Form 990 Questions and Answers (2008)

From Wikimedia Foundation Governance Wiki

Q/A for 2008 Form 990, covering fiscal year July 1, 2008 to June 30, 2009

When did you file the 2008-09 Form 990, and where can I find it?
The 2008-09 990 was filed with the Internal Revenue Service (IRS) on April 26, 2010, and has now been posted on the Wikimedia Foundation (WMF) wiki. It will also eventually propagate to other websites such as the ones belonging to the Foundation Center, Guidestar, etc.
What period does the 2008-09 Form 990 cover?
The 07-08 Form 990 covers the period of July 1, 2008 to June 30, 2009.
What is a Form 990 and what is its purpose?
The Form 990 is the annual informational return required by the IRS for non-profit organizations in the United States. The purpose of the filing is to provide information to the IRS and the public for evaluation purposes, since non-profits are not required to file any other financial reports or have an audit. (WMF voluntarily produces financial reports for the public and has an annual audit performed by the international accounting firm KPMG.)
Who is responsible for filling out the Form 990 for the Wikimedia Foundation?
The Form 990 is the responsibility of the management of WMF. KPMG provides an information template to WMF which WMF accounting and management staff complete. That information is then loaded into tax return software by KPMG to create the Form 990 in the proper IRS format. KPMG reviews the final product and questions and advises WMF as to the correctness of the resulting form.
Why was the Form 990 changed from the prior year and how has it changed?
The IRS Form 990 had not been materially redesigned in almost 3 decades. This year's revised Form 990 includes changes in both form and substance. The overriding goal of the changes was to improve the overall scope of materials presented in order to provide a more accurate summary of an organization's activities and to improve transparency and compliance. The changes also address common questions and complaints, reflect changes in tax law, and improve the logical, sequential flow of the document.
The new Form 990 consists of an 11 page core form plus 16 schedules (not every schedule is applicable to every organization) whereas the old Form 990 consisted of a 9 page core form with 2 additional schedules. Part I (Summary) now provides a snapshot of the core form, including the organization's mission, activities and current and prior years' financial results. Part IV includes a checklist to determine which of the schedules need to be completed. Generally the schedules focus on areas of interest to the IRS and the public in particular. One of the most significantly changed areas is Part VI, the section on Governance, Management and Disclosure. In addition to requiring disclosure regarding the organization's governing body and management, it ask questions about policies, practices and processes. For example, Part VI asks if the organization has a written conflict of interest policy and if the organization maintains records to substantiate several aspects of grant-giving such as the amount of grants, the eligibility requirements of grantees, selection and monitoring procedures. It also requires enhanced reporting regarding compensation practices including describing the process for determining the compensation of the ED, officers and key employees, clarifies the definition of a “key employee” and requires disclosure of certain benefits such as first-class travel.
Other changes include using a consistent accounting method for the Schedule A (Public Charity Status) and using a 5 year rather than 4 year computation for the public support test. Schedule F is new and requires reporting of the organization's activities conducted outside of the United States. This includes operational activities as well as grants or assistance to organizations and /or individuals outside of the United States.
Who is responsible for filling out the Form 990 for the Wikimedia Foundation?
As discussed above, WMF accounting and management staff work to provide data to KPMG. KPMG then provides a first draft of the Form 990 to the WMF. There may be several drafts. Once WMF accounting and management are comfortable with a "final draft," it is presented to the WMF Audit Committee for a detailed, line by line review. Once the Audit Committee approves it, it is given to the WMF Board. The WMF Board has a period of time to ask questions and then the Form 990 is officially filed with the IRS by KPMG.
What are the due dates for filing the Form 990?
The Form 990 is due on the 15th of the 5th month following the fiscal year-end, so in our case, November 15. However, the IRS grants a six-month extension to anyone who requests it thus moving the deadline this year for the WMF to May 15, 2010.
What are your legal responsibilities for posting the Form 990?
By law, we must submit the full Form 990 to the IRS, and if members of the public request, we must also provide suitable copies for their review. As part of the Wikimedia Foundation's commitment to accountability and transparency, and to make it easy for people to find it, we post the form 990 as a PDF on the Foundation website.
In the PDF posted on the Wikimedia Foundation's website, parts of the Form 990 such as Schedule B, Schedule of Contributors, do not list names and addresses of donors. Why is that?
There is certain information that non-profits are required to give to the IRS, but that, conventionally, is not disclosed publicly. For example, in Schedule B, we disclose to the IRS the names of major donors and their addresses. That information is omitted in the PDF (public) version of the Form 990.
It is the policy of the Wikimedia Foundation to preserve the anonymity of our donors unless they explicitly give us permission to do otherwise. In order to safeguard the privacy of our donors, and to prevent accidentally disclosing private donor information, it's our standard practice to omit all donor information in the Form 990. This is conventional: it's what most charities do. Donors who have chosen to be publicly named can be found on our benefactors page.
On page 9, Part IV, A, 2-the Form 990 asks if any director, officer, trustee or key employee had a family or business relationship with any other director, officer, trustee or key employee and the answer is marked “No”. However your audit report states that WMF paid rent to Wikia in the amount of $13,470.
The question on the Form 990 is subject to certain dollar thresholds; since our transactions with Wikia did not reach the minimum threshold, we are required to answer “No” for purposes of this question.
On page 9, Part IV, A, 9a, the question “Does the organization have local chapters, branches, or affiliates?” is answered “No”. Why?
This question refers to entities that are not their own legal entities but rather extensions of the parent entity. Wikimedia chapters are independent organizations.
On page 10, Part VII, A, there is a list of “current officers” which includes people who are no longer on the board (e.g., Domas Mituzas) and does not include people who are currently on the board (e.g., Matt Halprin, Samuel Klein and Bishakha Datta). Why?
The list is intended to be current for 2008-09 fiscal year, which means it includes anyone who was on the board for all, or any part, of that fiscal year. The fiscal year for 2008-09 runs from July 1, 2008 to June 30, 2009.
Also on page 10, Part VII, A, the detailed listing shows the compensation for "current officers directors, trustees and key employees". In the previous Form 990, Erik Moeller and Brion Vibber were listed and in this Form 990, they are not. Why?
The requirements for inclusion on this schedule are more specific than in prior years. The definition of “officer” is now those positions referenced as officers in the organizing documents, by-laws, or resolutions of its governing body, or, in absence of reference in those documents (for example, our by-laws name the Board Officer positions but not other Officer positions), it is the top management official and the top financial official. The definition of key employee requires that an individual meet 3 requirements: 1) Receives over $150K in reportable compensation, 2) has certain responsibilities and/or manages a certain % of activities, assets, income, expenses, etc. of the organization and 3) is one of the 20 employees (after satisfying the above) with the highest reportable compensation from the organization. Employees who do not meet all 3 of these tests are not listed on this part of the Form 990.