Transcript Internet Society Board of Trustees Revenue Report

INTERNET SOCIETY
BOARD OF TRUSTEES
PRESIDENT’S REPORT
November 8- 9, 2003
Minneapolis, MN
Agenda
• 2003 Review
–
–
–
–
–
–
2001- 2003 Board Direction
2003 Major Initiatives
Planning Process & Program Review
2003 Budget and End of Year Review
2003 Key Operating Goals Review
INET’04 Review
• 2004 Financial Preview
8-9 Nov 2003
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2
Board Direction - 2001 - 2003
On Plan
Plans focused on driving progress in 4 key areas:
1.
Financials - - Good, steady progress & expected to continue
•
•
2.
3.
4.
Stabilize short-term
Strengthen long-term
Strengthen ISOC governance model - Progressing well, now in 3rd
and final stage.
Significantly increase activities in: Standards, Public Policy,
Education & Publications - 1st phase well underway, and long-term
program plans being developed
Clarify & strengthen value proposition for ISOC, for Organization
Members, IM’s and Chapters - Significant advances in IM and
Chapters, (IM) Member Proposal developed and will significantly
strengthen Value Proposition for all members
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3
2003 Review
Major Initiatives - I
Q1 & Q2 2003:
– Launched PIR, significant support during start-up
– Completed negotiations -Verisign $5M Endowment
– Operating processes agreed - ISOC & PIR
– .org Program funds begin flowing - $300K in April
– European Chapter Coordination Council MOU
– INET’04 successfully negotiated
– AfNoG workshop held
• Resources: ISOC FTE’s = 6.5, plus 5 volunteer VP’s !!
Red = not foreseen in 2003 budget and/or staff activities
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2003 Review
Major Initiatives - II
Q3 & Q4 2003:
– New Platinum members - Sida (Educ), Afilias (Pub Pol)
– More .org Program Funds - $800K in August
– WALC (Latin American NTW)
– SeINIT - EU Security Initiative
– Workshop Portal
– WSIS Support (significantly increased support)
– PIR Board elections
– (IM) Membership Proposal
– IETF ADVCOMM
• Note: ISOC FTE’s = 8.5, plus 5 volunteer VP’s (today = 2)
Red= not foreseen in 2003 budget and/or staff activities
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2003 Review
Planning Process & Program Review
2003 Program Planning Process
Phased Approach
• May - July: 1st phase ISOC’s Planning Process
– Phase I: Q3/Q4 ‘03 - Programs =Bid-defined and infrastructure
building (largely based on existing plans)
• Directional statements prepared by ExComm, ISOC staff,
VP’s, etc.
• Input and reviews with PIR Chair, PIR President and PIR
Board to enable both orgs. to begin funding programs.
• ISOC BoT Review - July 2003
– Phase II: 2004 & beyond = strategic planning process began June,
on-going
• Note: Funding expected from multiple sources: .org,
existing Platinums and new Platinums: Sida, Afilias, etc.
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2003 Program Funding: A Recap
• ISOC’s 2003 budget (dev’d prior to start of PIR operations)
expected total available for programs of $422K. Net cont’n.
from PIR (after dir. exp.) of $170K.
• In April, PIR donated $200K to ISOC for Open (RFC)
Standards activities and $100K for Education Program Dev’t.
– Educ. Grant enabled ISOC to hire 2 prog. Mgrs (per budget)
• In July PIR resolved to contribute an add’l. $800K to ISOC for
program development, bringing total to $1.1M!
• New Platinum members also aided program efforts: Sida,
Afilias
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Program Planning Process
Key Programs - Q3/Q4’03
EDUCATION
NTW’s, Reg’l
Workshops, etc.
PUBLIC POLICY
Internet Policy &
Policy Portal
Phase 1 (& 2)
STANDARDS
COMM’Y &
OUTREACH
Internet Stds.
Advisories
Buildup Chapter
I/Struct/systems Comm’y. Bldg.
Upgrade NTW Matls.- Seminars: VoIP *
IPv6, IPSec
Seminars: IDN,
Security *
Polls & Polling
system
Workshops Toolkit &
Portal
RFC Ed. Support
Annual Report
Bulletins/White
Papers
ISOC/ACM Rpt.?? Hall of Fame
TBR: IEEE coop’n?
