On Wed, Dec 19, 2012 at 7:58 PM, Pete Forsyth <peteforsyth@gmail.com> wrote:

* Chapters historically came into existence to (1) process donations in local currency and (2) deal with local legal issues

I would say it is more
(3) provide an organization that could handle local partnerships and communication: with content and promotion and other targeted projects.  The sort of thing that the WMF explicitly leaves to other entities, by virtue of not accepting targeted donations.
* The difficulty of forming a chapter that doesn't conform to legal borders has caused tension in recent years

This was feared but has not been true in practice.   (It was an issue of forming an incorporated entity, period, not specific to a chapter.)  
* The WMF Board and many in the community are aware and concerned about this

Not sure...  concerned about what here?  The explicit recognition of other entities was to avoid forcing groups into a narrow mould in order to be recognized as a stable part of the movement.  It wasn't in response to issues with geographic groups that weren't national; it was in to recognize the majority of groups that are not geographic at all.
* The general solution is not so much to adapt the Chapter model to fit other cases, as to establish that other cases are fine *without* carrying the name "chapter".
The Wikimedia movement has a new approach to funds dissemination; being a chapter is not the only way to get grants or put the name "Wikipedia" (or "Wikimedia" etc.) to good use.

In other words, just because the CHAPTERS committee

There is no longer a chapters committee; it is now the Affiliations Committee :)  And please don't judge what they /might/ think; just ask them.