Form 2009 Questions and Answers
From the Wikimedia Foundation
Revision as of 22:11, 7 April 2011 by Swatjester
Questions and Answers for 2009 Form 990, covering fiscal year July 1, 2009 to June 30, 2010
- When did you file the 2009-10 Form 990, and where can I find it?
- The 2009-10 990 was filed with the Internal Revenue Service (IRS) on March 29, 2011, and has now been posted on the Wikimedia Foundation (WMF) wiki. It will also eventually propagate to other websites such as the ones belonging to the Foundation Center, Guidestar, etc.
- What period does the 2009-10 Form 990 cover?
- The 2009-10 Form 990 covers the period of July 1, 2009 to June 30, 2010.
- Why does the return year show 2009?
- The tax authorities refer to it as the 2009 return because the fiscal year period that the return refers to began in 2009.
- 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 WMF accounting and management staff 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.
- This return is over 40 pages long-can you give a quick overview of how it is organized?
- The Form 990 went through a significant overhaul last year; this is the second year of the “new” Form 990. The Form 990 consists of the core return form (approx. 12 pages long) with parts numbered from Part I to Part XI. Part I (Summary) provides a snapshot of the core form, including the organization's mission, activities and current and prior years' financial results. Part III is a summary of the main program service accomplishments (i.e. what are the main focus areas of our work). Part IV includes a checklist to determine which additional schedules need to be completed outside of the core form. Part V includes statements regarding tax filings and compliance, Part VI includes questions/statements re governance, management and disclosure, Part VII compensation, Part VIII-more revenue information, Part IX the functional expense statement, Part X balance sheet information.
- Additional schedules that WMF completes include Schedule A (Public Charity Status and Public Support)-this includes the test to make sure that we properly considered a 501 (c)(3) public charity as opposed to a different type of charity, Schedule B, schedule of contributors who gave over a certain threshold, Schedule C, additional Financial Statement information including reconciliation of audited revenue and expense vs revenue and expense per the Form 990, Schedule F, Activities Outside the U.S. (This includes operational activities as well as grants or assistance to organizations and /or individuals outside of the United States), Schedule J, compensation, Schedule M, non-cash contributions and Schedule O, supplemental information (this includes information on process and policy and continuation of items that don't fit completely on the standard form pages such as the full mission statement which is asked for on page 2 but wouldn't fit in its entirety there.)
- Can you tell us more about the increases in program service accomplishments?
- The program service accomplishments is the break-down of the total program expenses on the functional expense statement on page 11. Overall program expenses increased $4.2 million. Of the four main categories into which our work is divided (1) operating the website, 2) developing and maintaining open source software, 3) fostering the development of international chapters/facilitating volunteer efforts/improving content and reaching new readers, 4) supporting Wikimania), the largest program spending increase was in program area 3 ($1.5 million). This included a portion of the strategic planning costs as well as all the grants activity. The next largest increase was in program area 1, operating the website ($1.4 million) followed by program area 2, open source software development ($1MM) and finally program area 4, supporting Wikimania which increased $260K.
- Who is responsible for filling out the Form 990 for the Wikimedia Foundation?
- As discussed above, WMF accounting and management staff work to provide data to KPMG. KPMG then provides a first draft of the Form 990 to the WMF. There may be several drafts. Once WMF 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 given to the WMF Board. The WMF Board has a period of time to ask questions and then 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 this year for the WMF to May 15, 2011.
- 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, Schedule of Contributors, 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. Donors who have chosen to be publicly named can be found on our benefactors page.
- On page 7, Part VI, Section A, 2-the Form 990 asks if any director, officer, trustee or key employee had a family or business relationship with any other director, officer, trustee or key employee and the answer is marked “No”. However your audit report states that WMF paid rent to Wikia in the amount of $14,800.
- The question on the Form 990 is subject to certain dollar thresholds; since our transactions with Wikia did not reach the minimum threshold, we are required to answer “No” for purposes of this question.
- On page 7, Part VI, Section B, 10a, the question “Does the organization have local chapters, branches, or affiliates?” is answered “No”. Why?
- This question refers to entities that are not their own legal entities but rather extensions of the parent entity. Wikimedia chapters are independent organizations.
- On page 8, Part VII, Section A, there is a list of “current officers” which includes people who are no longer on the board (e.g., Domas Mituzas) and does not include people who are currently on the board (e.g., Phoebe Ayers). Why?
- The list is intended to be current for 2009-10 fiscal year, which means it includes anyone who was on the board for all, or any part, of that fiscal year. The fiscal year for 2009-10 runs from July 1, 2009 to June 30, 2010.
- What is included in Sue Gardner's compensation?
- Sue Gardner joined the Wikimedia Foundation as a consultant in July 2007 with annual compensation of 150K. She became Wikimedia's Executive Director in December 2007, whereupon she launched a reboot of the organization: relocating it to San Francisco, filling key staffing gaps and building fundraising capacity. During 2009, the Board of Trustees awarded Sue two one-time bonuses totaling $72,500, intended to express appreciation for her accomplishments on behalf of Wikimedia during her first two years with it. The Wikimedia Foundation does not have a standard bonus scheme, nor does it plan to institute one: the 2009 bonuses to Sue were intended to be unusual and non-recurring.
- On page 8, Part VII, Section A, how do you determine which staff are listed here?
- The requirements for inclusion on this schedule are more specific than in prior years. The definition of “officer” is now those positions referenced as officers in the organizing documents, by-laws, or resolutions of its governing body, or, in absence of reference in those documents (for example, our by-laws name the Board Officer positions but not other Officer positions), it is the top management official and the top financial official. The definition of key employee requires that an individual meet 3 requirements: 1) Receives over $150K in reportable compensation, 2) has certain responsibilities and/or manages a certain % of activities, assets, income, expenses, etc. of the organization and 3) is one of the 20 employees (after satisfying the above) with the highest reportable compensation from the organization. Employees who do not meet all 3 of these tests are not listed on this part of the Form 990.
- What is the purpose of Schedule F, Statement of Activities Outside of the United States (page 25)?
- This schedule shows what activities the organization has outside of the United States and how much the expenses are related to those activities. Furthermore, the IRS asks us to break the activities down by region; for example, North America includes Canada and Mexico (but not the U.S.since this schedule is focusing outside of the U.S.), East Asia and the Pacific includes Australia, South Asia includes India. Expenses include payments for services such as bandwidth, contractors, grants to organizations and individuals, etc. The IRS also asks about Fundraising activities. Through our online donations, we receive donations from every region that the IRS lists. We don't show expenses in those regions related to Fundraising because we do not pay individuals or organizations to fundraise in regions outside of the U.S.