Appendix: Scenario C
This Appendix reproduces the contents of an Internet-Draft defining
Scenario C, as it was posted on 20 September 2004. A table of
contents has been removed from this copy and the text has been
reformatted to fit within IETF publication guidelines. Each line is
prefixed with "C>>".
C>> B. Wijnen
C>> H. Alvestrand
C>> Cisco Systems
C>> P. Resnick
C>> QUALCOMM Incorporated
C>> September 20, 2004
C>> AdminRest Scenario C: An IETF Administrative Support Foundation as
C>> an Independent Nonprofit Corporation
C>> This document defines a proposal for an IETF Administrative
C>> Support Foundation (IASF) as an independent not-for-profit
C>> corporation as a means for providing focused support for IETF
C>> community activities. It proposes the creation of an IASF Board
C>> of Trustees (BoT) that is mainly selected by and accountable to
C>> the IETF community and would provide oversight for the IETF
C>> Administrative Support Foundation. The IASF will also establish
C>> and maintain a strong relationship with the Internet Society
C>> (ISOC) and the current relationships between IETF and ISOC will
C>> basically be left unchanged.
C>> In order to allow the community to properly evaluate this
C>> scenario, some draft Articles of Incorporation and draft Bylaws
C>> for the IASF are included. Some draft BCP wording for the IASF,
C>> IETF and ISOC relationships is also included.
C>> 1. Overview of Scenario C
C>> This document follows from two previous documents. [RFC3716]
C>> defined the overall parameters and criteria for an administrative
C>> restructuring. [I-D.malamud-consultant-report] provided an
C>> analysis of the implications of several of the suggested
C>> strategies. This document picks one strategy and develops it
C>> In order to provide the most focused and effective administrative
C>> support to the IETF community, this updated scenario C proposes a
C>> new and well-defined legal entity to support the IETF
C>> administrative functions. The name of that new entity is "The
C>> IETF Administrative Support Foundation" (IASF).
C>> First, it is important to understand that the IETF has been
C>> organized as an Activity of the Internet Society (ISOC) and as
C>> such represents the "Standards and Protocols" pillar of ISOC.
C>> Under this proposal, the IETF would continue to be an integral
C>> part of the Standards and Protocols pillar of ISOC. ISOC
C>> currently provides these important functions to the IETF:
C>> 1. Standards Process Functions. ISOC plays a fundamental role in
C>> the IETF Standards Process, including appointment of the
C>> Nominating Committee (Nomcom) chair, confirmation of IAB
C>> members, confirmation of documents that describe the
C>> standards processes, and acting as the last resort in the
C>> appeals process. These Standards Process Functions are
C>> defined in [RFC2026], [RFC2028], [RFC2031], and [RFC3677].
C>> 2. IETF Fund Raising Functions. ISOC provides the fund raising
C>> function as one source for financial support the IETF.
C>> 3. Administration Functions. ISOC provides administrative and
C>> financial functions, managing the contract with the RFC
C>> Editor, providing insurance for selected IETF participants,
C>> and administering a discretionary fund for use by the IAB and
C>> the IETF Chairs.
C>> The administrative restructuring of the IETF proposed in this
C>> document keeps that basic relationship between IETF and ISOC.
C>> Specifically, the recommendation does not propose any changes to
C>> the "Standards Process Functions" or to the "IETF Fund Raising
C>> Under the "Administration Functions", ISOC both funds and
C>> administers some (as stated above) parts of the IETF
C>> Administrative Support Functions. Some of the funds (like for
C>> the RFC-Editor) go directly to the contractor who executes the
C>> administrative function. The streamlining of the administrative
C>> support for the IETF ultimately intends to put the complete
C>> Administrative Support Functions under the newly recommended
C>> IASF. This means that we recommend that ultimately, ISOC funds
C>> for the IETF will be transferred to the IASF, which will then
C>> administer all the contracts and payments according to an
C>> approved yearly budget. The details of that process will be
C>> documented in a Memorandum of Understanding (MoU) between ISOC,
C>> IETF and IASF.
C>> This updated AdminRest Scenario C aims to provide the following:
C>> o A continued close relationship between IETF and ISOC.
C>> o A well defined legal entity within which the IETF can define
C>> the administrative activity in terms of IETF community needs.
C>> o A Board of Trustees with operational oversight that is
C>> accountable to the IETF community.
C>> o Continued separation between the IETF standards activity and
C>> any fund-raising for standards work.
C>> o A close and well defined relationship between IASF and ISOC,
C>> documented in a BCP (or MoU).
C>> o Appropriate ISOC oversight of its standards activities funds
C>> via a yearly budget approval and open reporting of funds
C>> In scenario C, it is intended that the IETF Administrative
C>> Support Foundation will be a tax-exempt not-for-profit
C>> corporation as defined by Articles of Incorporation and a set of
C>> Bylaws. These will describe the scope and purpose of the IASF
C>> and they also define the structure and responsibility of the
C>> Board of Trustees (BoT), a body that is mainly selected by the
C>> IETF and which is responsible for overseeing the IASF. A draft
C>> of the Articles of Incorporation and Bylaws is included in the
C>> next sections of this document.
C>> Scenario C allows us (IETF) to establish IETF control over our
C>> administrative support functions in terms of determining that
C>> they meet the community's needs, and adjusting them from time to
C>> time using IETF processes. This is to address the pressing
C>> administrative issues outlined in [RFC3716].
C>> Scenario C also encourages us (the IETF) to regularly evaluate
C>> that we do want to continue the relationships with ISOC and the
C>> contracts with our services providers (contractors). It is based
C>> on the premise that we prefer to actively maintain relationships
C>> with other organizations and service providers instead of being
C>> bound to such relationships based on poorly defined and poorly
C>> documented historical facts. A draft BCP for the relationship
C>> between ISOC, IETF and IASF is included as a separate section in
C>> this document.
C>> Scenario C does however bring the burden of creating a new legal
C>> entity (IASF) and such an undertaking is also not without risks.
C>> It will need careful planning and execution. Migration from the
C>> current structure to this new structure is probably also somewhat
C>> more costly and time and labour consuming. The sections below
C>> try to show how that would be achieved and outlines what further
C>> steps are needed to provide more detail if this scenario is
C>> 2. Work Plan for the IETF Administrative Support Foundation
C>> This section gives the work plan for the IETF Administrative
C>> Support Foundation (IASF) for the remainder of 2004 and the year
C>> 2.1 Workplan goals
C>> The work plan below is intended to satisfy three goals:
C>> o Satisfy the IETF's need for support functions in 2005
C>> o Operate with a positive account balance throughout 2005
C>> o Start building up a fund inside the IASF to serve as a buffer
C>> against budgetary emergencies in later years (such as meetings
C>> with a severe cost overrun, or force-majeure cancellations).
