There has been a lot of discussoin about the best funding model for XBRL International. In this post I explore one example of how XII can improve its funding position in the coming years. In future posts I'll consider some alternative funding models that are under discussion.

Jurisdictions, Membership Fees and Sponsorships

XBRL International (XII) is funded, in large part (greater than 75%), by the remittance of 1/3 of membership fees paid to jurisdictions. Without this funding, XII would be unable to manage and develop the XBRL standard. Development of the standard would stagnate, adoption efforts would reduce, advocacy would stall. Of course, there are cases where jurisdictions structure the membership to make a clear split between money paid for membership, and money paid in sponsorship of specific programs. This make a lot of sense, and I know of at least two jurisdictions that do this.

Yet there is a difference between sponsorship for defined programs, and sponsorship as a way of avoiding paying a fair 1/3 to XII.

Therefore, it is vital that all jurisdictions, and member companies, ensure that XII is appropriately and effectively funded, and that the one-third of membership fees actually are paid to XII. Without that funding, there will be no XBRL.

Not all "Membership Fees" are created equal

When the company XBRL US Inc was formed, it was recognized that a pool of funding (sponsorship if you will) was needed to ensure success.  In its first year of formation, XBRL US Inc created a special group of members known as the Founders Council. Each Founders Council member made a commitment of $1 million each, spread over three years. This $1 million was specifically excluded as "membership fees" and therefore not subject to the 1/3 dues owed to XII. A total of 9 organizations became Founders Council members, for a total of $9 million in revenue for XBRL US Inc. These 9 companies are listed as Members of XBRL US Inc, and in fact control the organization through their purchased board seats.

(I believe that was the right decision, although perhaps it would have been fairer to say that the Founders Council members would still have the "membershp fee" equivalent available to support XII.)

These firms do not pay an annual membership fee, and therefore none of their contribution to XBRL US Inc flows through to help fund XBRL International. This does not mean that these companies to not exercise influence over XII decisions, priorities or expenditure programs and decisions.

It seems that the only US companies that, through their membership fees, support XBRL International are those that are not Founders Council members.

Are the Founders Council companies "members" of XBRL US Inc? Yes. They are all listed on the XBRL US Inc Membership page of the XBRL US Inc website. They walk like members, quack like members, fly and swim like members, but do not pay membership fees that filter to XII.

For example, senior people on the XII Steering Committee work for companies that are Founders Council members - with none of their company's $1 million flowing through to XII. As these individuals are "at large" members, they have been elected by other "at large" members for the specific skills, experience and contacts, and their support for the important work of advocating for XBRL. Yet these people work for companies that provide exactly $0.00 in membership fee related funding to XII. Of course there is no requirement that "at large" members work for companies that are even members of an XBRL jurisdiction.

But I guess I'm still a little uncomfortable with this. But that's just me.

Members should fund XII:

While history cannot be changed, the International Steering Committee should at a minimum, remove the waiver for any Founders Council renewals, or for any new Founders Council members - this revenue is no longer required to support the US GAAP Taxonomy development or initial XBRL US Inc activities, as was the rationale for the original waiver. From now forward, if XII is serious about the success of XBRL, all membership fees should be counted and the 1/3 remitted to XII. That is the agreed price of being a jurisdiction.

I'm not suggesting that any funds contributed for XBRL Labs projects be subject to the XII membership fee calculation. These is sponsorship targeted at specific taxonomies and programs to increase adoption of XBRL. Of course, if XBRL US Inc membership is a benefit of participating in a Labs project, then the portion of the Labs "entry fee" that would otherwise have been a "membership fee" should be subject to the 1/3 remittance to XII.

Membership fees, regardless of the level of membership being bought, especially those fees that come with additional privileges such as purchased board seats, should be subject to the levy for XBRL International.

So what would that mean in actual revenue for XII?