chapters, especially in the light of at that 
time very vividly discussed WMUSA. The model we used for 2009 cut off 
the Foundation from half of the funds from Europe outside of Germany, 
especially from UK. In the light of higher funding result this was not 
very much a problem for the WMF, because the biggest part of the funding 
came from US. But in case that there would be a WMUSA and it would 
participate in fund raising in the same way it would mean that the WMF 
will lose almost half of its funding (given the case, that the fund 
raising target will not be raised), and I want to remind the readers 
that at that time the WMF budget in total was still quite low. That was 
my worry. Let me emphasize that it was my private thought. As I said I 
won't speak for anyone else. And I didn't talk with anyone in this 
respect. I didn't hear anyone speak out a similar concern so I take I 
was alone with this worry. There were no talk that I am aware of, 
official or unofficial, that was related to this concern. Even though at 
that time WMDE signaled to the Foundation that they were willing to 
change the 50:50 splitting in benefit to the WMF, it seemed to me still 
very worrisome.
In the end, some other issues came up. I think all concerns that were 
publicly made in this context are valid. And as I said in the other mail 
I think that at the end it is good that we have set up those standards 
and all organizations inside of the movement are profitable from these 
standards.
But I think that the end result of the whole process is a very radical 
centralized one. And as this it is not compatible to the value that we 
declared for ourselves: That our movement should be decentralized.
Concrete I find a few points especially problematic with the approach we 
currently have:
*
The WMF is currently the only body that is empowered and is able to
    distribute the funds
*
The grants are limited in one year's term and doesn't really help
    long term development and strategy
*
Almost all grants are conditioned and doesn't give the partner
    organization the necessary freedom and financial sovereignty that a
    healthy independent organization needs
*
The lack of a from all partner organizations agreed strategy
I won't say that we won't get into these issues if we have a different 
funding model, but I think that the current radically centralized 
funding model makes these problems worse and almost impossible to resolve.
Even though the FDC and the GAC are run by volunteers, this does not 
make them the ones that really distribute the funds of the movement. The 
part of the funds that the FDC and the GAC can distribute, is only a 
very small part of the entire fund raising result. And the amount of 
this part is at first defined by the WMF annual planning. Even though by 
the annual planning the feedback of the FDC and the GAC is taken into 
account the final decision about the portion and amount of this part 
lies entirely in the measure of the WMF. So, in the end only the WMF has 
the sovereignty upon the funding.
By the nature of how our movement is organized all organizations inside 
of the movement are independent organizations. And since we don't have a 
charter that is agreed by all partners, and don't have a movement 
strategic planning that is agreed by all partners, every organization 
stands for themselves. From the WMF perspective of view the partner 
organizations are business partners, and from this point of view the 
calculation is easy: What do I pay them and what would I get back from 
my investment. Under this condition it is just following the logic of 
business that the WMF want to, or more precise, is obliged to keep a 
short line on the funding it is giving out to other independent 
organizations.
The instrument of tightly monitored measurable business targets is today 
a common sense in the business world, and is more and more applied in 
the nonprofit world. It is taught in the preschools of the business 
schools and is deeply deeply implanted into the consciousness of any 
manager. If you miss your target for one quarter you are under pressure, 
if you miss it for two quarters there will be a serious talk with your 
boss, if you miss your target for three quarters you are fired. This is 
maybe a bit exaggerated but basically a rule for all high and middle 
management people. A company boss that fancy his idea of gather the 
energy that usually go lost by braking and use this energy as an 
auxiliary drive, and pursue his queer idea for years without real 
return, while at the same time people in his industry branch think the 
model is "an interesting curiosity", such examples are now a day very rare.
For our movement partners I believe the annual driven, short termed and 
always conditioned funding is a problem. It doesn't allow the young 
organizations to have a long term plan for their development. The 
traditional funding model like what the WMF is using by FDC is more for 
mature organizations. Young organizations need more funding model like 
what the venture capitalists do. The lack of common movement wide 
strategic planning only makes the situation worse. What venture 
capitalists need is a vision, before they are willing to fund a new 
enterprise.
I come back again and again to this point because I really think it is a 
crucial point for the movement. There is no common, from all partners 
agreed idea about where every body is going, what should / can they 
contribute, what is their duty and what is their contribution. There are 
some vague ideas but there is no common understanding. At this point I 
want to come back to a response from Cristian Connsoni on my last post. 
Cristian wrote: "It is worth adding that following the law and 
jurisprudence in Italy (but mind that IANAL) the mere possession of 
servers can be enough for an Italian judge to consider you responsible 
of the contents. That's why Wikimedia Italia does not want any server." 
I know where you come from, but I miss what you think where you can be. 
You come from the current situation, but do you make any thought where 
you want to be and how you can get there? I think this is the question 
that all organizations, each for themselves should ask and answer, and 
then all should put their answers together and see what everyone had 
thought for themselves and if all the answers can be put together to 
make a larger mosaic that makes sense.
