Wikimedia Endowment reports/Financial/Audits/2024-2025 - frequently asked questions - Meta-Wiki

Wikimedia Endowment reports/Financial/Audits/2024-2025 - frequently asked questions - Meta-Wiki
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Executive Summary
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The Wikimedia Endowment (the Endowment)
began operations as a standalone tax-exempt 501(c)(3) organization on September 30, 2023
, with the mission to act as a permanent fund that can support in perpetuity the operations and activities of current and future Wikimedia projects.
The Wikimedia Endowment has published
audited financial statements
(“audit report”) covering the fiscal year (FY) 2024-2025 (1 July 2024 - 30 June 2025), as well as the prior fiscal year for comparative purposes. The audit report provides details on the financial statements and the financial activities of the Endowment. The audit report is completed by an external auditor (
BDO
) to independently validate that the Endowment’s financial statements are presented fairly. This work is overseen by the Wikimedia Endowment’s Audit Committee.
The
Wikimedia Foundation
is the nonprofit organization that operates Wikipedia and other Wikimedia projects. The Endowment and the Wikimedia Foundation are considered “related parties” under the accounting rules, which is an accounting term that describes transactions between two parties that have a preexisting business relationship or common interest. Therefore, the audit reports for both reference one another.
The Endowment’s audit report is made up of 1) the independent auditor’s report, 2) financial statements, and 3) notes to the financial statements, as described below.
Independent Auditor’s Report
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This is a report from our external auditors, BDO, issuing their opinion that the Endowment's financial statements are presented fairly, and in accordance with U.S. generally accepted accounting principles (U.S. GAAP).
Financial Statements
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The financial statements provide an overview of basic information about an organization's financial position and its overall financial health. They are made up of the three below statements.
Statement of Financial Position
: provides an overview of assets, liabilities, and net assets as a snapshot in time - in this case, as of June 30, 2025 and June 30, 2024. As of June 30, 2025, the Endowment’s net assets were $169.4M, made up primarily of endowment investments of $169.7M, contributions receivable of $410K and accrued expenses of $702K.
Statement of Activities
: provides a summary of revenues (primarily donations) and expenses during the fiscal year. The Endowment’s total revenue was $33.1M for FY 2024-2025, including $11.9M in donations and
$21.2M in investment income
. Our expenses totaled $5.3M, made up of $3.4M in funding given to support Wikimedia projects, and $1.9M in costs to cover expenses and support services provided to the Endowment by the Wikimedia Foundation through a cost-sharing agreement.
Cash Flow Statement
: provides details on changes in the Endowment’s cash flows during FY 2024-2025. These cash flows are divided into cash flows from operating, investing, and financing activities. The Statement of Cash Flows reflects $0 beginning and ending cash balances because cash is held as part of the Endowment’s overall investment portfolio and is presented within endowment investments on the Statement of Financial Position. This presentation is consistent with common endowment practice, as cash is managed alongside other invested assets rather than maintained separately.
Notes to the Financial Statements
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These notes include a summary of significant accounting policies as well as additional details on specific accounts, as required by U.S. GAAP.
Key Highlights
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What are the important financial takeaways for the FY 2024-2025 Audit Report?
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The Endowment’s net assets were $169.4M, made up primarily of endowment investments of $169.7M, which will allow the Endowment to sustain its mission as a permanent fund that can support in perpetuity the operations and activities of current and future Wikimedia projects. Other balance sheet items include $410K in contributions receivable and $702K in accrued expenses.
The Endowment’s total
revenue
was $33.1M for FY 2024-2025, made up of $11.9M in donations and $21.2M in investment income.
Donation income
slightly outperformed
the Annual Plan revenue target of $10M
due to better than expected results in realized planned gifts, though there was a relative underperformance in grassroots giving.
Investment income
came in significantly higher than the Annual Plan’s $1.6M projection, due to a portfolio rebalancing following the updating and approval of the Endowment’s
Investment Policy Statement
. In order to align holdings with the target asset allocation outlined in the new policy, the Endowment bought and sold positions; some of the sold positions dated back to the Endowment’s early years, and had accumulated significant unrealized gains over time. Selling these positions resulted in the realization of these gains. $17.7M in investment income came primarily from these gains, while $3.5M came from interest and dividends, net of investment management fees, earned from the Endowment’s diversified investment portfolio. Read more about investment income in
“What drove the increase in investment income?”
The Endowment’s
expenses
totaled $5.3M for FY 2024-2025, slightly less than the $5.6 projected expenses in the
Annual Plan
. These expenses were primarily related to providing funding to support Wikimedia projects, with a small amount also related to administrative costs.
