Highlights from the fiscal year 2023-2024 Wikimedia Foundation and Wikimedia Endowment audit reports

Every year, the Wikimedia Foundation shares our audited financial statements along with an explanation of what the numbers mean. Our goal is to make our finances understandable, so that community members, donors, readers and more have clear insight into how we use our funds to further Wikimedia’s mission. 

This post explains the audit reports for both the Wikimedia Foundation and the Wikimedia Endowment for fiscal year 2023-2024, providing key highlights and additional information for those who want to dive deeper.

What is an audit report?

An audit report presents details on the financial balances and financial activities of any organization, as required by US accounting standards. It is audited by a third party (in the Foundation’s and Endowment’s case, KPMG) in order to validate accuracy. The Foundation has received clean audits for the past 19 years. Each annual audit is an opportunity to evaluate the Foundation’s activities and credibility as a responsible steward of donor funds.

The financial information found in the audit report is also 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. The Form 990 is released closer to the end of the current fiscal year.

Key takeaways from the Foundation’s fiscal year 2023-2024 audit report

The Foundation’s 2023-2024 Annual Plan laid out a number of financial goals for the fiscal year. Below are key takeaways from the audit report related to those goals:

• Clean audit opinion: The external auditors, KPMG, issued their opinion that the Wikimedia Foundation’s financial statements for FY 2023-2024 are presented accurately, marking the 19th consecutive year of clean audits since the Foundation’s first audit in 2006.
• Expense growth slowing in line with target: In anticipation of slower revenue growth, our 2023-2024 Annual Plan aimed to slow budget growth to around 5% after significant growth in the prior five years averaging 16%. We were able to reach that goal: during the fiscal year, expenses grew at 5.5% ($9.4M), from $169.1M to $178.5M. This came in at only slightly over our target of $177M. Growth in expenses was driven primarily by increases in movement funding (detailed below) and increases in personnel cost due mostly to cost of living adjustments. The Foundation is working to continue this trend of stabilizing growth in the current fiscal year. As outlined in the annual plan for fiscal year 2024-2025, the budget is expected to be $188.7M, which is 6% percent year on year growth.
  • During the year, we prioritized spending on a number of Infrastructure related projects which is the largest area of the Foundation’s work. Projects included a revamp of the Community Wishlist, new features for events and campaigns, improvements in moderation tools (e.g., EditCheck, Automoderator, Community Configuration etc.), and a new data center in Brazil.
  • Also during the year, we decided not to renew our lease of our San Francisco office and to instead move to a small administrative space. This move was aimed at both reducing expenses and responding to an increasingly global workforce, where the vast majority of employees (82%) are based outside the San Francisco Bay Area. This move will result in a rent cost savings of over 80% per month.

• More budget shifted toward movement support: The Annual Plan aimed to increase the percentage of the budget that goes directly to supporting the mission. This means working to minimize both fundraising and administrative costs and increase support for things like platform maintenance, grants to communities, feature development and more. This year’s percentage was 77.5%, up from 76% in the prior fiscal year. In real terms, this means that $9.8M more went to direct movement support in the 2023-2024 fiscal year than the prior fiscal year. While this percentage was just shy of our goal of 77.9%, it is well within the range of best practice for nonprofits, which recommends that at least 65% be devoted to programmatic work.
  • Progress was made on greater effectiveness in how we communicate with communities which collectively speak hundreds of languages. A new system for providing translations of core Foundation documentation enabled us to complete more than 650 requests for translations in a year. This has increased the number of languages supported from six to thirty-four languages in written translations. As an added benefit, the translations are provided by members of the Wikimedia volunteer community – whose experience and knowledge of the movement provides much higher quality translations.
• Growth sustained in community grants: In spite of the Foundation’s overall growth slowing to 5%, we increased community grants by $2.2M, or 9.9% from the previous fiscal year. Our Annual Plans have repeatedly prioritized growing community funding at a significantly higher rate than the overall budget–a goal we have continued to prioritize in the 2024-2025 Annual Plan.
  • We support our grantees by working closely with them to form strategic partnerships to close content gaps. An example is how we supported community gender gap campaigns in biographies and women’s health during Women’s History Month. This included running the Wikipedia Needs More Women campaign (14.5M Unique people reached) and coordinating the global landing page and calendar for the Celebrate Women campaign. 

