<html><head><meta http-equiv="Content-Type" content="text/html charset=utf-8"></head><body style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space;" class="">No prob Greg!<div class=""><br class=""></div><div class="">I truly believe Budget should remain in WS2 in any case as you proposed.</div><div class="">We need to delve much deeper into the financial aspects of all this.</div><div class=""><br class=""></div><div class="">cheers</div><div class=""><br class=""><div apple-content-edited="true" class="">
<div style="color: rgb(0, 0, 0); letter-spacing: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space;" class=""><div style="color: rgb(0, 0, 0); letter-spacing: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space;" class=""><span style="orphans: 2; widows: 2;" class="">Carlos Raúl Gutiérrez</span><br style="orphans: 2; widows: 2;" class=""><span style="orphans: 2; widows: 2;" class="">_____________________</span><br style="orphans: 2; widows: 2;" class=""><br style="orphans: 2; widows: 2;" class=""><span style="orphans: 2; widows: 2;" class="">email: </span><a href="mailto:crg@isoc-cr.org" class="">crg@isoc-cr.org</a><br style="orphans: 2; widows: 2;" class=""><span style="orphans: 2; widows: 2;" class="">Skype: carlos.raulg</span><br style="orphans: 2; widows: 2;" class=""><span style="orphans: 2; widows: 2;" class="">+506 8837 7173 (cel)</span><br style="orphans: 2; widows: 2;" class=""><span style="orphans: 2; widows: 2;" class="">+506 4000 2000 (home)</span><br style="orphans: 2; widows: 2;" class=""><span style="orphans: 2; widows: 2;" class="">+506 2290 3678 (fax)</span><br style="orphans: 2; widows: 2;" class=""><span style="orphans: 2; widows: 2;" class="">_____________________</span><br style="orphans: 2; widows: 2;" class=""><span style="orphans: 2; widows: 2;" class="">Apartado 1571-1000</span><br style="orphans: 2; widows: 2;" class=""><div class=""><span style="orphans: 2; widows: 2;" class="">San Jose, COSTA RICA</span></div><div class=""><br class=""></div><div class=""><br class=""></div><div class=""><br class=""></div></div><br class="Apple-interchange-newline"></div><br class="Apple-interchange-newline"><br class="Apple-interchange-newline">
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<br class=""><div><blockquote type="cite" class=""><div class="">On Jul 28, 2015, at 2:51 PM, Greg Shatan <<a href="mailto:gregshatanipc@gmail.com" class="">gregshatanipc@gmail.com</a>> wrote:</div><br class="Apple-interchange-newline"><div class=""><div dir="ltr" class=""><div class="gmail_default" style="font-family:verdana,sans-serif">Carlos,</div><div class="gmail_default" style="font-family:verdana,sans-serif"><br class=""></div><div class="gmail_default" style="font-family:verdana,sans-serif">I read what you said originally ("<span style="font-size:12.8000001907349px;font-family:arial,sans-serif" class="">financial BALANCE of the day to day operations (yes, balance because ICANN purpose is non for profit"</span>) 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.</div><div class="gmail_default" style="font-family:verdana,sans-serif"><br class=""></div><div class="gmail_default" style="font-family:verdana,sans-serif">Greg</div></div><div class="gmail_extra"><br class=""><div class="gmail_quote">On Tue, Jul 28, 2015 at 4:45 PM, Carlos Raúl Gutiérrez <span dir="ltr" class=""><<a href="mailto:crg@isoc-cr.org" target="_blank" class="">crg@isoc-cr.org</a>></span> wrote:<br class=""><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">Thank you Samantha!<br class="">
<br class="">
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.<br class="">
<br class="">
Carlos Raúl Gutiérrez<br class="">
<a href="tel:%2B506%208837%207176" value="+50688377176" target="_blank" class="">+506 8837 7176</a><br class="">
Skype: carlos.raulg<span class=""><br class="">
On 28 Jul 2015, at 13:20, Samantha Eisner wrote:<br class="">
<br class="">
</span><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex"><span class="">
Carlos, as a point of reference, ICANN has an investment policy in place<br class=""></span>
(<a href="https://www.icann.org/resources/pages/investment-policy-2014-07-30-en" rel="noreferrer" target="_blank" class="">https://www.icann.org/resources/pages/investment-policy-2014-07-30-en</a>)<span class=""><br class="">
that is regularly reviewed by the ICANN Board, which includes principles<br class="">
