The IETF LLC must function within a budget of costs balanced against limited revenues. The IETF community expects the IETF LLC to work to attain that goal, in order to maintain a viable support function that provides the environment within which the work of the IETF, IAB, IRTF, and RFC Editor can remain vibrant and productive.
The IETF LLC was generating income from a few key sources at the time that this document was written, as enumerated below. Additional sources of income may be developed in the future, within the general bounds noted in Section 7.8
, and some of these may decline in relevance or go away. As a result, this list is subject to change over time and is merely an example of the primary sources of income for the IETF LLC at the time of this writing:
IETF meeting revenues
Sponsorships (monetary and/or in-kind)
Donations (monetary and/or in-kind)
As noted in Section 5.2
, the IETF LLC must comply with relevant tax laws, such as filing an annual IRS Form 990. Other official financial statements may also be required.
In addition to these official financial statements and forms, the IETF LLC is also expected to report on a regular basis to the IETF community on the current and future annual budget, budget forecasts vs. actuals over the course of a fiscal year, and on other significant projects as needed. This regular reporting to the IETF community is expected to be reported in the form of standard financial statements that reflect the income, expenses, assets, and liabilities of the IETF LLC.
The IETF LLC maintains its own bank account, separate and distinct from ISOC. The IETF LLC may at its discretion create additional accounts as needed. Similarly, the IETF LLC may as needed create investment accounts in support of its financial goals and objectives.
The IETF LLC is expected to retain and work with an independent auditor. Reports from the auditor are expected to be shared with the IETF community and other groups and organizations as needed or as required by law.
ISOC currently provides significant financial support to the IETF LLC. Exhibit B of the [IETF-LLC-A
] summarizes the financial support from ISOC for the foreseeable future. It is expected that this support will be periodically reviewed and revised, via a cooperative assessment process between ISOC and the IETF LLC.
Meeting revenues are another important source of funding that supports the IETF, coming mainly from the fees paid by IETF meeting participants. The IETF Executive Director sets those meeting fees, in consultation with other IETF LLC staff and the IETF community, with approval by the IETF LLC Board. Setting these fees and projecting the number of participants at future meetings is a key part of the annual budget process.
Sponsorships and donations are an essential component of the financial support for the IETF. Within the general bounds noted in Section 7.8
, the IETF LLC is responsible for fundraising activities in order to establish, maintain, and grow a strong foundation of donation revenues. This can and does include both direct financial contributions as well as in-kind contributions, such as equipment, software licenses, and services.
Sponsorships and donations to the IETF LLC do not (and must not) convey to sponsors and donors any special oversight or direct influence over the IETF's technical work or other activities of the IETF or IETF LLC. This helps ensure that no undue influence may be ascribed to those from whom funds are raised, and so helps to maintain an open and consensus-based IETF standards process.
To the extent that the IETF LLC needs to undertake any significant special projects for the IETF, the IETF LLC may need to fundraise distinctly for those special projects. As a result, the IETF LLC may conduct fundraising to support the IETF in general as well as one or more special fundraising efforts (which may also be accounted for distinctly and be held in a separate bank account or investment, as needed).
The IETF LLC exists to support the IETF, IAB, and IRTF. Therefore, the IETF LLC's funding and all revenues, in-kind contributions, and other income that comprise that funding shall be used solely to support activities related to the IETF, IAB, IRTF, and RFC Editor, and for no other purposes.
When the IETF LLC conducts fundraising, it substantiates charitable contributions on behalf of ISOC -- meaning that according to United States tax law, the IETF LLC must send a written acknowledgment of contributions to donors. The IETF LLC evaluates and facilitates state, federal, and other applicable law and regulatory compliance for ISOC and/or the LLC with respect to such fundraising activities. In addition, the IETF LLC ensures that all fundraising activities are conducted in compliance with any policies developed by the IETF LLC, including but not limited to those noted in Section 8
An initial target operating reserve has been specified in Exhibit B of the [IETF-LLC-A
]. It says that the IETF LLC should maintain an operating reserve equal to the IETF LLC's budgeted Net Loss for 2019 multiplied times three. The IETF LLC, in cooperation with ISOC, may regularly review the financial target for this reserve fund, as noted in the [IETF-LLC-A
] or as otherwise necessary.
Should the IETF LLC generate an annual budget surplus, it may choose to direct all or part of the surplus towards the growth of the operating reserve.
As noted in Section 4.3
, the IETF LLC is responsible for managing the IETF's finances and budget. A key part of this responsibility is establishing, maintaining, and successfully meeting an annual budget. This is essential to the continued operation and vibrancy of the IETF's technical activities and establishes trust with ISOC, sponsors, and donors that funds are being appropriately spent, and that financial oversight is being conducted properly. This is also essential to the IETF LLC meeting applicable legal and tax requirements and is a core part of the Board's fiduciary responsibilities.
As explained in Section 5.1
, the IETF Executive Director is expected to develop, execute, and report on the annual budget. Regular reporting is expected to include forecast vs. budget statements, including updated projections of income and expenses for the full fiscal year.
The Board, as explained in Section 5.2
, is expected to review and approve the budget, as well as to provide ongoing oversight of the budget and of any other significant financial matters.
The annual budget is expected to be developed in an open, transparent, and collaborative manner, in accordance with Section 4.4
. The specific timeline for the development, review, and approval of the IETF LLC annual budget is established by the Board and may be revised as needed.