[Gnso-sc-budget] [information] [article] ICANN and Voodoo Economics in Wonderland

[Xavier J. Calvez]

Thank you Ayden for sharing.

All,

This article is a common example of information misunderstood taken to support an unrelated agenda.

The author believes that the information in the form 990 (ICANN’s tax return) indicates that ICANN overspent its budget by $23m. It is a reasonable misunderstanding which stems from the timing by which we recognize revenues on the new gTLD program.

In FY18, the ICANN’s operations (excluding the new gTLD program) have generated an excess of $5m, which allowed to make a contribution to the Reserve Fund. Not overspending…!
Separately, the new gTLD program currently shows, for the entire duration of it, projected expenses (including refunds) of $294m that are lower than the total amount of application fees collected of $362m, and therefore shows remaining funds of $68, to pay for risks costs. That is information is available publicly in our budget documents as you all know.
But our tax return (“form 990”) does not show the entire program’s financial information, only the FY18 portion. That FY18 portion includes an accounting adjustment for revenue, resulting from the extension of the program’s duration, which leads to revenue being lower, but is not financial loss.
It is difficult to explain this simply without being too technical and without a chance to show the financials of the entire new gTLD program.

We need to continue communicating and explaining ICANN’s finances to the public, which can sometime becomes unfortunately an accounting technical exercise. I hope this helps and I am happy to provide further information as you desire.

Separately, it is interesting to see how people’s agenda drives what information they use:

  *   When people want to say that we have too much money, they use our total available funds under management of $450 millions as an illustration of their point.
  *   When people want to blame us, they use an isolated data point, like the one above, which they then use to serve their argument.

This is normal daily life at ICANN as a result of our constant transparency…

Thank you.

Best,

Xavier

Xavier Calvez
ICANN – SVP & CFO
12025 Waterfront Drive, Suite 300
Los Angeles, CA 90094
Phone:   310-301-5838
Mobile:  805-312-0052
Fax:        310-957-2348


From: Gnso-sc-budget <gnso-sc-budget-bounces at icann.org> on behalf of Ayden Férdeline <icann at ferdeline.com>
Reply-To: Ayden Férdeline <icann at ferdeline.com>
Date: Wednesday, June 5, 2019 at 7:55 AM
To: "gnso-sc-budget at icann.org" <gnso-sc-budget at icann.org>
Subject: [Gnso-sc-budget] [information] [article] ICANN and Voodoo Economics in Wonderland

Dear all,

I am sharing this article for information purposes. The author offers some commentary on ICANN's lack of "budget discipline": https://medium.com/the-query/icann-and-voodoo-economics-in-wonderland-e76c4cb82c69 [medium.com]<https://urldefense.proofpoint.com/v2/url?u=https-3A__medium.com_the-2Dquery_icann-2Dand-2Dvoodoo-2Deconomics-2Din-2Dwonderland-2De76c4cb82c69&d=DwMGaQ&c=FmY1u3PJp6wrcrwll3mSVzgfkbPSS6sJms7xcl4I5cM&r=IWWGaKyGUGcKQNGe7LtArAou7HP6fPR5aWjbPBUFZ3k&m=ygjnDXqh700uWpLmRb1jLRJedeZtIxcoTbxlGzQrLlM&s=xIOSkcnGyaa7HiEV0lxF7AxipmfAlXf2e1JOCG1OdNA&e=>

Kind regards,
Ayden Férdeline

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