Please let me troll a bit at this place (I was not allowed to in the 
past years and now I feel the joy of a teenager who is allowed to stay 
at home for the first time of his life while his parents are taking a 
weekend off, and please apologize an old man share his infantile feeling 
in a meant to be serious long mail). I read once (in an article about 
searching for alien life) that one of the characteristics of life is to 
change the environment in a way that makes it more comfortable for 
himself. So you say the environment is hostile to you. Then answer for 
yourself what would be the ideal environment and what could you do to 
make the environment more comfortable for you and what resource do you 
need to do so. Just as the start point for your strategic planning. Or 
the other way around: think big, think about your friends and partners 
and what can you do with them? Together? What become the idea of an EU 
association? Who remembers CHIP? Yes WMIT in person of Illario took part 
on that meeting in the youth hostel in Brussels. Yeah, when I wrote 
about the European server in my last mail, I deliberately didn't put it 
in a country, but said EU. And I still think an EU association (with UK 
and CH and Amical part of it) makes sense in very many points of view.
Yes I know it is difficult to be at one point and think about where I 
want myself to be. When I was a member of the WMF board I really felt 
difficult to do this, because there were always current problems that we 
were facing and I had never had time, energy, save imagination to think 
something else. It was after I gave up my chair's person position and 
really after I quit the board that I have time and most important of all 
ease to think about the whole picture. And it is difficult to do this 
kind of thinking because between the where I am and where I want to be 
there is a blank gap. And it is difficult to imagine how I can bridge 
that gap, especially if I don't have the resource to bridge that gap.
Long term developmental funding is exactly for bridging such gaps. It is 
in some sense a complimentary system: You need a vision, and you need 
the funding to approach that vision. Both are necessary. Currently, in 
our movement, for most partner organizations, and for our movement as a 
whole, non of them are in place.
And the current model of our movement funding doesn't help to create any 
of them, and prohibits the creation of both of them. Looking back today 
I believe that the change of the funding model in 2010 in Haifa actually 
killed any realistic chance for a WMUSA, and maybe some others.
There are a lot of possible models how international movements, 
organizations and associations do funding. I think the current WMF model 
is one extreme. The other extreme is what the United Nations use. If we 
have kept the model we used in 2009 we would end up into a similar one. 
The funding of the United Nations is also the biggest weakness of the 
organization. In certain sense the United Nations is entirely dependent 
on the good will and the payment willingness of its member countries, 
and especially the rich countries. The organization is weak and bias 
because its foundation is weak and bias. And it doesn't help even if the 
payment is regulated in the UN charter and all member countries signed 
the charter. Personally I still find this a terrible model. With such a 
model we just turn the game around and makes the WMF totally dependent 
on the partner organizations. And it is a terrible model because it 
doesn't distribute the funds according to need but according to geolocation.
So I come back again and again to one point, which is for me the central 
piece of the movement, and which is lacking very very hurtfully: We need 
a common understanding about the movement roles and strategic planning, 
we need a charter so that every partner knows what his role inside of 
the movement is, what is expected from him and what can he expect from 
the partners in the movement, what is everyone contributing to the whole 
movement, and according to this we can find out what everyone really needs.
There are a few guidelines for the WMF fund raising:
*
WMF wants to stay independent, it does not want to be dependent on a
    few big grants
*
By acquiring grants, the WMF wants to keep its financial
    sovereignty, it always tries to negotiate unconditioned grants and
    actually broke some negotiations when it was clear that the grants
    won't be unconditioned.
*
In the past years the financial planning of the WMF is always driven
    by the 2010 strategic planning and its result. The start point was
    always: what is the projection in the strategic planning? What are
    the targets defined in it? What do we need to meet those targets.
    The presentations of Sue to the board on annual planning always
    start with a recap of the strategic planning and where we are.
I think what the WMF claims for itself as guidelines, it should also 
grant to its partner organizations.
So in my opinion our funding model should be based on this planning and 
agreement and charter and needs to give every movement partner the 
resource and financial sovereignty that they realistically need to 
fulfill their role. (I put here "realistically need" because naturally I 
can imagine for every organization a lot of things they can need but 
there is naturally also a constraint on what is possible and what every 
organization is able to handle. I take most of us, if not all, learned 
at first how to manage 10 bucks of pocket money before "a few" years 
later we learned how to manage our income. And non of us is empowered to 
give out millions from the cradle. I take this is common sense. But want 
to be more precise for this special quibbling loving mailing list 
*stretches his tongue*)
I see this more like a round table than what is currently the FDC. The 
round table starts in the third phase of every movement strategic 
planning: When the movement goals are set and the implementation 
planning starts, that's the point where the round table starts to work, 
it is an integral part of the strategic planning. The round table 
defines a rough portion of what every partner is empowered to get during 
the period of the implementation of the strategic planning according to 
the roles, developmental plan and contribution the organizations planned 
to accomplish during this period.
The FDC, or what a similarly composed committee would be, what is kind 
of a standing committee of the round table, will do the annual fine 
tuning according to the performance and achievement of every 
organization. It should also do the controlling and adjustment during 
the implementation phase. As this it needs to be really independent and 
also needs to have the teeth to enforce punishment when a partner 
organization violates the charter or is malfunctioning.
I won't claim that this is an easy approach. Discussion and negotiation 
is never easy, is actually unnerving. It is not easier in the Wikimedia 
movement than in any other associations. It always looks like it is 
easier to have one organization dictating the whole movement. But I 
think this is the wrong approach. The current status of the movement is 
that with one exception the partner organizations stay weak and 
underdeveloped. The WMF tried to fill in the roles that the partner 
organizations actually should fill in but noticed very soon that it 
cannot fill that role and retreated. In the end those works stay undone, 
even in the rich countries which by itself theoretically have enough 
resource to do it.
I think in the end the current model is devastating for the development 
of the movement as a whole in the long term.
Greetings
Ting