WIKIMEDIA FOUNDATION, INC.
Financial Statements
June 30, 2014 and 2013
(With Independent Auditors’ Report Thereon)

WIKIMEDIA FOUNDATION, INC.
Table of ContentsPage(s)Independent Auditors’ Report1

Financial Statements:
Balance Sheets

2

Statements of Activities

3

Statements of Cash Flows4

Notes to Financial Statements

5–14

KPMG LLP
Suite 1400
55 Second Street
San Francisco, CA 94105

Independent Auditors’ Report

The Board of Directors
Wikimedia Foundation, Inc.:
We have audited the accompanying financial statements of Wikimedia Foundation, Inc., which comprisethe balance sheets as of June 30, 2014 and 2013, and the related statements of activities, and cash flows forthe years then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements inaccordance with U.S. generally accepted accounting principles; this includes the design, implementation,and maintenance of internal control relevant to the preparation and fair presentation of the financial
statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted
our audits in accordance with auditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditors’ judgment, including the assessmentof the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditors consider internal control relevant to the entity’s preparation and fairpresentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of significant accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
OpinionIn our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of Wikimedia Foundation, Inc. as of June 30, 2014 and 2013, and the results of its
operations and its cash flows for the years then ended, in accordance with U.S. generally accepted
accounting principles.

San Francisco, California
September 19, 2014
KPMG LLP is a Delaware limited liability partnership,
the U.S. member firm of KPMG International Cooperative(“KPMG International”), a Swiss entity.

WIKIMEDIA FOUNDATION, INC.
Balance Sheets
June 30, 2014 and 2013
Assets2014

2013

27,879,980
1,800,000—
23,260,646
1,600,053

22,171,889
1,550,000
47,00017,579,068
1,391,447

54,540,679
4,053,326
1,966,769

42,739,404
4,911,806
495,683$

60,560,774

48,146,893$

2,028,617
3,577,291
17,564
1,462,281

1,092,313
1,456,735
37,311
371,410

Total current liabilities

7,085,753

2,957,769

Total liabilities

7,085,753

2,957,769

49,825,252
3,649,769

42,921,751
2,267,373

53,475,021

45,189,124

60,560,774

48,146,893

Current assets:
Cash and cash equivalents
Current portion of contributions receivable
Accounts receivable, net
Investments
Prepaid expenses and other current assets$

Total current assets
Property, plant, and equipment, net
Noncurrent portion of contributions receivable
Total assets
Liabilities and Net Assets
Current liabilities:
Accounts payable
Accrued expenses
Deferred revenue
Other liabilities

Net assets:
Unrestricted
Temporarily restricted
Total net assets
Total liabilities and net assets$

See accompanying notes to financial statements.

2

WIKIMEDIA FOUNDATION, INC.
Statements of Activities
Years ended June 30, 2014 and 2013
2014

2013

49,611,670
370,602989,577
243,707
1,588,690

44,666,470
260,909414,297
17,422
3,276,310

52,804,246

48,635,408

19,979,908
5,704,791
2,529,483
370,60212,484,881
1,965,854
2,722,007
143,219

15,983,542
2,791,378
2,549,992
260,909
10,017,121
1,395,013
2,706,841—

Total expenses

45,900,745

35,704,796

Increase in unrestricted net assets

6,903,501

12,930,612

Temporarily restricted net assets:
Contributions
Release of restrictions on temporarily restricted net assets

2,971,086(1,588,690)

605,764(3,276,310)

Increase (decrease) in temporarily restricted net assets

1,382,396(2,670,546)

Increase in net assets

8,285,897

10,260,066

45,189,124

34,929,058

53,475,021

45,189,124

Unrestricted net assets:
Support and revenue:
Donations and contributions
In-kind service revenue
Other income, net
Investment income, net
Release of restrictions on temporarily restricted net assets$

Total support and revenue
Expenses:
Salaries and wages
Awards and grants
Internet hostingIn-kind service expenses
Other operating expenses
Travel and conferences
Depreciation
Special event expense, net

Net assets at beginning of year
Net assets at end of year$

See accompanying notes to financial statements.

