On Jul 28, 2015, at 2:51 PM, Greg Shatan <gregshatanipc@gmail.com> wrote:Carlos,I read what you said originally ("financial BALANCE of the day to day operations (yes, balance because ICANN purpose is non for profit") as being based on the incorrect idea that a non-profit can't have a profit (a common misunderstanding). Clearly, that's not what you were saying, and you understand that "non-profit" is not quite so literal a term. Sorry I misunderstood you.GregOn Tue, Jul 28, 2015 at 4:45 PM, Carlos Raúl Gutiérrez <crg@isoc-cr.org> wrote:Thank you Samantha!
Xavier was very clear on the Reserve funds strategies during his last presentation to the GNSO Council in Buenos Aires and I praise him for that. I don´t consider creating those reserve funds outside the good practices of Non-for-Profit corporations, like Greg Shatan tried to imply in his reply.
Carlos Raúl Gutiérrez
+506 8837 7176
Skype: carlos.raulg
On 28 Jul 2015, at 13:20, Samantha Eisner wrote:
Carlos, as a point of reference, ICANN has an investment policy in place
(https://www.icann.org/resources/pages/investment-policy-2014-07-30-en)
that is regularly reviewed by the ICANN Board, which includes principles
on how funds held by ICANN are managed, as well as the size of the reserve
fund.
On 7/28/15, 10:13 AM, "accountability-cross-community-bounces@icann.org on
behalf of Carlos Raúl Gutiérrez"
<accountability-cross-community-bounces@icann.org on behalf of
crg@isoc-cr.org> wrote:
Carlos Raúl Gutiérrez
+506 8837 7176
Skype: carlos.raulg
On 28 Jul 2015, at 11:02, Greg Shatan wrote:
One other note -- there seems to be a misunderstanding of what a
"non-profit corporation" (and why it is called "non-profit").
No problem with reserves, contingencies, etc. ICANN has to big ones of
80 million each. But still a problem with unrealistic income
projections, and optimistic spending just because we have more money
coming in tomorrow.
A
"for-profit" corporation pays out net profits to its owners
(shareholders
or other types of owners). A non-profit does not have owners or
shareholders, so it does not pay out profits to anybody. While an
entity
can be " non-profit," this does not mean it is "non-surplus."
"Non-profit"
does not mean that it is not supposed to run an excess of revenues
over
expenses, or have no more assets than it has liabilities. So, this
idea of
"balance" is misplaced.
A healthy finial balance is always in place under the assumptions as per
above.
A non-profit, like a for-profit, needs to balance
its books in an accounting sense, but that does not in any way mean
that
there is a prohibition or even a presumption against having a surplus
of
cash over expenses.
agree. Two sets of reserves of $80million/each is quite alright
Greg
cheers
Carlos Raul
_______________________________________________<crg@isoc-cr.org>
On Tue, Jul 28, 2015 at 10:30 AM, Carlos Raúl Gutiérrez
wrote:
email: crg@isoc-cr.orgDear George,
I agree with you that a cumulated budget veto is a pretty useless
accountability tool (independently of how difficult it would be for
the
sole member to exercise itŠ)
Moreover, I think the community on the one hand should take care that
the
public interest objectives (policy development and compliance
functions)
are properly funded. It would be much more effective if those
separate hose
budgets (policy development and compliance functions) would be
developed in
a bottom up fashion, based on the needs of the community, and through
the
communities direct involvement. No need for a veto then since the
SOs/ACs
would be DIRECTLY responsible for their budgets.
On the other hand, it is up to management to guarantee the financial
BALANCE of the day to day operations (yes, balance because ICANN
purpose
is non for profit), as well as guarantee the demands of the community
for
proper funding of the public interest functions (independently of the
line
overseer of the functions, which is another black box altogether).
This would be in my view a much more effective system of so called
³checks
and balances² than an absolute veto over the cumulated budget,
where the
community has little knowledge on the different objectives under it
was
produced, and remains in my eyes will very obscure, independently of
the
overall sum in relation to the size of the business.