C>> The fund target is 6 months of operating revenue, and the target
C>> for building up the fund is 3 years. The budgeted set-aside for
C>> the fund should thus be approximately 17% of operating revenue.
C>> 2.2 Incorporation process
C>> There are 3 things that need to be in place before that
C>> corporation can be considered viable at all:
C>> o IETF consensus on the plan
C>> o ISOC agreement on a reasonable support contract
C>> o Assurance that the corporation will have tax-exempt status
C>> Once this document has been discussed in the IETF, and the IESG
C>> and IAB gauges that rough consensus seems reached, the IETF
C>> leadership will take the following actions:
C>> o Publish a Last Call on this document (to determine plan
C>> o Choose a negotiating team to negotiate the ISOC contract.
C>> o Choose an executive search team to find the IASF
C>> Administrative Director (IAD).
C>> o Consult with legal counsel to determine how best to achieve
C>> tax-exempt status; this will affect the bylaws and articles of
C>> When the Last Call is over, the IESG will consider whether there
C>> is still consensus, and if there is, approve this document for
C>> publication. Once that happens, it will take the following
C>> o As soon as negotiations conclude, publish a Last Call on the
C>> ISOC contract.
C>> o As soon as drafting of legal documents is completed, publish a
C>> Last Call on the Bylaws and Articles of Incorporation, and ask
C>> the Nomcom to start the process of selecting Nomcom-selected
C>> board representatives.
C>> These Last Calls are "speak now" Last Calls - if someone wishes
C>> to challenge the IETF consensus to go ahead with these actions,
C>> knowing what the formal documents will look like, this is their
C>> last chance.
C>> When these Last Calls are over, the IETF chair, the IAB chair and
C>> the ISOC President will jointly file the articles of
C>> incorporation, and the IESG, IAB and ISOC will fill their board
C>> Note: This document does not say when a Request for Information
C>> (RFI) for IETF support services such as meeting planning is sent
C>> out. Advice is sought on the earliest point where this can be
C>> 2.3 Contract establishment
C>> The most important activity for late 2004/early 2005 is to
C>> finalize contracts for the support of the IETF. This includes:
C>> o Funding
C>> o Technical infrastructure
C>> o Meeting management
C>> o Clerk's office
C>> o RFC Editor
C>> o IANA
C>> There appears to be consensus in the IETF community that these
C>> functions, whether they are offered for free, remunerated or
C>> arranged for other consideration, should be under contract.
C>> The contract for funding is expected to be with ISOC, and should
C>> be finalized before IASF is established.
C>> The contract for technical infrastructure is expected to be an
C>> RFP, published in November of 2004, with responses being
C>> evaluated in December 2004, and services rendered from a mutually
C>> agreed date early in 2005.
C>> The contract for meeting management will be influenced by the
C>> need to have stable agreements for the 2005 meetings at an early
C>> date. This indicates that IASF will honor a pre-IASF agreement
C>> to have these meeting contracts signed by Foretec (if that can be
C>> It is not clear how the contract for the clerk's office is to be
C>> managed at the time of this writing.
C>> The contract for the RFC Editor is expected to be with ISI, and
C>> is expected to be a continuation of the current contract with
C>> ISOC, which runs until the end of 2005.
C>> The contract with IANA will replace or augment the current MoU
C>> between the IETF and ICANN. In its simplest form, it would
C>> simply be a reconfirmation of the duties of ICANN under the MoU.
C>> 2.4 Performance evaluation
C>> The second task of the IASF is to make sure the IETF gets the
C>> support it needs. The IASF will work together with the IETF
C>> community to make an effort to identify whether or not the IETF's
C>> needs are being met, and to coordinate improvements with the
C>> contractors. This is an ongoing activity.
C>> 2.5 Budgeting for 2006
C>> In June 2005, the IASF will start the yearly budgeting process
C>> with ISOC, as specified in the ISOC contract, leading to a work
C>> plan and budget for 2006.
C>> 2.6 Reporting
C>> The IASF will present monthly updates on its economic status.
C>> These will be delivered to ISOC as part of the ISOC contract, and
C>> also be made publicly available so that the IETF community can
C>> inspect them.
C>> 3. Details of the IETF Administrative Support Foundation
C>> This section contains details about the proposal to change how
C>> the day-to-day IETF administrative support functions are
C>> provided. This recommendation is based on the initial
C>> description of "Scenario C" in the "Administrative Support
C>> Analysis" [I-D.malamud-consultant-report] provided by Carl
C>> Malamud. It is further based on discussion in the IESG and IAB
C>> and on feedback on Carl's document as received on the IETF
C>> mailing list. Further justifications, reasoning and motivations
C>> are given in Appendix A. Risk Analysis is done in Appendix C.
C>> This document recommends to create a well defined and legal
C>> entity called "The IETF Administrative Support Foundation"
C>> (IASF). The name intends to clearly express that this new legal
C>> entity has only one single function, namely to provide the
C>> administrative support of the IETF Standardization and Protocol
C>> Development activities. This entity will ultimately manage and
C>> administer all the administrative functions that are needed to
C>> support the IETF - the Standardization and Protocol Development
C>> activity of ISOC.
C>> 3.1 Organizational Form and Legal Domicile
C>> The consultant report [I-D.malamud-consultant-report] contains a
C>> writeup on various choices in terms of how and where to
C>> incorporate. This recommendation has made the choice to
C>> incorporate in the US in the state of Virginia. Some detail can
C>> be found in Appendix B.
C>> In this scenario, administrative support functions for the IETF
C>> are legally housed in a focused, incorporated institution
C>> (although the Administrative Director might be physically housed
C>> within the Internet Society).
C>> This scenario defines a number of concrete linkages with the
C>> Internet Society, which supplement the current close
C>> interconnection of the IETF community with ISOC. The
C>> relationship is to be documented in a MoU (initial text is in
C>> Section 4).
C>> 3.2 Draft Core Principles
C>> 3.2.1 Principles of Establishment and Governance
C>> The following principles are to be respected for the
C>> establishment and governance of the IETF Administrative Support
C>> Foundation (IASF) and are the basis for the Draft Articles of
C>> Incorporation as in Section 6.1 and the Draft Bylaws as in
C>> Section 6.2:
C>> 1. The IASF shall be governed by a Board of Trustees (BoT), who
C>> shall be responsible for the fiscal, legal, and
C>> administrative infrastructure that supports the activities of
C>> the IETF.
C>> 2. The governance of the IETF, the standards process, and all
C>> other aspects of how we make our standards are defined in the
C>> procedural Best Current Practice (BCP) RFC series, which will
C>> be explicitly referenced in the organization documents of the
C>> 3. The IASF shall be transparent and responsible to the IETF.