* Planned for Tunis but
cancelled
Italics = Phase II
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Annualized Forecast - Sept. 03
2003 Program Fund Disposition - K$
.ORG Funds $1.1M
.ORG & All ‘Program’ Funding - $1.7M
$200K
$420K
$503K
8-9 Nov 2003
noit acudE
Education
Pub Pol & Comm'y
Open Standards
$513K
$620K
& loP buP
y'mm oC
sdradnatS
$603K
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Recap: .ORG Division of Responsibilities
• PIR:
– manage registry, set registry policy, develop new products & services,
registrar relations, marketing, communications, Advisory Council, etc.
• ISOC:
– program dev’t. & marketing outreach building on ISOC’s established
knowledge, credibility and channels
• Afilias:
– back-end service provider
Source: ISOC President’s Report: ISOC - PIR Joint Board meeting November 2002
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2003 Key changes: Program Funding
vs. Budget
• In October PIR President and Chair indicated they
expect an add’l $700K to be available in December ‘03
• Assuming PIR Board approval, ISOC will recognize this
additional revenue in 2003 as a donation (due to now
common understanding on roles).
• Projected Program Funding in 2003:
– Platinums: $ 0.5M
– .org :
$ 1.8M (from $422k in budget)
• Note: 2003 = start-up year for PIR and additional .org
funding VERY welcome but has made planning and
operating to original budget more difficult
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2003 Key Changes
Operating Model
• With increased funding, comes increased deliverables and
increased expectations.
• With significant injection of funds, (many) programs and
new resources (internal & external), all ISOC processes
and systems under pressure to evolve (while delivering).
• Volunteer model is, not at all unexpectedly, under some
pressure - mainly affecting VP structure.
• ISOC must move to a more business-like structure.
Altogether transition is working well, but not w/o some
start-up problems.
• 2004 Budget = critical review of infra-structure reqmt’s.
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Internet Society
Board of Trustees
2003
Financial Review
8 November 2003
BoT Meeting/ Minneapolis, MN
2003 Year End Forecast
from July ‘03 BoT
• Revenues
– Organizations: challenging target, today’s running rate = $0.8M
vs.budget of $1.3M. Reminder - at a P&L level this means we need to
bring in approx. $1.5M in new org. member revenues before year end,
unless Platinum
– Platinum revenue: expect to meet or exceed budget
– Program revenues expected to offset any organizational member
shortfall and will have significant added benefit of increasing ISOC’s
visibility, thereby aiding future org. member recruitment efforts
• Nov. ‘03 Update = Commentary above still valid today, and
.org revenues continue to increase significantly
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2003 Year End Forecast (cont’d)
from July ‘03 BoT
• Expenses
– Non .org Expenses are on track (in fact are under budget), but .org
expenses will be higher given higher level of surplus avail. for
programs - however they will also be net positive
– Revenue recognition tied to expenses
– ISOC’s PIR governance - related expenses to be recouped
• Cost savings budget of $126K on track (and better than
original target of $100K)
• Nov. ‘03 Update:PIR’s contributions to be donations and
recognized immediately given (now) common
understanding of model. All else consistent w/ above.
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2003 Year End Forecast (cont’d)
from July ‘03 BoT
• Summary
– Org. Revenues continues to be very aggressive given economic
and world conditions, therefore actively positioning .org
surplus/programs to better and more broadly position ISOC & PIR
for the future.
– Fully expect to meet budgeted surplus.
– Working to further diversify our revenue stream: Seinit (thanks to
Latif Ladid ), US Cybersecurity & EU security efforts, etc.
• Nov ‘03 Update: Commentary above still valid today.
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Going forward
from July ‘03 BoT
• Board support/commitment
– Suggest I contact each board member individually to see how they
can support fundraising, how staff can help, etc.
– Goal is additional $50K min. per Trustee. Success here would
mean another $750,000 and would make an ENORMOUS
difference in operations.
• Continue relentless focus on Costs and Revenues
• Identify and pursue new creative revenue streams and roles
for ISOC consistent with our values & purposes
• Success of .org initiative shows potential for such
opportunities
• Nov ‘03 Update: Fundraising efforts in Point 1 above
seriously behind. All others still valid today.
