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ICANN will use $36 million of new TLD auction proceeds to cover shortfall

ICANN will use a combination of auction proceeds and operational savings to replenish reserve fund.

ICANN’s board has decided to fill its coffers with $36 million from new TLD auction proceeds.

ICANN’s organizational growth and the IANA transition has caused a budget shortfall, and ICANN plans to make it up by cutting costs and raiding the new TLD auction piggy bank.

The organization believes its reserve fund should equal one year of operating costs. It’s $68 million below that point.

It plans to make up this deficit over eight years by running a fiscal surplus of $32 million total. The other $36 million will be taken from the new top level domain auction proceeds.

Auctions have delivered over $240 million in cash. The community is still deciding how to divvy up that cash, but giving some of it back to ICANN was never the intention.

There’s a veiled threat to new TLD registries that might be upset about ICANN using some of it to cover its shortfall: another option was for ICANN to raise fees.

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  1. Charles Christopher says

    https://www.icann.org/en/system/files/files/financial-report-fye-30jun17-en.pdf

    Assets
    Cash and cash equivalents $ 107,432 $ 37,423
    Accounts receivable, net $ 39,872 & 37,223
    Investments $ 352,115 $303,423 (see 2018 increase below)
    Prepaid expenses $ 1,979 $ 2,762
    Other assets $ 939 $ 613
    Capital assets, net $ 17,451 $ 18,182
    Total assets $ 519,788 $ 399,626

    Half a billion in assets, and increase of $120 million from 2016 to 2017

    https://www.icann.org/en/system/files/files/financial-report-fye-30jun18-en.pdf

    Internet Corporation for Assigned Names and Numbers
    Notes to Consolidated Financial Statements

    Investments consist of the following as of June 30, 2018 ($70 million INCREASE over 2017)

    Corporate bonds $114,694 $- $114,694 $- $-
    Government agencies bonds $82,370 $- $82,370 $- $-
    Collective trusts $69,712 $- $- $- $69,712
    U.S. government bonds $67,677 $- $67,677 $- $-
    Asset backed bonds $28,898 $- $28,898 $- $-
    Money market funds $42,836 $42,836 $- $- $-
    International bonds $15,712 $- $15,712 $- $-
    Municipal and provincial bonds$501$-$501$-$-
    Total investments $422,400 $42,836 $309,852 $- $69,712

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