NCF Report Table of Contents 1. EXECUTIVE SUMMARY 1 2. ISSUE STATEMENT 2 3. BACKGROUND 2 4. ANALYSIS 3 4.1 MISSION 3 4.2 OBJECTIVES 4 4.3 STAKEHOLDER PREFERENCES 4 4.4 FINANCIAL 5 4.5 MARKETING AND FUNDRAISING 6 4.6 ORGANIZATION 7 4.6.1 Staffing 7 4.6.2 Structure 8 4.6.3 Systems 8 4.7 RESEARCH & DEVELOPMENT 8 4.8 PROCUREMENT 8 4.9 OPERATIONAL 9 4.10 ENVIRONMENT 9 4.10.1 Competition 9 4.10.2 Technological 10 4.10.3 Demographics 10 4.10.4 Legal and Political 11 5. ALTERNATIVES 12 5.1 CLOSE DOWN ITS OPERATION 13 5.2 MAINTAINING THE STATUS QUO 14 5.3 ESTABLISH ITS NICHE IN THE INTERNET WORLD 14 6. RECOMMENDATION 15 7. ACTION PLAN 16 8. APPENDICES 20 Appendix A Stakeholder Interests 20 Appendix B Composition of Government Grants in 1995 & 1996 21 Appendix C 1995 & 1996 Financial Statements 22 Appendix D April 1997 YTD Actual vs Budget 25 Appendix E Operating Costs Projection 27 Appendix F Internet Service Providers (ISPs) 28 Appendix G SWOT Analysis 31 Appendix H Responsibilities and Authority of the Executive Committee 33 Appendix I Responsibilities of the Executive Director 34 Appendix J Organizational Overview (1996 May) 35 Appendix K Summary of responsibilities 36 Appendix L Example of Operational Manual 37 Appendix M Organizational Structure 38 Appendix N Announcement: New NCF Executive Director 39 Appendix O Resource Gap Analysis 40 1. Executive Summary The FreeNet movement began in Canada in the early 1990s. The objective of many freenets was to provide a free and accessible electronic communications environment where not-for-profit organizations and community members could share information. Freenets grew in membership rapidly. For example, since its incorporation in 1992, National Capital FreeNet grew to approximately 60,000 registrants. Rising demand for services meant added pressure on freenets to expand resources quickly. With government support for infrastructure and ready sources of content provided by members and NPOs, it looked like FreeNets were to prevail as vibrant community information networks. The advent of Internet tools in the early 1990s like Mosaic that offered users a graphical front end interface to the WWW changed the nature of information retrieval on the Internet. In a few years there was a rapid explosion in the technology and in the number of users attracted to the Internet. National Capital FreeNet’'s mission states that “it preparepeople for full participation in a rapidly changing communications environment.” The issue of concern for the organization is how NCF can fulfill its mission given the rapidity of change within the environment. The key issues that challenge National Capital FreeNet include: - financial viability for the future - rapid technological change and remaining relevant to its members - on-line content and service enhancements - remaining accessible and “free” to all members What prompts us to deal with these issues is NCF’s growing lack of financial stability due to government funding cuts, a decline in corporate giving, and meager donations from members. What is required to fulfill its mission and to sustain and grow NCF are: - sustainable and reliable sources of revenue - increased levels of community access and involvement - improved technology infrastructure If NCF cannot secure adequate resources, increase community access and improve its technology infrastructure so that it can expand services, it will soon fail “to prepare people for full participation.” NCF must therefore carve its niche as a community network that is truly owned and operated by and for the local community. To remain relevant and attractive to information providers and to many of its members, its service must evolve to a WWW format while continuing to provide basic services. In practicing a niche strategy, NCF avoids direct competition with larger Internet service providers. It devotes itself to serving its target customers and it focuses on its core competency of providing community-based information and connecting people-to-people at the local level. 2. Issue Statement The issues that challenge National Capital FreeNet are not so different than those being faced by other freenets across Canada. The current strategic issues include: - financial viability for the future - rapid technological change and remaining relevant for its members - on-line content and service enhancements - remaining accessible and “free” to all members What prompts action to deal with the issues is NCF’s growing lack of financial stability due to government funding cuts and a decline in corporate giving. Although donations from members currently sustain the organization, it is not enough to “grow” it. Without growth potential, the issue of remaining technologically relevant (i.e. the ability to replace aging equipment and provide services) comes to the fore. A domino-effect ensues. With technological decrepitude comes a reduction in provision of content by members, a reduction in services and staff, and so a gradual “winding-down” of the entity until it is no longer a going-concern 3. Background The National Capital FreeNet (NCF) was the second community-based electronic information network to establish itself in Canada and was incorporated in September 1992 as a non-profit organization under the Canada Corporations Act. Its offices are located in Ottawa on the Carleton University campus. NCF received $10,000 in start-up funding from the Federal Government in 1992 and a $160,000 grant from the Ontario Network Infrastructure Program spanning 1993-96. Central to the freenet concept is the issue of community access and involvement. The objective of the first freenet, established as the Cleveland FreeNet in 1986, and most other FreeNets that have followed since is simple: to provide free or low-cost access to on-line information resources such as local community information and global information through the Internet to anyone who wants it. The early 1990s also saw the advent of local, wide and global area networks which facilitated the linking of computers located within a room or around the world. Carroll & Broadhead refer to this global area network or GAN as the Internet – or simply put, the “world’s largest computer network.” The National Capital FreeNet’s mission includes the statement that it “prepares people for full participation in a rapidly changing communications environment” and indeed it has been cited that they “have helped in furthering the use of the Internet in Canada by drawing many people to the network for the first time.” All that is required is access to a computer with a modem. Although awareness of the Internet is high, 93% according to a 1996 Environics poll, only 23% said they had ever used it. However 30% of those using the Internet at home said they accessed it through a FreeNet or some other non-profit group which lends credence to the notion that “freenets” offer a sound introduction to the Internet. According to the Canada West study, published early in 1997, many freenets or “community networks have simply become the victims of their own success.” [p8] They experienced rapid growth in membership and seemingly it looked as if freenets were here to stay until several roadblocks were placed in their way. As the cost of commercial services dropped, this meant competition from commercial information providers. Growth in demand meant the installation of more lines, more equipment and the need to engage qualified technical help. It also brought about increased pressure on limited financial resources, especially given that they were providing “free” service to all members. In the case of NCF, this now amounts to some 60,000 registrants with 36,000 active subscribers, approximately half of which remain very active. 