Hi Tony, Thanks for your reply.
Could you share the thinking behind setting up the Endowment in this Janus-like way, where it can be presented either as something that has nothing to do with the WMF or as something that is all about the WMF and its projects? Allow me to explain. You say on Meta, "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." On the other hand, Meta also tells readers:[1] 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 (on the 15th anniversary of Wikipedia) with the initial goal of raising $100 million to support the Wikimedia projects. 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. Moreover, * It is WMF employees – exclusively so, I believe – who solicit donations to the Endowment. The WMF Staff and Contractors page[2] contains a department named "Major Gifts, Foundations and Endowment", listing an "Endowment Director", "Senior Endowment Development Officer" and so on. * In internal documents[3] measuring the performance of the WMF Advancement (fundraising) department, donations to the Endowment are included under "revenue" (but are not so included in the financial statements or Form 990). * There is an overlap between the Wikimedia Endowment Advisory Board and the WMF Foundation board. * You reserved the right when setting up the Endowment to have the entire amount returned to you, and are in fact planning to exercise that right in order to move the Endowment to a new 501(c)3 non-profit organisation. * The WMF has paid $30M to the Endowment over the past six years, declaring it as an expense, plus another $8.7M to the Tides Advocacy fund, also declared as an expense. So as I understand it, on the one hand you say – and I'm sure are legally quite within your rights to say – that you "do not have any direct or indirect ability to determine the direction of management and policies of the Endowment Funds" and that the Wikimedia Endowment is not held by a "related organization". On the other hand, one of your board members sits on the Endowment Advisory Board, the WMF employs an "Endowment Director", the money "may be transferred from Tides either to the Wikimedia Foundation or to other charitable organisations selected by the Wikimedia Foundation" (this does mean it cannot be transferred to anyone else, right?), and you are in fact planning to have the entire $100M returned to you to set up a new organisation to hold the money – all of which would seem to indicate that you have practically complete control over the fund (as donors would also expect). It certainly seems like the organisations – the WMF and the parts of Tides managing the Endowment and Tides Advocacy funds – are "related", as the question on the Form 990 puts it. I don't doubt that these two seemingly opposed views of the Endowment are legally reconcilable, but why set it up in such a counterintuitive way? In what way is it exemplary? How does it benefit the WMF, donors and the mission? Best wishes, Andreas [1] https://meta.wikimedia.org/wiki/Wikimedia_Endowment [2] https://wikimediafoundation.org/role/staff-contractors/ [3] https://commons.wikimedia.org/w/index.php?title=File%3AWikimedia_Foundation_third_quarter_2020-2021_tuning_session_-_Advancement.pdf&page=9 On Thu, Jul 22, 2021 at 11:54 PM Tony Le <[email protected]> wrote: > Hi Andreas, > > Thanks for the question. Please refer to the talk page on meta > <https://meta.wikimedia.org/wiki/Talk:IRS_tax_related_information/2019_Wikimedia_Foundation_Form_990_Frequently_Asked_Questions> > for the answer as a similar question was posted there. > > Best, > Tony Le > > On Tue, Jul 20, 2021 at 2:17 AM Andreas Kolbe <[email protected]> wrote: > >> Hi Jaime, >> >> Thanks! >> >> One quick question: In the Form 990, you answered "No" to the question, >> "Did the organization, directly or through a related organization, hold >> assets in donor-restricted endowments or in quasi endowments?", and >> Schedule, Part V, "Endowment Funds", is left blank. >> >> Could you explain why the WMF is not required to report the – otherwise >> much-publicised – Wikimedia Endowment in the Form 990? >> >> Best, >> Andreas >> >> On Tue, Jul 20, 2021 at 4:42 AM Jaime Villagomez < >> [email protected]> wrote: >> >>> Hello everyone, >>> >>> >>> The Wikimedia Foundation has submitted our annual Form 990 for the >>> Fiscal Year 2019-20 to the US Internal Revenue Service >>> <https://en.wikipedia.org/wiki/Internal_Revenue_Service> (IRS) and >>> posted on-wiki[1]. The Form 990 is the annual financial reporting, known as >>> an “information return,” which the IRS requires nonprofit organizations in >>> the United States to file. >>> >>> >>> >>> In addition to posting the Form 990 on-wiki, we have also posted an >>> accompanying page with answers to frequently asked questions related to the >>> form and information we reported.