Funding to support Wikimedia projects
made up the majority of expenses, increasing 18% during FY 2024-2025 to $3.4M. The movement funding supported five key projects aligned with the Endowment’s long-term mandate: $1.0M for improved tooling for editor workflows, as well as other developments like improved reader navigation, using machine learning, $1.0M for Wikidata, $950K for Abstract Wikipedia, $150K for Wikimedia Commons, and $297K for Kiwix. These investments help ensure Wikimedia projects can innovate and remain relevant in a rapidly evolving technology landscape.
Administrative and support costs
totalled $1.9M, which were services provided to the Endowment by the Wikimedia Foundation under a cost-sharing agreement.
What has changed since the prior financial statements?
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The Endowment is a relatively new entity, and FY 2023-2024 was its first audit. As part of the audit for fiscal year ended June 30, 2025, management performed a thorough review of many aspects of the Endowment’s operations, including its governance and reporting and its classification as an unrestricted endowment.
Change in external auditor
: As the Endowment continues to grow in size and complexity, the Board felt that selecting a firm more specialized in endowment operations would be prudent. Following an extensive review process that involved examining ethics compliance and professional standards,
BDO
was selected as the Endowment’s independent auditor based on this and other key considerations, including technical expertise and dedicated nonprofit industry focus.
Change in classification to donor-restricted endowment
: The Endowment Board examined the way the Endowment has operated over time, as well as its purpose and mission, and determined that reclassifying the funds to donor-restricted from donor-unrestricted would better align its classification with the way the Endowment works in practice. The Endowment’s purpose is to support the operations and activities of the Wikimedia projects in perpetuity - it is a fund for which the principal is not intended to be spent, but is instead used to generate income which can then be invested in the Wikimedia projects. Since its inception, the Endowment has operated in this way, applying a formal
spending policy
that focuses on generating long-term investment returns. This means it has operated in practice as a donor-restricted fund. To bring the Endowment’s classification in line with how it operates, certain balances and activities were reclassified from “without donor restrictions” to “with donor restrictions” and cash balances were reclassified as part of endowment investments. This reclassification is a presentation change only and does not affect total net assets, financial performance, cash flows, or the Endowment’s operations or spending practices, including granting up to 4% of the Endowment’s value to support Wikimedia projects each year. The prior-year financial statements were also restated to reflect this reclassification. Ensuring that the way the Endowment is classified on paper is consistent with the way it operates in practice is critical for ensuring transparency, accountability and good stewardship of the Endowment’s mission. For more information on donor-restricted funds, see
"What is a donor-restricted endowment fund?"
What drove the increase in investment income in FY 2024-2025?
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Investment income for fiscal year 2024–2025 totaled $21.2M and was generated from two primary sources: $3.5M of interest and dividends, net of investment management fees, earned from the Endowment’s diversified investment portfolio, and $17.7M of realized investment gains, primarily resulting from portfolio rebalancing activities during the year.
During the fiscal year, the
Endowment Finance Committee
updated and formally approved the Endowment’s
Investment Policy Statement
for the first time since the Endowment became a standalone entity in 2023. The Investment Policy Statement establishes the Endowment’s long-term investment objectives, target asset allocation, and risk management framework, with the goal of supporting sustainable payouts while preserving the Endowment’s purchasing power over time.
As part of implementing this updated investment strategy, the Endowment rebalanced its portfolio to align holdings with the target asset allocation outlined in the policy. This involved increasing our exposure to US Equities while also replacing under-performing and more expensive funds within certain asset classes. Some of the positions that were sold in rebalancing dated back to the Endowment’s early years, and had accumulated significant unrealized gains over time. Selling these positions resulted in the realization of significant gains, which contributed to higher realized investment income during the year.
This rebalancing activity reflects normal portfolio management practices and supports the Endowment’s long-term investment strategy by maintaining diversification, managing risk, and aligning the portfolio with its approved investment objectives. These types of unusual realized gains from trading are not anticipated on a regular basis unless the Endowment materially modifies its investment policy (like it did this year).
What are the Endowment’s sources of revenue?
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The Endowment is funded by donations both large and small and through planned gifts, where donors include gifts to the Endowment in their estate plans. We also receive investment income (including interest, dividends and realized gains/losses).
What is the financial relationship between the Wikimedia Endowment and the Wikimedia Foundation?
