Subject: Building a surplus

From: Fred Baker <[email-masked]>
Date: Wed, 22 Dec 2004 21:52:04 -0800

Based on the discussion on the list including Christian's note that said:

    The current platinum sponsors of ISOC are Afilias Limited, APNIC,
ARIN,
    Microsoft, RIPE NCC, and the Swedish International Development
    Cooperation Agency (SIDA). Most of these sponsors, including
Microsoft,
    designate their funds for "standard activities". These standard
    activities are typically IETF related, but they are not necessarily
    managed through "the IETF". The current list includes: RFC Editor,
    scholarship funding for needy IETF participants to attend meetings,
    activities of the IAB, IESG, IRTF, special workshops of the IETF,
travel
    for IETF related activities, "errors and omissions" insurance coverage
    for IESG, IAB, and Working Group Chairs, communications charges for
    conference calls of the IAB, IESG, and IRTF.

    Forcing a particular bank account structure does not appear helpful.
    What is helpful, on the other hand, is a yearly report explaining how
    the contributions are actually used. Even large companies like
Microsoft
    don't like signing $100,000 checks without knowing how the money will
be
    spent.

I'd like to suggest that section 5.6 be changed to read:

    As an initial guideline and in normal operating circumstances, the
IASA
    should be able to count on an operating reserve for its activities
    sufficient to cover 6-months of non-meeting operational expenses, plus
    twice the recent average for meeting contract guarantees.  Rather than
    having the IASA attempt to build that reserve in separate accounts,
the
    IASA looks to ISOC to build and provide that operational reserve,
    through whatever mechanisms ISOC deems appropriate: line of credit,
    financial reserves, meeting cancellation insurance, and so forth. 
Such
    reserves do not appear instantaneously; the goal is to reach this
level
    of reserves within 3 years after the creation of the IASA.  Such funds
    shall be available for use by IASA for use in the event of IETF
meeting
    cancellation or other unexpected fiscal emergencies.

Under current conditions it is highly unlikely that an IETF-specific 
surplus will be developed anytime soon, so I do not think its necessary to
spend too much time planning for what to do with one (which I think is
what 
Leslie was saying).

In round numbers, the expected budget for the IETF-related activities next
year is $4.1 million US (that includes $1.4 million for running meetings 
and $2.7 million for all other expenses including the IAD, secretariat 
costs, insurance, RFC Editor, IESG & IAB support etc).  If the attendance 
at the meetings and the meeting fees stay the same, the meetings will
bring 
in about $2 million.  That leaves about $2.1 million for the ISOC to pick 
up. This is about half a million more support than the ISOC budgeted this 
year, and a bit over double ISOC's 2003 figure.

Clearly, any donations to the ISOC like the ones that Christian mentions, 
that specify that the donations are to be used to support "standard 
activities" would have to only be used to support standard activities. But
it is likely to be a while before such designated donations could exceed 
the IASA costs that the ISOC will be responsible to cover.

   Regards,
     Fred Baker

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