[Foundation-l] Report to the Board 2008 04 30 (April)

[Sue Gardner]

Michael Bimmler wrote:
> On Thu, May 15, 2008 at 6:01 PM, Sue Gardner <sgardner at wikimedia.org> wrote:
>   
>> We also continued explorations of the status of
>> our ability -in conjunction with the chapters- to offer
>> tax-deductibility outside the United States. We have developed a list of
>> the top-10 countries that have donated to Wikimedia in the past, with
>> the goal of developing tax-deductibility in priority countries where we
>> do not currently offer it.
>>     
>
> Hm, not sure whether I read this paragraph correctly. Do you
> a) want to support chapters to obtain tax-deductibility in the listed
> countries or
> b) try to get tax deductibility for *WMF itself* in these countries?
>
> If b), I wonder whether this is possible at all, because, surely, if
> you want to be tax deductible in a country, you must have a
> 'seat'/'residence' in this country.
> For Switzerland, at least, I can tell you with pretty much confidence
> that unless the WMF sets up offices in Zurich and / or creates a
> branch here, it won't qualify for tax deductibility and I would be
> rather surprised if this was different in other European countries (I
> know even less of the other legal systems...)
>
> But maybe I'm misunderstanding something.
>
> Michael
>
>   
I actually don't have any preconceived ideas about how best to do this - 
it would be great if there were a one-size-fits-all solution, but there 
isn't.

There are at least five, and possibly six, versions of "current state."

1., Countries that currently have chapters, and offer tax-deductibility. 
Mission accomplished :-)
2., Countries that currently have chapters, and do not offer 
tax-deductibility, but could, and want to. In those instances, we would 
probably just offer Foundation support to get it, if that would help; it 
would presumably be the simplest and shortest path.
3., Countries that currently have chapters which do not offer 
tax-deductibility, in which there are serious impediments to offering 
it, or the chapter does not want to offer it. In those instances, we 
would want to explore whether those impediments can be overcome, and if 
not, whether there is some other path to offering deductibility.
4., Countries that currently do not have chapters, but are on the verge 
of forming them. Some of those will end up in scenario 2 above, and some 
may end up in scenario 3. In some instances we may want to encourage 
faster development of chapters, if we think there's major fundraising 
potential in that country.
5., Countries that currently do not have chapters, and may not ever have 
chapters. In those countries, we will want to explore what other paths 
to deductibility may exist.
6., Countries in which deductibility is not an incentive to donate: 
where the culture of giving doesn't include an expectation of 
deductibility. In those countries, we don't need to change anything.

(I am talking here only about "fundraising priority countries" - 
countries that currently give us a lot of money, or who we think 
potentially could.  Clearly we're not -in the immediate future anyway- 
going to launch an effort to offer deductibility in all countries of the 
world: the bang for the buck would just not be there.)

It goes without saying that this is a complex area: lots of countries, 
lots of different rules. I spoke yesterday with a guy who handles this 
type of work for a major international accounting firm; he tells me 
that, beginning as far back as the fifties, international charities and 
other entities have made attempts to get the rules governing 
deductibility simplified/streamlined/systematized, to make it easier for 
them to collect donations internationally. He believes eventually that 
simplification will take place, but it'll take many, many decades.

It would probably be good to talk about this a bit at the chapters 
meeting; there are some other issues at play that I haven't gone into 
here.  But rest assured: we're just beginning to research: we're not at 
any decisionmaking point yet.

Thanks,
Sue

--

Sue Gardner
Executive Director
Wikimedia Foundation

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