Talk:IRS tax related information/2019 Wikimedia Foundation Form 990 Frequently Asked Questions

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Endowment[edit]

Would it be possible to add a question to the FAQ about the Wikimedia Endowment? The Wikimedia Endowment currently holds around $100 million, but is not mentioned at all in the Form 990.

In part IV (p. 3 of 57), question 10 "Did the organization, directly or through a related organization, hold assets in temporarily restricted endowments, permanent endowments, or quasi-endowments?" is answered "No", and Schedule D, Part V, "Endowment Funds", p. 26 of 57, is left blank.

Could the answer explain the reason why the WMF is not required to provide information on the Wikimedia Endowment in the Form 990? Thanks, --Andreas JN466 14:18, 21 July 2021 (UTC)Reply[reply]

Hi Andreas, we can certainly add the question and answer in the FAQ.

The Wikimedia Endowment is established and held by a separate legal entity (Tides Foundation) with its own separate Board and Advisory Board that has the authority to control and govern the Policies and Practices of the Endowment Funds. The Foundation and the Foundation’s Board do not have any direct or indirect ability to determine the direction of management and policies of the Endowment Funds. As such, per US Accounting Standards, in which the Internal Revenue Service (IRS) follows for the Form 990 reporting purposes, the Endowment Funds are not required to be reported within the Foundation’s financial statements on our Independent Auditors’ Report and Form 990.--Tle (WMF) (talk) 22:49, 22 July 2021 (UTC)Reply[reply]

Thanks, Tony. I've asked some follow-up questions on the Wikimedia mailing list. I'll just add a link here to the public mailing list archive for anyone reading in so we don't duplicate the conversation: [1]
Briefly, if anyone's interested, I am asking on the mailing list what the benefits are of setting the Endowment up in such a Janus-like way, where it can appear as though it is completely separate from the WMF or completely under WMF control, depending on the context. --Andreas JN466 12:46, 23 July 2021 (UTC)Reply[reply]
Hi Tony, I've added your answer to the FAQ now, as we discussed above. Hope that's okay. I still find it odd and counterintuitive – on Wikimedia Endowment, we're told that "The funds may be transferred from Tides either to the Wikimedia Foundation or to other charitable organisations selected by the Wikimedia Foundation to further the Wikimedia mission.", which seems plainly at odds with what you say above, namely that "The Foundation and the Foundation’s Board do not have any direct or indirect ability to determine the direction of management and policies of the Endowment Funds." Could you explain a bit further? --Andreas JN466 20:30, 13 September 2021 (UTC)Reply[reply]
I see no conflict there. The Endowment exists to support Wikimedia work, that line defines that that means. Supporting either WMF work (via transfer) or that of other organizations that further the WM mission. Defining what it means to further the goals of an endowment - endowments generally exist to further the goals of an associated org or mission - is the ongoing work of the endowment's governing body. An initial rubric of {among things selected by WMF as furthering the Wikimedia mission} seems standard and reasonable. I wouldn't call that 'under WMF control' as only the endowment board can decide to spend its funds, and if that group doesn't like the selected options they have the ability to change its policies to update that rubric. We've lately seen the addition of more experienced community members to the endowment board, which seems like a common-sense prereq to making any less standard / more novel decisions about what projects further the movement's mission. –SJ talk  17:30, 3 February 2022 (UTC)Reply[reply]
Thanks, SJ. The notion that any part of "The funds may be transferred from Tides either to the Wikimedia Foundation or to other charitable organisations selected by the Wikimedia Foundation to further the Wikimedia mission" was up for grabs and could be changed by the Endowment's board at will was not apparent. So this (frankly disquieting) notion that there could be "less standard / more novel decisions about what projects further the movement's mission" – which I read to mean money could potentially go to individuals and organisations not selected and endorsed by the WMF itself – did not even occur to me.
As you know, the Endowment as presently set up is a completely black box. There are no publicised audited accounts. We have no idea how much money there is currently in it and don't know whether any of it has been spent and on what. We have long been told that the Endowment will be transferred to its own 501(c)3 organisation, which would help somewhat with transparency, but this is yet to happen. All in all this is not an ideal situation, don't you think?
Pinging User:JBrungs (WMF) – Julia, can you speak to this? I.e. can you say how much money there is in the Endowment now, whether any of it has been spent and if so how, and when the move to the 501(c)3 organisation is likely to happen? (Tony Le, who used to reply here, is no longer with the WMF.) Thank you. --Andreas JN466 11:21, 7 February 2022 (UTC)Reply[reply]
Hi @Jayen466,
Just a quick note that we will be publishing more details around the Endowment later this fiscal year. Best, JBrungs (WMF) (talk) 08:13, 16 February 2022 (UTC)Reply[reply]

When the endowment at the Tides Foundation was established there was a weak rationale for keeping separate control over the funds until the full $100 million was raised. The "Advisor Board" was tilted toward reflect donor interests and assurance that the funds would remain in tact until that $100 million goal. In theory, the entire WMF Board, including the community elected members could have been designated the Advisory Board, but instead Jimbo Wales and a handful of philanthropists were designated instead. Today, we have reached the $100 million goal, and there is no valid reason to cut the community out of the governance of the Endowment. I would urge the WMF to replace the current "Advisory Board" with the full, duly-elected WMF Board. The WMF Board could then consider Endowment-related decisions as a part of its normal meeting agenda, in a transparent way that includes voting members elected by the community. Veery few universities or non-profits with a endowment over $100 million separates the Endowment governance from the Boad. Thanks, Hlevy2 (talk) 17:48, 15 March 2022 (UTC)Reply[reply]

