Re: [Wikimedia-l] WMF transfers $8.7 million to "Wikimedia Knowledge Equity Fund"

-- *Julia Brungs* Senior Community Relations Specialist Wikimedia Foundation https://wikimediafoundation.org/ On Wed, Apr 28, 2021 at 4:01 PM Andreas Kolbe jayen466@gmail.com wrote: > Hi Lisa and all, > > Could you provide any update on what is happening with the $8.7 million in > the Tides Advocacy fund? I asked about it on the Endowment talk page on > Meta two weeks ago, and while many other questions there have been > answered, this one has not. > > I also asked on Meta how much money the WMF had contributed to the > Endowment to date. Amy Parker just replied it had been $20 million,[1] but > that can't be right, as in the audited 2019/2020 financial statements > published last year (page no. 14), it was already $25 million ($5 million > p.a. over five years).[2] > > A curious side-effect of the Endowment is that money the WMF pays into its > own Endowment shows up as an Awards and Grants *expense* in the audited > statements, reducing the revenue surplus. Money flowing into the Endowment, > on the other hand, is included neither in Revenue nor Net Assets, as it is > legally separate.[7] > > So according to the financial statements for the last five years, the WMF > had a revenue surplus of over $100 million over that time period (measured > as increase in net assets, from $77.8 million to $180.3 million). But over > the same period, the Foundation also accumulated $100 million in Tides > Foundation funds (i.e. the Endowment, reported[6] to have passed $90 > million in early February, and the $8.7 million in Tides Advocacy). > > This means that the Foundation has actually had a revenue surplus of more > than $200 million over the past five years, averaging over $40 million per > annum. > > Could you provide an update on exactly how much many money is in the > Endowment and the Tides Advocacy fund at the moment? The Endowment is not > very transparent. I understand the only page showing how much money has > accumulated in the Endowment is the page on Meta, and this has only > sporadically been updated. In this edit,[3] for example, it jumped from > $62.9 million to $90 million. Before that, the total had last been updated > more than six months prior.[4] > > Would it be possible to provide, say, monthly updates for the Endowment on > Meta? (If I have missed any other pages or documents containing such > information, I would ask you to kindly provide a link.) > > In the discussions on Meta, Pats Peña pointed me to the FAQ[5] for the > most recent financial statements. One thing I miss in these FAQs is any > reference to the $100 million held by the Tides Foundation. Readers of the > FAQ will remain unaware that the actual amount of investments the WMF was > the beneficiary of in July 2020 substantially exceeded the figure of $170 > million given in the audited financial statements the FAQ refers to – > including the Tides funds, by well over $70 million when the FAQ was > published. > > I also cannot see any reference to the fact that the expenses noted in the > FAQ include $5 million that the WMF paid into its own endowment. Could this > be remedied in this and future FAQs? > > Finally, if we were trying to provide a best estimate of the Wikimedia > Foundation's current total net assets (last reported as $180 million, > excluding money in the Tides Foundation), would $200 million be in the > right ballpark, for a grand total of $300 million if we include the Tides > Foundation money? > > I understand that fundraising this fiscal year already exceeded the > combined year goal for the Foundation and endowment after the first six > months, followed by the year goal being raised, and exceeded again before > the end of the second quarter.