4. Analysis 4.1 Mission Although the NCF mission was updated as recently as 1996, it is important for it to revisit and revise its mission. Its present mission states that it is “a free, computer-based information sharing network accessible in both official languages of Canada,” and that “it links the people and organizations of this region, provides useful information, and enables an open exchange of ideas with the world.” As changes in the communications environment rapidly unfold, NCF’s values will also require re-structuring to reflect the needs of more technologically adept users and a further evolved network infrastructure. Membership may well remain “free and equal” but NCF should not make fulfillment of its mission incumbent upon the notion of “free” access. This constrains it from charging for value-added services and from developing efficient marketing and fundraising strategies. Physical access requirements for users will change significantly and rapidly and it’s likely that the information needs of its users will continue to evolve from a text-based environment to a multi-media one. Therefore a more broadly-based mission statement that better reflects what NCF provides to its membership and does for the community is preferable: The National Capital FreeNet / Libertel de la Capitale nationale is a computer-based information sharing network that provides universal and affordable access to the information highway in both official languages of Canada. Community members benefit from shared resources and information on the Internet and community while preparing for full participation in the 21st century infrastructure. 4.2 Objectives In line with a revised mission, the National Capital FreeNet’s objective must be to identify and secure its niche in the Internet world to assure its development into a stable and vital component of the 21st century infrastructure. This can be achieved via affiliation with Canadian freenets for a collaborative effort, establishing non-competitive status with Internet providers, and focusing on providing education and information about the Internet and local community to its members. 4.3 Stakeholder Preferences Strategic decision making requires an analysis of personal preferences, values and expectations of all stakeholders as each class has the power of influencing strategic decisions. For NCF the stakeholders that are of most importance (in order of importance) are users, volunteers, community, management (Board and Executive Director), suppliers, and government. (Appendix A). User’s interests are of prime importance since without them, NCF would have no reason to exist. Users want equal access opportunity to satisfactory Internet service with up-to-date content on the community and a platform to post messages. Volunteers want efficient delegation and tools to carry out their work. They are the front-line to the community and users and they want their input acknowledged. The community wants NCF to respond to their needs/wants by reflecting what is happening in the community and by preparing for the needs of the 21st century. They want this via accessibility to the service so they can ‘voice’ what is happening in the community. The volunteer board of directors are elected and are accountable for their actions to all stakeholders. It has the authority to make policies and personnel decisions and has a legal and social responsibility both to NCF, the community and users. Its decisions hold a lot of weight as they are the authority for NCF. Given this, the board is found to be somewhat risk-averse. This hesitancy has hampered NCF’s ability to be ‘proactive’ in defining its niche in the marketplace. Without defining its niche, NCF cannot situate itself in the external environment where it can take advantage of opportunities and tackle threats. Board members need to leave the ‘comfort zone’ to bring NCF into the 21st century. A ‘proactive’ approach will allow them to take the needed risks and monitor on a continual basis. The executive director manages the day-to-day operations, reports to the board of directors and acts as liaison to staff. S/he requires adequate tools and skilled labor to follow through on policies presented by the board. Suppliers have a substantial influence as they provide much of the needed equipment via donations to NCF. They require recognition and efficient use of their equipment. Government plays a diminishing role as a stakeholder at the local level however the national FreeNet network must develop linkages to ensure that the community has a voice in determining policy for Canada’s information highway. 4.4 Financial When FreeNet was incorporated in 1992 several levels of government were quite generous with funding (Appendix B). This allowed NCF to build their network and staff positions. As the years passed, various levels of government reduced their funding. In the Financial Year 1997 NCF does not receive any grants whatsoever. The absence of funding after some dependency on it caused major financial problems for NCF in 1996. This is evident from the fact that between 1995 and 1996 the current ratio dropped from 6.16 to 1.6. Also in this period current assets dropped from $101,486 to $18,820 and the excess of expenses over revenues were $99,108. See Appendix C for details. Clearly NCF wasn’t prepared for the change in government policy. Table 1. Comparison between key financial indicators for 1995 and 1996. 1995 1996 Current Assets $101,486 $18,820 Current Ratio 6.16 1.6 Excess Revenue over Expenses $50,789 ($99,108) Acc. Surplus End of Year $172,738 $73,630 When planning the 1997 budget NCF decided something had to be done. They targeted more of a contribution from the actual users by introducing an annual renewal process and gentling encouraging donations. In the 1997 budget donor projections were projected at $274,500 while in 1996 the amount was only $105,980. Still in 1996, based on 24,000 active users this only amounts to $11.44 per user. Even when considering the worst case scenario where only 75% of the users renew it only amounts to $15.25 per user per year – a real bargain by any standard. Compare this to Edmonton FreeNet which provides approximately the same level of service and which charges its users a mandatory $30 annual fee. Another comparison to indicate the bargain NCF users are receiving is to look at the fees Internet service providers (ISPs) charge. This is typically $150 annually. Although difficult to substantiate, it is felt that NCF users are not aware of all the costs involved in maintaining a FreeNet – hence the small average donation per user (Appendix C). As of April 1997 the current assets have increased to $92,952 and NCF has an improved cash flow with a surplus for the January-April period of $135,953 (Appendix D). This is a tremendous improvement over 1996 but financially NCF is in a poor position as its network infrastructure needs to be enhanced to accommodate user demand. This financial predicament will be further exacerbated by the increase in new users. It is projected that there will be 5,000 new users for 1997. Therefore, NCF must enhance its network in order to provide a sufficient level of service. Table 2 highlights the expected increase in operation costs for network infrastructure just to maintain the status quo (detail in Appendix E). Table 2. Projections of Increase in Operating Costs for 1998, 1999 and 2000 1998 1999 2000 Increase in Operating Costs $46,123 $40,463 $51,803 Currently users make many attempts before they can connect and NCF has to limit a user’s time as the existing 169 modem lines are insufficient to carry all user traffic. Clearly NCF is not providing the level of service users require. If the level of service does not improve, users will become dissatisfied to the point of “giving up” NCF. Worset still, the perception of NCF will be negative and will reduce the number of users willing to try the service. This hinders the number of people willing to surf the information highway in the National Capital region. 