C>> 4. The BoT shall appoint a Secretary and a Treasurer, who need
C>> not be members of the BoT. The IETF Administrative Director
C>> (IAD) of the IASF shall provide staff support to the BoT.
C>> 5. The BoT shall be composed to strike a balance between
C>> "outside" and "inside" directors. The IESG and IAB will each
C>> select a representative to serve as a voting member of the
C>> BoT. Mechanisms such as the Nominating Committee (Nomcom) and
C>> the appointment of certain seats by the ISOC fulfill the
C>> outside director obligations.
C>> 6. IAB, IESG and ISOC will have liaisons to the BoT in order to
C>> have a good basis for interaction.
C>> The BoT will have strong governance over a limited scope of
C>> activities (e.g., the fiscal, legal, and administrative
C>> infrastructure that are the charter of the IASF) but will have no
C>> authority over the IETF standards process. In this board
C>> composition, the ISOC and Nomcom appointments ensure that outside
C>> directors with no perceived conflicts of interest are on the
C>> All nominating bodies should make strong fiscal, legal, and
C>> administrative acumen essential selection criteria for this
C>> IAB and IESG representatives will serve for one year. For other
C>> appointments, a term proposed for the nominated positions is
C>> three years with staggered appointments. However, the nominating
C>> body might have the power to change their appointee during their
C>> All members of the BoT selected by the IETF are subject to the
C>> same recall procedures in effect for the IETF leadership such as
C>> members of the IAB and IESG.
C>> 3.2.2 Principles of Operation of the IETF Administrative Support
C>> The following are general principles for the operation of the
C>> 1. The IASF shall employ an IETF Administrative Director (IAD)
C>> of the IASF, who shall be hired by the BoT with the advice
C>> and consent of the IESG and IAB.
C>> 2. All support services shall be contracted in an open and
C>> transparent manner.
C>> 3. The IAD shall submit a proposed annual budget to the BoT at
C>> least 90 days before the beginning of the fiscal year. Such
C>> budget shall be developed with the advice and consent of the
C>> IAB and IESG.
C>> 4. The IAD shall serve on the BoT as a non-voting, ex-officio
C>> 5. The BoT shall select a professional audit firm and shall
C>> commission an audit immediately upon the close of each fiscal
C>> 6. The IASF will conduct financial reporting in a fully
C>> transparent fashion. Audits shall be conducted promptly and
C>> published. Tax returns shall be published. Detailed
C>> financial statements will be published on a regular basis,
C>> including timely reports on the financial results of IETF
C>> 4. Draft MoU between ISOC, IETF and IETF Administrative Support
C>> 4.1 Form and Scope of the Agreement
C>> This section presents some principles to be incorporated in a
C>> draft MoU/Contract between the Internet Society (ISOC) and the
C>> IETF Administrative Support Foundation (IASF), detailing the work
C>> each is expected to perform, the responsibilities each has, and
C>> the means by which these functions are accomplished. This
C>> MoU/Contract shall be published as an RFC.
C>> The MoU/Contract will specify the responsibilities of the
C>> Internet Society, including:
C>> o Reaffirmation of the Standards Process Function that ISOC
C>> performs for the IETF.
C>> o Continuation of the Fund Raising Function that ISOC conducts,
C>> in which a single, unified campaign is used to solicit
C>> corporate, individual, and other organizational donations for
C>> funding of the 3 Pillars.
C>> o Disbursement of funds to the IASF according to the agreed-upon
C>> budgets and processes as specified in this agreement.
C>> o Verification that IASF spends these funds to support the work
C>> of the IETF, within the scope described in the IASF bylaws.
C>> Responsibilities of IASF:
C>> o Determine, in cooperation with the IETF, the support functions
C>> that are needed for the IETF, and can be achieved within
C>> available funds.
C>> o Enter into contracts for these support functions.
C>> o Supervise these contracts and ensure that they are being
C>> performed in the best interest of the IETF, within a
C>> reasonable budget and with agreed-upon performance.
C>> 4.2 Cooperation mechanism
C>> IASF and ISOC agree that they will perform a budgeting procedure
C>> each year, comprising the following steps:
C>> o IASF puts together a budget proposal to ISOC, and presents it
C>> in June. This will specify the functions that need to be
C>> performed, the cost of each, the expected revenue from IETF
C>> meeting participation, and how much is being requested for
C>> ISOC to contribute.
C>> o By the end of August, ISOC will give a budget number to IASF
C>> that says how much ISOC is willing to contribute to support
C>> the functions described in the IASF budget.
C>> o Before November 1, ISOC and IASF will agree on a budget, an
C>> ISOC contribution, and a disbursement schedule.
C>> o If either party sees that there is reason to change the
C>> budget, they can start a negotiation to do so at any time. On
C>> mutual agreement to a change, payments are modified
C>> o ISOC may withhold funds if IASF fails to account for its
C>> expenditures, if it determines that IASF has departed
C>> significantly from its budgeted expenditures without agreement
C>> with ISOC to do so, or if ISOC determines that IASF is
C>> spending funds in violation of its bylaws.
C>> 4.3 Promises Not to Do Things
C>> This section lays out things that would constitute interference
C>> in each others' business, or things that are Just Plain Wrong.
C>> In legal terms, these are called "covenants."
C>> ISOC will not place requirements on how IASF does business,
C>> except on reporting. It will, for instance, not attempt to
C>> influence IASF choice of contractors or choice of meeting
C>> sponsors. This restriction is meant to enforce the separation
C>> between fund raising and the actual operation of the standards
C>> IASF will not ask companies for money. IASF may ask for sponsors
C>> for IETF events, per tradition, and may accept zero-cost provider
C>> contracts or in-kind donations, but ISOC is the organization
C>> charged with fundraising.
C>> Neither ISOC nor IASF will attempt to influence technical
C>> decisions of the IETF standards process.
C>> 4.4 Initial contribution
C>> The Internet Society has already allocated $700,000 in transition
C>> funds. As part of the formation process, this section sets out a
C>> way that a 2005 allocation of funds and an initial contribution
C>> for startup can be decided upon. NOTE: This section is a GUESS!
C>> Its purpose is to give some sense of where we're at.
C>> If this plan is pursued, one of the first activities is to put
C>> together a detailed 2005 budget, including an analysis of cash
C>> flow and balance sheets to make sure that the organization is
C>> properly funded and will be solvent throughout the year. This
C>> planning process should project out 3 years and show how the
C>> organization will be able to accumulate the appropriate cash
C>> reserve to make sure operations can continue in a stable manner.
C>> An initial estimate is for an on-going annual contribution of USD
C>> 900.000 to IASF in 2005. In addition, ISOC will contribute an
C>> additional USD 600.000 as an initial fund to start up IASF,
C>> payable after the Board of Trustees is seated and this contract
C>> is signed and approved by the IETF.