[8] As fundraising continues (currently in > Mexico, I understand), it seems certain the WMF net assets are once again > likely to have risen substantially by the end of the fiscal year, > especially given that once again, many physical events will have had to be > cancelled owing to the pandemic. > > Best wishes, > Andreas > > [1] > https://meta.wikimedia.org/w/index.php?title=Talk:Wikimedia_Endowment&di... > [2] > https://foundation.wikimedia.org/w/index.php?title=File:Wikimedia_Foundation... > [3] > https://meta.wikimedia.org/w/index.php?title=Wikimedia_Endowment&diff=21... > [4] > https://meta.wikimedia.org/w/index.php?title=Wikimedia_Endowment&diff=pr... > [5] > https://meta.wikimedia.org/w/index.php?title=Wikimedia_Foundation_reports/Fi... > [6] > https://www.axios.com/exclusive-the-end-of-the-maher-era-at-wikipedia-c1ed14... > [7] > https://meta.wikimedia.org/w/index.php?title=Talk:Wikimedia_Endowment&di... > [8] > https://upload.wikimedia.org/wikipedia/commons/1/15/Wikimedia_Foundation_sec... > > On Mon, Dec 14, 2020 at 5:54 PM Lisa Gruwell lgruwell@wikimedia.org > wrote: > >> Hi all, >> >> Thanks for the questions. We intend to announce the Knowledge Equity Fund >> in early 2021, once we have a bit more details and specifics worked out. >> However, we can share the overall intention today. >> >> Some background: Our fiscal year runs from July through June, which means >> that the second half of last year was heavily affected by the unforeseen >> effects of the Covid-19 pandemic. Community events were canceled, hiring >> slowed, and we put work on pause while we responded to the changing >> circumstances. As a result, we ended the year with funds that were >> underspent, relative to what we had planned for the budget. >> >> In May of last year, we were also planning for this current fiscal year >> and had very little insight about how fundraising would perform in this >> pandemic. People around the world were losing their sources of income, as >> unemployment soared. We worked with the board to plan for different >> scenarios, including if fundraising went really poorly. >> >> As a general matter, when the budget is underspent, any remainder goes >> into the reserve. For accounting purposes, it cannot be carried over into >> the budget of a new fiscal year. Because we were concerned about the >> uncertainty of fundraising this year, we decided to set aside underspent >> funds from the past fiscal year, so that we could keep our commitment to >> our grantees even if fundraising fell short and also make progress on >> knowledge equity. (Good news: Fundraising ended up going a lot better than >> we expected when we were planning in the early months of this pandemic. >> More to come on that.) >> >> With the WMF board’s approval, we set up a US$8.7 million grantmaking >> fund at Tides Advocacy, which has two purposes: 1) Funding Annual Plan >> Grants (APG) to the affiliates this year and 2) Funding Knowledge Equity. >> We have been working with Tides since 2016 when we launched the Endowment. >> The relationship has gone well and they have a lot of expertise at >> administering grants internationally. >> >> Our first priority was to ensure that we had enough funding to support >> community grants. We transferred the full amount for Annual Plan Grants >> (APG) for FY20-21 over to Tides to ensure that all funding for >> affiliates for this year was secured, regardless of how fundraising >> performed. It also gives staff at affiliates and the Foundation more time >> to work together to make thoughtful grants, instead of an end-of-year rush. >> All affiliates who will be receiving funding through Tides were informed of >> the arrangement last summer. All other grantmaking (Community Grants, >> Rapid Grants, Project Grants) are still being funded through WMF directly, >> as usual. There is a round of APG grants set to go out via Tides this week. >> >> As the Audit Report FAQ states,[1] the