Wikimedia Foundation Audit Committee/2021-04-20

Audit Committee Meeting

April 20, 2021

Noon PDT - 19:00 UTC

Participants WMF: James Baldwin, Tanya Capuano, Lisa Gruwell, Amanda Keton, Tony Le, Toby Negrin, Kira Sargatzke, Tony Sebro, Maria Sefidari, Julian Singh, Michael Snow, Janeen Uzzell, Jaime Villagomez, and Amy Vossbrinck. KPMG: Chad Franks, Shalini Saidha

Introductions

Review Agenda

Recording of Approval of Minutes

Moved to approve - Tanya. Seconded by Raju via email. Unanimous approval.

FY 19-20 Form 990 - Presentation/Review and Approval

KPMG presented the results of FY 19-20 Form 990 tax returns for comments and approval by the Audit Committee.

The Audit Committee is responsible for reviewing and approving the Form 990 to ensure that the Foundation complies with the IRS requirements, follows best practices, and operates with transparency and accountability. The deadline to file is May 17. Additionally, the Form 990 must be made available to the Public.

The Foundation is required to complete the applicable 9 of 16 schedules on the Form 990. KPMG provided highlights on the relevant sections.

Key Highlights Program Services There have been no significant changes in the Foundation’s program services during FY 19-20. Governing Body and Management The IRS considers this an important part of the Form 990 and KPMG noted that the responses under this section were unchanged to prior year responses and consistent with standard best practices. The Form 990 will be updated to reflect the current number of hours Board Members contribute. Compensation Reporting The Foundation meets the Rebuttable Presumption of Reasonable Compensation for the ED, other officers and key employees through its implemented procedures. Functional Expenses Comparison The Foundation’s functional expenses are consistent with prior year and had received high financial score from Charity Navigator WMF Program expenses - 75% WMF Management & General Expenses 14% WMF Fundraising Expenses 11% Lobbying Activities Lobbying activities are permissible and will not jeopardize WMF’s tax exempt status as long as the expense is not a substantial part of the Foundation’s activities. Expenditures less than 5% of total expenses are deemed to be insubstantial. The Foundation is under that limit at $25K for the fiscal year. Unrelated business income tax information The unrelated business income that the Foundation has generated is from sales of merchandise via the online Wiki Store. There was a profit of $8K for the reporting period and is offset from losses in previous years. Therefore the Foundation did not have any tax liability.

The Audit Committee requested an update to reflect the number of hours Board Members allocate their time to the Foundation’s activities.

Tanya moved to approve the Form 990 Raju seconded via email Approval was unanimous. KPMG representatives left the meeting.

FY 21-22 Annual Plan - Discussion & Feedback

The Foundation Staff provided the overview of the FY21-22 Annual Plan Process and the progress to date including providing the organization with strategic focus for further investment and establishing some useful budgetary planning guardrails that inspire our plans and teams - so that we can experiment, learn and absorb the risks associated with trying new ideas and fortifying our organizational resilience.

The Annual Plan Process Phase One - Strategic Pre-planning - has been completed Phase Two - Annual Planning and Budgeting - in process Phase Three - Sharing and Operationalizing, including obtaining Board and Audit Committee approval

Highlighted Strategic Focus for FY 21-22 Movement Strategy & Governance: Continue movement strategy process and create movement governance and leadership structures Emerging Market Contributor Pilots: Create and launch three cross-functional, tech driven pilot projects to grow content and contributors. Produce & Platform Strategy: Develop a future oriented strategy for the Wikimedia technology platform Resilient and Inclusive Organization - Develop core capabilities enabling the Foundation to deliver impact and build a more resilient, engaged and inclusive Foundation

Preliminary planning budgetary guardrails for revenue and expense, and as appropriate, functional expenses were shared for the Foundation, Wikimedia Enterprise and The Endowment.

On June 2nd, the Annual Plan and budget will be presented to the full Board for feedback and approval.

Q3 FY 20-21 Financial Update

The Foundation staff presented the financial activities through March 31, 2021 Revenue Highlights include Foundation donation revenue was $155M as of March 31st - 30% higher over the same period last year $1.93M Interest income - 4% above target. Expense Highlights include $74.8M YTD - Slightly below budget but still remains under the 5% threshold Total staff at 448. Functional expenses allocation 74% - Programmatic 13% - Fundraising 13%- General & Administration

Wikimedia Endowment Transition Update

The Foundation staff presented the work plan for the transition of the endowment from Tides Foundation to its own permanent charitable 501(c)3 entity. Both the Endowment Advisory Board and the Foundation Board have endorsed this transition.

The Foundation will be filing the Articles of Incorporation and the Bylaws with the State of California, and the application for the approval of the public charity with the IRS between June and December 2021.

Next Meeting

Monday, June 14, 2021/ Noon - 1:30 pm PDT/7:00 pm UTC.

Meeting concluded at 1:20 pm PDT. Respectfully submitted Amy Vossbrinck