3

WIKIMEDIA FOUNDATION, INC.
Statements of Cash Flows
Years ended June 30, 2014 and 2013
2014

2013

8,285,897

10,260,066

2,722,007(95,356)
91,1185,820
311,656

2,706,841(27,440)
26,211
24,61753,690(1,721,086)
47,000(208,606)
936,304
2,120,556(19,747)
1,090,871

2,844,236
447,487(134,095)
346,941
422,856(256,295)
166,434

Net cash provided by operating activities

13,566,434

16,881,549

Cash flows from investing activities:
Purchase of computer equipment and office furniture
Leasehold improvements
Purchase of investments
Proceeds from sales and maturities of investments(1,591,166)(278,181)(28,065,460)
22,076,464(2,475,158)—(24,977,929)
10,946,801

Net cash used in investing activities(7,858,343)(16,506,286)

Net increase in cash and cash equivalents

5,708,091

375,263

22,171,889

21,796,626

27,879,980

22,171,889

Cash flows from operating activities:
Increase in net assets$
Adjustments to reconcile increase in net assets to net cash
provided by operating activities:
Depreciation
Donation of common stock
Proceeds from sales of donated common stock
Loss on disposal of equipment
Unrealized and realized loss on investments
Changes in operating assets and liabilities:
Contributions receivable
Accounts receivable
Prepaid expenses and other current assets
pecial event expense, net includes costs for the annual Wikiman
Accrued expenses
Deferred revenue
Other liabilities

Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year$

See accompanying notes to financial statements.

4

WIKIMEDIA FOUNDATION, INC.
Notes to Financial Statements
June 30, 2014 and 2013

(1)

Organization and Summary of Significant Accounting Policies(a)Organization and Purpose
The Wikimedia Foundation, Inc. (the Foundation) is the nonprofit organization that operates
Wikipedia, the free encyclopedia. According to comScore Media Metrix, Wikipedia, and the otherprojects operated by the Foundation receive more than 431 million unique visitors per month,making them the 5th most popular Web property worldwide (June 2014). Available in more than 285
languages, Wikipedia contains more than 32 million articles contributed by a global volunteer
community of more than 80,000 people. Based in San Francisco, California, the Foundation is a
501(c)(3) charity that is funded primarily through donations and contributions.

(b)

Income Taxes
The Foundation is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue
Code and from state income tax under Chapter 220.13 of the Florida Statutes and Sections 23701d of
Revenue and Taxation Code of the State of California. The Internal Revenue Service has determinedthat the Foundation is not a private foundation and contributions to it qualify as charitable
contribution deductions.
The Foundation has evaluated the financial statement impact of positions taken or expected to betaken in its tax returns. Management has determined that no tax liabilities need be recorded underapplicable accounting guidance. However, the Foundation is subject to income taxes on any net
income that is derived from a trade or business, regularly carried on, and not in furtherance of the
purposes for which it was granted exemption. No income tax provision has been recorded as the net
income, if any, from any unrelated trade or business, in the opinion of management, is not material tothe combined financial statements taken as a whole.

(c)Financial Statement Presentation
Net assets, revenues, expenses, gains, and losses are classified based on the existence or absence ofdonor-imposed restrictions in accordance with Accounting Standards Codification (ASC) Topic 958,
Not-for-Profit Entities.
Unrestricted net assets represent unrestricted resources available to support operations and also
include temporarily restricted resources, which have become available for use by the Foundation inaccordance with the intentions of donors.
Temporarily restricted net assets represent contributions that are limited in use by the Foundation inaccordance with temporary donor-imposed stipulations. The stipulations may expire with time or
may be satisfied and removed by the actions of the Foundation according to the terms of thecontribution by the donor. Once such stipulations are satisfied, the associated net assets are released
from temporarily restricted net assets and recognized as unrestricted net assets.
Permanently restricted net assets represent contributions to be held in perpetuity as stipulated by thedonor. The Foundation does not have any permanently restricted net assets.

5(Continued)

WIKIMEDIA FOUNDATION, INC.
Notes to Financial Statements
June 30, 2014 and 2013(d)

Restricted and Unrestricted Contributions
The Foundation accounts for contributions in accordance with ASC Topic 958. Accordingly,
contributions received are recorded as unrestricted, temporarily restricted, or permanently restrictedsupport depending on the existence and/or nature of any donor restrictions.

(e)Cash and Cash Equivalents
The Foundation manages its cash through major financial institutions. At June 30, 2014 and 2013,
the carrying amount of the Foundation’s general ledger cash held in nationally recognized financial
institutions was approximately $27.3 million and $22.1 million, respectively. Cash balances are
insured by the Federal Deposit Insurance Corporation (FDIC) up to the applicable limits. The
Foundation’s current practice is to maintain at least six months of cash and cash equivalents to
support a combination of operating cash and a current reserve fund. The Foundation considers all
highly liquid investments with an original maturity of three months or less to be cash equivalents.
Cash equivalents of $631,261 and $37,861 as of June 30, 2014 and 2013, respectively, areconsidered Level 1 under ASC Topic 820, Fair Value Measurements.

