Wikimedia Foundation Audit Committee/2023-03-02
Audit Committee Meeting
March 2, 2023
11:30 am - 1:00 pm PDT
Chair: Tanya Capuano
Regular Members: Lorenzo Losa, Raju Narisetti
Advisors: Julian Singh, Michael Snow
Alternates: Mike Peel, Nataliia Tymkiv
CEO: Maryana Iskander
Staff: Aeryn Palmer, Helen Pang, James Baldwin, Linda Lenrow Lopez, Lisa Seitz-Gruwell, Shelby Langan, Stephen Laporte
Staff Liaison: Jaime Villagomez
Observer: Luis Bitencourt-Emilio
Minutes: Amy Vossbrinck
Agenda and Minutes
Proposed approval of October 2022 Minutes Moved to approved by Raju Narisetti Seconded by Tanya Capuano Unanimously approved
Form 990 FY 21-22 Overview
The Form 990 - will be presented at the March 29 Audit Committee Meeting by KPMG. Today we will look at an overview. The Staff described to the Audit Committee the purpose of the Form 990 and key proposed improvements.
As a 501(c)(3), WMF is required to report its activities on the Form 990 each year to the IRS. It's an informational return, not a tax return: Source for external stakeholders to gain insights into our mission, strategy and our programmatic effectiveness. Provides critical information about our governance practices. Requires many disclosures not in other tax returns. The Form 990 is reviewed and approved by the Audit Committee and shared with the Board of Trustees before filing.
Key improvements for this year
We prioritized the work on the Form 990 which began in August 2022. We will also prepare a Frequently Asked Questions document for the general public, which promotes additional transparency to the readers of the Form 990. We have enhanced the FAQs disclosures to align with work being done and to increase the answers to new frequently asked questions. We are advancing the filing date for the Form 990 for completion six weeks earlier (April) than in prior years (May).
On March 29 the Audit Committee will review the Form 990. In early April the Form 990 will be filed. Mid-May the Form 990 and FAQs will be posted.
FY 23-24 Annual Planning and Mid-Year Financial Update
As of Q2 both revenue and expenses were below our year to date targets. Revenue was below target by 5% due to certain factors including the change in the banner language which reduced online donations; this was partly offset by changes such as the sending of additional fundraising emails. Expenses were below budget by 9% attributable to a number of factors including exchange currency fluctuations, slight delays in grant making committee decisions and a variety of operational savings. For the full fiscal year, we project that revenue and expenses will remain under the $175 million budget, with expenses estimated to be slightly below revenue.
Looking Toward Next Year And General Budgetary Principles
Our preliminary revenue estimates indicate FY23-24 revenue targets will be marginally higher and that historical growth will not continue due to the following trends: Donation revenue model relies on a high volume of readers visiting our website. Page views have been flat over the last 3 years and Internet trends are changing with page views declining. Banner campaigns have been heavily optimized with more visible trade-offs. We are growing other revenue channels: Major Gifts, the Endowment and Wikimedia Enterprise but they will not make up for the decline we have seen in banner revenue.
Our preliminary expense estimates indicate flat growth to FY 22-23 which will require cost savings, maintaining budgets for grantmaking and critical infrastructure and potentially the approval of board designed reserves. As previously discussed, we initiated a comprehensive review of all of expense categories including: We started by prioritizing non-staffing expenses to identify areas where we can reduce costs including professional services and software and subscriptions Personnel and Contractors. Two-thirds of the budget is our people. These are our most important resource decisions. Travel and Events. Staff and Movement Convenings have rebounded in the first half of the year. It is expected that this trend will continue, but we will maintain a focus on reviewing the purpose for and impact of travel. The potential board designated reserve would be limited to non recurring, one time expenses.
Over the last two quarters, we have made the following progress with refreshing and refining our risk register. Working with the Foundation’s risk owners, we have identified additional risks that are informing our annual planning. Going forward we will be: Assigning owners to develop mitigant. Identifying additional or new risks to our Foundation annual plan priorities/objectives as they develop. Assigning owners to develop mitigants to newly identified risks. Finalizing any additional risk management plans for FY 23/24.
Respectfully submitted, Amy Vossbrinck