Re: [soac-newgtldapsup-wg] a Foundation

[Alain Berranger <alain.berranger@xxxxxxxxx>]

Dear Richard, dear All:

If you are thinking of a full-fledged foundation, it will have to be created
under a national legislation somewhere. Assuming an ICANN Foundation would
be created in the US, it would have to come under 501 c 3 IRS rules - see
http://www.irs.gov/charities/charitable/article/0,,id=96099,00.html.

Such a foundation must make grants that are considered charitable by the
IRS. The minimum granting is 5% of capital per year, year in, year out and
for ever as long as the capital fund investment returns more than 5% to
cover grants and operating and fixed costs. For instance the Ford Foundation
and most foundations use that approaché Another formula for capital draw
down, much less frequent in use, is 10% of capital per year for a limited
life of 10 years. Ted Turner funded UN Foundation and the Soros Foundation
started their existence by using that approach (I'm not updated on what
these two are currently doing).

The key question is: can a gTLD fee reduction be considered a charitable
grant? Only the foundation lawyers can answer that question for sure. Since
gTLD rounds are not annual, I think there is a problem with the Foundation
formula, if it limits itself to gTLD fee reduction subsidies. The ICANN
foundation would have to be broader in scope and get into the philanthropic
"business", including but not limited to gTLD fee reduction grants.

Hope this helps... cheers, Alain

A foundation cannot be ran by a panel. It has a Board of Directors of its
own, but it can have cross-postings
On Thu, Apr 28, 2011 at 2:04 PM, Richard Tindal <richardtindal@xxxxxx>wrote:

> Hi All,
>
> I haven't seen a response to my question below.  Eric commented (thanks)
> but not representing WG thinking.
>
> Leaving aside some of the details (which can be worked out later),  does
> the consensus position support the sort of framework below?
>
> Thx
>
> RT
>
> On Apr 26, 2011, at 5:18 PM, Richard Tindal wrote:
>
> Thanks.    I apologize for not being on top of current WG thinking -- but
> would the following, broad approach be something the WG strongly supports?
>
>
>    - ICANN creates a Foundation for new gTLD applicant support and funds
>    $$$ for this Foundation from its reserve
>    - Others could contribute cash or services to the Foundation
>    - A panel of qualified persons would be selected to manage the
>    Foundation
>    - The Foundation would be used to make grants to worthy new
>    gTLD applications - i.e. the grants would support the best proposals based
>    on a competitive grant process
>    - The number of grants would be limited by the funds in the
>    Foundation.
>    - Criteria for awarding grants would be based on the recommendations of
>    this WG - including Panel assessments of the community benefit of the
>    application
>    - Individual grants might be up to $200,000 each
>    - Any excess funds from auction proceeds from the new gTLD process
>    would be used to repay the reserve fund first, and then be directed towards
>    the Foundation
>
>
> Richard
>
>
> On Apr 26, 2011, at 1:52 PM, Alan Greenberg wrote:
>
> Given how ICANN normally addresses such issues, a suitably qualified
> external panel would be the only way to go (in my mind).  That will separate
> the Board and staff from making the decisions. Sadly, it will not separate
> the need to set the criteria on which the decisions are made, nor from
> criticism by those who do not like the decisions, but perhaps that it just
> life.
>
> Alan
>
> At 26/04/2011 04:18 PM, Richard Tindal wrote:
>
> I agree.  Difficult and subjective.
>
>
> Question ---  Is the WG recommending that a suitably qualified panel be
> established for such grant decisions?  This would somewhat separate the
> ICANN Staff/Board from the difficulty
>
> of deciding which applicants should receive grant funds.
>
>
>
> On Apr 26, 2011, at 12:59 PM, Alan Greenberg wrote:
>
>
> >
>
> > Mike, you are not alone in believing that the use to which the TLD will
> be put is important. Perhaps I am less worried about offending someone, but
> to be blunt, no matter how good their credentials (or how bad their
> financial situation), anyone is capable of a dumb idea, and I can see no
> reason that ICANN or anyone one else should support them in such a case.
> There is growing agreement with this in the WG.
>
> >
>
> > In international development cooperation, it is now in vogue to simply
> give money to a country (perhaps loosely targeted at a sector) and trust
> them to put it to good use. But for more traditional support, and still for
> pretty much all non-bilateral support, the projected use of the funds is at
> least as critical as who is receiving the support.
>
> >
>
> > A problem is, as you imply, that separating "good" applications from
> those which are not worthy of support is both difficult and subjective -
> both things that ICANN tends to shy away from in evaluations.
>
> >
>
> > Alan
>
> >
>
> > At 26/04/2011 12:45 PM, Mike Silber wrote:
>
> >
>
> >> I previously raised a suggestion (quickly shot down by Avri) that the
>
> >> content or purpose of the string should be considered. I thought I would
>
> >> raise it again and see if there is any traction.
>
> >>
>
> >> I have been trying to think of a hypothetical example so as not to
>
> >> offend anyone but I have struggled.
>
> >
>
>
>
>
>


-- 
Alain Berranger, B.Eng, MBA
Executive-in-residence, Schulich School of Business, www.schulich.yorku.ca
Vice-Chair, GKP Foundation, www.globalknowledgepartnership.org
Vice Chair, Canadian Foundation for the Americas - www.focal.ca
O:+1 514 484 7824; M:+1 514 704 7824
Skype: alain.berranger