Subject: RE: IASA BCP -02 Designated Donations - section 5.3

From: "Wijnen, Bert (Bert)" <[email-masked]>
Date: Wed, 15 Dec 2004 10:39:53 +0100

Inline
Biran answered me:
> 
> Wijnen, Bert (Bert) wrote:
> > I am not a real accountant and kind of simple-minded.
> > 
> > So when you say:
> > 
> >>>>>>>"Lynn" == Lynn St Amour <[email-masked]> writes:
> >>
> >>    Lynn> over 80% of ISOC's org. members donate less than $10K
> >>    Lynn> annually and managing these in a 'restricted accounting
> >>    Lynn> manner' requires more effort and overhead.  Also,
> >>    Lynn> organizations/donors expect recognition appropriate to their
> >>    Lynn> contribution and that implies differing levels of value and
> >>    Lynn> distinction.
> >>
> > 
> > I then wonder.... 
> > 
> > - if there is s separate or special bank account for IASA/ETF
> > - if I can just deposit my donation into that bank account
> > - What then is the "more effort and overhead" ??
> > 
> > I just do not understand.
> > 
> 
> Bert, I'm sure Lynn will answer this too, but from when the ISOC was
> discussing accounting practices for individual member subscriptions
> and donations, I remember that the bank account aspect is the least
> of the worries (and anyway, we already reached consensus not to
> have a separate bank account).

I am not even talking about "separate bank account" as we did in an 
early rev of the iasa-bcp doc. I am talking about an ISOC bank account
that will ONLY receive donations targeted for a specific purpose.
By depositing money on the specific bank account, you IMPLICITLY tell
ISOC that the money is intended for a specific purpose, in this case
IETF.  Again it must be the simple-minded me who does not understand.

Bert
> he issue is that accounting entries
> have to be made in a very specific way for money which is tied to
> a specific purpose, and while that is a small overhead if someone
> donates $100k, it becomes a significant overhead if 100 people
> donate $1k. It can end up eating money for accounting actions
> that really serve no useful purpose but have to be done to follow
> thr accounting rules. So I think Lynn is correct and we have to
> give ISOC the necessary flexibility.
> 
>     Brian
> 

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From: Brian E Carpenter <[email-masked]>
Date: Wed, 15 Dec 2004 12:55:24 +0100

Bert, that does not change the need for the ISOC accountants
to generate a separate entry for each case and for the auditors
to check each of those entries. It's a real cost, because
accountancy and auditing cost real money.

    Brian

---

From: Leslie Daigle <[email-masked]>
Date: Thu, 16 Dec 2004 16:28:37 -0500

Let me try a slightly different cut on the discussion.

1/ I believe the IETF is trying to address the fact we would like
    to be able to accept support in chunks that are greater than
    individual meeting fees, and less than $100kUS.  IMHO,
    it's not that the IETF needs to be able to accept donations
    in *any* size between those, but I have heard people say that
    they know the person in their company who could write a cheque
    for $40k, if it will pecifically support the IETF, but there's no
    way they can get $100k through their budget.

2/ I believe we've also heard the IETF say that it wants to be able
    to clearly identify its collected assets (and, as the flipside,
    is willing to pay for all of its expenses).  This is driven
    by a lot of factors, but I think the an important one is
    that the IETF believes it can and should be financially viable.
    Taking the bad along with the good, we want to be in an
    environment where we can prove that out empirically.

3/ We've heard clear explanations that attracting and managing
    corporate donations is not a simple task.  Specifically,
    that there are reasons that it's not a simple matter to
    drop the level of donation necessary for designating
    donations.

I don't believe the BCP needs to have specific text about
*how* "1/" and "2/" are achieved.  The current text is
about "how", and perhaps that's why it does not reconcile
with "3/".

The question is, do we all believe "1/" and "2/" are achievable?
If we do have a meeting of the minds that they are, given the
constrains in "3/", then what we have is "only" a wording problem
to capture that meeting of the minds.

If we do not have such a meeting of the minds, then we should
figure out fast whether it's a difference of opinion, or whether
"1/" and/or "2/" are not reasonably achievable in any universe.

Leslie.

-- 

-------------------------------------------------------------------
"Reality:
      Yours to discover."
                                 -- ThinkingCat
Leslie Daigle
[email-masked]
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From: Carl Malamud <[email-masked]>
Date: Thu, 16 Dec 2004 18:15:51 -0800 (PST)

Hi Leslie -

There's something I'm not quite understanding, and I was wondering if others
might share my confusion.

I can think of two reasons why taking small targeted donations is bad:

1. It's a pain to administer and account for.
2. It screws up the overall marketing plan in some way (e.g., should
   a $1 donor get their name on the web page, should bigger sponsors
   be part of some bundling strategy, etc...).

I could understand 1. being a problem if people could designate specifically
what they want (e.g., "support the newtrk working group").  But, if
the only designation available is "support of the IETF", it is a pretty
simple accounting transaction to book all receipts with that designation
as "Discretionary Funds Used for IASA".  It becomes a line-item on
the income statement and balance sheet, and becomes one line in the
annual tax return under restricted contributions received.  If the number
becomes high, there are some implications for the "public support"
test the IRS uses, but that doesn't seem to be an issue for the 
forseeable future.