on how funds held by ICANN are managed, as well as the size of the reserve<br class="">
fund.<br class="">
<br class=""></span>
On 7/28/15, 10:13 AM, "<a href="mailto:accountability-cross-community-bounces@icann.org" target="_blank" class="">accountability-cross-community-bounces@icann.org</a> on<span class=""><br class="">
behalf of Carlos Raúl Gutiérrez"<br class=""></span><span class="">
<<a href="mailto:accountability-cross-community-bounces@icann.org" target="_blank" class="">accountability-cross-community-bounces@icann.org</a> on behalf of<br class="">
</span><a href="mailto:crg@isoc-cr.org" target="_blank" class="">crg@isoc-cr.org</a>> wrote:<br class="">
<br class="">
<blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
<br class="">
<br class="">
Carlos Raúl Gutiérrez<br class="">
<a href="tel:%2B506%208837%207176" value="+50688377176" target="_blank" class="">+506 8837 7176</a><div class=""><div class="h5"><br class="">
Skype: carlos.raulg<br class="">
On 28 Jul 2015, at 11:02, Greg Shatan wrote:<br class="">
<blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
One other note -- there seems to be a misunderstanding of what a<br class="">
"non-profit corporation" (and why it is called "non-profit").<br class="">
</blockquote>
<br class="">
No problem with reserves, contingencies, etc. ICANN has to big ones of<br class="">
80 million each. But still a problem with unrealistic income<br class="">
projections, and optimistic spending just because we have more money<br class="">
coming in tomorrow.<br class="">
<br class="">
<blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
A<br class="">
"for-profit" corporation pays out net profits to its owners<br class="">
(shareholders<br class="">
or other types of owners). A non-profit does not have owners or<br class="">
shareholders, so it does not pay out profits to anybody. While an<br class="">
entity<br class="">
can be " non-profit," this does not mean it is "non-surplus."<br class="">
"Non-profit"<br class="">
does not mean that it is not supposed to run an excess of revenues<br class="">
over<br class="">
expenses, or have no more assets than it has liabilities. So, this<br class="">
idea of<br class="">
"balance" is misplaced.<br class="">
</blockquote>
<br class="">
A healthy finial balance is always in place under the assumptions as per<br class="">
above.<br class="">
<br class="">
<blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
A non-profit, like a for-profit, needs to balance<br class="">
its books in an accounting sense, but that does not in any way mean<br class="">
that<br class="">
there is a prohibition or even a presumption against having a surplus<br class="">
of<br class="">
cash over expenses.<br class="">
</blockquote>
<br class="">
agree. Two sets of reserves of $80million/each is quite alright<br class="">
<br class="">
<blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
Greg<br class="">
</blockquote>
<br class="">
<br class="">
cheers<br class="">
Carlos Raul<br class="">
</div></div><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex"><div class=""><div class="h5">
<br class="">
On Tue, Jul 28, 2015 at 10:30 AM, Carlos Raúl Gutiérrez<br class=""></div></div>
<<a href="mailto:crg@isoc-cr.org" target="_blank" class="">crg@isoc-cr.org</a>><br class="">
wrote:<br class="">
<br class="">
<blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex"><div class=""><div class="h5">
Dear George,<br class="">
<br class="">
I agree with you that a cumulated budget veto is a pretty useless<br class="">
accountability tool (independently of how difficult it would be for<br class="">
the<br class="">
sole member to exercise itŠ)<br class="">
<br class="">
Moreover, I think the community on the one hand should take care that<br class="">
the<br class="">
public interest objectives (policy development and compliance<br class="">
functions)<br class="">
are properly funded. It would be much more effective if those<br class="">
separate hose<br class="">
budgets (policy development and compliance functions) would be<br class="">
developed in<br class="">
a bottom up fashion, based on the needs of the community, and through<br class="">
the<br class="">
communities direct involvement. No need for a veto then since the<br class="">
SOs/ACs<br class="">
would be DIRECTLY responsible for their budgets.<br class="">
