[Foundation-l] Chapters and replacing the Audit committee

Tue Aug 9 21:03:17 UTC 2011

On Tue, Aug 9, 2011 at 4:43 PM, WereSpielChequers
<werespielchequers at gmail.com> wrote:
> A few points about Kyrill's statement, and a proposal.
>
> Firstly the idea that the work done by the chapters "could just as
> easily be done by the WMF as well, and likely at lower cost." Cost
> isn't everything, and I suspect the chapters are more likely to be
> able to adapt things to their local culture. But the WMF is sited in a
> high wage area by global standards, so I suspect that many chapters
> can do better especially where they have volunteers who speak the
> language and live in the culture. So even if cheapest turns out to be
> best, the WMF might not be the cheapest option as often as you think.
>
> Secondly  "The only real advantage a chapter's involvement can provide
> over a fully WMF-operated  fundraiser is the availability of tax
> benefits in a particular jurisdiction; and, given the small size of
> the average donation, it's unclear to what extent such tax benefits
> are a significant consideration for the average donor." Again this is
> something where decentralisation gives you an advantage. I'm aware
> that in the US the tax benefit accrues to the donor, and I can
> understand Kyrill's comment might make sense in such a tax regime
> (though I suspect it is still wrong, as I'd be truly astonished if we
> tested it and found there was no uplift on donations that were tax
> deductible). But here in the UK much of the tax advantage accrues to
> the charity, so it isn't just extra credibility with the donor, it is
> an extra 28% top up from the taxman to the charity. I don't know how
> other countries do this, but that is the glory of a decentralised
> system - we can rely on the local chapters to have such local
> knowledge. Also this rather misses the point that some funds are only
> available to charities.
>
> Thirdly "The chapters -- and, certainly, any _particular_ chapter --
> has no inherent right to lead the movement.  We may choose to _allow_
> it to lead, of course -- but it is up to the chapter to demonstrate
> that it is worthy of such a role, not for everyone else to prove that
> it isn't." Decentralisation does not mean that any one particular
> chapter gets to lead the movement, or even that the chapters
> collectively get to lead the movement. Those who advocate
> decentralisation of power are not actually arguing that any particular
> chapter should lead the movement, after all that would just be
> centralisation with a different centre. Power does not necessarily
> have to be centralised, in a decentralised movement the WMF would
> almost certainly still have far more budget and influence than any
> individual chapter.
>
> One possible way to decentralise whilst maintaining or even improving
> fiscal accountability would be to replace the Audit committee with a
> group audit committee. I'm familiar with this model here in the UK in
> our not for profit housing sector - basically multiple organisations
> in the same group are audited by the same committee. To keep the
> committee to a manageable size you  wouldn't have every chapter on it
> every year, and you would probably continue to have independents as
> now. But I would hope you'd avoid having a majority from any one
> continent let alone one country. Also as a matter of good governance
> there should be a separation of powers - none of our treasurers should
> serve on it without at least a break of a year since serving as a
> treasurer.
>
> WereSpielChequers
>>

I'm not a lawyer, but I don't think the WMF has much of a choice about
having an Audit Committee of the board, nor would they be able to cede
authority for such a function to an outside entity. This means that
the board has to retain effective oversight over the operations and
spending of the WMF, including the fundraiser, the channeling of funds
to chapters, and the affiliates themselves.

Nathan