C>> ISOC commits to this ongoing level of contribution (USD 75.000
C>> per month) for the lifetime of this contract, unless modified by
C>> mutual agreement.
C>> 4.5 Termination, law and so on
C>> This agreement may be terminated by either party for any reason
C>> on 12 months' notice.
C>> The parties may reach mutual agreement on a shorter termination
C>> All conflicts under this agreement are to be adjudicated under
C>> the laws of the United States and the State of Virginia, however
C>> the parties may also agree to arbitration, mediation or any other
C>> conflict resolution mechanisms.
C>> 5. Notes and Explanations
C>> This is where we put down why things are the way they are.
C>> 5.1 Type of legal instrument
C>> This document is styled as a contract - an agreement between two
C>> parties, enforceable under law. An alternate formulation would
C>> be a Memorandum of Understanding - but we want it to be clear to
C>> everyone that the parties stand behind their responsibilities
C>> under this document. At the moment, the authors see no
C>> compelling arguments for not making it a contract. In either
C>> case, the document is published as an RFC.
C>> 5.2 Power Balance
C>> As written, it is designed to make it easy to do the right thing
C>> as long as the parties agree what that is, to make it clear that
C>> ISOC will continue to pay money as long as IASF does the Right
C>> Thing (and reports what it's doing), and that ISOC can stop the
C>> show quickly if it's clear that IASF is not doing the Right
C>> 5.3 Budget figures
C>> The main purpose of the numbers is to make it clear that there
C>> WILL be numbers in this contract, and that it WILL represent a
C>> solid commitment by ISOC. The numbers are "subject to change
C>> without notice" while this contract is negotiated.
C>> 6. Draft Incorporating Documents for the IETF Administrative
C>> Support Foundation
C>> 6.1 Draft Articles of Incorporation
C>> This section contains standard, pro-forma Articles of
C>> Incorporation. Note well that tax lawyers often make significant
C>> alterations to standard Articles as they consider a 501(c)(3)
C>> application. They are included here merely as a sample for
C>> illustrative purposes only.
C>> 'Commonwealth of Virginia -- State Corporation Commission'|
C>> 'Articles of Incorporation -- Virginia Nonstock Corporation'|
C>> Form SCC819, 07/ 03  ------
C>> The undersigned, pursuant to Chapter 10 of Title 13.1 of the Code
C>> of Virginia, [Virginia] state(s) as follows:
C>> 1. The name of the corporation is The IETF Administrative
C>> Support Foundation.
C>> 2. The corporation shall have no members.
C>> 3. The purpose of the corporation is to manage and administer
C>> all the administrative functions for the IETF - the
C>> Standardization and Protocol Development activity of the
C>> Internet Society.
C>> 4. The Trustees of the corporation shall be elected or appointed
C>> as specified in Article IV (Section 6.2.5) of the Bylaws.
C>> 5. Name and agent:
C>> A. The name of the corporation's initial registered agent
C>> is: XXX
C>> B. The initial registered agent is a domestic or foreign
C>> stock or nonstock corporation, limited liability company,
C>> or registered limited liability partnership authorized to
C>> transact business in Virginia.
C>> 6. The initial Trustees are: XXX
C>> 7. The incorporators are: XXX
C>> 6.2 Draft Bylaws of the IETF Administrative Support Foundation
C>> As with the Draft Articles, the Draft Bylaws included here are a
C>> pro-forma, standard version. Substantial alteration may be
C>> required as legal counsel reviews the specific nature of an
C>> 6.2.1 Article I: Organization
C>> The name of the Corporation shall be The IETF Administrative
C>> Support Foundation (which is hereinafter also referred to as the
C>> 6.2.2 Article II: Purpose
C>> *Section 1: Purpose.* The IASF shall be operated exclusively for
C>> nonprofit educational, charitable, and scientific purposes,
C>> including, without limitation, the purposes stated in the IASF's
C>> Articles of Incorporation.
C>> *Section 2: Restrictions.* No part of the net earnings of the
C>> IASF shall inure to the benefit of, or be distributable to,
C>> private persons, except that the IASF shall be authorized and
C>> empowered to pay reasonable compensation for services rendered,
C>> and to make payments and distributions in furtherance of the
C>> purposes set forth in Article II, Section 1 hereof. Any other
C>> provision of these Bylaws to the contrary notwithstanding, the
C>> IASF shall not carry on any activities not permitted to be
C>> carried on by a corporation exempt from Federal Income Tax under
C>> Section 501(a) and Section 501(c)(3) of the Code. These Bylaws
C>> shall not be altered or amended in derogation of the provisions
C>> of this Section.
C>> 6.2.3 Article III: Members
C>> The IASF shall have no members and no stockholders.
C>> 6.2.4 Article IV: Offices
C>> The office of the IASF shall be as determined from time to time
C>> by the Board of Trustees (BoT) within or outside of the State of
C>> 6.2.5 Article V: Board of Trustees
C>> *Section 1: Authority and Responsibilities.* The power,
C>> authority, property, and affairs of the IASF shall at all times
C>> be exclusively exercised, controlled, and conducted by or under
C>> the authority of the Board of Trustees (BoT) subject to any
C>> limitations set forth in the Articles of Incorporation and in
C>> accordance with the Virginia Nonstock Corporation Act as it now
C>> exists or hereafter may be amended.
C>> *Section 2: Board of Trustees Composition.* The Board of Trustees
C>> shall consist of seven (7) Trustees.
C>> One (1) Trustee will be selected by the IAB.
C>> One (1) Trustee will be selected by the IESG.
C>> Two (2) Trustees will be selected by the Internet Society.
C>> Three (3) Trustees will be selected by the IETF community.
C>> The IAB chair and IETF chair will functions as liaisons from the
C>> IAB and IESG respectively to the Board of Trustees. The chair
C>> and president of the Internet Society will function as liaisons
C>> from the ISOC to the Board of Trustees.
C>> *Section 3: Terms.* The term of office of IESG and IAB Selected
C>> Trustees shall be one (1) year or until their successors have
C>> been selected and assume office. The term of office of otherwise
C>> Selected Trustees shall be three (3) years or until their
C>> successors have been selected and assume office. Selected
C>> Trustees may be selected to serve multiple terms.
C>> *Section 4: Selection of the Board of Trustee*
C>> 1. *Selection of IESG and IAB Selected Trustees.* The IESG and
C>> IAB shall each select one representative Trustee, who is not
C>> at the same time an IESG or IAB member.