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There are three main types of transactions between the Endowment and the Foundation:
Cost sharing agreement
: The Endowment does not have any employees of its own. In order to maximize cost efficiency, beginning in FY 2023-2024, the Endowment formed a cost sharing agreement with the Foundation in which the Endowment pays the Foundation for the work the Foundation does to support the Endowment, primarily fundraising and general and administrative support. Costs include direct business expenses for which the Endowment reimburses the Foundation, such as donation processing fees, business registration fees, website hosting costs, marketing material, printing, mailing, consulting, and travel and transportation. Costs also include Foundation staff time to support the Endowment, such as Fundraising, Legal, and Finance staff time. The Endowment recognized expenses of $1.9M related to services provided to the Endowment by the Foundation in FY 2024-2025. These costs are included within the Endowment’s statement of activities based on the nature of the cost.
Donation revenue
: While the Endowment can receive donations directly, for example via wires sent to the Endowment’s bank account, donations made to the Endowment online are processed via the Foundation’s payment processors. Monthly, the Foundation transfers those donations to the Endowment for donations raised in the prior month. As of June 30, 2025, the Foundation owed the Endowment $187.7K for donations raised on behalf of the Endowment in the month of June. This was subsequently paid in July 2025.
Funding
: During FY 2024-2025, the Endowment provided the Foundation with funding of $950K for the Abstract Wikipedia project, $1M for improved tooling for editor workflows, as well as other developments like improved reader navigation, using machine learning, $150K for Wikimedia Commons, and $1M for the Wikidata project. Each year, the Endowment
uses a portion of its earnings for funding to support the long-term sustainability of Wikimedia projects
. Since FY 2022-2023,
Endowment funding has supported technical infrastructure and innovation on the projects
Detailed financials for the Foundation are available in the Foundation’s
audit report
What is the Endowment’s approach to cash and investments?
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The Endowment’s goal is to ensure we have an appropriate amount of available operating funds in cash, with the majority of funds invested in line with
the investment policy
. The primary goal of the Endowment’s investment program is to preserve the purchasing power of the Endowment by achieving long-term returns while also preserving capital. This will allow the Endowment to fulfill its mission to act as a permanent fund that can support in perpetuity the operations and activities of current and future Wikimedia projects.
Audit Report General Questions
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What is an audit report and why does it matter for an organization?
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An audit report is a collection of an organization’s audited financial statements. It gives an overview of an organization’s financial position and overall financial health. An organization’s audit report is typically shared with board members, donors, and other important stakeholders. The information from the audit report is then used in the financial piece of the organization’s Form 990—a form required by the US Internal Revenue Service in order for a nonprofit organization to maintain its 501(c)(3) status.
As part of the audit report, an external auditor (in the Endowment’s case, BDO) expresses an opinion on whether the organization is presenting its finances accurately and in accordance with U.S. GAAP. In this audit report, BDO issued their opinion that the Endowment’s financial statements for FY 2024-2025 are presented accurately. It affirms that the Endowment’s existing processes are designed with appropriate control activities to initiate, authorize, record, process, and report financial data reliably, and designates the Endowment as a responsible steward of donor funds. Receiving clean audits year over year is critical to establishing credibility and reliability in the nonprofit space.
What timeframe does the audit report represent?
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The audit report covers the most recently completed fiscal year, the time period from 1 July 2024 - 30 June 2025, as well as the prior year for comparative purposes.
When will the audit report for the current fiscal year (July 2025 - June 2026) be published?
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Audit reports are published in the months after the fiscal year ends, meaning that they are a retrospective look back at the previous fiscal year. The audit report for the current fiscal year (July 2025-June 2026), is targeted to be released around October / November 2026.
How does the Endowment’s audit report relate to the Wikimedia Foundation’s audit report?
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The Wikimedia Foundation (the “Foundation”)
audit report
represents the financials of both the Foundation non-profit and Wikimedia Enterprise, a limited liability company that is a subsidiary of the Foundation and not a separate 501(c)(3).
As of September 2023, the Endowment began operations as a standalone tax-exempt 501(c)(3) organization that is legally separate and independent from the Foundation, and as such, the Endowment’s audit report represents the financials of the Endowment.
The Endowment and the Foundation are considered “related parties” under the accounting rules, which is an accounting term that describes transactions between two parties that have a preexisting business relationship or common interest. Thus, both the Endowment and the Foundation’s audit reports have additional disclosures in the notes to the financial statements that disclose the nature of transactions between the Endowment and the Foundation. See
above
for more information on transactions between the Endowment and the Foundation.
