Investment Guidance

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This policy is maintained by the Wikimedia Foundation to apply to Foundation activities.

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Wikimedia Foundation ­ Investment Guidance - January 3, 2013

Purpose

The purpose of this policy is to define the principles to be followed by the Wikimedia Foundation for investment of surplus cash. Surplus cash is defined as cash not needed to fund the annual plan of the Wikimedia Foundation as determined by the organization's Chief of Finance and Administration cash forecast model at the beginning of each fiscal year.

Statement Of Responsibility

The Board of a non­profit organization is ultimately responsible for its investments. The Audit Committee, acting as a committee of the Board of Trustee’s of the Wikimedia Foundation, authorizes the Chief of Finance and Administration to execute investment transactions directly or via professional investment managers consistent with the Delegations of Financial and Spending Authority approved July 11, 2012 by the Board of Trustees.

Principles and Objectives

The investment objectives of this policy shall be to maintain the nominal value of surplus cash and interest and other earnings. Preservation of principal and maintenance of liquidity shall be priorities over yield. The Wikimedia Foundation seeks to achieve this objective by investing in short­-term and medium­-term fixed income and similar securities with the goal of maintaining the real value of the surplus cash of the Wikimedia Foundation over time.

Eligible Securities

Securities and similar instruments that surplus cash may be invested in include the following:

  • Domestic fixed and variable rate bonds, notes and bills issued by the U.S. Government or its Agencies.
  • Domestic fixed and variable rate bonds and notes issued by U.S. domiciled corporations, non ­U.S. based corporations and governments and multinational organizations (e.g. World Bank, IADB, EDB).
  • Instruments issued by foreign issuers may be denominated in U.S. dollars or foreign currencies.
  • Mortgage­-backed securities (MBS) issued by U.S. government agencies or government sponsored enterprises (i.e. GNMAs, FNMAs, FHLMCs) or by corporate issuers, collateralized mortgage obligations collateralized by otherwise eligible mortgage­-backed securities (“CMOs”), interest only (IO) and principal only (PO) securities are also eligible.
  • Asset­-backed securities (“ABS”)
  • Taxable or tax­-exempt municipal bonds and other municipal fixed income issues.
  • Cash equivalent instruments including registered money market mutual funds, U.S. Treasury bills, bank certificates of deposit, time deposits or similar depository Funds and commercial paper.

Diversification, Credit Quality, Maturity and Other Guidelines

  • While there is no restriction on the credit quality of individual holdings, the weighted average credit quality of the fixed income holdings as a whole should be at least investment grade, that is, BBB­ or better (Standard and Poor’s) or Baa3 or better (Moody’s) or the equivalent.
  • With the exception of U.S. Government and Agency securities, fixed income issues of a single issuer and its Affiliates (defined below) shall at time of purchase constitute no more than 5% of the market value of surplus cash.
  • Derivative securities such as but not limited to MBS, ABS and CBOs shall not contain underlying leverage.
  • For purposes of diversification restrictions, “Affiliates” are companies in which one company has an ownership stake of 20% or more in the other company and/or vice versa.

Restrictions

In implementing this policy, the Chief of Finance and Administration or designated professional investment advisors may not buy securities on margin, may not incur debts of any other kind, may not leverage and may not sell securities short.

Long Term Investments

This policy is not designed to address long­-term investments. Until such time as the Wikimedia Foundation either, a) receives and accepts a donation restricted for long­-term investment purposes and/or b) decides to designate a portion of its unrestricted cash for the purpose of long-­term investment growth, its investment objectives are short-­term and intermediate­-term.

Reporting

The Chief of Finance and Administration will provide a copy of the investment statement(s) to the Chair of the Board of Trustee’s Audit Committee, on a quarterly basis.