Background
The charter, as set by the ALAC,
c) Establishing a framework, including a possible recommendation for a separate ICANN originated foundation, for managing any auction income, beyond costs. for future rounds and ongoing assistance;
The Final Application guidebook contains the following:
1 The purpose of an auction is to resolve contention in a clear, objective manner. Proceeds from auctions will be reserved and earmarked until the uses of the proceeds are determined. It is planned that costs of the new gTLD program will offset by fees, so any funds coming from a last resort contention resolution mechanism such as auctions would result (after paying for the auction process) in additional funding. Therefore, consideration of a last resort contention mechanism should include the uses of funds. Funds must be earmarked separately and used in a manner that supports directly ICANN's Mission and Core Values and also maintains its not for profit status.
Possible uses include formation of a foundation with a clear mission and a transparent way to allocate funds to projects that are of interest to the greater Internet community, such as grants to support new gTLD applications or registry operators from communities in subsequent gTLD rounds, the creation of an ICANN-administered/community-based fund for specific projects for the benefit of the Internet community, the creation of a registry continuity fund for the protection of registrants (ensuring that funds would be in place to support the operation of a gTLD registry until a successor could be found), or establishment of a security fund to expand use of secure protocols, conduct research, and support standards development organizations in accordance with ICANN's security and stability mission.
Further detail on the potential uses of funds will be provided with updated Applicant Guidebook materials.
The two elements in these quotes are obtaining funds that can be used to offset the costs for JAS-qualified applicants and establishing a framework for managing and distributing these funds. In discussing these two objects there is a close link between them, and in many cases it is hard to imagine one of them happening without the first. For example, without funds, there is no purpose in a framework that has been institutionally instantiated, yet without a framework it is impossible to collect funds.
Framework
As stated in the footnote in the Applicant Guidebook, investigations should be held on creating a foundation or fund to handle any auction funds that are not used in the manner described in this comment. Additionally, funds could be obtained from other fundraising opportunities such as the auction of single character second level domain names, or from donations from, e.g. the incumbent gTLD and ccTLD registrars and registries. In the case that such a fund or foundation can be setup in time to provide further funding opportunities for applicants in the later stages of the process, this should be documented at a later stage.
The JAS WG recommendation that the Board set up a planning committee, at the same time as the approval for the new gTLD program is approved, to investigate the various possibilities for funds and/or foundation and after consultation with the community to make recommendations on the formations of such a fund. the specific work items that should be included in the Board Foundation Recommendion WG include, but are not limited to:
- Investigate the legal structures that are available to a California 501C corporation for creating a fund of Foundations.
- Investigate the requirements for creation of a fund or foundation in California.
- Draft a document defining the core responsibilities and activities of the fund or foundations.
- Define methods of work for the found or foundation, including fundraising, and fund distributions
- Suggest membership for the first board of the foundation, including dealing with issue such as as the relationship between ICANN's corporate structure and the new fund or foundation.
- Start obtaining pledges of funding with which to seed the resulting fund or foundation.
Additionally, as recommended in MR1, JAS recommends that ICANN arrange a contract with a professional fundraiser familiar with this sort of international effort to support JAS-qualified applicants, to work with the Board Foundation Working Group.
Funds
Funds for the foundation to mange and distribute can come from a variety of sources:
- Auctions proceeds beyond the cost of the running the auction
- Allocation of funds from ccTLDs
- Allocations of funds from incumbent gTLD registries and registrars
- External funding sources
- Budget allocation from ICANN
- Other source yet to be determined
Donors:
Various registrars and registries from both the gNSO and the ccNSO have made statements that if there were a way to donate that could be gamed, they would be interested in helping. A well-formed fund or foundation could provide an opportunity for such generosity.
Various campaigns are possible. There is, for example, quite a lots of money in the hands of the some of the existing gTLD registries and registrars. We have, for example, seen an escalation in the amount each sponsor gives to the three ICANN meeting this year. There is a lot of funding available, it is just that no one has been doing the requisite fundrasing.
Auctions:
Since the GNSO first allowed for auctions as a possible method of resolving gTLD name contention, there has been the intent that these funds be applied to worthy causes including the support for what has now being called JAS-qualified applicants. Thought the quantity of the funds that may result from is unknown and they are certainly not available for the payment of fees in the 2011-2012 rounds, the funding will be available to fill the reserve and risk funds, if those funds are defered to cover the costs for the application fee reductions, as recommended in MR1 and MR2 for the fees of JAS-qualified applicants.
Availability of funds
It is improbable that a foundation could be created in time to assist applications directly with funding, though this might have been achieved if work on the proposal had started shortly after the JAS made the recommendations, though of course not with auction funds. At this point, however, a fund could be in place in time to help JAS-qualified applicants with deploying the new registry, and the expenses of the first years. The fund could also be available in time to replenish and reserve funds, or risk and contingency funding that was originally applied to help cover the application expenses for JAS-qualified applicants.