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2003 Budget vs. Forecast
K$
YTD
Budget
YTD
Actuals
REVENUES
Plat Rev
Org Rev
975
PIR Prog/Gov/Grant
386
IM & Misc Rev
95
Total Rev
1,456
185
462
600
211
1,458
EXPENSES
Dir.exps.- Standards
657
Dir.exps.-E & T
143
Dir.exps.- Pub Pol
124
Dir.exps.- PIR
208
G&A/Gov
368
Total Exp
1,500
Net Surplus(loss)
(44)
618
332
148
77
373
1,548
( 90)
YTD
EOY EOY
Variance Bud F/C
+185
(513)
+214
+116
+ 2
+39
(189)
(24)
131
( 5)
(48)
(46)
EOY
Variance
250
635
+385
1,300
725
(575)
422 1,400** +978
100
215
+115
2,072 2,975
+903
870
850
164
456
165
326
208
76
467
497
1,874 2,205
198
770
+20
(292)
(161)
+132
(30)
(331)
572
* Strong likelihood this will increase to $1.8 bringing surplus to approx. $1.1M.
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ISOC Total Revenues, Expenses and Net
Asset Trends - Good Progress
5000000
4000000
3000000
2000000
Revenues
Expe nses
Net Assets
1000000
0
-1000000
-2000000
1995
1997
1999
2001
2003
Bud
2003
F/C
Source: Mike Conn’s Treasurer Report
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2003 Budget by Pillar
PIR
165
255
195
247
280
1,550
2,072
870
288
1,158
164
54
218
164
56
220
209
69
278
1,407
467
1,874
132
37
27
2
198
286
201
EDUC
Total Revs
1,190
1,290
Expenses-Dir
Expenses-G&A
Total Expenses
Org.rev
Budgeted Surplus
EOY F/C Surplus
TOTAL
PUBLIC
POLICY
STDS
281
2
770**
** could be as high as $1.1M depending upon .org surplus and programs
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2003 YTD Budget vs. Sept. Actual - Revenue
REVENUES:
•
•
•
•
•
•
ORG. Revenues
= ($513K)
Platinum Rev.
= +$185K *
PIR Prog/Gov/Grant = +$214K
NDSS’03
=
+$36K
IM & Misc. rev.
= +$80K
Total revenue impact =
+$2K
* Afilias upgraded to Platinum - Public Policy
Sida became a Platinum Education member
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2003 YTD Budget vs. Sept. Actual - Expense
• Direct EXPENSES = ($43K) :
– E&T
• Educ & Trng. programs, etc. =($170K)
– Public Policy
• IM/Chapter support = ($15K)
• Publications = ($10K) increased effort to improve visibility.
• Re-classification of salaries into projects = +133K
• G&A = ($5K)
– Legal=($15K) sublease documentation & CEO contract
– BoT teleconferences=($10K)
– Deprec.=+$20K inventory revealed obsolete asset
Total Expense Impact = ($48K)
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2003 YTD Actuals By Pillar
STDS
EDUC
PUBLIC
PIR
TOTAL
POLICY
Org. Revenues
370
108
169
Total Revenues
685
396
277
100
1,458
Expenses-Direct
618
332
148
77
1,175
Expenses-G&A
232
67
51
23
373
Total Expenses
850
399
199
100
1,548
Actual Surplus(loss)
(166)
(2)
78
-
(90)
YTD Variance
(136)
45
47
(2)
(46)
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647
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Cash Flow- Sept ‘03 - Feb ‘04
Sept
Beginning Cash
Receipt s:
Dues
P lat inum Rev
.org Revenue
P IR Rent & Maint
Sublease Rent
Misc
T ot al Cash
P ayments:
Rent, P ayroll, P ension
RFC Edit or
Operat ing & Misc.
