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ISOC Document
Title: Report on Progress concerning the Recommendations of the ISOC
Advisory Council
Author(s): Anthony M. Rutkowski, Executive Director, International
Secretariat
Date: 1994.07.15
Body: Advisory Council
Document: 94-002
Revision: basic
Supersedes: -
Status: advisory
Maintainer: Anthony M. Rutkowski
Access: unrestricted
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1. Recommend that the ISOC AC be allowed to seat one third (1/3) of the
positions on the ISOC BOT.
1.1 See 4.2, below.
2. Recommend that the ISOC AC appoint four ex-officio (non-voting)
liaison members to the BOT and request that the BOT appoint one or
more return liaison(s) to the ISOC AC.
2.1 See 4.2, below.
3. Recommend that when the ISOC budget is presented to the ISOC BOT,
this budget should also be presented in full to the ISOC AC for
Comments.
3.1 Annex 1 contains the ISOC budget as presented by the President
to the Board at the 5th meeting in Prague. Comments are welcome
4. Recommend that the special status of the Charter ISOC Members be
revoked, while recognizing their contribution.
4.1 BACKGROUND
The concept of Charter Members is found in the Society's By-Laws;
it is not in the Articles of Incorporation.
Charter Members are defined in Art. VI, Sec. 2 of the By-Laws as a
special category of organizational member - to consist exclusively of
CNRI, Educom, and RARE, or up to 3 additional non-profit organizations
they agree to include. No additions have been made since the Society's
founding.
In two specific cases Charter Members have additional privileges:
1) Under Art. III, Sec. 2 of the By-Laws, Charter Members "...shall
at all times have a right to designate one Trustee who shall thereupon
be appointed by the Board." Such Trustees are exempt from any
term limitations or standing for election.
2) Under Art. VIII, Sec. 1 of the By-Laws, the Board cannot make any
amendment to the By-Laws "...which adversely affects the rights of a
Charter Member without the unanimous consent of all then-existing
Charter Members."
Although it might appear that Charter members have an absolute veto
power on all changes to the By-Laws, the Articles of Incorporation of the
Society themselves can be amended pursuant to paragraph 7.B. by a 4/5ths
vote of the trustees in office as they pertain to the election or
appointment of trustees in paragraph 6.
The basis of Charter Members originated from the uncertainties in
funding the Society during the startup period, and the possibility of
significant initial monies being provided by the Charter Members.
This is reflected in Art. VII, Sec. 3 which states that
Funds contributed or advanced by the Charter Members to establish
and further the activities of the Society shall be duly recorded
and shall be subject to reimbursement by the Society if and when
the financial situation of the Society permits. In the event of
the dissolution of the Society, any residual Society funds shall
be used to reimburse pro rata the Charter Members for any such
contributions and advances made but not previously reimbursed.
The receipt of significant contributions at the outset from other
organizational members have rendered this provision essentially moot,
although CNRI has contributed significant overhead and other services
for which it has never been reimbursed.
In addition, the Charter Member mechanism was also felt to act as
a potential moderator to the organization's being taken in an
inappropriate direction through unforseen circumstances.
4.2 POSSIBLE COURSES OF ACTION
The Advisory Council resolution adopted at its Prague meeting and
Rick Adams on behalf of the Council state that whatever usefulness
the Charter Member category and the priviliges such Members enjoyed
during the Society's initial period of operations no longer exist,
and should be eliminated.
The three year startup period of the Society will soon be over. It
is reasonable to reevaluate all special provisions in the By-Laws
at this time. The Board of Trustees could appoint a subcommitte
consisting of members of the Board and members of the Advisory Council
to examine the current By-Laws and make a recommendation to the
Board on whatever changes should be considered now. At a minimum all
references to the start-up period should be removed. The need to
review the types of members Members, their roles and privileges
could also be reviewed by this subcommittee.
