Wikimedia Foundation Audit Committee/2024-12-02

Wikimedia Foundation Audit Committee Meeting

December 2, 2024

Location: Virtual

10:00 - 11:30 am PST

18:00 - 19:30 UTC

Participants

Committee Members Present:

Audit Committee Chair: Kathy Collins*

Audit Committee Board Members: Raju Narisetti*, Lorenzo Losa*

Audit Committee Alternates: Mike Peel*, Luis Bitencourt-Emilio*

Audit Committee Observers: Christel Steigenberger*, Maciej Nadzikiewicz*,

Audit Committee Advisors: Julian Singh, Michael Snow, Tanya Capuano

Non-Committee Members Present: WMF Chief Executive Officer: Maryana Iskander* Board Chair: Nataliia Tymkiv* Staff Liaison: Jaime Villagomez* Other Staff: Courtney Bass Sherizen, Helen Pang, James Baldwin, Lisa Gruwell, Shelby Langan, Dhaval Patel, Jacob Rogers, Nadee Gunasena, Kira Sargatzke, Amy Vossbrinck

The meeting opened at 10:01 am PST.

Kick off and Approval of the October 8, 2024 Minutes

Moved to approve the October 8, 2024 Audit Committee Minutes: Raju Narisetti Seconded: Kathy Collins Approved by voting members: Kathy Collins, Lorenzo Losa, and Raju Narisetti

WMF Financial Model and Scenario Planning

James Baldwin, Sr. Director of Finance presented on our work to update our 3-year financial outlook to inform the upcoming annual plan and budget process. This involves assessing our current financial position, analyzing key trends, evaluating strategic choices, and projecting revenue and expenses to understand potential scenarios over the next three years.

We shared the relevant trends that are increasing external uncertainty and necessitating a prudent approach to planning. Despite these trends, the organization remains financially healthy with reserves offering risk mitigation.

Preliminary projections suggest slow revenue growth that may slightly exceed expenses, enabling limited incremental investments. Revenue growth is supported by diversified channels like online giving, Wikimedia Enterprise, and new initiatives such as direct mail and SMS campaigns. However, challenges in major gifts due to geopolitical issues and slowing online program growth were noted. There was discussion about possible changes in Enterprise policies that would increase revenue potential.

We shared our outlook on the key drivers of cost growth, including compensation and benefits, grants and movement funding, legal and regulatory areas, and fundraising.

Three financial scenarios were presented: low growth, moderate growth, and a contingency plan for adverse trends. The growth scenarios could allow for limited to moderate new investments, focusing on emerging high priority needs.There was discussion about possible use of the reserve to fund one-time costs such as the convening planned for 2025.

Investments - Performance and ESG Rating

Dhaval Patel, Principal Investment Manager, provided an update on investment performance and the ESG (Environmental/Social/Governance) profile of the Foundation’s portfolio. Cash and investment balances have been maintained, and investment performance is on track. The ESG profile of the Foundation slightly outperforms the benchmark. There was discussion about what components of the portfolio were contributing to the outperformance and which components were underperforming.

Enterprise Risk Management

Helen Pang, Vice President/Controller, welcomed Jacob Rogers, Associate General Counsel, who provided an update regarding the DSA (Digital Services Act) Audit. The Foundation received a “favorable with recommendations” audit opinion. The Legal Department is working with the Communications Department to prepare external communications, to come out in the spring, regarding the DSA audit report.. The Foundation is implementing the recommendations in the DSA Audit Report.

Advisory Member Renewal and Selection Process, and Gift Policy Refresh

Kathy Collins, Audit Committee Chair, described a suggested process to refresh the Advisory Member Selection Process and solicited feedback from the Audit Committee members on the selection process for Audit Committee Advisors. Committee Members offered their input for guidelines to enhance the experience of Advisory Members and better align with Committee needs. Once Committee member input has been incorporated into the refreshed selection process, a proposal will be shared with the Committee.

The Committee also moved to approve the renewal of Tanya Capuano’s service on the Audit Committee as an Advisor for an additional one year: Raju Narisetti Seconded: Kathy Collins Approved by voting members: Kathy Collins, Lorenzo Losa, and Raju Narisetti Gift Policy Refresh

Helen Pang, Vice President/Controller, welcomed Shelby Langan, Technical Accounting and Financial Reporting Principal, who presented proposed updates to the Foundation’s gift policy which aim to simplify the policy and raise the threshold that requires Board approval so that the Board focuses its attention on significant gifts. Approval of the updates to the policy and a separate new policy for Wikimedia Enterprise contracts will be put forward to the Audit Committee in the spring of 2025.

The meeting closed at 11:19 am PST

Respectfully submitted by Amy Vossbrinck

An Executive Session was held. Participants are so noted by an * by their name.

APPENDIX: PASSED RESOLUTIONS

Resolution: Minutes Approval, December 2, 2024

RESOLVED, that the Audit Committee hereby approves the minutes from the October 8, 2024 Audit Committee meeting.

Moved to approve: Raju Narisetti Seconded: Kathy Collins Approved by voting members: Raju Narisetti, Kathy Collins, and Lorenzo Losa

Resolution: To extend Tanya Capuano’s service on the Audit Committee as an Advisor for one year

RESOLVED, that the Audit Committee hereby approves the extension of Tanya Capuano’s service on the Audit Committee as an Advisor for one year.

Moved to Approve: Raju Narisetti Seconded: Kathy Collins Approved by voting members: Kathy Collins, Lorenzo Losa, and Raju Narisetti