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Lyzzys Post Meine Idee vom CPB ist nur wenig hinzuzufügen. Als Mitantragsteller unterschreibe ich das sofort. Es geht um das, was die Amerikaner Empowerment nennen: Freiwilligen sollen die Mittel gegeben werden, ihre Ideen zugunsten der Wikimedia-Projekte zu verwirklichen und, idealerweise, dabei über sich hinauszuwachsen.

Subsidiarity as a fundamental principle

In a blog post titled Fundraising, chapters, and movement priorities, Stu West, Vice Chair and Treasurer of the Wikimedia Foundation, raised a number of interesting questions today. They all center around accountability, stewardship, and effectiveness.

In this post, I want to provide some answers on how I would respond to his questions. But before I do that, let me go off on a small, but significant tangent on subsidiarity. What’s subsidiarity? In general terms, it means that, whenever a problem needs to be addressed, it ought to be addressed by the most local, least centralized entity that is competent to solve it. In other words, whenever a problem needs to be solved in a complex system, start at the smallest possible level. If that doesn’t work, go one level broader and try again. If that doesn’t work, go even broader and try again, and so on. It’s a guiding principle of, for example, federalism in the United States where, in general, matters that can be solved at the level of the states ought to be solved by the states, and not the national government. It’s also gotten a lot of attention in management where empowering staff at lower levels to make their own decisions has, in many ways, replaced a more traditional top-down approach. It’s the very opposite of centralism where a single entity makes decisions for all other (subordinate) entities involved, regardless of how low-level that decision may be.

So why is subsidiarity good? There are two main concerns were I find subsidiarity persuasive: effectiveness and political legitimacy. Let’s look at these separately.

Effectiveness, in the way I use it here, is a measure of how well a solutions addresses the problem it is meant to solve. It’s different from efficiency, which is all about achieving maximum effect at minimum cost or effort.

Subsidiarity can achieve a high level of effectiveness when the problem to be solved at a global level is actually a thousand distinct problems when taking into account local circumstances. To make that less abstract, let me provide a totally absurd, oversimplified scenario that still proves a point. Let’s say the problem to be solved is world hunger: in aggregate, the human population is not eating enough or not the right things to stay healthy. One possible (centralist) solution to that problem would be to decide that, from now on, every single human being worldwide will, on each day, receive a box of food consisting of one banana, one orange, two apples, three carrots, four potatoes, two hard-boiled eggs, one grilled pork chop, a cup of yogurt, two bottles of milk, four bottles of water, and four slices of white bread. The box of food will be produced by US government farmers in the American mid-west and delivered each day worldwide by US government employees by plane, ship, train, car, etc.

Does this solution have the potential to solve the problem? Yes, in theory. The contents of the box certainly provide all the nutrients most dieticians would recommend in a daily diet. Carbohydrats, fat, protein, minerals, vitamins—all there. Will it actually solve world hunger? Yeah, probably not. Why? It totally fails to take into account different local situations. It doesn’t consider that about a fifth of the world population are Muslims who won’t touch a pork chop, much less eat it. It doesn’t consider that about three quarters of the world population is estimated to be lactose intolerant, i.e. cannot properly digest dairy products, and therefore has no use for yogurt or milk. It doesn’t consider that import of food, in many countries, is highly regulated and subject to significant customs duties. It doesn’t consider that what is appropriate and acceptable to eat varies highly between the cultures found in this world. It doesn’t consider that people in Western Europe tend to have plenty, or rather too much, to eat, whereby such a food program would likely serve only to expand landfill and incinerator use. The solution is ineffective because it treats world hunger as one single problem, rather than a whole multitude of problems influenced by highly varied local circumstances.

What would a subsidiarity-infused solution to world hunger be? Well, it would first acknowledge the fact that situations are different at different places. It would also acknowledge that these differences need to be worked into the solution to be effective. It thus might set a general goal, such as that every single human being shall be provided with the ability to eat food with at least such and such calories, minerals, and vitamins. It might then determine actual nutrition levels in different countries to sort out all the places where it isn’t a significant problem. Of what’s left, it would then find or establish local partners in those places to solve the problem within the local cultural, economic, and political framework. As a result, not everyone everywhere will eat the same things – but that wasn’t the goal anyway. That people eat sufficient, healthy amounts was. The subsidiarity solution makes that possible, the centralist one rather not.