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Annex 1
Internet Society Financials
5th Meeting of the Board of Trustees
Prague June 1994
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Internet Society
Balance Sheet
31 December 1993
ASSETS:
Current Assets:
Riggs - 14838710 $331,700.42
Citibank - 17107736 $39,928.66
Accounts Receivable-Ind Dues $4,567.00
Accounts Receivable-Org Dues $170,000.00
Accounts Receivable-Other $3,266.00
Accounts Receivable-Educom $38,319.58
Prepaid Expenses $307.92
Deposits $4,000.00
Inventory $8,503.77
consigned Inventory $7,025.00
TOTAL Current Assets $607,618.35
Fixed Assets:
Computer Equipment $2,399.05
Accum. Deprec. - Comp Equip. ($39.98)
TOTAL Fixed Assets $2,359.07
Other Assets:
Organizational Costs $80,450.31
Accum. Amort. -Org. Costs ($23,919.90)
TOTAL Other Assets $56,530.41
TOTAL ASSETS $666,507.83
LIABILITIES;
Current Liabilities: $330,013.66
Accounts Payable $42,007.63
Deferred Revenue-Ind. Dues $15,000.00
Deferred Revenue Org. Dues $895.48
Sales Tax Payable
TOTAL Current Liabilities $387,916.77
TOTAL LIABILITIES $387,916.77
CAPITAL:
Fund Balance $180,000.97
Year-to-Date Earnings $98,590.09
TOTAL CAPITAL $278,591.06
TOTAL LIABILITIES & CAPITAL $666,507.83
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Internet Society
Balance Sheet
31 December 1993
Income
Revenue $84,586.95 8.4%
Revenue-OrganizationDues $860,000.00 85.6%
Revenue-Advertising $450.00 0.0%
Revenue-Proceedings $2,720.00 30.0%
Revenue-Other Sales $107.00 0.0%
Revenue-Meetings $55,864.45 5.6%
Donation $500.00 0.0%
TOTAL Income $1,004,228.40 100.0%
NET INCOME $1,004,228.40 100.0%
Expenses
Salaries, Wages, Fringes $146,149.16 14.6%
Postage $20,810.71 2.1%
Printing $47,986.44 4.8%
Telephone and Courier $9,465.84 0.9%
Media Services $3,141.85 0.3%
Materials and Supplies $32,244.37 3.2%
Travel $34,431.48 3.4%
Meetings $5,586.72 0.6%
International Filings $2,909.16 0.3%
Professional Services $53,770.52 5.4%
Administration $125,332.36 12.5%
Facilities $135,776.72 13.5%
Miscellaneous $314.00 0.0%
Other Expenses $289,200.78 28.8%
TOTAL Expenses $907,120.11 90.3%
OPERATING PROFIT $97,108.29 9.7%
Other Income & Expenses
Other Income and Expenses $1,481.80 0.1%
TOTAL Other Income & Expenses$1,481.80 0.1%
PROFIT BEFORE TAXES $98,590.09 9.8%
NET PROFIT $98,590.09 9.8%
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Internet Society
1994 Cash Flow Estimate
24 May 1994
Cash
NOW (Riggs) 235,619.00
Money Market (Riggs) 70,921.00
Citibank 164,965.00
SUBTOTAL 471,505.00
Organizational A/R 300,500.00
Individual A/R 36,812.00
TOTAL 808,817.00
Expenses
CNRI (Jan.-Mar.) 107,051.00
CNRI (Apr.-June est.) 54,000.00
Legal (May-June est.) 17,000.00
Acct. (May-June est.) 9,000.00
Payroll (May-June est.) 15,000.00
Other exp., travel, etc. 24,000.00
UUNET Service 8,000.00
July-Dec. est payroll 300,000.00
Newsletter 72,000.00
TOTAL 606,051.00
NET 202,766.00
Notes:
1. Without INET'94/JENC ISOC income ($100k)
2. Without IETF $100k expense
3. Reduces working capital from $278k to $202k
4. Without further fundraising
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