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<p>Thanks Xavier, <br>
</p>
Your point 1, linking costs to the "products" being delivered, is
well taken. However an estimate of total costs is not the central
issue here. <br>
It is, as you explore in your point 2, the relative costs of of the
respective Mechanisms for supplying the same "products mix", those
"products" being funded projects, evaluations, etc.. <br>
<div class="moz-cite-prefix">Let me take your arguments one at a
time:</div>
<div class="moz-cite-prefix">
<ul>
<li><i>RE: suggestion</i> that A (in-house) would have lower
overheads. That is not a forgone result. While ICANN might
cover administrative costs at a competitive rate, it has
little expertise in managing competitive grant funding, and
the ongoing administration of funded projects. (<i>how the
funds are administered can be a nightmare</i>). It also does
not have the expertise for ongoing and final project
evaluation, and for presenting those results in ways that
ICANN org, its Board and the stakeholder communities can
understand. All of that expertise will have to be bought,
retained, and added to the ICANN payroll.</li>
<li> <i>RE: suggestion</i> that B will result in some
duplication of costs between ICANN and partner organization.
That need not be the case. A partner organization would be
selected based on its competencies, and Mechanism B would
benefit from having that expertise "in-house", within
Mechanism B. Each of the Mechanisms has similar internal work:
funds distribution and evaluation, and an Accountability
component. There is little reason to believe that costs, all
assigned to the Mechanism, would be higher for B than for A.
If such costs stood out as exceptional, that would be a red
flag that something is being done wrong. <br>
</li>
<li><i>RE: suggestion</i> that C would have higher overhead
costs than B. I believe it is a mistake to compare operating
costs for C to B, and not count partner costs in B. While it
is true that a partner organization would leverage its
existing structure in B, the costs of those resources would be
levied against the Mechanism's operating costs. The partner
selection for B would be based on its capacity to do the work
(<i>not because it is a charity providing free services</i>).
<br>
</li>
</ul>
<p>Lastly, one distinguishing feature as between A and B&C,
especially C, is that B and C carry the potential to be ongoing
activities with funding from other sources (grants, whatever).
That may or may not be a significant factor. <br>
</p>
<p>Sam Lanfranco, NPOC<br>
</p>
</div>
<div class="moz-cite-prefix"><br>
</div>
<div class="moz-cite-prefix"><br>
</div>
<div class="moz-cite-prefix">On 11/21/2019 5:23 PM, Xavier J. Calvez
wrote:<br>
</div>
<blockquote type="cite"
cite="mid:E4DEA908-02DD-4E73-90BC-93336C3B709A@icann.org">
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<p class="MsoNormal">All,<o:p></o:p></p>
<p class="MsoNormal">You are having a great productive
brainstorming about costs. To feed into this brainstorming
exercise, please consider the following few comments which
have been made at some point, usually verbally, by the Board
liaisons, Sam and I over the past 2.5 years:<o:p></o:p></p>
<p class="MsoNormal" style="background:white"><span
style="font-size:12.0pt;color:black">1. Any estimate of
costs can only be done once we know what we do. The
mechanisms will need to be transformed into implementation
plan with detailed design in order to be able to evaluate
the costs. An illustration of such questions (please don’t
comment on this example, it just an example), is the size of
the grants: 1 grant of $200m is very differently managed
than 200,000 grants of $1,000, with many differences in
costs.<o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span
style="font-size:12.0pt;color:black">2. However, some
differences and logical principles can be formulated:<o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span
style="font-size:12.0pt;color:black">- mechanisms B and C
would have higher overheads costs than A, because there
would be some duplication of costs between ICANN and the
partner organization (mechanism B) and ICANN and the
foundation (mechanism C). There is also a cost of
coordinating 2 entities which exists with B and C and does
not with A.<o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span
style="font-size:12.0pt;color:black">- I would expect C to
have, for the same reason, higher overhead costs than B,
because some of the costs in B would be shared resources
since the partner organization would leverage its existing
structure.<o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span
style="font-size:12.0pt;color:black">- resources directly
and fully allocated to the program would probably cost the
same in the 3 mechanisms: there is a requirement in
not-for-profit oversight that salaries must be reasonable
for the job purpose, so we would expect that across each of
these mechanisms, the salaries paid to support the program
itself would be somewhat similar.<o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span
style="font-size:12.0pt;color:black">- If the focus is on
selecting the lowest cost mechanism, the focus would be on
areas of duplication of roles and cost drivers.<o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">I hope this helps.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<div>
<p class="MsoNormal">Thank you.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Best,<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Xavier<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><b><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif;color:#18376A">Xavier Calvez</span></b><span
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