[Owasp-leaders] [Request for Feedback] New Profit Sharing Model Proposal

Michael Coates michael.coates at owasp.org
Tue Nov 20 15:51:15 UTC 2012


Leaders,


The profit sharing model used in past years has been in need of a revamp to
better serve our growing organizational needs.  The proposed policy was
drafted with input from board members and committee members.  It has been
discussed initially at the board and has also been socialized with
committees for their feedback.

We'd like to also gather feedback from the OWASP leaders list.  Please
review the below material and provide any feedback via this thread.  We're
accepting feedback today through Saturday, Nov 24th. This item is on the
board meeting agenda* for a vote on Monday, Nov 26th.

* https://www.owasp.org/index.php/OWASP_Board_Meetings


Thanks,
Michael

--
Michael Coates | OWASP | @_mwc
michael-coates.blogspot.com







*New Profit Sharing Proposal*

https://docs.google.com/a/owasp.org/document/d/159bD2oeAmM2yfPNeq5wHvIvHcl10Hl-c3Um2GXAW81Y/edit


(Thanks to Sarah Baso for pulling together the below comparison information
and notes).

*First for reference, here is the current policy in place:*
*
*
Local host chapters will share in OWASP event profits under the following
schedule. In the case of multiple host chapters, the host chapters will be
responsible for determining the division before the event.

   - Global AppSec Conference - 25% of event profits with a $5,000 USD cap
   ($10,000 for multi-chapter events)
   - Regional/Theme Events - 30% of event profits with a $4,000 USD cap
   - Local Events - 50% of profits with a $3000 USD cap



*Budgeting Implications*
Under the new plan, there is a opportunity for the local chapter to earn
much more than that listed below if they surpass the profit target, but
just using the profit target as a guideline... here are the numbers....
(note these are examples numbers used for 2013 and don't reflect profits or
loss from 2012)
*
*
*[image: Inline image 1]
*


*Comments from Conferences Committee Call & Mailing List Thread*
>From July 18, 2012 Conference Committee Call:

*


   - Request for Comment: proposed policy for profit sharing and financial
   oversight of future OWASP events:
   https://docs.google.com/a/owasp.org/document/d/159bD2oeAmM2yfPNeq5wHvIvHcl10Hl-c3Um2GXAW81Y/edit


The Board intends to finalize this policy at their next meeting (scheduled
for August 13, 2012), and have requested that you submit any comments,
questions, or concerns for their consideration by that time.


   - “Any amount above the profit target will be allocated 60/40 to the
   local chapter.” Need to clarify that 60 is to Foundation and  40 is to
   local chapter.
   - Should we have different policies for different areas of the world to
   reflect the different culture/mindset in different areas (US, Europe, etc.)
   - No perspective on how we continuously evolve and better the Global
   AppSec Conference in that region next year.  For instance, how can we use
   the profits from AppSec EU research this year to benefit AppSec EU (and the
   European region) next year.
   - Current policy is focused 2 things: on local chapter and foundation as
   a whole.  However there are other considerations such as regional
   development/outreach.
   - Are we adjusting the policy to only accommodate needs in the US, but
   not the rest of the world?
   - This policy also doesn’t take into account any corporate
   supporters/membership dues that come in during a conference.
   - What are chapters doing with their conference proceeds? What is their
   motivation for keeping a “stock pile” in their chapter accounts?
   - Ralph - “The current proposed model is great!”

*

Email Request to Conference Committee mailing
list<http://lists.owasp.org/pipermail/global_conference_committee/2012-July/002659.html>

   - *Response from Josh Sokol*

1. The point about when the profit target is determined is unclear.  Does
this mean for the US event that we are determining the target after the
event has taken place or is this for the next year's event?  Why are we
using the US event to determine the timing for other events.  IMHO, we
should be able to set the profit target for the following year's event
within 60 days of the completion of the current year's event.

