[governance] Re: IGF Financing

Dan Krimm dan at musicunbound.com
Wed Jun 13 13:55:00 EDT 2007

At 12:30 PM +0200 6/13/07, Norbert Bollow wrote:

>If you want an international multistakeholder process to discuss the
>future of the internet in a way that is not "beholden" to the U.N.
>and to the nation-state system, let's work together on creating such
>a process.  I'm game.

If I may, it seems there have been several suggestions already.  Perhaps
they could be collected together, and I have a few additional ideas.
Obviously just a starting point, and I'm still an outsider, but perhaps it
might set you folks on a productive path.

 - Concentrate on general operational (unrestricted) funds, with only a
small proportion of project-earmark funding (Milton).

 - Quotas per stakeholder group:  Milton started out with "e.g. 30% from
govts, 30% from PS, 20% from CS, and 20% from the international
organizations within its purview (ICANN, UNESCO, ITU, WIPO, etc.)"

 - I might offer a tweak on that: specifically, caps (maximums) instead of
"quotas" (which I think can sometimes be interpreted as minimums or
"exacts"), and have caps add up to somewhat more than 100%, so that
reductions in funding below cap from one area need not immediately reduce
funding from other sectors.

 - Parminder brings in micro-funding (ala MoveOn.org in the US, as well as
many NPOs), and that could be added to the mix.  Note that the success of
such appeals tends to rely on a real-time context of issues and actions
that capture the attention and passion of "common folk" and is often
attached to the announcement of a clearly-budgeted project, but the
donations are still available for general purposes on an unrestricted
basis.  Any overages can be applied to general funds.

 - How about putting in place a strategy to build an endowment?  Perhaps
5-10% of revenues over the first 5-10 years should be earmarked for the
endowment, with no tapping of those funds for any reason except imminent
threat of abject operational collapse.  Put it in the charter.  Perhaps any
project funding should require a small (say, 1-2%) contribution to general
funds and/or the endowment.  Mandate a diverse portfolio of investments,
and perhaps some portion for green/sustainable investments or index funds?
(I'm just throwing that green thing in there...)

 - That said, the endowment should not constitute a majority of resources,
because that removes accountability to *any* constituency.  The point of an
endowment is to cover short-term fluctuations in funding, so as to reduce
dependency on any specific funding source, just as diversifying the
portfolio is designed to do the same thing.  Once the endowment hits a
certain magnitude, it should be managed for steady state, and some of the
annual interest could contribute to a portion of annual budgets.  If an
endowment were supporting the overwhelming majority of the budget via
interest, that would place far too much power in the hands of the
administration (in the absence of national laws to constrain activity), so
we don't want to go overboard here.  If the endowment is hit by shortages
for several years in a row, the charter should mandate steps to rebuild it,
even if that means a reduction in general expenditures for a period of
several years.  The point is to keep year-to-year funding and expenditures
fairly stable, but long term levels can respond to long term trends.

In toto, this is intended to minimize dependency on any single funding
source (i.e., diversify the portfolio), without undermining fundamental
accountability to the broad range of stakeholders.  Thus, this is a real
balancing act.

So maybe the caps look more like: 30% govts, 30% PS, 20% CS, 20% intl, 30%
micro, 10% endowment.  (Maybe micro funding could have a rather higher cap,
even though it may not be likely to get there often in practice, because
there is infinitesimal dependency risk in the micro sector, which is why it
is attractive as a specific-dependency-reduction tactic.)

Note: It occurs to me that in the case of international orgs such as the UN
that do not aggregate funding into general funds, but rather earmark
project funding (thanks for that tidbit, Milton, I was not aware of that
detail), a strategy similar to micro-funding might be used, perhaps call it
"mini-funding", targeted at a broad range of nations for a large number of
smaller amounts.  (As Bill Drake says, "chump change from their sofas" ...
maybe in the 4-digit range?)

Put this all together, and it starts to look like something that may not be
out of the realm of possibility?  Talk amongst yourselves...


PS -- Anything along these lines obviously requires cooperation of the
various stakeholder sources, so target caps may not be achievable
immediately.  So then, targets should be devised in a phase-in mode to move
in this direction.  I honestly don't know what is reasonable to expect in
this space, so obviously I would want to stay within the bounds of
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