4.5 Marketing and Fundraising NCF currently uses the services of the National Public Relations (NPR) on a ‘pro bono’ basis for its communications strategies, media releases, damage control assistance as necessary. All media and communications are routed through the Administrative Coordinator. A media advisory group made up of selected board members, staff and users is in place. Fundraising is presently the responsibility of the board and the Executive Director. Previously there was a development person on contract with FreeNet however NCF experienced difficulty in replacing this person with adequately experienced personnel when he left the organization. Given the current level of “donation” support from FreeNet memberat latess than $1 per month per renewing member there is a need for awareness raising of what NCF’s requires to operate and a need to communicate to its membership that it offers a valuable community service. There is little doubt that the current structure for “fund-raising” will only last for the short-term and fulfill NCF’'s immediate requirements. NCF needs to develop linkages with its members, its community and with the corporate sector. 4.6 Organization 4.6.1 Staffing FreeNet currently employs three individuals and has over 500 volunteers. The three employees are the Executive Director (Lisa Donnelly), the system administrator (Yannick Gravel), and the staff administrator (Sheila Currie-Alder). Both Ms. Donnelly and Ms. Currie-Alder have been with FreeNet for a number of years. Mr. Gravel joined the organization only three months ago (Refer to Appendix H for the responsibilities and authority of the Executive Committee, Appendix I for the responsibilities of the Executive Director, and Appendix J for the organizational overview). Ms. Donnelly will be leaving NCF prior to the end of June 1997. Christopher Cope has been hired as the new Executive Director. The primary problems and issues include: - a staff of three is not enough to fulfill the mandate governed by the Board of Directors; - a new Executive Director has been hired and organizational changes can be expected; - two of the three staff members are new to the organization; - improvements are required for managing volunteers to eliminate conflicts and burnout; and the effort needed to raise funds is not being met. Fundraising has become essential due to the elimination of government grants and is currently the responsibility of the Executive Director. 4.6.2 Structure An organizational chart exists with responsibilities and mandates clearly defined for each position and team (Refer to Appendix M for the organizational structure). A primary issue is whether there is enough staff within this structure to effectively manage the day-to-day operations and manage the volunteer teams. 4.6.3 Systems The systems within FreeNet have a vertical structure. From the top, FreeNet’s mission and strategic direction is decided by the Board of Directors. It is the responsibility of the Executive Director to formulate the action plan to fulfill the mission. From the bottom, a volunteer planning committee exists which facilitates the Board’s planning process by making recommendations and by clearly defining and presenting alternatives. An issue of concern is that the strategic direction given by the Board of Directors often lacks clarity and is perceived unattainable given the limited number of staff. 4.7 Research & Development Ongoing research and development is very important for NCF to keep up-to-date with the rapidly changing computer and telecommunication technologies. The R&D activity is carried out by a technical director and a system administrator. The technical director focuses on the evolution for the infrastructure to provide new services (e.g. WWW) while the system administrator performs the day-to-day maintenance of the system with the help of other volunteers. R&D personnel with the required technical expertise is in high demand. For example, a system administrator can expect to be paid a minimum of $40,000 a year. As such, NCF is disadvantaged in competing with other companies for the scare skills due to its financial constraints. However, NCF can tap into a large member population for those skills. Those members who works in the high technology industries in the Ottawa-Carleton region will possess those required skills. 4.8 Procurement Most of NCF software and hardware are donated. When NCF embarks on a project, the technical personnel will come up with a wish list of equipment which is then presented to the potential donors. This approach has generated good results in past. Up to two-thirds of the computer equipment is obtained through donation. Currently, 15 corporate partners have provided donations ($5,000 to $10,000). For example, the ACC Amazon router was donated by Newbridge Networks Corporation. It is important for NCF to continue to explore and expand its opportunities for donated equipment. Another key supply factor is the phone lines for dial-up access to NCF. Bell, the local phone company, has delayed the decision the move all NCF (and Internet Service Providers) lines from Centrex voice grade lines to regular business due to the long connection time. NCF currently still uses Centrex voice grade lines (at $27 per line) as opposed to regular business lines which cost more than twice the current charge (at $70 per line). 4.9 Operational Due to the large member population and the limited number of modems, the registered-member-to-modem ratio has increased to 300-to-1 in February 1996. It is significantly higher than the typical ratio of 100-to-1 for other FreeNets and commercial providers promise ratios as low as 7:1. Members often encounter busy signals that predominate during peak periods between 8 a.m. and 1 a.m. Although the modem congestion is somewhat alleviated as more members access via telnet (through Internet rather than dialing in), the increased log-in sessions exacerbate the computer system load which causes slow response. 4.10 Environment 4.10.1 Competition Although NCF does not face direct local competition there are a myriad of partial substitutes available in the marketplace. The commercial service providers pose the greatest threat. Other free-nets across Canada cannot really be viewed as substitutes since the long distance charges required to reach them would quickly offset any cost advantage of using another free-net. The major commercial Internet providers (ISP’s) include: Compuserve, AOL, Prodigy, Genie (which are covered in detail in Appendix F), as well as Bell’s new entry with Sympatico, and providers popular with business such as I-Star and I-Can. The National Capital Region also has some local providers such as: Intranet technologies and the OttawaU.Net (sponsored by ACC Tel), details are also included in Appendix F. The commercial providers are aggressive, hungry for revenues to cover their huge infrastructure investment. Advertising and promotion budgets are large and many offer free start-up hours which somewhat negates NCF’s primary advantage. They all offer higher speed data transmission, technical support, full graphical interface, and e-mail access. Initial set-up software is also usually provided free to new customers. Barriers to entry for this industry are high with large initial capital investments required in both hardware and software just to start up. Exit barriers are also high since providers have to develop the expensive infrastructure required to operate an ISP. The larger providers enjoy better economies of scale than NCF and generally there are no switching costs if a consumer chooses to jump from one provider to another. The larger ISP’s are beginning to emerge with their own brand identity and have started to offer more proprietary services further weakening NCF’s competitive position. Government does not yet regulate the Internet but it is becoming a world-wide possibility. The telephone companies which provide Internet access lines are of course heavily regulated (in Canada) by the CRTC. 4.10.2 Technological Modem speed has more than tripled in the past few years. Currently, the speed of 28.8k and 33.6k are the norm and 56k is emerging. On the high end, ISDN line access at 64k is common for business users. Most of NCF’s modems operate at 14.4k and a few operate at 9.6k. Only 10 modems operate at 33.6k (limited to 30 minutes per session) for WWW service. Both 14.4k and 9.6k modems are considered very slow by today’s standard although they are acceptable for text based applications. With the trend moving toward World Wide Web (WWW) services and Graphical browsers with multi-media capability, the slow speed modems will become a bottleneck. Since NCF introduced WWW services, the system administrator has noticed that there is no significant increase in the network’s load. As most of the WWW traffic is passed through (to other servers on the Internet rather destined to NCF servers), most of the increase load is placed on the proxy server. Also, as WWW traffic is more graphics intensive and requires more bandwidth, the new traffic requirement is stretching the NCF network. 