2. I am fine with the percentage splits here, but do not agree with the
$5,000 value at which they happen.  This is more than enough for a smaller
chapter holding an event, but for a larger chapter, such as my Austin
chapter, our event would have to profit $18,750 in order for us to raise
our annual budget of roughly $10,000.  In other words, this $5,000 number
does not allow us to scale profit splits well as chapter sizes grow.  My
suggestion would be to make $5,000 the base number here UNLESS a chapter
running an event has submitted a budget showing annual expenses greater
than that amount, in which case they are allowed up to that amount at the
10/90 split.  A subtle change, but one which I believe is necessary in
order for this policy to scale appropriately.

3. I agree that the Chapters committee should be responsible for monitoring
chapter accounts, budgets, and expenses as necessary.

4. I agree that the Chapters committee will need to establish new
guidelines similar to those of the Conferences committee for local and
regional events held by the chapters.


   - *Response from Mark Bristow*

I agree with josh on #1.  The profit targets should be set in outyear
budget planning with it locked in at the beginning of each OWASP FY.  The
mechanics of this as proposed are a bit odd.  My only point is that the
targets should be set BEFORE the CFP goes out so applicants have clear
expectations set.

Otherwise I'm personally fine with this as written.  I'm not in favor of
Josh's proposed changes in #2.  As written this provides an avenue for
chapters to raise significant funds from events while ensuring that the
foundation also recovers it's capital investments/costs in a "chapters
first" model.  IMO this is a good balance of the priorities.



   - *Response from Dave Wichers*


The target is done in advance, not after the event. We use the U.S. event as
the date after which we figure out next year's targets because it is the
biggest single revenue source for OWASP, so it affects the entire next
year's budget in a significant way.



However, I could see that we could come with an estimate for each event
right after the previous event, and then potentially adjust it right after
OWASP AppSec USA, with the goal that it NOT be adjusted if possible. That
way conference planning generally know almost a year in advance the revenue
target primarily based on the revenue generated the previous year.



Regarding the $5K threshold, I think some potential for adjustment above $5K
is reasonable to consider for the larger chapters. I might not agree to have
the 10/90 go up to their entire target budget, because chapters raise
revenue in other ways  too, like encouraging memberships, etc. And if they
go way over their target, then the chapter could be significantly overfunded
because they get 40% of the overage too. And we should also consider the
amount of $ the chapter already has in their account as well. I.e., if you
plan to spend $10K but have $5K already there, then maybe $5K is a more
appropriate target.



The good news, from your reply is that you seem to be OK with the entire
policy except for this one specific point, which I think is BIG progress.
Hopefully others feel similar so we are approaching closure on this.



Thanks for reviewing this.



   - *Again from Josh Sokol*


Sure there are other ways to raise revenue, but that's not really the
point.  The point is that a chapter should be able to raise the operational
funds it needs via whichever method it desires.  Membership revenue is
limited and will in all likelihood not make up that gap.  And not every
chapter is fortunate to be able to land a big company to sponsor them.
Also, chapters having a little bit more money than they need is not
necessarily a bad thing and is a reward for running a successful event.
Having some extra funds available also breeds innovation.  As an example,
it's having extra funds that got the Austin Chapter to start doing these
monthly webinars as part of our meetings and that translates directly to a
wider reach for the OWASP organization.  Perhaps the compromise here is to
take the chapters annual budget minus the money currently in the chapters
account?


   - *From Tin Zaw*

First of all, thank you for all who worked on this draft proposal. I
think we are getting somewhere with this.

Secondly, thank you Sarah for kindly attaching the document for those
of us who cannot access Google Docs (at work).

1. I understand Dave's explanation. I would suggest we make it clear
that such number is communicated well in above so that event planners
(the host chapter) know what they need to deliver, preferably before
submitting a proposal.

2. I am OK with $5000 limit before 60/40 split kicks in, assuming that
$5000 is the profit that goes to the chapter under 10/90. I would like
to see it states explicitly that $5000 is the profit portion for the
chapter, not overall profit or income.

The rest, I agree.

Great job guys!
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