As part of the Wikimedia Foundation’s commitment to transparency, we strive to do more than just disclose our financial information–we want to make it accessible and understandable. Our goal is for all our stakeholders–from donors, to partners, to community members–to have insight into how we use donor funds to support the Wikimedia projects. Every year, we share and explain our audited financial statements (which is accessible on our website as the “audit report”) as part of this work. The audit report contains details about expenditures, donations, investments, and more. In this post, we’ll break down the audit report for our Fiscal Year 2022-2023 (July 2022 – June 2023), sharing highlights, key takeaways, and explanations of what the numbers mean.
The audit report is just one of the places we share financial information. If you’re interested in diving deeper, you can also take a look at the Foundation’s Form 990 and FAQs, annual report, annual plan, fundraising report, and grantmaking report.
What is an audit report?
An audit report presents details on the financial balances and the financial activities of any organization, as required by US accounting standards. It is audited by a third party (in the Foundation’s case, KPMG) in order to validate accuracy. The financial information found in the audit report is then used to build an organization’s Form 990, which is the form required by the United States government for organizations to maintain their nonprofit status.
Key takeaways from the Foundation’s fiscal year 2022-2023 audit report
This year’s audit report contains several key takeaways:
- Clean audit opinion: Our external auditors, KPMG, issued their opinion that the Wikimedia Foundation’s financial statements for fiscal year 2022-2023 are presented fairly and in accordance with U.S. GAAP. The Wikimedia Foundation has now had 18 years of clean audits.
- Slowed expense growth in line with our target: Overall expenses grew $23.1M, from $146M in fiscal year 2021-2022 to $169.1M in fiscal year 2022-2023. This growth was on target with the Foundation’s 2022-2023 annual plan, where we aimed to stabilize growth at around 17%. Growth was driven primarily by increases in community grants and people-related costs. Community grants increased by $5.4M (29%), with the most significant increases happening in Latin America and the Caribbean, Sub-Saharan Africa, and East, Southeast Asia and the Pacific (read more in the 2022-2023 Funding Report). Personnel costs increased by $13.2M (15%), and was driven primarily by the increased employee headcount from the prior year, fiscal year 2021-2022s. Note that we do not expect to see similar headcount or other expense growth in the current fiscal year 2023-2024. As outlined in the annual plan for fiscal year 2023-2024, expenses are expected to be $177M, which is 5% percent year on year growth (down from 17% increase in 2022-2023 and 34% increase in 2021-2022).
- Revenue primarily driven by donations, with additional revenue coming from investment income and other fundraising streams: The Foundation’s total revenue was $180.2M during fiscal year 2022-2023. The vast majority of this revenue ($168.9M) came from donations, with a small portion coming from investment income and other revenue primarily related to Wikimedia Enterprise. While the Foundation experienced a shortfall in banner fundraising that caused us to miss our banner revenue target, we were able to offset some of the decline through major gifts and other donation channels. Donation revenue increased to $168.9M from $164.8M the prior year. Investment income reached $6.6M, up from a mostly unrealized loss of $11.7M during the market lows of fiscal year 2021-2022. Revenue from Wikimedia Enterprise increased to $3.2M from $1.6M. Together, these sources contributed to an overall revenue growth of $25.5M.
- Strong financial position: As of June 30, 2023, the Foundation’s net assets (meaning its assets, less liabilities) were $255M, This is the number that the Foundation holds in our reserves. This amount represents 17 months of operating expenses, in-line with our target. This protects the sustainability of our work to support the Wikimedia movement and the Wikimedia projects, and ensures that, even in the face of a temporary major revenue shortfall, we will be able to continue to run the servers, provide grants to affiliates, maintain the projects, and continue with other operations critical to sustaining Wikimedia.
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