May 16, 2008

Wikimedia Foundation Form 990 for 2007 posted

The Wikimedia Foundation Form 990 for fiscal year 2007 is available now. for people who don't know, the "form 990" is an IRS disclosure form required for charities. And it's often full of interesting financial information. Definitely worth a look if you're interesting in the internal workings of an organization.

Fun facts (money, money, money):

The compensation of general counsel and interim executive director: $118,500

The compensation of chief operating officer: $45,914

Directors, Secretary, Treasurer, Vice-Chair, Chair, positions are uncompensated

There's $6,000 from Wikia, the commercial start-up company formed by several high-level people involved in Wikipedia (such as Jimmy Wales), but which is not in any way formally or legally a part of the non-profit Wikimedia Foundation charity (but has plenty of informal associations which are an ongoing topic of interest, though I should hasten to add those connections seem to be completely within the letter of the tax laws and do not constitute a "self-dealing" violation of IRS regulations). I believe this $6,000 is financial insignificant, and harping on it per se is "thinking small". That's not where the big money is to be found.

Kudos to the WMF for posting a FAQ addressing some of the obvious issues that arise when reading the form, e.g:

On page 8, the question is asked "Are any officers related to each other through family or business relationships?" Given that several individuals who were on the Board during 06-07 (Jimmy, Angela, and Michael Davis) were also involved with Wikia, how can this answer be no?

At first glance, it does seem like this question should be answered "yes." However, the IRS provides non-profits with detailed guidelines regarding what it considers a "business relationship."

Whether or not there is a business relationship hinges upon the amount of direct compensation (salary) a person receives, as well as the amount of stock they own. In the case of Jimmy, Angela and Michael, none of them received sufficient compensation, nor owned sufficient stock, to qualify as having a business relationship under the IRS guidelines. Therefore, the question is properly answered no. We have reviewed this issue in detail with Wikia and with our audit firm, and we are satisfied that the question is answered accurately.

I've never considered whether or not that box was checked to be as important as some critics have made it. It's not as if the associations are difficult to find. But in the past, addressing the issue has been far more tedious than it needs to be, perhaps due to a "bunker mentality".

By Seth Finkelstein | posted in wikipedia | on May 16, 2008 08:55 PM (Infothought permalink)
Seth Finkelstein's Infothought blog (Wikipedia, Google, censorware, and an inside view of net-politics) - Syndicate site (subscribe, RSS)

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Seth, I don't want to be vain, but I think you refer to me above as one of those "some critics". I've actually known for many months now that the "business relationships" clause probably was being skirted legally because "Business relationships are employment relationships, contractual relationships, and common ownership of a business in excess of 35%."

Still, you hit the nail on the head. When we brought these questions, wouldn't the responsible, ethical, and professional thing have been to issue an informed explanation of why the "no" box was checked?

Seth, congrats -- this blog post is the #2 Google result for: "business relationship" "form 990".

Posted by: Gregory Kohs at May 16, 2008 10:57 PM

Let's distinguish between whether the Yes/No answer is meaningful, versus why it was a struggle. I don't see the box's practical significance, in that the relationships were extremely well-known. Nothing was hidden in terms of the existence of Wikia and the positions there (rather the opposite ...).

I don't like to give an impression of journalistic arrogance, that someone MUST talk to a journalist, or anyone at all. So I can sort of see where the antagonism can come from. Sometimes there's just a sub-optimal situation all around.

Posted by: Seth Finkelstein at May 17, 2008 12:39 AM

Why doesn't wikipedia simply switch over to a "for profit" business model? They could EASILY quadruple their income, and then donate that money back to charity, whether it be their own charity, or a different one. They could sell VERY TARGETED ads on their website.

Posted by: mmorpg at May 20, 2008 09:35 AM