(f)Contributions Receivable
Contributions receivable represent gift amounts due from various entities, which are occasionallydirected at specific activities. Contribution receivables due more than one year from the contribution
date are discounted to present value using fair value rate of 0.9% under ASC Topic 820.
Contribution receivables are subject to review and adjustment by management should amounts bedeemed uncollectible.

(g)

Accounts Receivable
Accounts receivable comprise primarily fees charged to Web sites for live-feed access to Wikipedia
and licensing fees. All receivables are noninterest-bearing. Management periodically reviewsreceivables for past-due amounts based on payment history and adjusts for uncollectible amounts asnecessary. As of June 30, 2014, the Foundation wrote off all of its uncollectible receivables and theassociated reserve.

(h)Investments
The Foundation’s policy regarding investments is to invest surplus cash in short-term andintermediate-term fixed income instruments without assuming undue risk to principal. Preservationof principal and maintenance of liquidity are priorities over yield. Investments are reported at fairvalue with realized and unrealized gains and losses included as a component of the change in net
assets. Additionally, the Foundation holds no shares of stock as of June 30, 2014 and 2013,
consistent with its policy to sell stock received through donations as soon as possible.
ASC Topic 820 establishes a fair value hierarchy that prioritizes inputs to valuation techniques used
to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1 measurements) and the lowest priority tomeasurements involving significant unobservable inputs (Level 3 measurements).

6(Continued)

WIKIMEDIA FOUNDATION, INC.
Notes to Financial Statements
June 30, 2014 and 2013

The three levels of the fair value hierarchy are as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical investments that
the Foundation has the ability to access at the measurement date.



Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable forthe investment, either directly or indirectly.

Level 3 inputs are unobservable inputs from investments.

As a policy, the Foundation recognizes transfers between levels at the end of the reporting period.
During the years ended June 30, 2014 and 2013, there were no transfers of Level 2 assets.
(i)

Property, Plant, and Equipment
Expenditures for property, plant, and equipment with useful lives of one year or more are capitalized
and recorded at cost. Depreciation is calculated on a straight-line basis over the estimated useful
lives of the assets. The estimated useful life of furniture is five years, while the estimated useful livesof computer equipment and software are three years. Leasehold improvements are amortized overthe life of the lease. Donated computer equipment and software are recorded at the fair value of theitems at the time of the donation and are deemed as unrestricted contributions in the year in which
they are received. Repairs and maintenance of equipment are charged to operations. Upon
retirement, sale, or other disposition of property, plant, and equipment, costs, and accumulated
depreciation are eliminated from the accounts and any resulting gain or loss is included inoperations.

(j)Deferred Revenue
Deferred revenue represents sponsorship income and registration fees for the annual conference
supported by the Foundation and payments related to live-feed and licensing agreements that havebeen paid or billed in advance.

(k)

Other Liabilities
Other liabilities includes $1,136,588 of grant funds held for the Wiki Education Foundation (WEF),
which the Foundation acts as a fiscal sponsor until the WEF receives its 501(c)3 exempt status.

(l)Special Event Expense, net
Special event expense, net includes costs for the annual Wikimania Conference, such as

venue rental and catering services, net of sponsorship income.
(m)

Noncash Contributions
Contributed services are reported at fair value in the financial statements for voluntary donations ofservices when those services (1) create or enhance nonfinancial assets or (2) require specializedskills provided by individuals possessing those skills and are services that would be typicallypurchased if not provided by the donation, and (3) the services are professional in nature, and havebeen explicitly agreed to in advance.
7(Continued)

WIKIMEDIA FOUNDATION, INC.
Notes to Financial Statements
June 30, 2014 and 2013

A substantial number of volunteers make significant contributions of their time in the furtherance of
the Foundation’s projects. The value of this contributed time is not reflected in the accompanying
financial statements as the criteria above are not met.
In-kind service revenue and expenses recorded on the statements of activities consist of contributed
legal services and Internet hosting. The amounts of specialized contributed legal services and otherconsulting services recognized as revenue and expenses are $118,769 and $32,691 for the years
ended June 30, 2014 and 2013, respectively. The value of contributed Internet hosting services forthe years ended June 30, 2014 and 2013 are $251,833 and $228,218, respectively.
Included in the 2014 and 2013 amounts are donated hosting services and bandwidth from four
companies: (1) LeaseWeb, (2) Teliasonera, (3) Tele2, and (4) Datahop.
Noncash contributions also include investments, which are recorded as contributions on thestatement of activities at fair value at the date of donation.
(n)

Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Significant items subject to such estimates andassumptions include the allowance for doubtful accounts, investment valuations, useful lives of fixed
assets, and the valuation of in-kind gifts. Accordingly, actual results could differ from thoseestimates.