[2] >>> >>> >>> >>> Here are a few key highlights on this year’s Form 990: >>> >>> >>> >>> - The Wikimedia Foundation's total revenue for fiscal year >>> 2019-2020 was US $124.6 million. Our total expenses during this period were >>> US $112.2 million and our total net assets at the end of the fiscal year >>> were US $180.3 million. >>> >>> - At the end of our fiscal year 2019-2020, our revenue exceeded our >>> expenses by US $12.5 million, which increased our operating reserve to >>> $179.7 million, or the equivalent of 19-20 months of expenses per the >>> fiscal year 2020-2021 annual plan >>> <https://meta.wikimedia.org/wiki/Wikimedia_Foundation_Medium-term_plan_2019/Annual_Plan_2020-2021>. >>> As reported under our prior Form 990, we have been maintaining the >>> operating reserve at 17-18 months. Our goal is to have sufficient reserve >>> funds to conservatively provide at least 12-18 months of operating expenses >>> in order to mitigate against unforeseen risk, secure operational stability, >>> and ensure the overall financial health of the organization, in particular, >>> with the COVID-19 pandemic which brings a significant amount of volatility >>> and uncertainty for a majority of businesses, including non-profit >>> organizations. This principle is consistent with many other financially >>> stable, non-profit organizations that are rated by Charity Navigator >>> <https://www.charitynavigator.org/>. With a stable and secure reserve, >>> we have the ability to fund specific Wikimedia Movement investment >>> opportunities that may arise. >>> >>> - During the fiscal year 2019-2020, we continued to experience >>> growth in our fundraising revenue and success that was attributed to our >>> fundraising campaigns. >>> >>> - We continue to invest in programmatic activities and >>> evaluate to ensure that our allocation percentage is at or above the >>> standard benchmark of 65%. During the fiscal year 2019-2020, we invested >>> 75% in programmatic activities, 14% in Management & General activities, and >>> 11% in fundraising activities. For fiscal year 2020-2021, we continued to >>> maintain our commitment to our programmatic activities and projected to >>> invest above the standard benchmark in our total spending. >>> >>> - Our expenses increased due to the investment to support our >>> medium term plan and priorities, that are outlined in the Annual Plan >>> <https://meta.wikimedia.org/wiki/Wikimedia_Foundation_Medium-term_plan_2019/Annual_Plan_2019-2020>. >>> The major programmatic areas are to evolve our systems and structures and >>> to grow new contributors and content along with supporting a thriving >>> movement and global advocacy. >>> >>> - Our Governance, Management, and Disclosure practices are >>> committed to maintaining best practices for non-profit charitable >>> organizations, we’ve achieved a score of 100% from Charity Navigator for >>> our accountability and transparency and meet the IRS requirements as >>> applicable. >>> >>> >>> >>> Through reports and discussions like these, the Wikimedia Foundation >>> will continue to strive to provide a responsible level of transparency and >>> accountability. I imagine there are other questions, and I invite you to >>> review the on-wiki FAQ[2], or post your questions on the discussion page >>> should you have any. >>> >>> >>> >>> Thank you to the Foundation's Audit Committee for their oversight and >>> our Staff for their work in developing this year's Form 990 and related >>> communications for filing and public disclosure. >>> >>> >>> >>> Best Regards and Be Well, >>> >>> Jaime >>> >>> >>> >>> >>> >>> [1] - https://wikimediafoundation.org/about/financial-reports/ >>> >>> [2] - >>> https://meta.wikimedia.org/wiki/IRS_tax_related_information/2019_Wikimedia_Foundation_Form_990_Frequently_Asked_Questions >>> >>> >>> Jaime Villagomez >>> >>> Chief Financial Officer >>> >>> Wikimedia Foundation <https://wikimediafoundation.org/> >>> >>> *Imagine a world in which every single human being can freely share in >>> the sum of all knowledge. That's our commitment. Donate. >>> <https://donate.wikimedia.org/>* >>> _______________________________________________ >>> Wikimedia-l mailing list -- [email protected], guidelines >>> at: https://meta.wikimedia.org/wiki/Mailing_lists/Guidelines and >>> https://meta.wikimedia.org/wiki/Wikimedia-l >>> Public archives at >>> https://lists.wikimedia.org/hyperkitty/list/[email protected]/message/UBPBO6GOQBHDCGG4YQKBCL5R4KRTTYYG/ >>> To unsubscribe send an email to [email protected] >> >> _______________________________________________ >> Wikimedia-l mailing list -- [email protected], guidelines >> at: https://meta.wikimedia.org/wiki/Mailing_lists/Guidelines and >> https://meta.wikimedia.org/wiki/Wikimedia-l >> Public archives at >> https://lists.wikimedia.org/hyperkitty/list/[email protected]/message/QMVQ6S2765YMAELB6JIESBN6AOFK7Q3E/ >> To unsubscribe send an email to [email protected] > > > > -- > Tony Le > Wikimedia Foundation > Ph: 415-839-6885 ext 6749 > Fax: 415-882-0495 > [email protected] > > This message is confidential and may be legally privileged or otherwise > protected from disclosure. If you are not the intended recipient, please > telephone or email the sender and delete this message and any attachment > from your system; you must not copy or disclose the contents of this > message or any attachment to any other person. > _______________________________________________ > Wikimedia-l mailing list -- [email protected], guidelines > at: https://meta.wikimedia.org/wiki/Mailing_lists/Guidelines and > https://meta.wikimedia.org/wiki/Wikimedia-l > Public archives at > https://lists.wikimedia.org/hyperkitty/list/[email protected]/message/VMSY37HAJ7XJZYC63LPGZ5BVGXTV2C7I/ > To unsubscribe send an email to [email protected]
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