remaining funds will be used to >> launch the Wikimedia Knowledge Equity Fund. This new fund is in addition to >> the existing grants that are already available for the communities >> (Community Grants, Rapid Grants, Project Grants, and APGs) and does not >> impact the amount of funds in those grant portfolios. >> >> Our goal is to use this fund to invest in new opportunities that >> increase the availability of free knowledge for marginalized people and >> counteract structural inequalities. Knowledge equity is a key pillar of the >> 2030 movement strategy, and this investment will help us to address some of >> the barriers preventing people from accessing and contributing to free >> knowledge. >> >> As of now, this is a one-time commitment of approximately $4.5 million. >> We are still working on the specific initial objectives of the fund and how >> it will operate. As a pilot initiative, we’ll be learning and adapting as >> we go. >> >> We’ll share more details in early 2021 about the Knowledge Equity Fund. >> We are excited to see what progress we can make for knowledge equity with >> this investment. >> >> Thank you, >> >> Lisa Gruwell >> >> [1] >> https://meta.wikimedia.org/wiki/Wikimedia_Foundation_reports/Financial/Audit... >> https://meta.wikimedia.org/wiki/Wikimedia_Foundation_reports/Financial/Audits/2019-2020_-_frequently_asked_questions/id#This_year%E2%80%99s_report_says_that_the_Wikimedia_Foundation_provided_an_unconditional_grant_of_$8.723_million_to_Tides_Advocacy_for_the_Wikimedia_Knowledge_Equity_Fund._What_is_the_Wikimedia_Knowledge_Equity_Fund? >> >> >> On Sun, Dec 13, 2020 at 12:35 PM Katherine Maher kmaher@wikimedia.org >> wrote: >> >>> Hi folks, >>> >>> Happy Sunday from San Francisco -- we've seen the questions on this >>> list, and we'll reply tomorrow when folks are back at work. Thanks for your >>> understanding! >>> >>> Hope everyone is staying well and safe, >>> >>> Katherine >>> >>> On Sun, Dec 13, 2020 at 5:36 AM Isaac Olatunde reachout2isaac@gmail.com >>> wrote: >>> >>>> I agree with Dan. A question about this should have been directed to >>>> the WMF and allow them to respond prior to raising it here (if that's even >>>> necessary in the first place.) >>>> >>>> Regards >>>> >>>> Isaac >>>> >>>> >>>> On Sun, 13 Dec 2020, 14:30 Dan Garry (Deskana), djgwiki@gmail.com >>>> wrote: >>>> >>>>> It seems disingenous to describe it as "secret" given that it was >>>>> willingly acknowledged in the the FAQ of the annual financial audit >>>>> https://meta.wikimedia.org/wiki/Wikimedia_Foundation_reports/Financial/Audits/2019-2020_-_frequently_asked_questions/id#This_year%E2%80%99s_report_says_that_the_Wikimedia_Foundation_provided_an_unconditional_grant_of_$8.723_million_to_Tides_Advocacy_for_the_Wikimedia_Knowledge_Equity_Fund._What_is_the_Wikimedia_Knowledge_Equity_Fund?. >>>>> The information provided in the FAQ is somewhat lacking, but these are not >>>>> the actions of people trying to sweep it under the rug. >>>>> >>>>> Let us politely ask for more information without being unnecessarily >>>>> alarmist. >>>>> >>>>> Dan >>>>> >>>>> On Sun, 13 Dec 2020 at 08:54, Yair Rand yyairrand@gmail.com wrote: >>>>> >>>>>> According to the recent Independent Auditors' Report of the WMF [1], >>>>>> at some point prior to the end of June 2020, an entity called the >>>>>> "Wikimedia Knowledge Equity Fund" was established, and $8.723 million was >>>>>> transferred to it by the WMF, in the form of an unconditional grant. The >>>>>> Fund is "managed and controlled by Tides Advocacy" (a 501(c)(4) advocacy >>>>>> nonprofit previously led by the WMF's current General Counsel/Board >>>>>> Secretary, who served as CEO, Board Secretary, and Treasurer there). >>>>>> Given that a Google search for "Wikimedia Knowledge Equity Fund" yields >>>>>> zero results prior to the release of the report, it is clear