Proposed Financial Scenarios

January 2, 2018

ADHO Implementation Committee

Financial Model Recommendations

¶ 1 Leave a comment on paragraph 1 0 Version 2.2

¶ 2 Leave a comment on paragraph 2 0 This document was prepared by the ADHO Implementation Committee (IC) for the ADHO Steering Committee following the guidance of the ADHO Governance Proposals and other documents. It is a recommendation for how ADHO finances could be governed. It is shared with all so that we can get feedback and improve the recommendations. To help us we ask that you please add comments to this post or channel feedback through your Constituent Organization.

¶ 3 Leave a comment on paragraph 3 0 This document is a step towards replacing parts of the Governance Protocol with Bylaws and/or Protocols. See our Roadmap for the other steps. The idea is that there should be a public consultation with feedback channelled through the Constituent Organizations (COs) after which the recommendation will go to the Steering Committee which will review and choose/adapt one of the scenarios below (or send it back to the IC for more scenarios). Once a scenario has been decided the IC will prepare the appropriate documents like bylaws and protocols for the SC and final approval.

¶ 4 Leave a comment on paragraph 4 0 See Appendix A for a glossary of relevant acronyms.

Preamble

¶ 5 Leave a comment on paragraph 5 0 The proposed scenarios below were developed based on these principles:

¶ 6 Leave a comment on paragraph 6 3
The Mission of ADHO is to provide support for shared activities in the Digital Humanities on behalf of the Constituent Organizations (COs). These can take the form of shared infrastructure (web sites, journals), shared activities (annual conference), or projects that have a defined lifespan.
The members of ADHO are therefore the COs and it is the COs that ADHO serves. ADHO does not serve the members of the COs directly except through the participation of the COs in ADHO’s administrative bodies.
The ADHO structure has to be adapted so it can scale as new and different COs join. This means focusing on the efficiencies of shared infrastructure/activities. ADHO should avoid initiating things independently from COs.
The ADHO structure has to be adapted so that membership in an ADHO CO does not depend on a subscription to Digital Scholarship in the Humanities (or even going through the Oxford University Press site) as was the case. The COs should be able to keep the flexibility to enroll and serve their members as they see fit while still being able to collaborate through ADHO when they so desire. That said, the institutional subscriptions to DSH are important to the financial health of ADHO so memberships should be encouraged where appropriate.
ADHO should beware of initiating activities that don’t arise from the COs. Its sole purpose is to support COs. Wherever practical, all infrastructure, activities and projects supported should be proposed by, and managed by one or more COs and not by ADHO itself.
The COB decides what are the shared services for support. Proposals for new infrastructure, activities and projects should come to the COB from a CO with at least one other CO as a seconder. They should include a discussion of outcomes, a timeline, the use of existing services, and an itemized budget. They should be discussed and voted on by the COB. If there are budgetary implications then the Executive needs to account for the activity in the next budget.

Proposals

¶ 7 Leave a comment on paragraph 7 0 In light of the principles we drew from documents and discussion we propose some general recommendations and two scenarios in no particular order.