• Exploring diversified revenue streams for the movement: In order to ensure the movement’s future financial sustainability, the Foundation has aimed to diversify our revenue streams over time. For several years, we have been anticipating a trend where fundraising revenue through banners would no longer represent the majority of our donations. During fiscal year 2023-2024, the Foundation’s total revenue was $185.4M, of which $174.7M came from donations. This total number represents not only banner fundraising, but also increased percentages in email and major gift donations. Diversified donation income was complemented by increased investment income, income from a cost sharing agreement with Wikimedia Endowment, and increased income from Wikimedia Enterprise. Investment income was $5.1M up from $3M in the prior year, primarily due to increased interest income from higher interest rates during the year. The new cost sharing agreement with the Wikimedia Endowment generated $2.1M in revenue to offset costs incurred by the Foundation to support the Endowment (Note: This is in addition to the $2.6 million the Foundation received from the Endowment to support technical innovation projects), and Wikimedia Enterprise brought in gross revenue of $3.4M, up slightly from $3.2M in FY 2022-2023. While diversification fell slightly short of our Annual Plan goals, we believe we are still on track over the medium-term: Enterprise contracts have since increased $400K year over year in monthly revenue so far in FY 2024-2025, and we anticipate more income to be generated from Enterprise in subsequent fiscal years.
  • More about Enterprise’s financials and the work to diversify revenue streams is available in the Enterprise financial report. More information about the Endowment detailed below.

You can read the full audit report on the Foundation’s website, review the frequently asked questions on Meta-Wiki, or ask any additional questions on the FAQ talk page.

Key takeaways from the Wikimedia Endowment’s fiscal year 2023-2024 audit report

The Wikimedia Endowment has completed its audit report covering the fiscal year (FY) 2023-2024, which was the nine month time period from 30 September 2023 – 30 June 2024, from the time that the Endowment began operations as a standalone 501(c)(3) organization on 30 September 2023 through the end of the fiscal year on 30 June 2024. This was the first year that the Wikimedia Endowment completed an independent audit report, as it became a standalone 501(c)(3) during this fiscal year. The Endowment is a permanent fund that generates income for the Wikimedia projects in perpetuity with the aim of protecting Wikimedia projects far into the future. The work was overseen by the Endowment’s Audit Committee, led by Chair Kevin Bonebrake. Here are a few key takeaways:

• Clean audit opinion: The external auditors, KPMG, issued their opinion that the Wikimedia Endowment’s financial statements for fiscal year 2023-2024 are presented fairly and in accordance with U.S. GAAP.
• Revenue from Tides transfer, donations, and investment income: The Endowment’s total revenue was $132.0M for fiscal year 2023-2024. However, the vast majority of this revenue came from the transfer of $116.2M of the Endowment fund from the Tides Foundation. Funds for the Endowment were held by the Tides Foundation from 2016-2023. In 2023, the Endowment became its own standalone 501(c)(3). At that point, all of the Endowment funds held by Tides were transitioned over to the new entity in the form of a one-time transfer. The Endowment received $13.4M in new donations during FY 2023-2024 and had $2.4M in investment income.
• Funding to support Wikimedia projects: The Endowment provided $2.9M in funding in FY 2023-2024 to support technical innovation on the Wikimedia projects: $1.5M for MediaWiki upgrades, $600,000 for Abstract Wikipedia, $500,000 for efforts aimed at reaching new audiences, and $278,375 for Kiwix. More information about this round of Endowment funding can be found here.
• Strong financial position: As of June 30, 2024, the Endowment’s net assets were $144.3 million, made up primarily of cash of $20.1M and investments of $123.4M. These assets have generated $19.7M in returns on investment during FY 2023-2024, of which $6.1M has been used to fund technological innovation of the Wikimedia projects over the past two fiscal years. 

You can read the full audit report, review the frequently asked questions on Meta-Wiki, or ask any additional questions on the FAQ talk page.

About the Wikimedia Endowment

Launched in 2016, the Wikimedia Endowment is a nonprofit charitable organization providing a permanent safekeeping fund to support the operations and activities of the Wikimedia projects in perpetuity.  It aims to create a solid financial foundation for the future of the Wikimedia projects. As of June 30, 2024, the Wikimedia Endowment was valued at $144.3 million USD. The Wikimedia Endowment is a U.S.-based 501(c)3 charity (Tax ID: 87-3024488). To learn more, please visit www.wikimediaendowment.org.