Wikimedia Foundation Audit Committee/2018-03-21

Wikimedia Foundation Audit Committee Meeting

March 21, 2018

9:00 am PDT - 16:00 UTC

At the offices of the Wikimedia Foundation 1 Montgomery Street, Suite 1600, San Francisco, CA

Participating in Person: Katherine Maher, Tony Le, Jaime Villagomez, Amy Vossbrinck, Valerie Ball(KPMG), and Shalini Saidha(KPMG).

Participating Remote: Kelly Battles, James Heilman, Tony Sebro, Michael Snow, and Julian Singh. Christophe Henner joined at 9:48 am.



Form 990 Review

Preliminary Annual Plan FY 18 – 19

Cash & Investment Portfolio

Date for Next Audit Committee Meeting

Form 990 Review


Valerie Ball from KPMG presented the Form 990, highlighting the relevant sections.

  • Part I - Summary - an overview of the organization
  • Part III - Mission Statement and Program Service Activities
  • Part IV - Checklist of Additional Schedules: The Foundation is only required to complete 9 of the 16 schedules
  • Part V - Statements Regarding Other Tax Compliance Requirements
  • Part VI - Governance and Policies: This is considered an important part of the 990 as it addresses the governance and policies of the organization. The Foundation has all policies in place, including the Document Retention and Destruction policy that was adopted during the Form 990 reporting period.
  • Part VII - Officer, Directors, Trustees, Key Employees, Highest Compensated Employees and Independent Contractors: The Foundation uses an independent organization to compare salaries paid to its employees with those paid to other like organizations.
  • Parts VIII - XI - Financial Information: Groups like Charity Navigator look at this information to rate non profits. A 4 star rating requires that at least 65% of expenses spent on program services along with other metrics. The Foundation spends 74% on program services. They also look at the amount of money spent on fundraising. The Foundation spends .09 for every one dollar raised.

Kelly moved to approve the Form 990 and James Heilman seconded.

Additionally, Shalini Saidha from KPMG presented anticipated IRS tax reform items that may impact tax exempt organizations. There are two areas with potential impact which were discussed:

  • The potential impact to charitable contributions - Under IRS tax changes, it is expected that the number of tax filers who will be itemizing their tax deductions due to increase in the amounts for standard deductions will be reduced. The increases to standard deductions may dilute the benefit of charitable donations. The net operating loss deduction modifications which are now limited to 80% of taxable income – because the Foundation is tax exempt, this only applies to the online merchandise store.
  • Unrelated Business Taxable Income (UBTI) – If a non profit provides non taxable transit benefits to employees it needs to be reported on the Form 990.

The next steps are:

  • Share a draft with the Board of Trustees for review and questions during the March 27 Board meeting.
  • Prepare the FAQ and communications plan and share with the Board of Trustees during the week of April 23rd.
  • File the final Form 990 with the IRS before the due date May 15.
  • Publish the Form 990 along with the FAQ thereafter May 15.

Presentation of the Preliminary Annual Plan FY 18-19


Katherine Maher and Jaime Villagomez from the Foundation presented the preliminary Annual Plan for FY 18-19 to the Audit Committee with a focus on the approach, proposed revenue and spending targets, resources investment in programs and investments focused on the 3 defined goals.

Katherine Maher presented the Approach to the FY18-19 Annual Plan.

  • The Foundation is in year”0” of its 2030 strategic direction – preparing the organization to make progress against the strategic direction and creating the 3 – 5 year strategic plan.
  • In FY17-18 - Cross-Departmental Programs began.
  • In FY18-19 - Define Programs in terms of Resources, Outputs and Outcomes.
  • The goals are:
    • Knowledge Equity – new contributors and readers – diversify to engage in communities where we are not currently active.
    • Knowledge service – encourage users – reach and audiences.
    • Foundational strength – invest in the core functions of the organization. Build out teams so they are sufficiently resourced.

Jaime Villagomez presented the timeline and financial data.

  • The preliminary Annual Plan for FY18-19 budget sets targets for revenue of $93.1M and expense of $92.1M; which includes an $11.3M increase in program spending, $.5M increase in General and Administrative spending and a $1.5M increase in Fundraising spending. The budget has been created to fully conform to US GAAP and the Form 990.
  • Of the $70.9M investment in programmatic budgets, approximately $49.3M is allocated to the 3 defined goals and a resourcing pool to fund new programs as our capacity increases.
    • Evolve our systems and structures - $24.5M
    • Grow new contributors and content - $18.7M
    • Increase reach - $4.6M
    • Resourcing pool - $1.5M

The direction has been given by the Board of Trustees to increase our investment in the Foundation’s work by 15 – 20%. The Foundation is looking at its programs, those that are “shovel ready” and where it can make the very best use of donor dollars; while making sure that it has reserves set aside when investment opportunities arise.

Cash and Investment Portfolio


Jaime Villagomez reviewed the proposed revisions to the Investment Policy Statement (IPS) as a follow up on the discussion at the prior audit committee meeting held on September 27, 2017.

The objective of the proposed revisions is to accomplish the followings:

  • Establish a highly liquid working capital fund - better yielding money market fund.
  • Establish a complementary fund for cash in excess of working capital fund - invest in high quality fixed income instruments with a target duration of 2 years.
  • Fund a new portfolio of $10M investments in the sustainability focused portfolio - 50% equity and 50% fixed income - align with the Board of Trustees’ resolution on environmental impact that was passed on February 24, 2017.

The overall principle of the revisions was endorsed by the Audit Committee. Kelly Battles, the Audit Committee Chair, requested that the language in the Revised Investment Policy Statement for the credit rating of the Short-Term Fixed income portfolio be expanded to ensure it is clear that the Foundation does not invest in junk bonds. Once the changes are made, the Audit Committee will review, approve and recommend to the Board for final approval and implementation.

Next Audit Committee Meeting


Amy Vossbrinck will poll the Committee regarding a June 4 or 5 meeting. At this meeting the Committee will review the latest draft Annual Plan FY18-19 which will include any adjustments made as a result of community input.

Respectfully submitted: Amy Vossbrinck