Talk:Wikimedia Endowment/Archive 3

Bringing together some questions and answers

Because this discussion has taken place partly on my English Wikipedia talk page and partly here, I thought that as I have an hour's journey to the airport to go to Wikimania, it might be an opportune time to try to pull everything together in one place.

• What was the Endowment's revenue in 2022–2023? (I assume the Endowment's fiscal year now ends on June 30, just like the WMF fiscal year; if not, please provide the actual dates.)
• What were the Endowment's expenses in 2022–2023?

These finalized historical numbers will be provided when we release the financials in the autumn. In the meantime, the Wikimedia Endowment 2023-2024 plan has useful preliminary numbers that you may find interesting. In particular look at slide 11 for expense budgeting, which does talk about 2023 expenses as a comparison.

• Who were the Endowment's highest-paid contractors (both on the Tides side and the 501(c)(3) side)?

I earlier answered this with a bit of puzzlement, which I still have to some extent. The main contracted parties are the WMF (who provide services to the Endowment in the form of work by the fundraising, accounting, and other teams) and Tides. There is a small line item in slide 11 of the deck I've provided for Contractors, Interns, and Fellows - $50,200. This consists, I believe, of multiple small things but if anyone is interested in further details, I can check.

• How much of the $118 million is cash, and how much of it is investments?

I do not know the exact numbers at the present time. Typically, the vast majority of the money is in investments, the only exception being money that's just arrived, or money that's just departing. It's never good to have money just sitting in a bank account earning nothing. The financial reports to be released this autumn ought to have more details. In the meantime, slide 8 in the deck that I've shared has some useful information about the valuation. As you can see, the value fluctuates with the performance of the markets.

• How much of this is currently held by Tides, and how much by the new 501(c)(3)?

I do not know the exact number, but it changes every day. Most of the money has been moved. We are awaiting signoffs from a couple of major donors (this is not expected to be a problem, it's just a requirement that is in process).

• How much longer will part of the Endowment remain with Tides?

We will keep the account open for some time, for reasons relating to income from existing investments. It's worth noting that Tides has done a good job for us, money with Tides is not a bad thing, so there is not a lot of extreme urgency to cut all ties. But my understanding is that the relationship will be wound up within months rather than years.

• What has the Endowment invested in to date?

Stocks and bonds as well as shorter term instruments. I'm not really sure what you're looking for here - it's a big diversified portfolio. Going forward, I will see if I can find out what additional information can be given, but I don't really think the day to day ins and outs of purchases and sales is all that interesting?

• Will you publish audited financial statements drawn up by KPMG covering the Endowment's revenue and expenses during its first 7.5 years?

No, because we have no ability to do this. When the Endowment Fund was with Tides, it was of course audited regularly as a part of Tides auditing. Tides is a third party, and we have no way to pay KPMG (or any other auditor) to audit Tides - that just isn't a thing. You could go and look up the Tides audits, but I believe the published audits are about all of their clients and not broken down into much specific details for us. I can tell you that we got a good deal on Tides fees, and I have no reason to think that even if a new audit were somehow possible, that it would turn up anything all that interesting. A benefit of launching the fund with Tides was removing all kinds of operational burden on us, especially at a time when the amount of money in the endowment made it difficult to justify. But a downside of this kind of arrangement is of course that things like audits were Tides responsibility (which they carried out correctly and professionally as far as I know) and therefore out of our hands. Jimbo Wales (talk) 15:17, 12 August 2023 (UTC)

Thanks. As you say, the Tides Foundation's audited financial statements (here is the most recent one) are for the total organisation. They do not break this down into individual funds or clients. So they contain no revenue and expense data for the Wikimedia Endowment. Wikimedia is not even mentioned by name. So this does not provide meaningful transparency.

That is of course inherent with Tides. Even a Democratic Senator like Sheldon Whitehouse of Rhode Island has described Tides as a "dark money" group, because the whole set-up is designed to obscure and anonymise money flows. Moreover, the head of the Tides Foundation became the WMF General Counsel during the life of the Endowment. :/

I am sure the WMF has annual revenue and expense figures for the Endowment's entire life. Why not have KPMG look through those, and publish them afterwards? Any other Wikimedia affiliate would be required to make this information available, wouldn't it? Regards, Andreas JN466 17:53, 12 August 2023 (UTC)

I think that will be easy enough to publish, but I'm not making any promises on behalf of staff. I'm not sure what it would mean to ask KPMG to look through those, or why we would want to pay them to do that, but there shouldn't be any problem with digging up the numbers and publishing them in one simple place. Remember, it's Wikimania this week, so I'm about to drop out of this conversation for several days most likely.--Jimbo Wales (talk) 12:24, 13 August 2023 (UTC)

Ultimate responsibility for whether such a disclosure happens or not rests with the board. The point of having KPMG look through the figures is the same as with any other use of independent auditors – to increase confidence in what is being reported. Regards, Andreas JN466 14:52, 13 August 2023 (UTC)

Employees and contractors

@Jimbo Wales and Lgruwell-WMF: The following content was recently added to the FAQ overleaf:

Does the Endowment have its own employees and contractors?