My confusion is whether people think that designating means the donor
writes the conditions or whether it simply means support of IASA.  If it
is the latter, it really isn't that tough to administer.  If it is
the former, I'd be kicking and screaming if I were Lynn.  :))

As to the second reason why one might not do this, my own personal opinion
is that if people want to make any size contribution to the IETF and
there are no strings attached, we shouldn't be so proud as to say no.

Regards,

Carl

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From: Brian E Carpenter <[email-masked]>
Date: Fri, 17 Dec 2004 16:02:33 +0100

Well, I'd like to suggest that we should decide not to decide
at this time. It is a low-level issue compared to getting the
BCP to a point of consensus and keeping to the schedule for
creating the IASA. As a survivor of many ISOC Board discussions
on such issues, I can tell you we aren't going to converge any
time soon - so could we agree to put it aside? That will mean
adding a few weasel words in the draft, but that's easy if
we agree to disagree, e.g.: "Accounting mechanisms for small designated
donations will be decided in the light of experience" instead
of the last sentence of 5.3 para 2.

    Brian

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From: Carl Malamud <[email-masked]>
Date: Fri, 17 Dec 2004 07:40:47 -0800 (PST)

> of the last sentence of 5.3 para 2.

Hi Brian -

I think you should do what it takes to get a consensus on the doc.  :)
If that means dropping the language altogether and that makes people
happy, that's the answer.  If it means leaving it in, but putting
in a clause that makes you happy, that works as well.

May I make a suggestion?  Run the small donations program for 1 year
as an experiment (e.g., don't enshrine it as a dedicated principle),
charge any costs for administering that program back to the IASA
accounts, and then evaluate at the end of the year if it is a worthwhile
thing.

In terms of BCP language?  Something like: "The IASA and ISOC
shall investigate concrete mechanisms that will allow  small
contributions designated for use in the IASA  and shall
report back periodically to the community on such matters."

(Or, any language that makes you, Lynn, Scott, Bert, Leslie, and
the others who spoke up on this issue happy.  IMHO, this shouldn't
be a gating issue and folks seem pretty close to agreement.
It seems like people are simply arguing over the level at which
this mechanism might kick in ... US$1 is clearly too small,
US$1m is clearly large enough.)

A suggestion?  Maybe Leslie and Lynn could talk and propose 
something in this area?  I'm sure I would immediately agree to
anything they proposed.

Regards,

Carl

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From: Leslie Daigle <[email-masked]>
Date: Fri, 17 Dec 2004 12:12:41 -0500

Brian,

I agree, with respect to the specifics (as I said in my note).

However, a principle should be captured.  And, to the extent
we do not yet (apparently) have general agreement on the principle,
we still have work to do.

Though, in general, my thinking this morning has been running
along the lines of Carl's proposal of capturing the desired
outcome with an expression of uncertainty ("we would *like*
to be able to do "X""), and a plan of reviewing it for
a year ("will make effort to implement and report back
after a year").   I'm not nearly so worried, on that front,
about the small donations front, as I am about the overall
principles of identifying IETF donations and achieving
some model for dependent sustainability.

Leslie.

--

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From: Ted Hardie <[email-masked]>
Date: Fri, 17 Dec 2004 11:16:38 -0800

>some model for dependent sustainability.

I'd like to chime in my agreement with Leslie here.  I think
we've been somewhat distracted by the "small donations"
label; I have heard some of the same numbers as Leslie,
and they are a range, including some in the 5 figure range.
Getting the principle down--that people who want to
make a donation to the IETF activity should be able to do
so--is the important part.  How that gets structured
may change over time (costs incurred because
of donations to IETF paid from those same funds, an
overhead model similar to University research funding,
whatever).  Getting the principle right is a job we shouldn't
put off; it should go into the BCP.  Getting the specifics
right is an activity we should expect to revisit, not just once
but over time.
		regards,
			Ted Hardie

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From: Margaret Wasserman <[email-masked]>
Date: Sat, 18 Dec 2004 09:13:54 -0500

Hi Leslie,

I'm not sure that I understand what you are saying...

>I'm not nearly so worried, on that front,

What do you mean by "dependent sustainability"?

One nit:  There won't really be "IETF donations".  All of the fund 
raising will be done through ISOC, so all of the donations will be 
ISOC donations.  Some of those donations may be designated to a 
particular ISOC activity (such as the IASA or a particular 
educational or public policy project), and others will not be 
designated to a particular activity at all, but will be allocated 
between ISOC's activities as part of the ISOC budgeting process.

Margaret

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From: Brian E Carpenter <[email-masked]>
Date: Sun, 19 Dec 2004 12:23:11 +0100

> right is an activity we should expect to revisit, not just once

We agree. I thought that the text already made it clear that
designated donations were allowed, and all we were debating
was how much detail to write down.

    Brian