Aside from effectiveness, though, subsidiarity helps with something any non-anarchaic society faces: the quest for political legitimacy, i.e. the acceptance of a decision by the group affected by it. One of the characteristics of political legitimacy is that it’s distance-sensitive, i.e. the further the distance between those making the decision and those affected by it, the smaller political legitimacy becomes. Distance here means both geographical, but also influential distance. To use the food program above as an example again, decisions such as, one, there will be a food program and two, it will consist of delivering these food items, are made at a level very much removed from the individual affected by it. Also, democracy implied, that single individual will have very little influence on such global decision-making because he has to compete with nearly seven billion other individuals also clamoring for influence. So the acceptance for such a program will be rather low making fun things like boycotts and sabotage much more likely.

If, on the other hand, subsidiarity is king, you can get much stronger political legitimacy. Because here, local partners decide how hunger is addressed specifically. And at a local level, individuals have a much higher chance in getting their voice heard. They can influence how hunger is solved in their community. And, because their voice was significant, they are much more likely to accept the program and might even support it to ensure its success.

What does any of that have to do with Wikimedia and Stu’s e-mail? The Wikimedia movement is a world-wide endeavor. It envisions a world in which every single human being can freely share in the sum of all knowledge. Since access to and participation in knowledge varies between regions and cultures, the problem Wikimedia tries to solve is just like the hunger problem earlier: it’s actually a multitude of problems influenced by local circumstances. If you evaluated acccess to knowledge in Germany and in Botswana, you would get very different results and likely find that Germany has deficiencies that Botwsana doesn’t have and Botswana has deficiencies that Germany doesn’t have. As a result, the priorities for what to do in Germany would be vastly different from those in Botswana. Because of that, it makes a lot of sense to apply subsidiarity to the „Wikimedia problem“, provided that effectiveness and political legitimacy matter to you.

Subsidiarity, in fact, can be found in many places within the Wikimedia movement. Each Wikimedia project (i.e. Wikipedia, Commons, Wikisource, etc.) in each language has its own community with its own rules. Decisions specific to English Wikipedia, for example, are made within the English Wikipedia community, not on a central level. Similarly, even within these projects, there are often rules where decision-making powers are further divested to, for example, the editors engaged in specific topics. Similarly, Wikimedia chapters are established in a number of countries to organize and execute activities appropriate to their jurisdiction, subject to the will of their constituents. There’s no global body that decides what kind of events are to take place in different countries, or what kind of policies are to apply to verifiable sources, or what names users may take when they sign up in one of the projects. It’s all decided at the most local level possible and sensible.

On the other hand, where prudent, decisions are made at a higher or a global level. The different language Wikipedia projects all have in common that, what they are to produce, is an encyclopedia. If Gaelic Wikipedia wanted to decide that, instead of an encyclopedia, they want to produce a cookbook under that name, their project would fall out of the bounds of what Wikipedia is and an intervention would likely follow. Similarly, the Wikimedia Foundation, as a technical provider subject to United States law, has set a few global rules regarding copyright issues and coverage of living persons that could not be left to the individual Wikimedia projects, because doing so would have left the Foundation at significant risk of litigation and/or criminal prosecution.

With all that general stuff out of the way, let’s move on to Stu’s questions:

Stu: Is it right that 50% of rich country donations stay in those rich countries?
As Stu states, at least 95% of all money donated to Wikimedia entities comes from well-developed countries. Whether it’s right for half of that to stay in those rich countries depends on what criteria one chooses to determine „rightness“. But the question itself is actually a bit misleading. As Stu pointed out, $4.3 million or 15% was raised by chapters last fiscal year, $25 million or 85% by the Foundation whose largest source country is, by far, the United States. 95% of that would be $27.8 million, 50% of that would be $13.9 million. So, what he’s actually asking is: Is it right that $13.9 million of rich country donations stay in those rich countries?

The answer to that is difficult to tell, because, in reality, much more than that has actually been spent and, according to the Foundation’s annual plan 2011/12 will be spent, in „rich countries“. While the plan doesn’t outright specify how much of its expenditures go to places other than „rich countries“, It is possible to estimate the range of that spending. According to the plan, 44% of the projected overall spending will go to technology, 24% to administration, 23% to programs, 8% to fundraising and 1% to governance. It is safe to assume that close to all of administration, fundraising, and governance (32%) expenditures remain in the US as that is where the Foundation is located . Most of the technology spending and some of the program spending will likely also stay in the US. But, even if it were half of each, that would only amount to 34% of total spending, a far cry from 50%. But, if we accept that number, even next year, 66% of total Foundation spending plus most of the chapter’s spending will go to „rich countries“.