No, the Wikimedia Endowment does not have any employees nor has it had its own contractors. Wikimedia Foundation staff work in support of the Endowment. Beginning in FY2022-23 ( after the fund reached the initial $100 million goal), the Endowment began reimbursing the Wikimedia Foundation for the cost of the time that WMF employees work on the Endowment as well as the other expenses that WMF incurs on its behalf. In FY22-23, the Endowment reimbursed WMF $1,297,620 for expenses as well as $420,177 in payment processing fees for the donations that WMF received on the endowment’s behalf, which were deducted at the point of sale. In FY23-24, the Wikimedia Endowment is budgeting to reimburse the WMF $2.09 million.

However, I am not sure how to reconcile this with Endowment content on the Foundation wiki, such as the following table present on foundation:Endowment Delegation of Authority Policy:

Schedules of Financial Delegations Authority

DATED AND EFFECTIVE AS OF 27 January 2022

Schedule of Financial Delegations Authority

Senior Staff Position	Delegation Level (Per Transaction)
Chief Finance Officer, Endowment; General Counsel, Endowment; Chief Fundraising Officer, Endowment; or other delegate named by the President	In the event of a documented absence of the President and notice via email of express delegation, all authority of the President.
Chief Finance Officer, Endowment	All authority granted by the Board of Directors as Chief of Finance & Administration. Authority to transfer funds and manage the accounts for payroll and accounts payable up to $1,000,000. General Spending & Contractual Authority up to $50,000 USD. Authority to sign legally binding contractual arrangements up to $1,000,000 Authority to sign Grant Agreements up to $2,000,000.
General Counsel, Endowment	General Spending & Contractual Authority up to $50,000 USD. Authorization to settle lawsuits up to $100,000 USD.
Grants Program Officer, Endowment	General Spending & Contractual Authority up to $50,000 USD. Grant making authority up to $50,000 USD.
Chief Fundraising Officer, Endowment	General Spending & Contractual Authority up to $50,000 USD.
Endowment Fundraising Director	General Spending & Contractual Authority up to $10,000 USD.

Schedule of Special Financial Delegations Authority

Position	Delegation Level (Per Transaction)
Legal Counsel, as expressly delegated in writing by the General Counsel, Endowment	General Contractual Authority for non-monetary contracts.
Senior Staff, as expressly delegated in writing by the Chief Finance Officer, Endowment	Authority to transfer funds and manage the accounts for payroll and accounts payable up to $1,000,000.

This (along with related documents) speaks routinely of Endowment staff. It also mentions an Endowment payroll and defines various Endowment staff members' authority to sign off on 7-figure contracts. So do these delegations of authority relate to payments made from Endowment funds or not? Regards, Andreas JN466 11:34, 28 September 2023 (UTC)

As we said, the Wikimedia Endowment does not have any employees. What you are referring to is a Delegation of Authority which shows the scope of delegated roles that people play in the Endowment and the responsibility they have for it. However, they are not employed by the Endowment. The staff are employed by the Foundation and the Endowment reimburses the Foundation for the staff time spent on the Endowment as well as other expense it incurs on the Endowment’s behalf. The policy covers common types of standard business activities like payroll even when these activities are not currently applicable to the Endowment. --Lgruwell-WMF (talk) 17:44, 28 September 2023 (UTC)

As you know, the Endowment does not have direct employees nor a direct payroll. Staff from the WMF do those jobs and are paid by the WMF. The Endowment then reimburses the WMF for the time. I'm not really sure exactly what you are asking, but for clarity, the delegations of authority of the Endowment relate to things having to do with the Endowment. Note that these legal delegations of authority are absolutely not the only control here - it isn't as if the Chief Financial Officer of the Endowment (which is the same person as the CFO of the WMF, outlined above) can just sign any old grant agreement he wants for up to $2,000,000. This document merely establishes the legal authority for him to sign things. These things are specifically set up well in advance as good governance policy matters, even in cases where the actual amount is zero, just to have a good framework for the future. It is entirely possible (though there are no plans to do so at the present time) that in the future the endowment might directly hire people for some of these roles. Jimbo Wales (talk) 17:47, 28 September 2023 (UTC)

A key part of the Delegation of Authority Policy is: "Any delegation to incur expenditure must be exercised within the limits of the relevant approved budget." With regard to grants, the Endowment board approves all grants. This policy gives the CFO the authority to sign grant agreements and to make the payment. --Lgruwell-WMF (talk) 22:25, 28 September 2023 (UTC)

@Jimbo Wales and Lgruwell-WMF: Thank you both, this makes sense in conjunction with the Tides Foundation – Wikimedia Endowment financial statements you've released. Best, Andreas JN466 18:16, 29 September 2023 (UTC)