General Recommendations

¶ 8 Leave a comment on paragraph 8 15
ADHO should be funded to support only shared infrastructure, activities and projects on behalf of COs. The shared infrastructure, activities and projects currently includes items like the annual conference, shared computing infrastructure, selected publication venues, prizes, and scholarships. In general ADHO should focus on supporting only shared and ongoing infrastructure/activities, but it might also support selected time-limited projects led by COs too (e.g. the launch of a new journal or conference).
The COB is responsible for budgetary decisions for ADHO. Each year prior to the annual COB meeting, the Executive would present an Annual Budget for the next year for discussion and amendment. This budget would cover the costs for the core infrastructure/activities, the management of ADHO costs, costs for any shared projects that have been approved, and a budget line for unforseen costs. This budget would be voted upon, and if needed, amended, by the COB. In many cases funds would then be transferred to the COs that are leading the infrastructure, activity or project. The transfer of funds should be a priority of the ADHO Treasurer so as to facilitate CO activity.
For every infrastructure/activity and project that ADHO funds and a CO manages there should be a Memorandum of Agreement (MoA) that should be signed by the President of ADHO and the President of the relevant CO. This MoA should cover the nature of the activity, the amount of support, the duration of the support, and any agreed upon details.
ADHO should avoid making commitments to new forms of core infrastructure that must be supported on an ongoing basis. Instead ADHO should fund activities first as time-limited projects and then review them before committing to ongoing support.
Any funds left over from the income after the ADHO budget would be redistributed to the COs based on the percentage of members paying the service fee. ADHO should aim to redistribute as much as possible, as its mission is to support COs not replace them. This will ideally mean that the minimal service fees will typically be returned to the COs along with a portion of the institutional fees, but that could change.
The COs keep any funds that they get from their membership over and above the mandatory service fee. Likewise the COs keep any fees they collect for their own conferences or other activities.
The COs can run their own membership systems as long as they collect the approved minimal service schedule of fees and report to ADHO in a timely fashion. If a CO doesn’t want to run their own system they can take advantage of the existing Oxford University Press system (or a membership system from someone else.) COs can set a higher membership fee, in which case they would keep the difference. (Note that the COs should be getting the minimal fee back anyway according to fiscal projections.)
Membership systems run by ADHO (Oxford University Press) or COs should encourage prospective members to choose the CO to which they primarily align for the purpose of the redistribution of ADHO funds. There should no longer be options for belonging to more than one CO on the Oxford University Press site, at least for the purposes of ADHO.
The COs have to report annually on the individual members that have paid the minimal service fee. The reports on paid-up members are what ADHO will use to redistribute funds. As there is the possibility of individuals being members of more than one CO there needs to be a way to count such shared members. In the event that someone has paid the fee to more than one CO their alignment could be divided among the COs. For example, if someone aligns with two COs and pays to minimal fees then each CO will get .5 of a member for the purposes of redistribution of ADHO funds. Alternatively they could be counted as a full member of each CO given that they have paid the fee.

Scenario 1: Minimal Service Fee

¶ 9 Leave a comment on paragraph 9 1 That each Constituent Organization charge members a minimal and mandatory service fee to pay for the shared infrastructure run by ADHO.

¶ 10 Leave a comment on paragraph 10 2
ADHO’s financial income in this scenario would come from two sources:
1. ¶ 10 Leave a comment on paragraph 10 2
2. Institutional subscriptions to DSH via Oxford University Press.
3. A minimal and mandatory service fee paid by members of the COs for the support of ADHO.
This minimal fee would follow a schedule voted on by the Constituent Organization Board (COB) that should differentiate the minimal fee of students vs faculty or differentiate on the basis of other agreed upon criteria (e.g. economic status, retirement). It is understood that actual membership fees charged by COs to members may be greater than the minimal ADHO fee; but the membership fees set by COs should include the ADHO minimal service fee.
As a guide to what the minimal service fee should be we recommend the per-member cost of funding the central ADHO activities. If one takes all the expenses and divides by all the members you get what it take to support ADHO if the institutional subscriptions were not there. (See our financial model.)

Scenario 2: No Minimal Service Fee

¶ 11 Leave a comment on paragraph 11 2 That the Constituent Organizations would not collect a minimal service fee so long as the institutional subscriptions to DSH can cover the costs of the shared ADHO infrastructure. In this scenario COs would not need to collect minimal service fees. Our financial models suggest that the minimal fee of Scenario 1 would probably just be returned to the COs as long as ADHO expenses don’t exceed income from the institutional subscriptions.

Discussion

¶ 12 Leave a comment on paragraph 12 2 What follows is a discussion of the advantages and disadvantages of the two scenarios.

¶ 13 Leave a comment on paragraph 13 4
The major advantage of Scenario 2 is that it is simple and requires little overhead (infrastructurally, or volunteers’ time) to organise. The disadvantage is that it depends entirely on the institutional subscriptions which could lessen over time or be redirected elsewhere.
ADHO’s revenues are currently generated by institutional and personal subscriptions to the Journal of Digital Scholarship in the Humanities (which is owned by EADH). For the health of ADHO it is important to continue to support DSH as a priority. It is also important to consider alternative sources of income for ADHO, no matter how minimal, which is the reasoning behind Scenario 1. Should DSH income lessen or cease, ADHO needs to be able to compensate. It may also important symbolically that there be sources of income for ADHO that all COs are invested in.
The relationship between ADHO and core activities needs to be regularized once the new model is implemented. A Memorandum of Agreement (MoA) should be drawn up with each of the major activities/projects like DSH, DHQ, DS and so on. The Implementation Committee will prepare a recommendation as to what sort of MoA should be pursued with each of these activities, but the ultimate decision is up to the Steering Committee or the COB (once the new model is running.) In general we recommend that the COB fund a small number of core infrastructure/activities and for all other things fund them first as projects with a time limit, then review them, and only then make a decision to provide ongoing funding as a shared activity or not. The COB should try to avoid being treated by COs as a funding source for projects for which ADHO then becomes responsible. Instead it should aim to return funds to COs to do things with.
Scenario 1 solves some of the problems around how legitimate members are determined. It is up to the COs to determine who are their members and to report that. From ADHO’s perspective, what matters is that a minimal service fee has been paid to the CO (or an affiliated organization) that can be nominally be transferred to ADHO to support the shared infrastructure. All that ADHO should care about is income from the COs (and DHS), services for the COs, and redistributing what is left back to the COs. The COs can worry about what a member is. For that matter, if a person X took out membership in more than one CO and paid the minimal fee to both, would it matter that they had been counted as a member twice?
The COB will need to determine a set of rules for CO membership. The Implementation Committee will make some recommendations in this regard, but it will need to be up to the Admissions Committee of ADHO and the COB to make ongoing decisions about what a CO needs to do to be and stay a CO. We have mentioned reporting on membership above. In principle a CO also needs to be willing to transfer the minimal service fee to ADHO if ADHO should ever need that income. ADHO might also ask that a subscription to DSH be an option in whatever membership system a CO uses. ADHO might ask that all COs adopt a common code of conduct and that they have elected officers. If the IC has time we will document what might be a starting position.