4.10.3 Demographics A demographics study of NCF members was conducted by the Network Services & Interface Design Laboratory Communications Research Centre of Industry Canada in 1994 . From the result of a small portion (approximately 8.9%) of the active members, it showed that: - the majority of members are male (81.8%) - the average age is 34.3 years old - the most frequent age group is 19-24 (> 15%) which is followed by the 25-29 and 30-34 age groups (each has > 12%) - more than 50% of the respondents are university educated - 41.4% of the users were salaried employees, while 27.5% classified themselves as students - the most common income level category was less than $9,000 per year (this is surprising since the most frequent occupation status was salaried employee) - the most frequent category is in the middle range of incomes ($40,000-$49,000), followed by households with incomes greater than $99,000 per year - the average of their computer experience was 11.5 years with most users had between 6 and 15 years of computer experience - the average of the networking and electronic bulletin board experience is 4 years The study found that the demographics of NCF members closely reflects the demographics of the national capital region. As such, NCF is reaching a wide range audience and is serving the community at large. In addition, the NCF system design group has conducted a survey on the members’ intention to donate and their attitude towards existing services and the PPP-based service. In that particular survey, the participation rate is quite good with close to 20,000 members (of 36,000 active members) responded. The result as follows: - 98% of respondents prefers language is English - 89% of respondents prefers improved level of services with addition of donation while 11% prefer reduced level of services with less donation - 69% of respondents have used a graphical 'web browser', such as Netscape Navigator or Microsoft Internet Explorer, and have regular access to a computer capable of running a graphical web browser - 38% of respondents either inquired for further information on donating or have recently donated; only 13% have no intention to donate 4.10.4 Legal and Political NCF currently does not have charitable status from Revenue Canada for issuing receipts on donations for tax purpose. Most FreeNets are built with the assumption that charitable status will be forthcoming. Without charitable status, one of the major motivators of member donation will be substantially decreased. There is a turning point. Recently, Vancouver Community Network (VCN) appealed to the Federal Court of Appeal which ruled in favor of VCN. The argument was that access to Internet and information of the community provided by FreeNets is a public good much like a bridge and highway. Despite of the minority view that there is no provision that the services provided are used exclusive for activities that are charitable in the legal sense, Justice Hugessen, one of judges of the VCN appeal, stated that the Federal Charitable Act may be outdated to deal with charitable activities of the 21st century. In addition, the Information Highway Advisory Council (IHAC) has recommended that the government should develop a national access strategy based on four principles: (1) Universal, Affordable and Equitable Access; (2) Consumer Choice and Diversity of Information; (3) Competency and Citizen’ Participation; and (4) Open and Interactive Networks Within (1), they acknowledge the need to maintain funding support for shared public networks such as the FreeNets. Another argument put forth by the Public Interest Advocacy Centre (PIAC) to CRTC outlines that FreeNets should be funded using the model for funding community cable channels. Companies involved in the Internet business, for example, the phone companies and the Internet service providers, will contribute part of their gross earnings to FreeNets to provide public access and the development of Canadian content. These trends and public opinions indicate that there is potential for political and social support for the continued funding of FreeNets. However, it will require significant effort to organized the FreeNets across Canada to provide a common voice to lobby government. 5. Alternatives The NCF is at a critical juncture in its history. Given the enormous challenges that it faces, can the organization survive into the next century as a non-profit entity that will continue to provide valuable services to its community? Examination reveals that NCF has essentially three alternatives. It can: - Close down its operation - Maintain the status quo - Establish its niche in the Internet world 5.1 Close down its operation If this option seems a bit drastic, it is nevertheless one that warrants some consideration. First, there is the issue of money. For many FreeNets, trying to keep up with the financial demands has simply become overwhelming. With government funding cut dry, the NCF relies heavily on member donations to fund its operations. For the past two years, this has been sufficient but it will be more and more difficult for the organization to maintain a positive cash flow given the escalating costs required to manage such a complex system infrastructure. Then there is the issue of relevance. Long before the Internet became the buzzword it is today, the FreeNet movement was introducing people to the Internet and all it had to offer. Now, given the explosive growth of the Internet and the rapid technological changes in the computer and telecommunication industries, the usefulness of a community network is greatly diminished. One can still argue that a community network is supposed to be a tool in developing the electronic highway for the benefit of each and every Canadian regardless of opportunity or economic status. But if technological innovations render the tool outdated where it can no longer serve its users particularly well, then it is unlikely that such a tool could make a very important contribution to the future electronic highway and may even risk becoming a sort of technological ghetto. What about the “universal access” ideal or the goal of providing affordable Internet access. This may have been a laudable goal two or perhaps three years ago but it is no longer very relevant given the extremely competitive market for consumer access to the Internet. The typical monthly charge for Internet use in the Ottawa region is now around $10, for which a customer might get ten hours of prime-time usage -- hardly a price accessible to only the wealthy. Pros - Because the NCF is primarily a volunteer organization, its dissolution would result in few job losses. Moreover, those who would be affected are highly skilled people who will not have any problem readjusting to the vibrant local job market. - Resources and energies from enterprising individuals within the community can be redirected to the creation of a vibrant National Capital Region public space on the Internet. - Assets can be sold while they still have reasonably good market value. Cons - The National Capital region would lose a valuable community service organization. - With over 60,000 registered accounts many of whom are active users, the NCF still has a considerable base of users who are actively supporting it. It is therefore possible that a political battle may be raised by key members to revive the network. 