Hi @Hlevy2,
You might have missed the Diff post we published in September last year which gives you a bit more background on what is happening and also introduces the community members that have joined the Endowment Board. As mentioned above, we will be publish more news around the Endowment later this financial year. Best, JBrungs (WMF) (talk) 07:13, 17 March 2022 (UTC)Reply[reply]

UK bank account[edit]

Part 5, Question 4a and 4b (p. 5 of 57), mentions that the WMF has or had a UK bank account:

"At any time during the calendar year, did the organization have an interest in, or a signature or other authority over, a financial account in a foreign country (such as a bank account, securities account, or other financial account)?" (Answer: Yes)

"If "Yes," enter the name of the foreign country" (Answer: UNITED KINGDOM)

Could you say what this bank account was used for, and by whom? Thanks, --Andreas JN466 14:18, 21 July 2021 (UTC)Reply[reply]

The UK bank accounts were established so that the Foundation can receive and retain donations via one of our processors in their original currencies in AUD, CAD, EUR and GBP to avoid any currency conversion costs due to the foreign exchange volatility environment. By doing this we are minimizing the adverse financial impact and risks to the Foundation. The accounts are owned by the Foundation and being used for disbursements for transactions such as grants to the Chapters, Affiliates, User Groups and individual Volunteers along with outside contract services that payments are required in these currencies. --Tle (WMF) (talk) 22:49, 22 July 2021 (UTC)Reply[reply]

Thanks, Tony. --Andreas JN466 12:46, 23 July 2021 (UTC)Reply[reply]

WMF salary costs[edit]

What please was the 2019 salary cost per WMF employee, per the most recent Wikimedia Foundation Form 990?

According to the linked Form 990, the WMF had salary costs of $55,634,913 (page 1, line 15, "Salaries, other compensation, employee benefits") in 2019, and a total of 291 employees (page 1, line 5). On the face of it, this makes for an average salary cost of over $191K per employee.

Is this the correct figure, or if not, what is the correct calculation for the average salary cost per employee in 2019? Are there estimates for more recent years? Thanks, --Andreas JN466 01:04, 17 February 2022 (UTC)Reply[reply]

Hi Andreas - I am six weeks into the job and have seen your questions about salaries at the Wikimedia Foundation in various public forums. I would like to try and give you a response. What interests me most is understanding the motivations for your questions so that I can attempt to share appropriate information. You are welcome to contact me directly at miskander(_AT_)wikimedia.org for a conversation as I won’t respond further here.
What I can share is the following:
Calculating an average salary based on the Form 990 is highly misleading. It produces totals that match our highest-paid employees, as you see on the 990 form. This is true of many organisations, not only the Wikimedia Foundation. As we will not release non-public salary information in public forums, we accept that this number is much higher than the true average salary. We currently have over 500 staff all over the world that are in a wide variety of job types and levels, each of which are paid differently and by location. An average is difficult to calculate and while it may provide a data point, it lacks meaning for evaluating our performance as an organisation. An average salary cost, even based on non-public data, is not useful for most of the issues that concern me most. We hire in over 50 countries, which is a reflection of our values as a global movement, but introduces complexity in ensuring we can offer competitive packages that will attract mission-driven talent, and especially engineers who we need to support the technology obligations of the Foundation. People are the biggest investment we make in supporting the Wikimedia projects and community, so this is a topic of critical importance to me. Finally, I have also checked that we are in line with other open knowledge organisations (e.g., Mozilla, Creative Commons, EFF) in the financial, salary, budget, and staff information that we publish. MIskander-WMF (talk) 14:54, 17 February 2022 (UTC)Reply[reply]
From my point of view it is an important question and I do not see a problem in answering the question. Companies for example publish the number of Full Time Equivalent and why can the Wikimedia Foundation not publish a number in FTE including the contractors. It is useful to have the average salary per employee as it can help in a discussion about the way how the Wikimedia Foundation should compensate their employees. I think think that for the employees in a Non-Profit-Organisation the compensation should be not higher as the median income of a specific region in which they work and with the possibilty to go higher than this in regions that have a low median income. Also the distance between the compensation of different people should be low from my point of view. I prefer for myself another way how the compensation for people is calculated that it is at the moment usual. There is from my point of view the chance to discuss the way how the people in the Wikimedia Foundation are compensated and if there are possibilities to reduce the compensation of some. In Germany there usually the compensation in Non-Profit-Organisations is lower as what people could earn in a company and as I told people that there are key employees who work at the Wikimedia Foundation who earn more than 400,000 Dollars in a year they wonder about that and tell me that they think it it is too high and not responsible for such an kind of organisation. So I see the question as a chance to discuss about that further. --Hogü-456 (talk) 21:00, 18 February 2022 (UTC)Reply[reply]
See [2] as well as [3] for more info on the salary costs per head. Even though the WMF refuses to say how many employees there were, it is possible from the information in the Form 990 (page 30 in the 2019 form) to at least put an upper limit on the number of non-US employees, and so to establish a lower limit for the salary costs per employee (I make it $195,555 per head or more according to the data in the latest, 2020 Form 990). Andreas JN466 14:03, 2 June 2022 (UTC)Reply[reply]