home Domainnews Raid the Piggy Bank: ICANN to allocate US$36 million of auction windfall to its Reserve Fund

Raid the Piggy Bank: ICANN to allocate US$36 million of auction windfall to its Reserve Fund

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The organizational growth at ICANN and the IANA transition has dug up a huge hole in ICANN’s pockets causing a budget shortfall, and ICANN has made approvals to make it up by cutting costs and raiding the new TLD auction piggy bank.

ICANN is planning to make up this deficit over eight years by running a fiscal surplus of $32 million total. The other $36 million will be taken from the new top level domain auction proceeds.

While the community is still discussing how to manage the up the $240 million in auction proceeds, without ever handing some of of it back to ICANN,the organization believes its reserve fund should equal one year of operating costs. It’s $68 million below that point.

Reserve Fund Replenishment Strategy

Ron da Silva, Chair of the Board Finance Committee, introduced the agenda item. He stated that one of the key responsibilities of the Board is fiduciary oversight and the ICANN‘S operating reserves falls directly into this remit. He reported that in recent years, ICANN org made a significant withdrawal from the reserve fund to finance the IANA stewardship transition. To replenish the reserves, he highlighted the consultative effort undertaken by the ICANN Board, organization and community to assess the appropriate level of reserves and how to address any shortfall in reserves. As a result of this collaborative effort, it was determined that an appropriate level of reserve funding would be set at one year of operating expenses. With a reserve fund balance of about $70 million, a shortfall of $68 million was identified.

Resolved (2018.10.25.22), the Board directs the President and CEO, or his designee(s), to take all actions necessary to increase the Reserve Fund through annual excesses from the operating fund of ICANN organization by a total amount of US$32 million over a period of seven to eight years, starting with FY19.

Resolved (2018.10.25.23), the Board directs the President and CEO, or his designee(s), to take all actions necessary to allocate US$36 million of auction proceeds to the Reserve Fund, as soon as technically feasible.

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James Barnley

I’m the editor of the DomainingAfrica. I write about internet and social media, focusing mainly on Domains. As a subscriber to my newsletter, you’ll get a lot of information on Domain Issues, ICANN, new gtld’s, Mobile technology and social media.