that the WMF >>>>>> kept this significant move completely secret for over five months, perhaps >>>>>> over a year. The Report FAQ additionally emphasizes that the WMF "has no >>>>>> right of return to the grant funds provided, with the exception of >>>>>> unexpended funds." >>>>>> >>>>>> The WMF unilaterally and secretly transferred nearly $9 million of >>>>>> movement funds to an outside organization not recognized by the >>>>>> Affiliations Committee. No mention of the grant was made in any Board >>>>>> resolutions or minutes from the relevant time period. The amount was not >>>>>> mentioned in the public annual plan, which set out rather less than this >>>>>> amount for the entire grantmaking budget for the year. No application was >>>>>> made through any of the various Wikimedia grants processes. No further >>>>>> information has been provided on the administration of this new Fund, or on >>>>>> the text of the grant agreement. >>>>>> >>>>>> I am appalled. >>>>>> >>>>>> -- Yair Rand >>>>>> >>>>>> [1] >>>>>> https://upload.wikimedia.org/wikipedia/foundation/f/f7/Wikimedia_Foundation_... >>>>>> _______________________________________________ >>>>>> Wikimedia-l mailing list, guidelines at: >>>>>> https://meta.wikimedia.org/wiki/Mailing_lists/Guidelines and >>>>>> https://meta.wikimedia.org/wiki/Wikimedia-l >>>>>> New messages to: Wikimedia-l@lists.wikimedia.org >>>>>> Unsubscribe: https://lists.wikimedia.org/mailman/listinfo/wikimedia-l, >>>>>> mailto:wikimedia-l-request@lists.wikimedia.org?subject=unsubscribe >>>>>> >>>>> _______________________________________________ >>>>> Wikimedia-l mailing list, guidelines at: >>>>> https://meta.wikimedia.org/wiki/Mailing_lists/Guidelines and >>>>> https://meta.wikimedia.org/wiki/Wikimedia-l >>>>> New messages to: Wikimedia-l@lists.wikimedia.org >>>>> Unsubscribe: https://lists.wikimedia.org/mailman/listinfo/wikimedia-l, >>>>> mailto:wikimedia-l-request@lists.wikimedia.org?subject=unsubscribe >>>>> >>>> _______________________________________________ >>>> Wikimedia-l mailing list, guidelines at: >>>> https://meta.wikimedia.org/wiki/Mailing_lists/Guidelines and >>>> https://meta.wikimedia.org/wiki/Wikimedia-l >>>> New messages to: Wikimedia-l@lists.wikimedia.org >>>> Unsubscribe: https://lists.wikimedia.org/mailman/listinfo/wikimedia-l, >>>> mailto:wikimedia-l-request@lists.wikimedia.org?subject=unsubscribe >>>> >>> >>> >>> -- >>> >>> Katherine Maher (she/her) >>> >>> CEO >>> >>> Wikimedia Foundation https://wikimediafoundation.org/ >>> >>> >>> _______________________________________________ >>> Wikimedia-l mailing list, guidelines at: >>> https://meta.wikimedia.org/wiki/Mailing_lists/Guidelines and >>> https://meta.wikimedia.org/wiki/Wikimedia-l >>> New messages to: Wikimedia-l@lists.wikimedia.org >>> Unsubscribe: https://lists.wikimedia.org/mailman/listinfo/wikimedia-l, >>> mailto:wikimedia-l-request@lists.wikimedia.org?subject=unsubscribe >>> >> >> >> -- >> >> Lisa Seitz Gruwell >> >> Chief Advancement Officer >> >> Wikimedia Foundation https://wikimediafoundation.org/ >> >> _______________________________________________ >> Wikimedia-l mailing list, guidelines at: >> https://meta.wikimedia.org/wiki/Mailing_lists/Guidelines and >> https://meta.wikimedia.org/wiki/Wikimedia-l >> New messages to: Wikimedia-l@lists.wikimedia.org >> Unsubscribe: https://lists.wikimedia.org/mailman/listinfo/wikimedia-l, >> mailto:wikimedia-l-request@lists.wikimedia.org?subject=unsubscribe >> > _______________________________________________ > Wikimedia-l mailing list, guidelines at: > https://meta.wikimedia.org/wiki/Mailing_lists/Guidelines and > https://meta.wikimedia.org/wiki/Wikimedia-l > New messages to: Wikimedia-l@lists.wikimedia.org > Unsubscribe: https://lists.wikimedia.org/mailman/listinfo/wikimedia-l, > mailto:wikimedia-l-request@lists.wikimedia.org?subject=unsubscribe >