Appendix A: Glossary of Acronyms

¶ 14 Leave a comment on paragraph 14 0 ADHO: Alliance of Digital Humanities Organizations

¶ 15 Leave a comment on paragraph 15 0 CO: Constituent Organizations

¶ 16 Leave a comment on paragraph 16 0 COB: Constituent Organization Board

¶ 17 Leave a comment on paragraph 17 0 DHQ: Digital Humanities Quarterly journal

¶ 18 Leave a comment on paragraph 18 0 DS: Digital Studies / Le champ numérique journal

¶ 19 Leave a comment on paragraph 19 0 DSH: Digital Scholarship in the Humanities journal

¶ 20 Leave a comment on paragraph 20 0 EADH: European Association for Digital Humanities

¶ 21 Leave a comment on paragraph 21 0 IC: ADHO Implementation Committee

¶ 22 Leave a comment on paragraph 22 0 MoA: Memorandum of Agreement

¶ 23 Leave a comment on paragraph 23 0 SC: ADHO Steering Committee

¶ 24 Leave a comment on paragraph 24 0

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4 Comments on the whole Post

Michael Sinatra January 9, 2018 at 5:23 am

Is this supposed to be Digital Studies / Le champ numérique?
Geoffrey Rockwell January 9, 2018 at 11:21 pm

Yes. Thanks for the correction.
Roopika RIsam January 16, 2018 at 9:45 pm

A minor detail but defining COB at its first usage (which, I believe is above) rather than later in the document would facilitate greater clarity.
Vika Zafrin March 28, 2018 at 7:33 pm

Is there a provision behind the scenes to revisit whichever financial scenario gets adopted after a certain amount of time? If not, I’d strongly advocate making an explicit plan to revisit after 3 years or so.

Elisabeth Burr January 22, 2018 at 11:33 pm

I am not so sure whether the server should be run by one CO. Perhaps you should delete “all” next to infrastructure. The sentence starting with “Wherever practical” would then also make more sense.
Elisabeth Burr January 22, 2018 at 11:45 pm

it could also be that what makes the text not clear enough for me is the fact that it talks about shared infrastucture and all infrastructure in § 6
Geoffrey Rockwell March 19, 2018 at 12:59 am

Your point about deleting “all” is a good one and makes sense to me. I’ll bring it to the Implementation Committee.

Thanks,

Geoffrey Rockwell

0 Comments on paragraph 7

15 Comments on paragraph 8

Roopika Risam January 16, 2018 at 9:48 pm

A minor detail but defining COB at its first usage (which, I believe is above) rather than later in the document would facilitate greater clarity.

Another query, on the matter of redistribution of funds leftover: are members who are (paid) members of multiple COs double counted or only counted in their primary affiliation?
1. Geoffrey Rockwell March 19, 2018 at 1:07 am
  
  You are right. We should define it in the first usage.
  
  On the matter of the redistribution of funds the idea is that those who sign up through Oxford could only pick one CO to keep things simple. That said, once COs start building their own membership systems this will be impossible. Someone could pay a membership to multiple COs. I think the COB will then have to work with the COs to iron things out. They could decide that a paid up member is a member, even if they pay to more than one CO.
Simon Appleford January 17, 2018 at 3:50 am

Regardless of the outcome of the other proposals in the document, I think requiring MOAs between ADHO and COs is critical to protect the interests and expectations of both parties.