C>> 2. *Selection of otherwise Selected Trustees.* Three (3) IETF
C>> Selected Trustees shall be selected by the IETF nominations
C>> process (as defined in [RFC3777] or its successor) and
C>> confirmed by the IESG. Two ISOC Selected Trustees shall be
C>> selected by the Internet Society using means of their own
C>> 3. *Resignation.* A Selected Trustee may resign by delivering
C>> his resignation in writing to the IASF at its principal
C>> office or to the Secretary of the IASF. Such resignation
C>> shall be effective upon its receipt or upon such date (if
C>> any) as is stated in such resignation, unless otherwise
C>> determined by the Board.
C>> 4. *Removal.* A Selected Trustee selected by the IETF
C>> nominations process may be removed from office at any time
C>> using the procedures specified in [RFC3777] or its successor.
C>> A Selected Trustee selected by the Internet Society may be
C>> removed by the Internet Society using means of their own
C>> 5. *Vacancies.* Any vacancy in the Board of Trustees shall be
C>> filled using the procedures set forth above on the
C>> composition of the Board of Trustees. The Trustees shall
C>> have and may exercise all of their powers notwithstanding the
C>> existence of one or more vacancies in their number.
C>> *Section 5: Quorum.* A majority (i.e. fifty (50) percent plus
C>> one (1)) of the Trustees shall constitute a quorum for the
C>> transaction of business. Unless otherwise stated in these
C>> Bylaws, decisions of the Board of Trustees shall be made by the
C>> concurrence of a majority of members of the Board of Trustees
C>> present and voting. If at any meeting there is no quorum
C>> present, the Board must not transact business.
C>> *Section 6: Compensation and Reimbursement.* No member of the
C>> Board of Trustees may receive compensation for his or her
C>> services as a Trustee. A Trustee shall, at their request, be
C>> reimbursed for actual, necessary and reasonable travel and
C>> subsistence expenses incurred by them in performance of their
C>> *Section 7: Meetings.* The Board of Trustees shall meet at least
C>> twice annually.
C>> 1. *Written notice, waiver, action.* Wherever the text below
C>> speaks of "written" it is also permitted to use e-mail.
C>> 2. *Annual Meeting.* The Board of Trustees shall hold a public
C>> Annual Meeting at a time and place associated with the first
C>> IETF meeting each year. This Annual meeting shall be open to
C>> all IETF attendees except that the parts of the meeting
C>> dealing with personnel issues may be held in executive
C>> 3. *Meeting Types, Methods, and Notice.* Meetings of the Board
C>> may be held from time to time at such intervals and at such
C>> places as may be fixed by the Board. Meetings of the Board
C>> may be held only in person or via teleconference. Notice of
C>> all regular meetings of the Board shall be delivered to each
C>> Trustee by e-mail or by postal mail and announced on the
C>> IETF-Announce list at least ten (10) calendar days before the
C>> meeting. Special meetings of the Board may be called for any
C>> purpose at any time by the Chairman of the Board or by any
C>> three (3) Trustees. Notice of any special meeting shall state
C>> the purpose of the meeting. A Trustee may waive notice of a
C>> meeting of the Board of Trustees by submitting a signed,
C>> written waiver of notice, either before or after the meeting.
C>> A Trustee's attendance at or participation in a meeting
C>> waives any required notice of the meeting unless at the start
C>> of such meeting or promptly upon arrival the Trustee objects
C>> to holding the meeting or transacting business at the
C>> meeting, and does not thereafter vote for or assent to action
C>> taken at the meeting.
C>> 4. *Actions Taken By the Board of Trustees Without Meeting.* Any
C>> action required or permitted to be taken at any meeting of
C>> the Board of Trustees may be taken without a meeting if all
C>> Trustees consent in writing to such action. Such action
C>> shall be evidenced by written consents approving the lack of
C>> a meeting, signed by each Trustee.
C>> *Section 8: Board Committees.* The Trustees may elect or appoint
C>> one or more committees (including but not limited to an Executive
C>> Committee) and may delegate to any such committee or committees
C>> any or all of their powers, provided that any committee to which
C>> the powers of the Trustees are delegated shall consist solely of
C>> Trustees. Committees shall conduct their affairs in the same
C>> manner as is provided in these By Laws for the Trustees. The
C>> members of any committee shall remain in office at the pleasure
C>> of the Board of Trustees.
C>> *Section 9: Trustee Member Conflict of Interest.*
C>> 1. As set forth in Section 9(3) below, a Trustee of the IETF
C>> Administrative Support Foundation (IASF) who has a personal
C>> interest in a transaction, as defined below, may not
C>> participate in any discussion of that transaction by the
C>> Trustees of The IASF and may not vote to determine whether to
C>> authorize, approve, or ratify that transaction except as
C>> specifically described below. For purposes of these Bylaws, a
C>> "personal interest" is defined as any act that will provide,
C>> directly or indirectly, a financial benefit or a disparate
C>> benefit individually to the Trustee, or to a company he or
C>> she is employed by, has a significant financial interest in,
C>> or represents in any fashion. However, policies under
C>> consideration by the IASF are likely to have an impact on the
C>> business of every Trustee. It is expected that most policy
C>> decisions will have a direct or indirect impact on the
C>> Trustee's company, but such a non-individualized interest
C>> does not constitute a "personal interest" as used in these
C>> Bylaws. A "transaction" with The IASF for purposes of these
C>> Bylaws is a contract or consultancy in which the Trustee has
C>> a direct or indirect financial benefit, or a policy under
C>> consideration that will have a disparate and unusual impact
C>> on a business with which the Trustee is directly or
C>> indirectly associated.
C>> 2. The mere existence of a personal interest by a Trustee of The
C>> IASF in a transaction with the IASF shall not invalidate the
C>> IASF's ability to enter that transaction so long as the
C>> following conditions are met: (i) the material facts of the
C>> personal nature of the transaction with The IASF and the
C>> Trustee's interest in the transaction with the IASF are fully
C>> disclosed to the Board of Trustees of the IASF, either by the
C>> Trustee having a direct or indirect personal interest in the
C>> transaction with the IASF, or are brought to the attention of
C>> the Board by a third party; or (ii) the BoT of the IASF, by a
C>> vote of the Trustees (without a conflict of interest) of the
C>> IASF vote to authorize, approve, or ratify a transaction with
C>> the IASF; or (iii) the transaction with the IASF in which the
C>> direct or indirect personal interest of a IASF Trustee was
C>> disclosed to the BoT of The IASF and was determined by the
C>> BoT of the IASF entitled to vote on the matter is determined
C>> by the BoT voting to be in the IASF's interests,
C>> notwithstanding the personal interest of the non-voting
C>> 3. In determining whether a conflict of interest exists, the BoT
C>> of the IASF has the prerogative, upon review of all facts and
C>> circumstances, to make its own determination of whether a
C>> conflict of interest exists and how it is appropriate to
C>> proceed. A Trustee who perceives the possibility of a
C>> conflict of interest for him or herself, or for another Board
C>> member, may raise this issue at any point prior to a vote on
C>> any issue. Any Trustee who perceives a possible conflict of
C>> interest may present justification with respect to whether or
C>> not a conflict of interest exists, but the entire Board, with
C>> the exception of the Trustee having the potential conflict of
C>> interest, shall make the final determination to proceed in
C>> such a matter. If the BoT finds there is a conflict of
C>> interest, the Trustee with the conflict may be excluded by
C>> the Chair of the Board from that portion of any meeting where
C>> a substantive discussion or decision to engage or not in such
C>> a transaction is made, except that he or she may provide any
C>> information that will assist the Trustees in such a matter
C>> before leaving such a meeting.