When will the 2024-2025 Form 990 for the Endowment be published?
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The Form 990 is a United States IRS form, “Return of Organization Exempt From Income Tax". While both the Form 990 and the audit report provide financial information about the Endowment, the two documents have different financial reporting requirements as stipulated by the IRS. We will soon begin working on the Form 990 for 2024-2025 with the support and guidance from BDO. It is our target and intention that the Form 990 will be completed, approved by the Audit Committee, submitted to the IRS, and published around May 2026, barring unforeseen circumstances.
What are the differences in the financial statements within the audit report versus the Form 990?
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The financial information found in the audit report is used to build an organization’s Form 990; however, there are some differences in the financial statements and their presentation and a few differences in recognition in both reports.
In terms of the overall statements, instead of the Statement of Activities reported in the audit report, the Form 990 presents the Statement of Revenue (Part VIII) and the Statement of Functional Expenses (Part IX). Both the audit report and the Form 990 have a balance sheet (called the Statement of Financial Position for the audit report and called Part X - Balance Sheet for Form 990). The audit report also includes a Statement of Cash Flows that is not required for the Form 990.
In terms of presentation, the requirements in the above statements are sometimes different - typically, the Form 990 requires more granular reporting.
In terms of recognition, certain revenue and expenses are recognized in the audit report but not recognized in the Form 990. The Form 990 includes a reconciliation from the audit report to Form 990 within Schedule D - Part XI - Reconciliation of Revenue per Audited Financial Statements With Revenue per Return. For the Endowment, unrealized gains and losses on investments are recognized in the audit report but not recognized in the Form 990.
Where else can I find information about the Endowment’s finances?
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The audit report is one of several financial documents that will provide information on the Endowment’s financials and organizational policies as a standalone organization. Each year, we also publish an annual report about the Wikimedia Endowment, that summarizes the activities of the Endowment, its impact and its financials. You can read the
FY 2023-2024 Annual Report
, and the FY 2024-2025 Annual Report will be published in April 2026. We will publish the Form 990 covering FY 2024-2025 in the May 2026 timeframe. You can also read the Endowment’s
FY 2025-2026 Annual Plan
Terms and Definitions
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What is a donor-restricted endowment fund?
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A donor-restricted endowment fund is a fund of charitable gifts that donors have given with the understanding that the funds will be invested for the long term. For the Wikimedia Endowment, these gifts form a permanent safekeeping fund to support the operations and activities of Wikimedia projects in perpetuity.
The original donated amount, often called the “principal” or “corpus”, is intended to remain intact and is not spent. Instead, the funds are invested alongside other endowment gifts, and a portion of the investment returns may be used each year to support Wikimedia’s mission, in accordance with the Endowment’s
spending policy
This approach differs from gifts to the Wikimedia Foundation’s annual fund, which are typically used to support immediate needs within the current fiscal year. Gifts to the Wikimedia Endowment are never intended to be spent directly. Rather, they are invested to generate returns year after year, providing a growing and sustainable source of long-term support.
Over time, this structure allows each endowment gift to support the Wikimedia projects more broadly and sustainably than a one-time gift alone, helping to strengthen the long-term financial resilience of the Wikimedia movement and ensure that its mission can be supported for future generations.
What is "investment income, net"?
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"Investment income, net" is primarily interest, dividends, and realized gains/losses earned on the Endowment's cash and investment portfolio, net of investment management expenses. During this audit period, the Endowment was primarily invested in publicly traded securities (Note 3), in line with the
investment policy
. The primary goal of the investment program is to preserve the purchasing power of the Endowment by achieving long-term returns.
What are "other operating expenses"?
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"Other operating expenses" primarily include general and administrative expenses such as for software, legal costs, and insurance.
What is the "functional allocation of expenses"?
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The functional expense statement is created to break out the purpose of spending. Expenses are reviewed and allocated among three categories: Programs, General and Administrative Support, and Fundraising.
What are "Programs" expenses?
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The "Programs" category includes all the work done by the Endowment that directly supports the Wikimedia mission, primarily providing funding to support the Wikimedia projects.
What are "General and Administrative" expenses?
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The "General and Administrative" category is primarily costs paid to the Wikimedia Foundation for general and administrative support, such as Finance and Legal personnel staff time to support the operations of the Endowment.
What are "Fundraising" expenses?
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The "Fundraising" category includes all spending associated with fundraising activities. For example, it includes the cost charged from the Wikimedia Foundation for Fundraising staff support, donation processing expenses related to online fundraising, and all fundraising-related travel and conference costs.
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