5.2 Maintaining the status quo This option means that the NCF continues to operate under its existing mission and values. It will serve the community as it best can given its current level of resources and voluntary support. Pros There is a considerable base of FreeNet users in the National Capital region who have been, and will likely remain, faithful to the NCF. Their donations, as well as contributions from Key Partners, provide a limited but adequate budget to allow the organization to fulfill its purpose effectively for the short-term. Since the future of community networks in general is very difficult to predict, the organization would continue to focus on its present objectives. As technology becomes more and more sophisticated, what used to be considered “high-end” equipment could be made available to the NCF at little cost as commercial Internet providers and their clients continually upgrade their systems. Cons If Bell Canada decides to move the NCF from Centrex grade voice lines to regular business lines, the organization may not be able to survive the huge increase in yearly operating costs. As the content on the Internet is slowly being upgraded to include more and more of video, audio, animation, or a combination of these elements, the limited communication and computing resources of the NCF will render its services less attractive to its high-end users. The result will be a slow exodus of the organization’s important supporters. There is a high risk of a gradual “winding down” of operations to the point where the entity is no longer a going concern. 5.3 Establish its niche in the Internet world The Internet world is fraught with competition and everyone is trying to get their share of the market. This option requires that the NCF becomes more cognizant of the role it intends to play in the on-line community It must carve its niche as a community network, with an ever-expanding group of dedicated stakeholders, that is truly owned and operated by and for the local community. It is useful for the organization to relate its services to that of a public library or a community cable channel. Although both of these latter services do not necessarily want to become “bigger” than what they are, they do need to offer an attractive enough service so that the people in the community will find them relevant and will be interested in using them. Similarly, to ensure its relevance, the NCF must introduce its services to a greater number of people in the community in order to create a critical mass of users who will be interested in creating content that will attract even more users. The NCF must provide Point to Point Protocol access to the Internet for its users to allow them to take full advantage of everything on the Internet (e.g., video, graphics, photographs, multi-media). Pros A niche strategy offers and ensures: - A proactive approach that will ensure that the NCF remain an important contributor to the development of the Canada’s information highway. - A new, revitalized organization will emerge as NCF’s staff and volunteers embark on a new challenge. Cons - Heavy demand will be placed on existing NCF’s staff and volunteers. - Rising financial risks as operating costs will increase with the operation. 6. Recommendation Community networks comprise a very important element in the development of Canada’s information highway. The NCF has the capability to reach a diverse group of people, regardless of their economic status or access to the requisite technology. Its survival is therefore important. If NCF is going to fulfill its mission in becoming a stable and vital component of Canada’s 21st century infrastructure, it cannot continue in its current mode - the status quo is not a viable option. Instead, it must establish its niche in the Internet world and more actively press the case that it is an essential community service. It must actively promote its role as a community network run by volunteers and dedicated to the advancement of education and the promotion of community. It must overcome the common perception that it is merely a cheap Internet provider and that it merely offers users a permanent e-mail address. It must show governments, business and the general public that it plays a valuable role in the development of an information highway that all Canadians can take advantage of. Once NCF receives recognition for its contribution, it will find an increasing base of support. And with this support, the NCF will be able to provide Canadians with education about the Internet and ensures that universal and affordable access remain a primary feature of Canada’s information highway. 7. Action Plan In practicing a niche strategy, NCF avoids direct competition with the larger Internet service providers. NCF devotes itself to serving its set of target customers whose needs are not well met by other service providers or through other electronic media. Its core competency is that of providing community-based information, connecting people-to-people at the local level (through SIGs, discussion groups, etc.), and several electronic tools, such as e-mail. By focusing on the community networking component, NCF is able to differentiate itself from other Internet service providers while serving both text-based and hypertext-based users (2 tiers of users). Although full access to the WWW for all users is some time away, by developing in this area, the organization increases its chances for survival. Objectives The objectives of following the recommended strategy for NCF to establish its niche in the Internet world and the action plan below are to ensure that NCF has sufficient resources (financial, human and technical) to remain relevant to its members and to the citizens of the National Capital Region well into the 21st century. Its goals must include: -Þ Increasing annual individual donation levels among members. This involves increasing member awareness of costs associated with running NCF. In the longer term donor categories should be revised to reflect a percentage of this cost or potentially all off this cost if adequate support from the corporate sector cannot be secured. In addition donor categories should be revised every one-to-two years to reflect increases in the CPI. -Þ Continued and increasing involvement of the board and high-level volunteers in solicitation of cash and in-kind donations from the business sector. The board and community volunteers are integral to the success of any fundraising plan. -Þ Hiring the human resources needed to fulfill marketing and fundraising functions. -Þ The continued and increased solicitation of the technology sector for goods and services in- kind. The projections for individual donations in Table 3 covers the added cost of the marketer/fundraiser and anticipated network infrastructure needs. Table 3. Comparison between present individual donations and projections 1998 1999 2000 Active Members 29,000 34,000 39,000 Present donation level per member ($11.44 per user) $331,760 $388,960 $446,160 Average individual donation $15.00 $20.00 $25.00 Increase donation level ($15 yr 2; $20 yr 3; $25 yr 4) $435,000 $680,000 $975,000 Key Success Factors - An awareness raising of NCF as a community network in the National Capital region - An ability to create a sense of urgency among the key stakeholders (the Board of Directors) to refine and implement an action plan - An ability to secure new line-sponsors, gifts-in-kind of equipment, and significantly increase annual giving levels among members Action Plan Immediate (1-3 months) - new Executive Director introduced to membership and announced to media - anticipated learning curve for new Executive Director - continue user account renewal process as is - review of the roles and responsibilities of staff members (as relates to fulfilling short and longer term needs) - review the 1996 and 1997 strategic plans with a view to developing a detailed action plan for its implementation; revise as necessary; allocate resources required to achieve results - agreement must be