Given the motivation of this document is to ensure the long-term financial stability of ADHO I also agree priority should be given to short-term projects (even if they later demonstrate that long-term support is beneficial to ADHO’s mission).
1. Geoffrey Rockwell March 19, 2018 at 1:08 am
  
  Agreed!
Elisabeth Burr January 22, 2018 at 11:53 pm

I would advise to refrain as much as possible from transferring money because of the costs and possible currency losses. The ADHO treasurer might have to study carefully which are the best ways of administering funds.
1. Geoffrey Rockwell March 19, 2018 at 1:10 am
  
  Yes, I agree that actual transfers should be kept to a minimum. This will be an issue for the Treasurer. One worry is that the book keeping may get too complicated for a volunteer. In that case ADHO may need to look at getting the Treasurer help.
Elisabeth Burr January 22, 2018 at 11:56 pm

Some COs have a chair and a president or just a chair. According to me the MoA – it finds my approval – needs to be signed by the person who “runs” the CO and not only represents it.
1. Geoffrey Rockwell March 19, 2018 at 1:12 am
  
  Good point. I will look into a change of wording and propose it to the Implementation Committee.
Elisabeth Burr January 23, 2018 at 12:01 am

The paragraph about funds left over would seem to predict that Scenario 1 will be agreed upon. This paragraph needs to be deleted here to make the proposal more clear.
1. Geoffrey Rockwell March 19, 2018 at 1:15 am
  
  Interesting, that was not our intent. Currently the institutional subscriptions more than cover the costs so there would be funds left over to redistribute in both scenarios. I would go further and say that we hope the COB will try to make sure that there are funds going to the COs rather than being tempted to spend them.
Elisabeth Burr January 23, 2018 at 12:02 am

The same goes for the paragraph starting with “The COs kee any funds”
Elisabeth Burr January 23, 2018 at 12:04 am

The same goes really also for the next paragraph on the COs running their own membership systems
Elisabeth Burr January 23, 2018 at 12:13 am

I would like to propose to put under “General Recommendations” only dots 1-4 and then the two Scenarios. Dots 5-9 do only apply if Scenario 1 is adopted.
1. Geoffrey Rockwell March 19, 2018 at 1:18 am
  
  Our hope was that all the general recommendations would apply to both, but we may have to revisit that.
  
  Thanks,
  
  Geoffrey R.
Elisabeth Burr January 23, 2018 at 12:20 am

As long as ADHO really can do what it is supposed to do with the income from the institutional subscriptions then I would favour Scenario 2 because it is much leaner and avoids transferring money back and fro between different countries. I would built in, however, a clausola that Scenario 2 may have to be amended at a later point.

1 Comment on paragraph 9

Élika Ortega April 2, 2018 at 5:16 pm

Was there ever a discussion about a minimal service fee per CO that doesn’t depend on the individual memberships?

I bring this up because, it seems to me, it would provide a financial parallel to Scenario 1 in the governance discussion.

I’d be concerned that Scenario 1 of the Financial Model could potential skew governance based on membership numbers and monetary contribution (more members=more monetary contributions=bigger representation in the COB). While there is, of course, reason for a model such as this, I can’t help but think this would punish small COs (often the newer ones) in the long term.

2 Comments on paragraph 10

Elisabeth Burr January 23, 2018 at 12:21 am

I cannot find the financial model. Would be good to be able to look at it.
Geoffrey Rockwell March 19, 2018 at 1:19 am

I will check to see if we can post it in public.

Geoffrey R.

2 Comments on paragraph 11

Élika Ortega January 22, 2018 at 5:16 pm

I am in favor of scenario 2. I think it will streamline the financial relationships between ADHO and the CO’s without adding a potential burden to members.

It also leaves ample room for revision if/when/as needed. As ADHO continues to grow, a scalable model seems the most appropriate. Scenario 2 lends itself more easily for new CO’s to join the organization as they figure out their own financial status and health.
Vika Zafrin March 28, 2018 at 7:27 pm

I’m in favor of scenario 2 IF there is a provision for what happens if ADHO expenses do exceed income from institutional subscriptions. Something about splitting overage among COs based on membership numbers and where in the world they operate

2 Comments on paragraph 12

Roopika Risam January 16, 2018 at 10:16 pm

I am strongly in favor of the Scenario 2: continuing without a minimal service fee, as long as the financial health of ADHO’s funding priorities is secure. The details in this proposal suggest that Scenario 2 would work out financially.