C>> *Section 10. Approval of Meeting Minutes.* Minutes of the BoT of
C>> the IASF must be approved by a procedure adopted by the board and
C>> published on the IASF web site.
C>> 6.2.6 Article VI: Officers
C>> *Section 1: Number.* The officers of the IASF shall consist of a
C>> Chairman of the Board, a Treasurer and a Secretary, and such
C>> other inferior officers as the BoT may determine.
C>> *Section 2: Election Term of Office and Qualifications.* All
C>> officers shall be elected annually by the vote of a majority of
C>> the Board of Trustees present and voting (excluding abstentions)
C>> at the Annual Meeting. The Treasurer and Secretary need not be
C>> members of the Board. The Chair of the IETF nor the chair of the
C>> IAB shall be the Chairman of the Board of the IASF.
C>> *Section 3: Resignation.* An officer may resign by delivering his
C>> written resignation to the IASF at its principal office or to the
C>> Chair or Secretary. Such resignation shall be effective upon
C>> receipt or upon such date (if any) as is stated in such
C>> resignation, unless otherwise determined by the Board.
C>> *Section 4: Removal.* The BoT may remove any officer with or
C>> without cause by a vote of a majority of the entire number of
C>> Trustees then in office, at a meeting of the BoT called for that
C>> purpose. An officer may be removed for cause only if notice of
C>> such action shall have been given to all of the Trustees prior to
C>> the meeting at which such action is to be taken and if the
C>> officer so to be removed shall have been given reasonable notice
C>> and opportunity to be heard by the BoT.
C>> *Section 5: Vacancies.* In case any elected officer position of
C>> the IASF becomes vacant, the majority of the Trustees in office,
C>> although less than a quorum, may elect an officer to fill such
C>> vacancy at the next meeting of the BoT, and the officer so
C>> elected shall hold office and serve until the next Annual
C>> *Section 6: Chairman of the Board.* The Chairman of the Board
C>> shall, when present, preside at all meetings of the BoT of the
C>> IASF. If the Chairman is not available to preside over a
C>> meeting, the majority of the Trustees present shall select
C>> another Trustee to preside at that meeting only.
C>> *Section 7: Treasurer.* The Treasurer shall have the custody of
C>> all funds, property, and securities of the IASF, subject to such
C>> regulations as may be imposed by the Board of Trustees. He or
C>> she may be required to give bond for the faithful performance of
C>> his or her duties, in such sum and with such sureties as the BoT
C>> may require or as required by law, whichever is greater. When
C>> necessary or proper, he or she may endorse on behalf of the IASF
C>> for collection, checks, notes and other obligations, and shall
C>> deposit same to the credit of the IASF at such bank or banks or
C>> depository as the BoT may designate. He or she shall make or
C>> cause to be made such payments as may be necessary or proper to
C>> be made on behalf of the IASF. He or she shall enter or cause to
C>> be entered regularly on the books of the IASF to be kept by him
C>> or her for that purpose, full and accurate account of all monies
C>> and obligations received and paid or incurred by him or her for
C>> or on account of the IASF, and shall exhibit such books at all
C>> reasonable times to any Trustee on application at the offices of
C>> the IASF incident to the Office of Treasurer, subject to the
C>> control of the BoT. Certain duties of the Treasurer as may be
C>> specified by the BoT may be delegated by the Treasurer.
C>> *Section 8: Secretary.* The Secretary shall have charge of such
C>> books, records, documents, and papers as the BoT may determine,
C>> and shall have custody of the corporate seal. The Secretary
C>> shall keep, or cause to be kept the minutes of all meetings of
C>> the BoT. The Secretary may sign, with the Chairman, in the name
C>> and on behalf of the IASF, any contracts or agreements, and he or
C>> she may affix the corporate seal of the IASF. He or she, in
C>> general, performs all the duties incident to the Office of
C>> Secretary, subject to the supervision and control of the Board of
C>> Trustees, and shall do and perform such other duties as may be
C>> assigned to him or her by the BoT or the Chairman of the BoT.
C>> Certain duties of the Secretary as may be specified by the BoT
C>> may be delegated by the Secretary.
C>> *Section 9: Other Powers and Duties.* Each officer shall have in
C>> addition to the duties and powers specifically set forth in these
C>> By Laws, such duties and powers as are customarily incident to
C>> his office, and such duties and powers as the Trustees may from
C>> time to time designate.
C>> 6.2.7 Article VII: Amendments
C>> *Section 1: By Laws.* These By Laws may be amended by an
C>> affirmative vote of a majority of the Trustees then in office
C>> (excluding abstentions) at a regular meeting of the board or a
C>> meeting of the board called for that purpose as long as the
C>> proposed changes are made available to all trustees and posted to
C>> the IETF Announce list at least 30 days before any such meeting.
C>> *Section 2: Articles of Incorporation.* The Articles of
C>> Incorporation of the IASF may be amended by an affirmative vote
C>> of two-thirds of the BoT then in office at a regular meeting of
C>> the board or a meeting of the board called for that purpose as
C>> long as the proposed changes are made available to all trustees
C>> and posted to the IETF Announce list at least 30 days before any
C>> such meeting.
C>> 6.2.8 Article VIII: Dissolution
C>> Upon the dissolution of the IASF, the IASF, after paying or
C>> making provisions for the payment of all of the liabilities of
C>> the IASF, dispose of all of the assets of the IASF exclusively
C>> for the exempt purposes of the IASF in such manner or to such
C>> organization or organizations operated exclusively for social
C>> welfare or charitable purposes. Any such assets not so disposed
C>> of shall be disposed of by a court of competent jurisdiction of
C>> the county in which the principal office of the organization is
C>> then located, exclusively for such purposes. In the event of a
C>> sale or dissolution of the corporation, the surplus funds of the
C>> corporation shall not inure to the benefit of, or be
C>> distributable to, its Trustees, officers, or other private
C>> 6.2.9 Article IX: Miscellaneous Provisions
C>> *Section 1: Fiscal Year.* The fiscal year of the IASF shall be
C>> from January 1 to December 31 of each year.