reached between the Board and existing staff as to what is manageable in the short-term - reorganization of volunteer management structure, such that conflict and burnout are eliminated or reduced - review of past and present funding sources (in particular corporate and individual sources) - starting at the Board level, determine Board member commitment to NCF as donors (all should minimally be supporting members in the Guru category or intend to be by the end of the fiscal year); this is to set the standard for giving in the organization prepare all (or a critical mass of) Board members to become willing solicitors of donations at the corporate and at the individual level - revise the budget to incorporate additional marketing/fundraising staff - advertise on-line and in the newspaper for position; interview for full-time marketing/fundraising position Short-term (4 - 6 months) - hire a full-time marketing/fundraising person, $35,000 salary range (preferably someone with marketing and fundraising experience in non-profit organizations) - in conjunction with the new staff person, ED and Board of Directors, develop an integrated marketing and fundraising plan - change the role of the National Public Relations to that of an advisory one - determine technical requirements for developing a fully integrated electronic member renewal and donation process (which includes encrypted payment capabilities) - develop a survey to be completed along with membership renewal; to determine profile of users and how NCF can better serve its membership - pilot test some of the strategies developed in the plan - determine the cost of technical requirements for basic service upgrade to accommodate user traffic (lines, modems) - identify and recruit the volunteers needed to carry the marketing and fundraising plan forward (they should be from among the pool of donors already contributing beyond the lowest member renewal category of $25). Medium term (7 - 12 months) - fully implement the marketing / fundraising plan - continue moving service toward WWW; this also offers visibility on the Web - prepare for full two-tiered system within 18 months - lower the ratio of access (300:1) to be in line with other freenets - review opportunities for collaboration with other freenets across Canada - determine if there is any potential for a national campaign or a national sponsorship of freenets by a Canadian corporation or a U.S.-based corporation Longer-term (Year 2) - focus on collaborative efforts with other Canadian freenets in lobbying (informing) the government on the benefits of freenets as a strategic tool in “getting” Canadians on the information highway - further exploration of funding model for community cable channels (% of revenues of Internet service providers to community networks) - increase in community outreach; i.e. add to the number of community access points - more aggressive sourcing of Information Providers to provide content - expansion of business-access component - 1998 strategic plan with implementation plan - re-visiting and revision of the mission statement - full integration, two-tiered access Contingency: If dollars cannot be raised from corporations or individuals, then the Board must re-visit its “free” policy and implement an annual user fee or develop promotional opportunities which can be “sold” to businesses in exchange for advertising or sponsorship dollars. 8. Appendices Appendix A Stakeholder Interests Stakeholder Preferences, Values, Expectations Board of Directors - Authority/power - Financial responsibility - Social responsibility - Policy maker - Legal responsibility - Objective viewpoint provider - Strategic planners - Self-maintenance - Participation in personnel decisions Executive Director (ED) - Day-to-day management - Liaison between Board & staff - Provides professional expertise - Evaluates program achievements - Provides objective reactions to the Board Volunteers - Day-to-day work Professional team worker - NCF representative to the community - Assists Board committees as needed - Information provider to planning process - Provides objective reactions to the Board & ED Suppliers - Recognition - Efficient use of equipment Users - Equal access opportunity - Up-to-date content - Satisfactory access to NCF - Opportunity to post messages Community - Environmentally sound activities - Response to community needs/wants - Actions socially sound Government - Continuity of tax payments - Advance national objectives - Environmentally sound activities - Satisfy regulations Appendix B Composition of Government Grants in 1995 & 1996 Government Grants 1995 1996 Ontario Ministry of Economic Development and Trade $15,000 $15,000 Regional Municipality of Ottawa-Carleton $90,000 $10,000 Community Foundation of Ottawa-Carleton $3,000 $0 Appendix C 1995 & 1996 Financial Statements NATIONAL CAPITAL FREENET INCORPORATED Statement of Revenue, Expenses and Surplus Year ended December 31, 1996, with comparative figures for 1995 1996 1995 Revenue: Donations $ 105,980 $ 175,941 Fundraising 90,403 81,390 Deferred contributions (note 3) 28,139 23,290 Government grants (note 2) 28,000 105,000 Promotional items 3,927 5,992 Public access cost recoveries - 530 ------- ------- 256,449 392,143 Expenses: Systems administration 74,729 57,459 Telecommunications 70,545 69,076 Admin. and professional fees 68,607 67,352 Depreciation 65,917 54,677 Office staff and supplies 42,819 31,217 Fundraising 32,608 53,652 Public events 217 722 Promotional items 115 6,113 Public access - 1,086 ------- ------- 355,557 341,354 ======= ======= Excess of rev. over exp (99,108) 50,789 Surplus, beginning of year 172,738 121,949 Surplus, end of year $ 73,630 $ 172,738 See accompanying notes to financial statements. NATIONAL CAPITAL FREENET INCORPORATED Balance Sheet December 31, 1996, with comparative figures for 1995 1996 1995 Assets Cash $ 18,368 $ 95,885 Amounts receivable - 5,000 Prepaid expenses 252 601 ------- ------- 18,620 101,486 Equipment and software: Computer equipment 23,517 113,830 Systems software 43,784 36,909 Telecommunications equipment 112,976 83,753 Business equipment 6,533 6,033 ------- ------- 286,810 240,525 Less accumulated depreciation 165,128 99,211 ------- ------- 121,682 141,314 ======= ======= Total Assets $ 140,302 $ 242,800 Liabilities and Surplus Liabilities: Accounts payable and accrued liability $ 11,650 $ 16,481 Deferred contributions (note 3) 55,022 53,581 Surplus 73,630 172,738 ======= ======= Total Liabilities & Surplus $ 140,302 $ 242,800 Notes to Financial Statements Year ended December 31, 1996 National Capital FreeNet Incorporated is a non-profit organization, the aims and objectives of which are to establish and operate a community based computer network to store, access and exchange information between individuals and organizations in the national capital region. The Company was incorporated on September 29, 1992 under the Canada Corporations Act as a non-profit organization without share capital within the meaning of the Income Tax Act (Canada) and accordingly is exempt from income tax. 1. Significant accounting policies: These financial statements have been prepared in accordance with generally accepted accounting principles. The significant accounting policies are summarized as follows: (a) Equipment and software: Equipment and systems software which is purchased is recorded at cost. Contributed equipment and software is recorded as an asset at fair value at the date of contribution. Contributed equipment and software is recognized as revenue at an amount equal to the related depreciation on those assets. Depreciation is provided on the straight-line basis using an annual rate of 25%. (b) Revenue recognition: Government grants provided for specific purposes are recognized as revenue in the period in which the related expenses are incurred. Unrestricted government grants are recognized as revenue when received. (c) Contributed services: Contributed services are recognized when a fair value can be reasonably estimated and when the services would otherwise have been purchased. 