<br class="">
On the other hand, it is up to management to guarantee the financial<br class="">
BALANCE of the day to day operations (yes, balance because ICANN<br class="">
purpose<br class="">
is non for profit), as well as guarantee the demands of the community<br class="">
for<br class="">
proper funding of the public interest functions (independently of the<br class="">
line<br class="">
overseer of the functions, which is another black box altogether).<br class="">
<br class="">
This would be in my view a much more effective system of so called<br class="">
³checks<br class="">
and balances² than an absolute veto over the cumulated budget,<br class="">
where the<br class="">
community has little knowledge on the different objectives under it<br class="">
was<br class="">
produced, and remains in my eyes will very obscure, independently of<br class="">
the<br class="">
overall sum in relation to the size of the business.<br class="">
<br class="">
Best<br class="">
<br class="">
<br class="">
Carlos Raúl Gutiérrez<br class="">
_____________________<br class="">
<br class=""></div></div>
email: <a href="mailto:crg@isoc-cr.org" target="_blank" class="">crg@isoc-cr.org</a><span class=""><br class="">
Skype: carlos.raulg<br class="">
<a href="tel:%2B506%208837%207173" value="+50688377173" target="_blank" class="">+506 8837 7173</a> (cel)<br class="">
<a href="tel:%2B506%204000%202000" value="+50640002000" target="_blank" class="">+506 4000 2000</a> (home)<br class="">
</span><a href="tel:%2B506%202290%203678" value="+50622903678" target="_blank" class="">+506 2290 3678</a> (fax)<span class=""><br class="">
_____________________<br class="">
Apartado 1571-1000<br class="">
San Jose, COSTA RICA<br class="">
<br class="">
<br class="">
<br class="">
<br class="">
<br class="">
<br class="">
<br class="">
On Jul 27, 2015, at 9:30 AM, George Sadowsky<br class=""></span>
<<a href="mailto:george.sadowsky@gmail.com" target="_blank" class="">george.sadowsky@gmail.com</a>><div class=""><div class="h5"><br class="">
wrote:<br class="">
<br class="">
All,<br class="">
<br class="">
These are my personal opinions.<br class="">
<br class="">
I suspect that the reaction to this post will be, "we are way past<br class="">
this,<br class="">
we've discussed this, and now just help us work on the implementation<br class="">
details." If so, I think that's a mistake, because what I'd like to<br class="">
do is<br class="">
question one of the fundamental assumptions behind what this group is<br class="">
doing.<br class="">
<br class="">
When this process started, there was general agreement that it was<br class="">
more<br class="">
important to do this right than to do it quickly Unfortunately, this<br class="">
feeling appears to have reversed, with the current sense that it is<br class="">
more<br class="">
important to get it done quickly in the name of the transition than<br class="">
to<br class="">
spend the time needed to do it right. This process is going beyond<br class="">
accountability to a fundamental redesign of ICANN, with IMO<br class="">
inadequate<br class="">
concern for assuring inclusivity of support as well as lack of<br class="">
concern for<br class="">
unanticipated consequences.<br class="">
<br class="">
So here's what I'd like to contribute ...<br class="">
<br class="">
I've been uncomfortable with the notion of budgetary control/veto<br class="">
since<br class="">
the idea was first presented. I think that I now know why: in my<br class="">
opinion<br class="">
it solves the wrong problem, and it is the wrong solution to the<br class="">
right<br class="">
problem. Let me explain.<br class="">
<br class="">
In general, budgetary control is exercised by groups who want to<br class="">
control<br class="">
an aggregate budget, whether for reasons of limiting growth or<br class="">
ensuring<br class="">
that aggregate expenses for a budget do not exceed some measure of<br class="">
income.<br class="">
I don't think that's the case here, although I suppose that under<br class="">
exceptional circumstances it might be.<br class="">
<br class="">
The alternative is that the control the group appears to want must be<br class="">
by<br class="">
program or even by line item, even though you're planning to use a<br class="">
very<br class="">
