User:Seddon (WMF)/Endowment

The purpose of the Wikimedia Endowment is to act as a permanent safekeeping fund to generate income to support the operations and activities of the Wikimedia projects in perpetuity. The Endowment has been established as a Collective Action Fund at Tides Foundation, a public charity with a 40-year track record of holding and managing charitable funds for nonprofit organizations. The Endowment was launched in January 2016 with the initial goal of raising $100 million to support the Wikimedia projects.

Endowment Investment Policy

The purpose of the Wikimedia Endowment is to serve as a permanent safekeeping fund to generate income to support the operations and activities of the Wikimedia projects in perpetuity. This investment policy is meant to guide the Wikimedia Endowment while we are in our initial fundraising period.  This policy will take effect once the fund reaches $10 million in assets and will be revisited once the fund reaches $33 million is assets.

Expected Returns & Risk

During this initial phase, the Wikimedia Endowment seeks to track the performance of a global passive investment market index with the goal of producing returns that match a recognized benchmark for institutional investors. This benchmark will be based on a 65% allocation to global equities, 25% allocation to sovereign and investment-grade US bonds, and 10% allocation to Real Estate Investment Trusts (“REITs”). The Wikimedia Endowment is designed to take principal risk in pursuit of higher returns, but that also may require liquidity.

Liquidity

All investments in the Wikimedia Endowment will be highly liquid. Typical investments will include Exchange Traded Funds (“ETFs”) and mutual funds administered by industry leaders, such as Vanguard. Assets under management, bid-ask spreads, and other liquidity indicators will be considered in selecting appropriate securities. Typically, load funds will be avoided. Cash settlement on these instruments is typically one to three days after trade execution.

Investment Guidelines

The Wikimedia Endowment will target a 75% equity and 25% debt portfolio using low-cost passive index funds, both in mutual fund and ETF format as appropriate to meet liquidity needs.

Benchmark

The Wikimedia Endowment is beginning as a passive investment pool and performance will be measured against the benchmarks of the funds in which it is invested, in proportion to its target weights.

Asset Class	Benchmark	Target Allocation
US Equities	CRSP US Total Market Index	33%
Non-US Developed Equities	FTSE Developed All Cap ex US	26%
Emerging Market Equities	FTSE Emerging Markets All Cap	6%
US Govt & Investment-Grade Debt	Barclays US Aggregate	25%
US Real Estate Investment Trusts	MSCI USREIT	10%

The Wikimedia Endowment will revisit this allocation periodically to make sure it delivers appropriate risk-adjusted returns.

Rebalancing Limits

The Wikimedia Endowment will rebalance as necessary to maintain an asset allocation that stays within 3% of target allocation (i.e. 33% target would stay between 30% and 36%).

-Adopted January 6, 2017

Meetings

January 6, 2017 - Agenda

10:00 -10:15 am - Introductions and Business Items (Lisa Gruwell, Chief Revenue Officer, Wikimedia Foundation)

1. Motion to Appoint Niels Nielsen to the Wikimedia Endowment Board
2. Discussion and Motion to Adopt the Investment Policy

10:15 - 11:45 am -Discussion of Board and Staff Roles (Annette Campbell White, Endowment Board)

Noon - 1:30 pm - Lunch - Discussion of the Challenge and Opportunities of the WIkimedia Movement (Katherine Maher, Executive Director, Wikimedia Foundation)

1:30 - 1:45 pm - Update on Upcoming Fundraising Events (Marc Brent, Wikimedia Foundation)

1:45 - 2:00 pm - Endowment Board Recruitment (Lisa Gruwell)

2:00 - 3:00 pm - Wikimedia Cultural Orientation (Anna Stillwell, Wikimedia Foundation)

Background

• Endowment Essay
• Discussion