(2)

Contributions Receivable
Contributions receivable at June 30, 2014 and 2013 consist of the following:Amounts due in:
One year
Two to four years
Less discount to net present value

$

Total
Less current portion
Noncurrent portion

$

2014

2013

1,800,000
2,000,000(33,231)1,550,000
500,000(4,317)

3,766,769

2,045,683

1,800,000

1,550,000

1,966,769

495,683

As of June 30, 2014, three contributions comprised 8%, 13%, and 79% of contribution receivable. As ofJune 30, 2013, three contributions comprised 15%, 36%, and 49% of contribution receivable.

8(Continued)

WIKIMEDIA FOUNDATION, INC.
Notes to Financial Statements
June 30, 2014 and 2013

(3)

Fair Value of Investments
The following tables present the fair value of the investments based on hierarchical level as of June 30,
2014 and 2013:

Fair value measurements
at June 30, 2014 using
significant other observable
inputs (Level 2)

Description
Certificates of deposit
Municipal bonds
Mortgage backed securities
U.S. Treasury securities
U.S. Corporate bonds
Other
Total

$

2,157,598
4,039,187
6,032,385
3,875,028
7,019,079
137,369$

23,260,646

Fair value measurements
at June 30, 2013 using
significant other observable
inputs (Level 2)

Description
Certificates of deposit
Municipal bonds
Treasury inflation-protected securities
U.S. Treasury securities
U.S. Corporate bonds
Other
Total

$

4,141,012
2,873,081
2,010,093
4,771,650
3,658,422
124,810$

17,579,068

The following table presents investment return for the years ended June 30, 2014 and 2013:
2014

2013

Interest and dividends
Unrealized and realized loss on investments$

555,361(311,656)

71,112(53,690)

Total investment income, net$

243,705

17,422

Fair Value of Financial Instruments
The fair values of the financial instruments as of June 30, 2014 and 2013 represent management’s best
estimate of the amounts that would be received to sell those assets or that would be paid to transfer thoseliabilities in an orderly transaction between market participants at that date. Those fair value measurements
maximize the use of observable inputs. However, in situations where there is little, if any, market activity
for the asset or liability at the measurement date, the fair value measurement reflects the Foundation’s own
9(Continued)

WIKIMEDIA FOUNDATION, INC.
Notes to Financial Statements
June 30, 2014 and 2013

judgments about the assumptions that market participants would use in pricing the asset or liability. Those
judgments are developed by the Foundation based on the best information available in the circumstances.
The following methods and assumptions were used to estimate the fair value of each class of financial
instruments:
Cash and cash equivalents, current contributions receivable, accounts receivable, prepaid expenses, othercurrent assets, accounts payable, accrued expenses, deferred revenue, and other liabilities: The carrying
amounts approximate fair value because of the short maturity of these instruments.
Investments: Certificates of deposit, municipal bonds, mortgage-backed securities, treasury
inflation-protected securities, U.S. Treasury securities, and U.S. corporate bonds are measured using
significant other observable inputs, particularly dealer market prices for comparable investments as of thevaluation date.
Noncurrent contributions receivable: The carrying amounts are discounted to present value using the fairvalue rate at the report date.

10(Continued)

WIKIMEDIA FOUNDATION, INC.
Notes to Financial Statements
June 30, 2014 and 2013

(4)

Property, Plant, and Equipment, Net
Property, plant, and equipment at June 30, 2014 and 2013 consist of the following:
2014

2013

684,024
278,181
10,577,241

439,562—9,504,243

Total

11,539,446

9,943,805

Less accumulated depreciation(7,486,120)(5,031,999)

4,053,326

4,911,806

Furniture
Leasehold improvements
Computer equipment$

Property, plant, and equipment, net(5)$

Net Assets
Temporarily restricted net assets at June 30, 2014 and 2013 are available for the following purposes:

Restricted to future periods
Restricted by purpose:
Sloan Foundation – Bolster Wikipedia’s Readership &Editors
Sloan Foundation – Developing and Sustaining Educational
Mission
Knight Foundation – Wikipedia Zero and Mobile
Technology
Stanton Foundation – Wikipedian-in-Residence @Belfer Center$

Temporarily restricted net assets

$

11

2014

2013

530,770

811,683

2,968,999——

1,000,000

150,000

450,000—

5,690

3,649,769

2,267,373(Continued)

WIKIMEDIA FOUNDATION, INC.
Notes to Financial Statements
June 30, 2014 and 2013

(6)