Best
Carlos Raúl Gutiérrez
_____________________
Skype: carlos.raulg
+506 8837 7173 (cel)
+506 4000 2000 (home)
+506 2290 3678 (fax)
_____________________
Apartado 1571-1000
San Jose, COSTA RICA
On Jul 27, 2015, at 9:30 AM, George Sadowsky
<george.sadowsky@gmail.com>Accountability-Cross-Community@icann.org
wrote:
All,
These are my personal opinions.
I suspect that the reaction to this post will be, "we are way past
this,
we've discussed this, and now just help us work on the implementation
details." If so, I think that's a mistake, because what I'd like to
do is
question one of the fundamental assumptions behind what this group is
doing.
When this process started, there was general agreement that it was
more
important to do this right than to do it quickly Unfortunately, this
feeling appears to have reversed, with the current sense that it is
more
important to get it done quickly in the name of the transition than
to
spend the time needed to do it right. This process is going beyond
accountability to a fundamental redesign of ICANN, with IMO
inadequate
concern for assuring inclusivity of support as well as lack of
concern for
unanticipated consequences.
So here's what I'd like to contribute ...
I've been uncomfortable with the notion of budgetary control/veto
since
the idea was first presented. I think that I now know why: in my
opinion
it solves the wrong problem, and it is the wrong solution to the
right
problem. Let me explain.
In general, budgetary control is exercised by groups who want to
control
an aggregate budget, whether for reasons of limiting growth or
ensuring
that aggregate expenses for a budget do not exceed some measure of
income.
I don't think that's the case here, although I suppose that under
exceptional circumstances it might be.
The alternative is that the control the group appears to want must be
by
program or even by line item, even though you're planning to use a
very
blunt instrument -- control over approval of the aggregate budget
-- as
your tool to accomplish this. If that's the case, then what you
really
want is programatic control, not budgetary control. If the program
is
accepted, then subject to resource constraints, it's up to the staff
to
deliver, and any specific line item or similar objection, however
expressed, interferes with the execution of the activity.
If the disagreement is with the program, with the objectives to be
accomplished, and how the objectives are to be accomplished, then
that is
where the control should be exercised. Any budgetary control after
that is
micromanagement. The response to that is if you don't trust the
organization to implement a rather well defined activity, then change
the
management/staff, don't restrict their resources and let them
continue
anyway.
I suggest pursuing this line of argument further. In my opinion, our
fundamental problem has two components: (1) a persistent inadequate
level
of trust between groups within the ICANN community, and (2) our
inability/unwillingness to create and use structures to deal directly
with
this situation and improve it. I see the mechanism as starting with
a
lack of trust -- in Board, management, staff, as well as the ACs
and the
SOs and their constituent parts -- that generates not only suspicion
regarding motives, non-transparent actions, and actions that are not
equally favorable to all groups involved, but also the sense that the
process is not serving "me" (whoever I am) well and is therefore out
of
control.
In other words, IMO we have a fundamental problem of trust, and we
don't
have an effective way to talk about it or to otherwise address it,
much
less solve it.
The budget rejection process that is being defined by the group is
IMO
based more upon defining ultimate ("nuclear" if you like)
confrontation
mechanisms than upon finding cooperative mechanisms to identify and
resolve
potential conflicts at an earlier stage. It does not address the
trust
issue, and to the extent that my hypothesis is correct, if not
addressed
the trust issue will continue to bedevil ICANN activities, in other
probably equally destructive ways. Should not this group be equally
or
more concerned about mechanisms to identify issues and encourage
cooperative-based and trust building processes to solve problems as
they
arise? It does not appear so to me.
In summary, the current approach, gaining more control over budget
approval, is based upon a model of checks and balances, and that may
be
legitimate to some extent. However, I sense that is not the way in
which
it is planned to be employed. If so, it solves the wrong problem,
nad it
does not address the real problem. We need a different approach,
one of
getting to the root of disagreements, real and perceived, that is
early and
based upon increased cooperation and trust, and we need a way to
communicate that encourages this to happen. This is not an easy
problem to
solve, but IMO it's the real problem that we have to solve, rather
than
some well meaning but inaccurate proxy representation of it.
Please consider these thoughts in your discussions.
George
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