Form 990 Questions and Answers (2007)
From the Wikimedia Foundation
Revision as of 07:38, 2 July 2010 by Jamesofur
Q/A for 2007 Form 990, covering fiscal year July 1, 2007 to June 30, 2008
- When did you file the 07-08 Form 990, and where can I find it?
- The 07-08 990 was filed with the Internal Revenue Service (IRS) on May 6, 2009, and has now been posted on the Wikimedia Foundation (WMF) wiki in the "Form 990 (PDF)" section. It will also eventually propagate to other websites such as the ones belonging to the Foundation Center, Guidestar, etc.
- What period does the 07-08 Form 990 cover?
- The 07-08 Form 990 covers the period of July 1, 2007 to June 30, 2008.
- What is a Form 990 and what is its purpose?
- The Form 990 is the annual informational return required by the IRS for non-profit organizations in the United States. The purpose of the filing is to provide information to the IRS and the public for evaluation purposes, since non-profits are not required to file any other financial reports or have an audit. (WMF voluntarily produces financial reports for the public and has an annual audit performed by the international accounting firm KPMG.)
- Who is responsible for filling out the Form 990 for the Wikimedia Foundation?
- The Form 990 is the responsibility of the management of WMF. KPMG provides an information template to WMF which accounting and management complete. That information is then loaded into tax return software by KPMG to create the Form 990 in the proper IRS format. KPMG reviews the final product and questions and advises WMF as to the correctness of the resulting form.
- What is the process for reviewing and approving the Form 990 for the Wikimedia Foundation?
- As discussed above, accounting and management work to provide data to KPMG who then provides a first draft of the Form 990. There may be several drafts. Once accounting and management are comfortable with a "final draft", it is presented to the WMF Audit Committee for a detailed, line by line review. Once the Audit Committee approves it, it is presented to the WMF Board for their review. Once it is approved by the WMF Board, the Form 990 is officially filed with the IRS by KPMG.
- What are the due dates for filing the Form 990?
- The Form 990 is due on the 15th of the 5th month following the fiscal year-end, so in our case, November 15. However, the IRS grants a six-month extension to anyone who requests it thus moving the deadline to May 15.
- What are your legal responsibilities for posting the Form 990?
- By law, we must submit the full Form 990 to the IRS, and if members of the public request, we must also provide suitable copies for their review. As part of the Wikimedia Foundation's commitment to accountability and transparency, and to make it easy for people to find it, we post the form 990 as a PDF on the Foundation website.
- In the PDF posted on the Wikimedia Foundation's website, parts of the Form 990 such as Schedule B, do not list names and addresses of donors. Why is that?"
- There is certain information that non-profits are required to give to the IRS, but that, conventionally, is not disclosed publicly. For example, in Schedule B, we disclose to the IRS the names of major donors and their addresses. That information is omitted in the PDF (public) version of the Form 990.
- It is the policy of the Wikimedia Foundation to preserve the anonymity of our donors unless they explicitly give us permission to do otherwise. In order to safeguard the privacy of our donors, and to prevent accidentally disclosing private donor information, it's our standard practice to omit all donor information in the Form 990. This is conventional: it's what most charities do.
- On page 5, section V-A, there is a list of “current officers” (see Statement 7), which includes people who are no longer on the board (e.g., Michael Davis) and does not include people who are currently on the board (e.g., Ting Chen). Why?
- The list in section V-A is intended to be current for 2007-08, which means it includes anyone who was on the board for all, or any part, of that fiscal year. The fiscal year for 07-08 runs from July 1, 2007 to June 30, 2008.
- Also on page 5, section V-A, the detailed listing on Statement 7 shows the compensation for "current officers directors, trustees and key employees". Since Wikimedia Foundation board members are not paid, their compensation is listed as zero. But why are staff members such as Erik Moeller and Veronique Kessler also shown with compensation of zero?
- The compensation shown is based on the official wage statements known as W-2s for the calendar year 2007 (January 1, 2007 through December 31, 2007). Since Erik and Veronique did not begin working at the Wikimedia Foundation until 2008, their compensation for 2007 was zero.
- If the 2007 Form 990 reports on our fiscal year why would we report compensation based on the calendar year?
- This reflects one of the changes mandated by the IRS for next year's Form 990, which the Wikimedia Foundation has adopted early. Essentially: wages are reported to the IRS based on calendar year via W-2 Forms. By also using the calendar year for wages on the Form 990, both the organization and the IRS can easily match the figures on the Form 990 to figures on the W-2, thereby decreasing the chance of errors in reporting. Please note that W-2 Forms themselves are not public documents.
- What is the $6,000 for accounts receivable from Wikia listed on Schedule A, Part III, 2b? Is this money they owe you? Wasn't this on last years' form? I also see $5,000 referred to on Schedule A, Part III, 2c. Is this the same thing? Which amount is correct?
- Both amounts are correct.
- The $6,000 for accounts receivable is money that, at one time, Wikia owed the Wikimedia Foundation. It represented Wikia's share of hosting costs, and was repaid to the Wikimedia Foundation long ago. This is the same $6,000 that appeared last year as an accounts receivable ending balance: this year it shows up as an accounts receivable beginning balance. Next year, it will not show up at all.
- The $5,000 represents Wikia's portion of shared hosting costs for the period July, 2007 through December 2007. This amount was also paid back during the fiscal year covered by this 990, and it also will not show up next year. Today, Wikia and the Wikimedia Foundation no longer share hosting services.
- On page 8, the question is asked "Are any officers related to each other through family or business relationships?" Given that Jimmy Wales and Michael Davis were on the Wikimedia Foundation board during 07-08 (Michael Davis through November 2007) and are also involved with Wikia, how can this answer be no?
- At first glance, it does seem like this question should be answered “yes.” However, the IRS provides non-profits with detailed guidelines regarding what it considers a "business relationship."
- According to those guidelines, whether or not there is a business relationship hinges upon the amount of direct compensation (salary) a person receives, as well as the amount of stock they own. In this case, the amount of compensation received and stock owned by Jimmy and Michael, did not trigger the IRS threshold for a "business relationship." Therefore, the question is properly answered no. We have reviewed this issue in detail with Wikia and with our audit firm, and we are satisfied that the question is answered accurately.
- When does the new Form 990 come into effect?
- The new Form 990 becomes effective for fiscal years that begin in 2008. That means that next year, WMF will use the new Form 990 to report on the period covering July 1, 2008 to June 30, 2009.