Now, the criteria that I would use to determine whether that 50% figure is right nor not is effectiveness and efficiency of that money spent. If achieving the goals set out in the strategy actually require 50% to be spent on Global South, then 50% seems like a good amount to spent. If it actually requires only 30%, 50% would be too much, if 80% are needed, 50% too little. Unfortunately, we really don’t know. The emphasis on the Global South just started last year and there’s been, so far, no evaluation of how much impact Foundation spending in the area has actually had. We simply don’t know how much money needs to be spent on the Global South in total, or even within the coming year, to achieve the goals set out in the strategy. But if we don’t know that, how are we to decide whether 50% is enough?

Stu: How do we establish solid movement-wide financial controls to protect donor funds?
If subsidiarity is accepted as a principle, the best to establish solid movement-wide financial controls way would be for all donation-handling entities to agree to a set of common financial standards and set up a structure to make sure they are enforced. Right now, neither those standards nor that structure exist. What we do have, are institutional arrangements within the Foundation and each chapter for financial controls that are often heavily influenced by the regulatory environment within which they operate. These arrangements are not, in general, intentionally aligned with any global strategy. There are also local auditors, although whether they are internal or external and which responsibilities they have varies widely.

So there are no global standards, such as a requirement to publish financial statements, or requirements to set out a budget, or requirements for conflict-of-interest policies, etc., yet but they are partially on their way. With this year’s fundraising agreement, chapters are required to submit a plan of activities with budgets for the next fiscal year in order to participate in the annual fundraising campaign. It’s a good step in the right direction. But it leaves much room for improvement because, for example, the entity that checks these activities plans (the Foundation) also engages in its own activities and also handles donations and there’s no one checking the Foundation’s activities plan.

One of the failures in this recent process has been that requirements have been set more or less unilaterally. I don’t mean that as an accusation, merely an observation that, so far, only one party has really pushed this subject forward: the Foundation. For the past couple of years, it has always been the Foundation who has proposed more/stricter requirements as a prerequisite to participating in gobal fundraising, basically using the fundraising agreement as a means to effect better financial controls. That’s unfortunate because it shows that while the Foundation has certainly spent time thinking about sound financial stewardship of donations and has been creative in finding ways to ensure that on a global level, the chapters have not. It’s unfortunate because that responsibility doesn’t rest with the Foundation alone—it rests with all of us.

My approach to „how to establish solid movement-wide financial controls“ would be to start conversations between Foundation and chapters both on a set of global minimum standards and a solid and independent reporting/enforcement structure. One option could be the creation of a global Wikimedia Audit Committee that takes on responsibility for collecting continuous reports from chapters and Foundation, checking compliance with the global standards in cooperation with chapter and Foundation auditors, investigating violations of those standards, and working with these local auditors to correct them. It’s important to involve the local auditors, though, because reporting and enforcement will always be influenced by local circumstances, especially the legal framework of the jurisdiction under which the entity operates. It also makes sure that political legitimacy isn’t lost due to the long distance of influence between an individual community member and this oversight body. Finally, it acknowledges and strengthens the fact that chapter leadership is first and foremost accountable to their local constituents.

Stu: >Who is ultimately responsible for stewarding donors’ contributions?
On a moral level, I think everyone of us, i.e. every Wikimedian, is responsible for that. On a structural level, right now, there’s not a single „who“ that is responsible for stewarding all of donor’s contributions, and the principle of subsidiarity wouldn’t raise the prospect of there ever being exactly one.

I don’t see that as a deficiency though. We have to accept and acknowledge that, what stewardship of donations means, is culture-dependent. The United States‘ approach to regulating non-profits is very different from that of France is very different from that of Venezuela, etc. That shouldn’t stop us from setting certain minimum standards for the participants of the Wikimedia movement. But it does stop us from setting up centralized, one-size-fits-all solutions.

As an epilogue, I want to thank Stu that he raised these questions and that he did so publicly. All too often, these kind of topics aren’t really discussed openly, either because some find them boring, mundane, technical, or too critical for public discourse. I hope, strongly hope, that there will be others deliberating on this subject, expressing their opinions, putting forth proposals, and working together to effect a solution. It’s an important subject that certainly merits this sort of attention and care.

Hallo, Welt!

Hier findet sich nun mein dritter Versuch eines eigenen Blogs. Schauen wir mal, wie lang das anhält.