2. Government grants: Grants have been obtained from the following sources: 1996 1995 Ontario Ministry of Economic Development and Trade (Ontario Network Infrastructure Program) $ 15,000 $ 15,000 Regional Municipality of Ottawa-Carleton 10,000 90,000 Community Foundation of Ottawa-Carleton - 3,000 ======= ======= $ 28,000 $ 105,000 3. Deferred contributions: Deferred contributions relate to the unrecognized portion of contributed equipment and software. The changes in the deferred contributions balance for the year are as follows: 1996 1995 Balance, beginning of year $ 53,581 $ 67,671 Add contributed equipment and software 29,580 9,200 Less amount recognized as revenue (28,139) (23,290) ======= ======= Balance, end of year $ 55,022 $ 53,581 Appendix D April 1997 YTD Actual vs Budget National Capital Freenet Statement of Revenue, Expenses, and Surplus Period ended as stated Actual Budget Actual Budget Apr-97 Apr-97 YTD1997 YTD1997 Revenue Donations from members Associated with registration $4,333 $6,000 $22,507 $24,000 Associated with renewals $31,977 $31,000 $120,983 $124,00 Total member donations $36,311 $37,000 $143,489 $148,00 Fundraising Activities Line Sponsorships $700 $1,600 $700 $6,400 Corporate donations $0 $0 $0 $0 Auctions $50 $0 $836 $0 Sale of promotional items $130 $0 $445 $0 Other activities $0 $0 $0 $0 Total fundraising $880 $1,600 $1,981 $6,400 Government grants $0 $0 $0 $0 Other revenues $0 $0 $0 $0 Deferred contributions $0 $0 $7,231 $7,959 Total revenue $37,191 $38,600 $152,701 $162,35 Expenses System access telecommunications $5,720 $5,819 $22,939 $23,275 System administration $3,736 $5,349 $12,981 $21,398 Office staff and supplies $2,992 $2,878 $13,108 $11,510 Volunteer Coordination $0 $50 $7 $200 Administration and professional fees $6,837 $5,805 $23,664 $23,220 Fundraising and promotional costs $0 $0 $4 $0 Public events and access $0 $0 $480 $0 Costs of Grants $0 $0 $0 $0 Depreciation $0 $0 $17,197 $18,007 Total expenses $19,285 $19,901 $90,379 $97,609 Excess of revenue over expenses $17,906 $18,699 $62,322 $64,750 Surplus, beginning of period $118,047 $102,231 $73,631 $56,180 Surplus, end of period $135,953 $120,930 $135,953 $120,930 National Capital Freenet Balance Sheet For the period ended as stated Actual Budget Apr-97 Apr-97 Assets Cash $92,028 $77,004 Other current assets $924 $1,370 $92,952 $78,374 Capital equipment Computer equipment $123,517 $122,780 Systems software $43,784 $43,784 Telecommunications equipment $112,976 $122,508 Business equipment $6,533 $9,033 $286,810 $288,105 Less accumulated depreciation $182,325 $184,376 $104,485 $103,729 Total assets $197,438 $182,103 Liabilities and Surplus Accounts payable and accrued liabilities $13,693 $15,034 Deferred contributions, net of amortization $47,791 $46,139 Surplus $135,953 $120,930 Total liabilities and surplus $197,438 $182,103 National Capital Freenet Statement of Changes in Financial Position For the period ended as stated Actual Budget Actual Budget Apr-97 Apr-97 YTD1997 YTD1997 Operating activities Excess of revenue over expenses $17,906 $18,699 $62,322 $64,750 Items not involving cash: Deferred contributions $0 $0 ($7,231) ($7,959) Depreciation $0 $0 $17,197 $18,007 Net change in non-cash working capital items Acc Rec & Prepaid Expenses ($924) $130 ($672) ($1,322) Acc Pay & accrued liabilities $2,452 $2,199 $2,044 $836 Cash provided by operations $19,434 $21,028 $73,661 $74,311 Investing activities Purchase of equipment for cash $0 $0 $0 $2,000 Cash applied to investing $0 $0 $0 $2,000 Increase in cash during the period $19,434 $21,028 $73,661 $72,311 Cash, beginning of period $72,595 $55,976 $18,368 $4,693 Cash, end of period $92,029 $77,004 $92,029 $77,004 Appendix E Operating Costs Projection Projections of Increase in Operating Costs for 1998, 1999, & 2000 (1997 Budget used as a baseline) Appendix F Internet Service Providers (ISPs) National/ International Providers: GENIE : - Free $50 of service on start-up - Free graphic user interface (Windows/Mac) - 9,600 baud transmission - Offers “Roundtable” or chat sites, allowing real time conferences - Bulletin board access - Various topics: Windows, Sci-fi, comics, Mac, photography, travel, military, Microsoft, dogs, electronics, motorcycling, soaps, reggae, hot sauces, genealogy, current affairs, small business, automotive, writers, sports, and lots more! - E-mail (GE Mail) - Fantasy adventure games, combat simulations, also multi-player games (Dragon’s Gate, BattleTech, Air Warrior) - Also traditional games: poker, chess, backgammon, etc. - News from Reuters, up-to- the-minute sports scores, stock and mutual fund quotes - Access to on-line shopping at over 40 stores - Access airline reservations for American Airlines (@ Sabre) - Analyze and trade securities with an Investment Analyst, or invest with Charles Schwab - Search : Dow Jones, D & B, Company Profiles, and a newsstand (900+ publications - 1-800 support (1-800-638-9636) - Fees: $US 8.95/mo. or $CDN 10.95/mo. (includes 4 hours non-prime time usage), additional hours @ $3/hour ($CDN 4/hr.) - Prime -Time surcharge $CDN 12/hr. (8 am to 6 p.m. weekdays only, holidays excluded) - Service offered out of Rockville, Maryland, USA AOL : - Free installation disks sent to homes with 15/ 50 free hour offers included - Offers an easy to use, intuitive interface - Good graphics package - Over 15 magazines available on-line - On-line help always available - Offers news, investment services (private portfolio monitoring, 15 min. delay stock quotes) - Offers chat rooms: public and private - Offers E-mail, with customized options to enhance your mail - Private password access, all family members can have their own access code - 1-800 support (1-800-827-6364) - Many on-line games available, also on-line visits with special “hosts” - Upgrades available free on-line - 33,600 modems PRODIGY : - Free software, and first month trial (20 hours) - Supports Windows, DOS, Mac - Offers great graphics and sound - Diversified bulletin boards (over 2 MM members) - “Power “ tools to assist advanced users, simple screens to help basic (new) users - Offers one of the largest support staff to help users - Can track news headlines as they arise, and follow stock markets - Offers total sports coverage through ESPNET, - Many sundry services: weather, entertainment, reference, shopping, travel, etc. - 1-800 support (1-800-PRODIGY, or 1-800-776-3449) - Fees: Basic US $9.95/mo. (5 hours), or classic plan is US $19.95 for unlimited use - Rated on top in May for all ISP’s (of the big ten providers) COMPUSERVE : - Offers initial month free, plus $15 credit on extended usage - Free software, support, and monthly Compuserve magazine - Offers access to E-mail (send 60 free messages/mo.) - Offers various services: News, sports, weather; reference library; shopping; financial information; travel and leisure; and entertainment/games - Over 2000 extended and premium services are provided - Supports 28,800 baud modems - Local dial-ups (including Ottawa: 613-841-0400) - Supports Windows 3.1, Windows ‘95 and Mac (all on dick or CD-ROM) - 1-800 support (1-800-848-8990) - Fees: 5 hours/month free then $2.95/hr for each additional hr, or flat-rate @ $24.95/mo. for 20 hours, extra hours at $1.95/hr LOCAL PROVIDERS OTTAWAU.NET : - Sponsored by ACC TEL - Links with ICAN.NET - Software sent free within 5 days ($99 value) - Includes a licensed web browser plus e-mail address - 24 hour toll free support (1-888-274-7919) - Offers 28.8 Kbps modem capability - Offers local dial-ups across Canada (in major cities), can use your laptop for local access! - Fees: CDN $6.95/mo. basic plan (10 hours), annual plan $69.95/yr. (12*10 hours), High volume plan $22.95/mo. (100 hours), or high volume annual plan $229.50/yr. (12*100 hours) - Requires 386 or better, 486 preferred, and Windows 3.1 or greater, 14.4+ modem - Offered out of Etobicoke, Ont. INTRANET TECHNOLOGIES : - Sponsored by the Ottawa Citizen - Available for Windows and Windows ‘95 - Free software and support (local 613-234-6999) - offers full internet and