blunt instrument -- control over approval of the aggregate budget<br class="">
-- as<br class="">
your tool to accomplish this. If that's the case, then what you<br class="">
really<br class="">
want is programatic control, not budgetary control. If the program<br class="">
is<br class="">
accepted, then subject to resource constraints, it's up to the staff<br class="">
to<br class="">
deliver, and any specific line item or similar objection, however<br class="">
expressed, interferes with the execution of the activity.<br class="">
<br class="">
If the disagreement is with the program, with the objectives to be<br class="">
accomplished, and how the objectives are to be accomplished, then<br class="">
that is<br class="">
where the control should be exercised. Any budgetary control after<br class="">
that is<br class="">
micromanagement. The response to that is if you don't trust the<br class="">
organization to implement a rather well defined activity, then change<br class="">
the<br class="">
management/staff, don't restrict their resources and let them<br class="">
continue<br class="">
anyway.<br class="">
<br class="">
I suggest pursuing this line of argument further. In my opinion, our<br class="">
fundamental problem has two components: (1) a persistent inadequate<br class="">
level<br class="">
of trust between groups within the ICANN community, and (2) our<br class="">
inability/unwillingness to create and use structures to deal directly<br class="">
with<br class="">
this situation and improve it. I see the mechanism as starting with<br class="">
a<br class="">
lack of trust -- in Board, management, staff, as well as the ACs<br class="">
and the<br class="">
SOs and their constituent parts -- that generates not only suspicion<br class="">
regarding motives, non-transparent actions, and actions that are not<br class="">
equally favorable to all groups involved, but also the sense that the<br class="">
process is not serving "me" (whoever I am) well and is therefore out<br class="">
of<br class="">
control.<br class="">
<br class="">
In other words, IMO we have a fundamental problem of trust, and we<br class="">
don't<br class="">
have an effective way to talk about it or to otherwise address it,<br class="">
much<br class="">
less solve it.<br class="">
<br class="">
The budget rejection process that is being defined by the group is<br class="">
IMO<br class="">
based more upon defining ultimate ("nuclear" if you like)<br class="">
confrontation<br class="">
mechanisms than upon finding cooperative mechanisms to identify and<br class="">
resolve<br class="">
potential conflicts at an earlier stage. It does not address the<br class="">
trust<br class="">
issue, and to the extent that my hypothesis is correct, if not<br class="">
addressed<br class="">
the trust issue will continue to bedevil ICANN activities, in other<br class="">
probably equally destructive ways. Should not this group be equally<br class="">
or<br class="">
more concerned about mechanisms to identify issues and encourage<br class="">
cooperative-based and trust building processes to solve problems as<br class="">
they<br class="">
arise? It does not appear so to me.<br class="">
<br class="">
In summary, the current approach, gaining more control over budget<br class="">
approval, is based upon a model of checks and balances, and that may<br class="">
be<br class="">
legitimate to some extent. However, I sense that is not the way in<br class="">
which<br class="">
it is planned to be employed. If so, it solves the wrong problem,<br class="">
nad it<br class="">
does not address the real problem. We need a different approach,<br class="">
one of<br class="">
getting to the root of disagreements, real and perceived, that is<br class="">
early and<br class="">
based upon increased cooperation and trust, and we need a way to<br class="">
communicate that encourages this to happen. This is not an easy<br class="">
problem to<br class="">
solve, but IMO it's the real problem that we have to solve, rather<br class="">
than<br class="">
some well meaning but inaccurate proxy representation of it.<br class="">
<br class="">
Please consider these thoughts in your discussions.<br class="">
<br class="">
George<br class="">
<br class="">
<br class="">
<br class="">
<br class="">
<br class="">
<br class="">
<br class="">
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