C>> *Section 2: Execution of Instruments.* All checks, deeds, leases,
C>> transfers, contracts, bonds, notes and other obligations
C>> authorized to be executed by an officer of the IASF in its behalf
C>> shall be signed by the Chairman of the Board or the Treasurer, or
C>> as the Trustees otherwise determine. A certificate by the
C>> Secretary as to any action taken by the BoT shall as to all
C>> persons who rely thereon in good faith be conclusive evidence of
C>> such action.
C>> *Section 3: Severability.* Any determination that any provision
C>> of these By-Laws is for any reason inapplicable, illegal or
C>> ineffective shall not affect or invalidate any other provision of
C>> these By-Laws.
C>> *Section 4: Articles of Incorporation.* All references in these
C>> By Laws to the Articles of Incorporation shall be deemed to refer
C>> to the Articles of Incorporation of the IASF, as amended and in
C>> effect from time to time.
C>> *Section 5: Gender.* Whenever used herein, the singular number
C>> shall include the plural, the plural shall include the singular,
C>> and the use of any gender shall include all genders.
C>> *Section 6: Successor Provisions.* All references herein: (1) to
C>> the Internal Revenue Code shall be deemed to refer to the
C>> Internal Revenue Code of 1986, as now in force or hereafter
C>> amended; (2) to the Code of the State of Virginia, or any Chapter
C>> thereof, shall be deemed to refer to such Code or Chapter as now
C>> in force or hereafter amended; (3) the particular sections of the
C>> Internal Revenue Code or such Code shall be deemed to refer to
C>> similar or successor provisions hereafter adopted; and (4) to the
C>> Request for Comment Series shall be deemed to refer to the
C>> Request for Comment Series as they are now in force or hereafter
C>> 7. Acknowledgment of Contributions and Reviews
C>> A lot of text was taken from the report from Carl Malamud.
C>> Further review was done by various IESG and IAB members. Carl
C>> Malamud also reviewed this document and helped with making the
C>> text better English and easier to read.
C>> This document was created with "xml2rfc"
C>> <http://xml.resource.org/> using the format specified
C>> in [RFC2629].
C>> 8. IANA Considerations
C>> This documents requires no action from IANA.
C>> 9. Security Considerations
C>> This document describes a scenario for the structure of the
C>> IETF's administrative support activities. It introduces no
C>> security considerations for the Internet.
C>> Safety considerations for the integrity of the standards process
C>> are outlined in Appendix C.
C>> 10. References
C>> 10.1 Normative References
C>> [RFC2026] Bradner, S., "The Internet Standards Process --
C>> Revision 3", BCP 9, RFC 2026, October 1996.
C>> [RFC2028] Hovey, R. and S. Bradner, "The Organizations Involved
C>> in the IETF Standards Process", BCP 11, RFC 2028,
C>> October 1996.
C>> [RFC2031] Huizer, E., "IETF-ISOC relationship", RFC 2031,
C>> October 1996.
C>> [RFC3677] Daigle, L. and Internet Architecture Board, "IETF ISOC
C>> Board of Trustee Appointment Procedures", BCP 77, RFC
C>> 3677, December 2003.
C>> [RFC3716] Advisory, IAB., "The IETF in the Large: Administration
C>> and Execution", RFC 3716, March 2004.
C>> [RFC3777] Galvin, J., "IAB and IESG Selection, Confirmation, and
C>> Recall Process: Operation of the Nominating and Recall
C>> Committees", BCP 10, RFC 3777, June 2004.
C>> [Virginia] State of Virginia, "Title 13.1: Corporations, Limited
C>> Liability Companies, Business Trusts", Undated,
C>> bin/legp504.exe?000+cod+TOC1301000> .
C>> 10.2 Informative References
C>> [I-D.ietf-xmpp-core] Saint-Andre, P., "Extensible Messaging and
C>> Presence Protocol (XMPP): Core", draft-ietf-xmpp-
C>> core-24 (work in progress), May 2004.
C>> Appendix A. Justification, Reasoning and Motivations
C>> Quite a bit of the proposals from the consultant report have been
C>> incorporated in this recommendation. However, a number of
C>> changes have been made. In this section we try to explain which
C>> changes were made and why.
C>> A.1 Changes to the name of the administrative entity
C>> In order to make it very clear that the new and legal
C>> administrative entity is separate from the ISOC IETF activity
C>> that deals with standardization and protocol development, this
C>> recommendation uses "The IETF Administrative Support Foundation"
C>> as the name for the corporation to be created.
C>> A.2 Domicile
C>> Various questions have been raised if the choice of Domicile
C>> should be further investigated. In order to make progress this
C>> document recommends to make a definite choice now and go for a US
C>> based not-for-profit corporation in the state of Virginia.
C>> Further investigation would most probably delay the whole process
C>> by at least half a year.
C>> A.3 Changes to the composition of the BoT
C>> The consultant report had a proposal for Position-based Trustees,
C>> which would automatically make the IAB chair and the IETF chair
C>> voting members of the Board of Trustees (BoT) of the IETF
C>> Administrative Support Foundation. There was discussion on the
C>> IETF mailing list that those people are not selected because of
C>> their business acumen but rather for their technical leadership.
C>> We do not want to change those criteria. Another concern was
C>> that this might generate a conflict of interest as well. So this
C>> recommendation has made the IAB and IETF chairs liaisons to the
C>> Instead of making IAB and IESG chairs voting Trustees, this
C>> recommendation specifies that IAB and IESG can each select an
C>> outside (i.e. not a member of IAB or IESG) person as a voting
C>> The selection of three (3) IETF selected Trustees has not changed
C>> in this recommendation. However, there is a concern that the
C>> current composition of the Nomcom is not tailored to selecting
C>> people for this position. So over time a different process may
C>> need to be defined for selecting those Trustees.
C>> In order to balance the ISOC and IETF people present at the BoT
C>> meetings, this recommendation also specifies that the chair and
C>> president of ISOC also function as liaisons to the BoT of the
C>> IETF Administrative Support Foundation.
C>> Appendix B. Domicile of the IETF Administrative Support Foundation
C>> A U.S. non-profit, non-member corporation is being recommended.
C>> This recommendation is based on simple considerations of
C>> expediency and pragmatism: a transition will be simplest and
C>> least risky (in the short term). The reasoning is as follows:
C>> o Administrative support for the IETF is currently enmeshed in a
C>> series of relationships with other institutions, most of which
C>> are also U.S.-chartered non-profit organizations. Any change
C>> in the institutional status of administrative support
C>> functions will require familiarity with U.S. nonprofit law.
C>> Incorporation in another country would require familiarity
C>> with those laws as well. Thus, the incorporation expenses
C>> would be higher and the process would take longer.
