A New Milestone for ICANN’s Reserve Fund

Two years ago during ICANN63, the ICANN Board approved an eight-year plan to replenish the ICANN Reserve Fund to an amount equal to one year of operating expenses as the minimum target level of the Reserve Fund. Last month, for the first time in ICANN’s history, the Reserve Fund reached the funds required for 12 months of operating expenses.

This achievement is a result of Board-directed replenishment actions, which included allocating USD 36 million from auction proceeds in 2018, USD 11 million of excess funds, and USD 13 million from reinvested gains. This milestone, realized five and a half years earlier than anticipated, was only possible thanks to the Board’s leadership, the org’s implementation, and the community’s ongoing support.

Established in 2007, the ICANN Reserve Fund is crucial to ensuring ICANN’s long-term financial accountability, stability, and sustainability. Since its creation, any operational surpluses or investment returns have been allocated to the Reserve Fund.

From 2014 to 2018, the Board approved several withdrawals from the Reserve Fund to cover the exceptional expenses incurred during the Internet Assigned Numbers Authority (IANA) stewardship transition. Following the completion of the transition, the ICANN Board established a working group, supported by ICANN org, which resulted in an updated rationale and target level for the Reserve Fund. The final replenishment strategy directed ICANN to allocate USD 32 million over a period of seven to eight years, and allocated to the fund USD 36 million from the proceeds that ICANN holds from the New Generic Top-Level Domain (gTLD) Program auctions of last resort.

The Board and org thank the community for its continued support as ICANN org works to strengthen ICANN’s financial stability and sustainability.

While it’s important to celebrate this milestone, it’s equally important that we remain steady and consistent in further growing the Reserve Fund. As the events of the past few months have demonstrated, circumstances can change quickly, and new risks can emerge overnight. Having appropriate reserves ensures that ICANN is ready to face unforeseen circumstances. ICANN org is committed to working closely with the Board and community to responsibly grow the Reserve Fund to better prepare for whatever challenges lie ahead.
Domain Name SystemInternationalized Domain Name ,IDN,”IDNs are domain names that include characters used in the local representation of languages that are not written with the twenty-six letters of the basic Latin alphabet “”a-z””. An IDN can contain Latin letters with diacritical marks, as required by many European languages, or may consist of characters from non-Latin scripts such as Arabic or Chinese. Many languages also use other types of digits than the European “”0-9″”. The basic Latin alphabet together with the European-Arabic digits are, for the purpose of domain names, termed “”ASCII characters”” (ASCII = American Standard Code for Information Interchange). These are also included in the broader range of “”Unicode characters”” that provides the basis for IDNs. The “”hostname rule”” requires that all domain names of the type under consideration here are stored in the DNS using only the ASCII characters listed above, with the one further addition of the hyphen “”-“”. The Unicode form of an IDN therefore requires special encoding before it is entered into the DNS. The following terminology is used when distinguishing between these forms: A domain name consists of a series of “”labels”” (separated by “”dots””). The ASCII form of an IDN label is termed an “”A-label””. All operations defined in the DNS protocol use A-labels exclusively. The Unicode form, which a user expects to be displayed, is termed a “”U-label””. The difference may be illustrated with the Hindi word for “”test”” — परीका — appearing here as a U-label would (in the Devanagari script). A special form of “”ASCII compatible encoding”” (abbreviated ACE) is applied to this to produce the corresponding A-label: xn--11b5bs1di. A domain name that only includes ASCII letters, digits, and hyphens is termed an “”LDH label””. Although the definitions of A-labels and LDH-labels overlap, a name consisting exclusively of LDH labels, such as””icann.org”” is not an IDN.”

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