Workshops/P ort al
Comm'y Bldg. (Ext )
Int ernet P olicy P ortal (Ext )
Silk Nog (Ext ernal)
T ot al P ayment s
Ending Cash
Oct
Nov
518,636
362,493
65,000
65,000
61,250
61,250
86,000
86,000
50,000
7,450
7,450
2,657
2,657
634
634
7,450
7,450
2,657
2,657
1,000
1,000
723,594
590,993
103,185
110,500
15,478
85,000
35,000
83,000
$647,853
Dec
266,693
Jan
437,300
Feb
$311,892
122,500
122,500150,000150,000
30,000
400,000
300,000
7,450
7,450
7,450
7,450 7,535 7,535
7,535
2,657
2,657
2,657
2,657
2,657 2,657
2,657
1,000
1,000
1,000
1,000 1,000 1,000
1,500
509,600
1,100,300
598,492
353,584
82,000
130,907
30,000
1,295
118,000
40,000
35,000
204,958
228,500
242,907
20,000
100,000
313,000
$518,636
362,493
266,693
787,300
92,400
132,000
40,000
92,400
25,000
80,000
20,000
22,200
386,600
75,000
192,400
211,892
161,184
Note: Assumes $300K from PIR in December 2003 not $700K.
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30,00
7,53
2,657
1,50
Barcelona INET/IGC’04 Update
• April’03 ExComm expressed concern re; progress of INET’04 Board
committee. CEO tasked to prepare proposal.
• LOI successfully concluded with IGC in July 2003
• BoT Approved 7/03 - met all BoT conditions, incl. Financials
• After slow start and w/ significant effort by ISOC staff, two Board
members and VP Public Policy, INET/IGC’04 now back on track
– Call for Papers to be issued week 2 Nov’03, automated web-based process
– Relationship solid between IGC and ISOC
• Program Committee Chair and Organizing Committee Chair appointed.
– PC Chair: Artur Serra (key individual behind ISOC/IGC collaboration)
– OC Chair: Rosa Delgado
• More in tomorrow’s session
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Key Operating Goals
2003 President’s Operational Goals
1.
2.
3.
4.
5.
6.
7.
8.
Cash reserves >= 2 mos. Op. Expenses - on track
Revenues and Surplus >= Budget - challenge in Org. revs. but overall
surplus will be met
With VP’s, build effective Pub Pol Init. - on track
CEO executes effective review for PIR - on track
Effectively involve Trustees in fund-raising - needs more
involvement/depends on all of us
Plan/decision for INET 2004 by Sept. ‘03 - done & back on track
With VP’s, ISOC participation in min. of 2 regional conferences WALC, AfNog, (almost Tunis)
Individual Members and Chapters - on track
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Internet Society
Board of Trustees
2004
Financial PREview
8 November 2003
BoT Meeting/ Minneapolis, MN
2004 FINANCIAL PREVIEW
• Still too many unknowns to create budget:
– .ORG Contributions could be $1.4M - $1.9M but won’t
be confirmed by new PIR BoT until mid-December at
the earliest
– Individual Member Assumptions not yet built in
– New opportunities to work with IETF on Publications
and/or Knowledge extraction but model not yet known
– Need to complete infrastructure and resource
evaluations
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2004 Budget PREVIEW
Revenue:
Standards
Platinum
Organization Member
NDSS 2004
.org Program Rev enue
Contributions & Miscellaneous
$
250,000
800,000
Total Revenue
$ 1,505,000
Education
$
450,000
5,000
Expenses:
ISOC Salaries & related costs
RFC Editor-ISOC Funded
IETF, IAB, D&O Support
NDSS 2004 (excluding salaries)
Miscellaneous Direct Expenses
External Costs-PIR Programs
External Costs-Sida Programs
External Costs-Security Initiativ e
$
428,115
550,000
98,000
12,500
158,000
142,000
50,000
115,000
500,000
Public
Policy
$ 100,000
150,000
Total
550,000
15,000
492,000
1,000,000
115,000
1,500,000
20,000
815,000
$ 3,127,000
242,204
411,650
80,000
23,000
204,125
100,000
80,000
1,081,969
550,000
98,000
80,000
35,500
462,125
80,000
807,000
$
$
Total Direct Expenses
G&A/Governance
1,246,615
198,203
549,329
112,132
591,650
190,580
2,387,594
500,916
Total Expenses
1,444,818
661,461
782,230
2,888,510
Surplus (Loss)
8-9 Nov 2003
$
60,182
$
145,539
BoT Pres. Rpt Nov03.ppt
$
32,770
$
238,490
30