C>> o U.S. law has a strong concept of "nexus," which is a
C>> determination of when a foreign organization has enough
C>> relationship to U.S. law to fall under the jurisdiction of a
C>> U.S. court. Because of a long history of operating in the
C>> U.S., numerous meetings in the U.S., and the large number of
C>> U.S. residents who are participants and leaders, we feel it is
C>> likely that U.S. courts would find nexus in relation to our
C>> US-based activities, even if the IETF administrative support
C>> organization was incorporated in another country. In other
C>> words, incorporating in a country besides the U.S. does not
C>> necessarily free the support organization from any perceived
C>> vagaries of U.S. law.
C>> o Incorporating in a country other than the US may have tax
C>> implications if the Internet Society is providing funding
C>> o It is very likely that the IETF Administrative Support
C>> Foundation would be deemed to clearly fall under the
C>> "scientific" and "educational" grounds for classification as a
C>> tax-exempt charity under section 501(c)(3) of the IRS code, so
C>> a tax-exempt application should be quite straight-forward.
C>> o The incorporation laws of the U.S. states being considered do
C>> not require that any members of the Board of Trustees be of a
C>> certain nationality or state residency (e.g., there are no
C>> "local director" requirements). The U.S. Dept. of Commerce
C>> foreign-controlled organization reporting requirements apply
C>> only to "business enterprises", and do not apply to non-profit
C>> entities such as an IETF administrative support organization.
C>> Since this document recommends incorporating in the U.S.,
C>> Virginia is the logical pick as the state of domicile to allow
C>> the IETF administrative support organization to make use of ISOC
C>> headquarters to house its single employee (though the employee
C>> might be able to be housed at the Internet Society even if the
C>> incorporation were elsewhere, for example the ISOC Geneva
C>> Appendix C. Risk Analysis
C>> This scenario (as do all scenarios) has some risks. This section
C>> tries to enumerate the sort of risks that we recognize and
C>> summarizes why we think we can accept the risk or what kind of
C>> action we think we can take if the risk indeed materializes into
C>> a problem.
C>> C.1 US Domicile risks
C>> As explained in [I-D.malamud-consultant-report], incorporating in
C>> the US carries two specific risks: the perception of the IETF
C>> being a US-based organization and the potential for (or
C>> perception of) governmental interference.
C>> The IETF is an international organization. However, even now,
C>> the fact that the IETF standards processes are run in English and
C>> that many of its current support organizations are US-based
C>> leaves an impression that the IETF is too US-centric.
C>> Incorporating the new administrative entity in the US may add to
C>> that perception.
C>> Also, the IETF history is based in US federal government research
C>> and funding. Though IETF is long separated from those
C>> beginnings, even in the past few years there have been
C>> interactions between the US government and the IETF that have
C>> concerned people. Incorporating the administrative entity in the
C>> US may invite more US governmental interference in the standards
C>> activity of the IETF, or at the very least may leave the
C>> perception that the US government might get involved.
C>> Both of these are serious problems, but we think there is
C>> justification for and at least one mitigation to these risks. Of
C>> course, the primary reason to consider US incorporation is
C>> expedience (See section 22.214.171.124 of [I-D.malamud-consultant-
C>> report]). We agree that the expedience makes US incorporation
C>> worth the risk. But incorporating in multiple domiciles would
C>> significantly mitigate the risk. Assuming we go down the path of
C>> US incorporation, we would like legal counsel to advise on the
C>> possibility of incorporating in other domiciles (specifically
C>> Switzerland and The Netherlands) at a later date after US
C>> incorporation has been completed. If this is (as we suspect)
C>> indeed possible, we think this would be the best way to go
C>> C.2 Non-profit status risk
C>> One of the risks pointed out to incorporation was the potential
C>> that we would not get non-profit status, and that we must
C>> therefore preserve some money in escrow for tax liability
C>> purposes. Estimates for the time it will take to get such status
C>> can be several months or even longer in some cases.
C>> It is important to point out that the tax liability is based on
C>> profits, not on gross revenues. If the IASF is only taking in
C>> enough money to cover expenses, there would be very little tax
C>> liability. However, if more revenue is brought in than is spent,
C>> for example to build up an endowment or operating reserve, that
C>> "profit" is potentially taxable if non-profit status is not
C>> To mitigate this risk, the corporation could be created and non-
C>> profit status applied for first, and operation of the corporation
C>> would only begin after non-profit status was obtained. The IETF
C>> would use an interim plan for continued operations until that
C>> time. This way, no money would need to be in escrow during the
C>> process of applying for non-profit status. However, that seems
C>> an excessively cautious path to take given what appears to be the
C>> fairly clear non-profit nature of the IETF.
C>> Commencing operations while the non-profit application is being
C>> considered, but being careful about balancing revenue with
C>> expenses and keeping an appropriate escrow account seems like a
C>> prudent task. Further, any fund raising campaigns that result in
C>> shifts to the balance sheet of the IASF should be conducted
C>> cautiously until non-profit status is granted.
C>> C.3 Execution risks
C>> It is important that the execution goes well. Risks that we are
C>> aware of include:
C>> o we can't hire a good IAD
C>> o we fail to project cash flow properly and go insolvent
C>> o we can't cut a deal with Foretec and have no 2005 meetings
C>> o we get bad lawyers and they take too long and charge too much
C>> o isoc runs out of money and doesn't tell us early enough
C>> In order to mitigate these problems we have a proposed work plan
C>> included in this document. It is important that we get review of
C>> this work plan by as many eyes as we can get, to make sure we
C>> have considered all the possible steps that need to be taken.
C>> C.4 Insolvency risk
C>> Improper management controls and procedures or other imprudent
C>> fiscal or administrative practices could expose the IETF to a
C>> risk of insolvency. Careful selection of trustees, a process of
C>> budget approval, and a methodical system of fiscal controls are
C>> necessary to minimize this risk.
C>> C.5 Legal risks
C>> Improper formulation of the legal framework underlying the IETF
C>> may expose the institution and individuals in leadership
C>> positions to potential legal risks. Any such risk under this
C>> plan appears to be equivalent to the risk faced by the community
C>> under the current legal framework. This risk is further
C>> mitigated by a thorough review by legal counsel, and by use of
C>> insurance coverage.
C>> The legal exposure is best minimized by a careful adherence to
C>> our procedures and processes, as defined by the Best Current
C>> Practice Series. A carefully stated process, such as the BCP
C>> documents that govern the selection of leadership positions and
C>> define the standards process are the best insurance against legal
C>> exposure, provided care is taken to stick to the process
C>> standards that have been set. Adherence to a public rule book and
C>> a fully open process are the most effective mechanisms the IETF
C>> community can use.