By way of background, I served as ACH’s liaison to the conversations about adding nominal fees for additional CO membership, and while I was hesitant about agreeing to it, it did, indeed, seem nominal enough that I was swayed.

My hesitations are the same with the minimal fee model: our COs should be as accessible to graduate students, people with contingent employment, and people in countries with currencies weaker than British £, Euro, USD, CAD, etc. as possible.

Granted, if there is a way to guarantee that a minimal service fee would actually be cheaper than the current membership dues without the journal subscription, bring on the minimal service fee model. From numbers I have seen, my sense is that not likely to be the case.

While the proposal to create a fee schedule to account for students, economic status, or retirement would certainly help mitigate accessibility for some of these constituencies, it doesn’t take into account how far the currency in which one is paid can stretch in relation to a fee in British £. I’m not sure the extent to which a fee schedule could be sufficiently differentiated to equitably capture the range of fiscal realities on a global scale.

Particularly as we are seeing the emergence of new COs from countries of the Global South gaining admittance to ADHO, we should strive to maintain our fiscal health while not discouraging new membership to COs from countries where such fees would be prohibitive simply on the basis of global economic inequality. It isn’t a stretch to imagine that particular communities might be dissuaded from seeking CO status on the basis of a minimal service fee.

Moreover, a fee schedule that distinguishes between faculty and student may also not adequately capture the fiscal constraints on faculty in many countries, where they aren’t compensated like full-time tenure-line faculty in the US (for example).

With the minimal service fee, we are at risk of depressing global participation at a time when ongoing collaboration and communication is important as ever.
Alex Gil January 19, 2018 at 8:01 pm

I agree with the assessment by Dr. Risam.

4 Comments on paragraph 13

Simon Appleford January 17, 2018 at 4:30 am

It’s a little hard to evaluate the need for these scenarios without access to current and projected finances. Based on what is presented here, it seems as though ADHO is being proactive about exploring different models in case of changes. This strikes me as sensible, especially at a time when institutions continue to face financial constraints and threats. Even so, Scenario 2, if sustainable, seems like the preferred option since it will likely keep overheads and costs to individual members down.

Nonetheless, the proposed model outlined in scenario 1 seems like a reasonable solution to the question of how to make ADHO less dependent on subscriptions to DSH. I especially like how it addressees the question of how COs will report membership numbers (a figure that presumably would be used to help calculate both the minimal service fee and the amount to be refunded at the end of each financial year).

I am concerned, however, about the potential amount of overhead that implementing this system will add to ADHO and especially wonder if there might be issues with scalability given that there is potential to have to deal with a growing number of countries, each with differing international laws on how these types of transaction are handled (not to mention additional costs related to currency conversion fees, etc.) I could see this becoming quite difficult to manage very quickly, especially if ADHO continues to grow.

I also share the concern about how the costs of a minimal fee might be passed on inequitably to individual members of a CO. Thinking about just the US context, it is easy to imagine that even a modest increase in fees could make membership unaffordable to contingent faculty/staff and students, even with the already heavily discounted rates. This becomes even more pressing for COs that don’t have the membership levels of larger organizations and might be less able to absorb some of these additional fees. Again, I don’t know what proportion of ADHO members fall into these categories, but anything that makes membership less attainable has to be carefully considered before being implemented.

Other random thoughts. I don’t think the question of how to handle a person who has taken out a membership in multiple COs is really an issue. Verifying if a person falls into this category seems like an onerous task, especially since they would likely have also contributed to the cost of two service fees as part of their memberships.

The final bullet here also concerns me. I may have misread, but I understood Scenario 1 to require COs to pay a service fee to ADHO, whereas this bullet implies that this fee will only be due if “ADHO should ever need that income.” Some rewriting to clarify this might be warranted.
1. Geoffrey Rockwell March 19, 2018 at 1:24 am
  
  Thanks for this,
  
  Geoffrey Rockwell
Elisabeth Burr January 23, 2018 at 12:27 am

I agree that it may be important symbolically that there be sources of income for ADHO that all COs are invested in. I would refrain, however, from redistribution (costs, currency losses, complexity of the whole business). I would rather build up a certain amount of funds for the time when the income from institutional subscriptions might lower or invest them in more bursaries or the like.
Martin Grandjean May 3, 2018 at 10:23 pm

Finding a way to make the COs contribute to ADHO budget is an important element to me. Without saying that the contribution from DSH must become a minority at any cost, a good financial model would indeed be that we do not depend only on the benefits of a single journal. I’m therefor in favour of scenario 1 (kind of).

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