Functional Allocation of Expenses
Costs of providing the Foundation’s activities have been summarized below on a functional basis. Projects
are comprised of various initiatives that focus on (1) building the technological and operating platform thatenables the Foundation to function sustainably as a top global Internet organization, (2) strengthening,growing, and increasing diversity of the editing community, and (3) accelerating impact by investing in
key geographic areas, mobile application development, and bottom-up innovation, all of which, to support
Wikipedia and eight other wiki-based projects. Accordingly, certain costs have been allocated among the
projects benefited and supporting services for the years ended June 30, 2014 and 2013, as follows:
2014

Salaries and wages
Awards and grants
Internet hostingIn-kind service expenses
Other operating expenses
Travel and conferences
Depreciation
Special event expense, net

Projects

General andadministrative

Fund-raising

Total

$

15,026,534
5,704,791
2,529,483
251,833
3,711,904
1,724,718
2,380,442
143,219

3,516,451——
118,769
6,275,088
158,527
341,565—

1,436,923———
2,497,889
82,609——19,979,908
5,704,791
2,529,483
370,60212,484,881
1,965,854
2,722,007
143,219$

31,472,924

10,410,400

4,017,421

45,900,745

2013

Salaries and wages
Awards and grants
Internet hostingIn-kind service expenses
Other operating expenses
Travel and conferences
Depreciation

Projects

General andadministrative

Fund-raising

Total

$

11,744,168
2,791,378
2,549,992
228,218
2,859,197
1,125,114
2,441,148

2,700,060——
32,691
5,012,142
147,835
265,693

1,539,314———
2,145,782
122,064—

15,983,542
2,791,378
2,549,992
260,909
10,017,121
1,395,013
2,706,841$

23,739,215

8,158,421

3,807,160

35,704,796

The Foundation has a program of awarding grants to support chapters in projects that further the mission of
the Foundation. Chapters are independent organizations that share the goals of the Foundation and support
them within a specified geographical region. In addition to this work, which is reflected above in theawards and grants line, an overwhelming majority of the Foundation’s project activities are carried out by
an international network of volunteers, whose activity is not reflected in the table above.
12(Continued)

WIKIMEDIA FOUNDATION, INC.
Notes to Financial Statements
June 30, 2014 and 2013For example (unaudited):(7)For the year ended June 30, 2014, the educational content of the Foundation’s largest project,
Wikipedia, grew by approximately 4.8 million articles to more than 32 million articles total.



For the year ended June 30, 2014, volunteers added approximately 4.5 million images, movies, andsound files to the Foundation’s multimedia repository, making the total 22.1 million files.



Volunteers also contribute in several ways to the Foundation’s wiki software: volunteer softwaredevelopers add new functionality to the code base, and volunteer language specialists add to the codebase by translating the wiki interface into different languages. By the year ended June 30, 2014, thesource code hosted in the Foundation’s version control repository contained approximately
12.8 million lines of code through the effort of approximately 2,278 contributors, in whichapproximately 862 are active contributors.

Operating Leases
The Foundation has a seven-year noncancelable operating lease for its San Francisco location. The lease
expires on September 30, 2017.
Minimum rent payments under operating leases are recognized on a straight-line basis over the term of thelease including any periods of free rent. Rental expense for operating leases for the years ended June 30,
2014 and 2013 was $1,230,176 and $1,005,896, respectively.
Future minimum lease payments under noncancelable operating leases as of June 30, 2014 are as follows:

Lease
payments
Year ending June 30:
2015
2016
2017
2018
Total minimum lease
payments$

1,239,472
1,273,229
1,306,986
329,565$

4,149,252

On November 20, 2012, the Foundation entered into a sublease agreement to rent out its unoccupied space.
The lease term is for two years from January 2013 through December 2014 with a monthly rent income of$46,285 in year 1 and $47,229 in year 2.
(8)

Retirement Plan
The Foundation offers a 401(k) plan (the Plan) to all of its employees residing in the United States.
Employees are eligible to participate in the Plan upon employment. Effective January 1, 2011, theFoundation matches employee contributions on a dollar-for-dollar basis up to 4% of the employee’s
compensation. The Foundation contributed $438,147 and $360,586 to the Plan for the years ended June 30,
2014 and 2013, respectively.
13(Continued)

WIKIMEDIA FOUNDATION, INC.
Notes to Financial Statements
June 30, 2014 and 2013

(9)

Contingencies
In the normal course of business, the Foundation receives various threats of litigation. In the opinion ofmanagement, the outcome of the pending lawsuits will not materially affect operations or the financial
position of the Foundation.

(10) Subsequent Events
The Foundation has evaluated its subsequent events through September 19, 2014, the date at which thefinancial statements were available to be issued, and determined there are no items to disclose.

14