WWW access - Fees: $9.95 mo./20 hours (basic), or intermediate $19.95 mo./40 hours, or frequent plan $29.95 mo./90 hours. Additional hours on each service at $0.75/hr. - Can read and post articles in newsgroups - Offers E-mail address - Expert help available 9 a.m. to 9 p.m. daily - Available locally at Inly Systems or Sona Computers - maximum dial-up speed is 33,600 Appendix G SWOT Analysis STRENGTHS - has attracted a large membership (20K active) - infrastructure simple to learn and explore - modest user equipment needs - community support: volunteers/contributions - independent, free from for-profit constraints - on-line help available - diverse topics available - provides tools for ‘community mobilization’ - provides vehicle for advocacy - low salary overhead/ rent free premises - automated annual renewal process - can attract volunteers more easily - some hardware is donated - has clearly defined role for the board/executive director - thorough screening process to ensure capable volunteers - strong new executive director - has a formal organizational structure - has self-sustaining teams - manuals available for volunteers/staff - offers a “volunteer-of-the-month” award WEAKNESSES - modems often busy - growing overhead - no central activity/meeting place - NCF not evolving as quickly as the marketplace - small employee base, mostly volunteers many with their own agendas - volunteer burnout/conflicts - part-time software development inadequate - unreliable/unpredictable membership funding - less flexibility due to policies/procedures/fixed costs - no statistics on members/donors - no PR/fundraising budget - not recognized as charitable organization/no tax receipts - no fundraising expertise - line sponsorship is down - donations are decreasing - there is no minimum “donation” - unable to finance needed changes - not enough staff to meet board'’s mandate - very new System Administrator who is unable to perform all the duties yet - a change in senior management (new culture/preferences) - expertise required of volunteers is growing more technical OPPORTUNITIES - target schools/colleges/universities - get volunteers/client base to assist with fundraising - increase marketing to both small and large businesses - research demographics/needs of users - acquire a fund-raiser - deregulation may allow NCF to use another (cheaper) phone provider - pursue additional government funding (IHAC) - can re-apply for charitable status since BC free-net recently acquired that status - develop new sponsorships with local hi-tech firms - explore other revenue generating opportunities (on-line auctions, etc.) - “youth” need to be computer literate - if a “ community service” possible access to community funding/grants - the non-profit nature of the NCF can more easily attract additional volunteers - access available from libraries/community centres - technology costs are falling - small home office (SHO) market is currently under-serviced - could add advanced products for additional user-fees - growing market of on-line computer users - Ottawa has one of the highest penetrations of the home PC market - for $25/year clients can have a “permanent address while they continually jump providers THREATS - governments drastically reducing funding - loss of subscribers - donations are decreasing - internet being used as a substitute (ISP’s) - NCF exposure greatly reduced since onset of Internet provider prevalence - illegal for phone companies to donate lines (CRTC) - if NCF gets converted to business lines, line costs would double - members may resist auto-renewal process - shortage of funds makes technical upgrading difficult - donation patterns are cyclical (uneven cashflow) - unclear membership profiles is causing current line sponsors to become reluctant to renew - NCF is vulnerable to recession and the business cycle - expertise of volunteers is becoming increasingly more technical - no government grants are currently forthcoming - commercial providers are upgrading quickly, and offer full graphical interface - ISP’s are getting cheaper, and 247 WWW servers are in Ottawa - competition is doing significantly more advertising - new equipment is very expensive, while old equipment faces rapid obsolescence - vulnerable to community involvement/interest for content - difficult to fulfill mandate (remain free) and meet growing technical requirements of its users Appendix H Responsibilities and Authority of the Executive Committee The following is a summary of the authority delegated to the Executive Committee by the NCF Board of Directors in motions passed since the beginning of the Board to the current date. At the Board meeting of 1995-03-21, The authority of the Executive Committee was reviewed and it was agreed to limit that authority primarily to implementing disciplinary actions. The Executive was tasked with reviewing its mandate. a) Since the Executive Director is now responsible for day-to-day operations and staff supervision, the Executive Committee will not need to retain responsibility for operations. The Executive Director will report directly to the President. b) In order to deal with members who contravene the User Agreement or other NCF policies, the Executive are authorized to suspend user accounts for such contravention’s. All suspensions will be reported to the Board and each account will remain suspended unless the Board passes a motion to reinstate the account. c) The Complaints Committee has also been delegated by the Board to look after investigation of complaints regarding contravention’s of the User Agreement or other NCF policies, to send warning notices, and to suspend accounts. d) In order to deal with news groups that are in violation of our Acceptable Use Policy or the User Agreement, the Executive are authorized to remove the news group for such contravention’s. All suspensions will be reported to the Board and each such news group will remain suspended unless the Board passes a motion to reinstate the news group. e) Signing authority for the NCF bank account has been delegated to the President, First Vice-President, Treasurer and Executive Director. f) The agenda for Executive Committee meetings will be e-mailed to NCF Board members prior to the meeting, and minutes of such meetings will be e-mailed to Board members within two weeks of the meeting. g) The current composition of the Executive Committee is: David Sutherland President Andrew Patrick First Vice-President Julie Chahal Second Vice-President Richard Taylor Secretary Lisa Donnelly Executive Director Jeff Bossert Treasurer Note: At the Board Meeting of 1995-03-21 it was decided that the Executive Committee shall consist of the Officers of the Corporation and the Executive Director. -------- last modified 1996-02-10 R. Taylor, aa333 Appendix I Responsibilities of the Executive Director About the NCF Executive Director The National Capital Freenet hired its first Executive Director (ED), Lisa Donnelly (am412), on 1 October 1994. The following is the job description created by the NCF Board. National Capital FreeNet Executive Director Contract: "Schedule A" Human Resource Management - implement personnel policy including hiring, supervision and evaluation of NCF staff and contractors - mobilize and coordinate all volunteer and committee activities Planning and Governance - act as a liaison between the Board, staff and volunteers - propose short and long term plans - formulate and recommend policies for Board approval - prepare Board briefing materials and arrange for Board secretariat services Community Relations - represent the NCF to other organization and the media - oversee day-to-day correspondence and communications - cultivate associations with the community Financial Management - prepare budget with Treasurer - manage fiscal resources, including timely deposit of revenue and payment of bills - ensure accurate bookkeeping and reporting of financial performance Appendix J Organizational Overview (1996 May) The National Capital FreeNet (NCF) is incorporated under Part II of the Canada Corporation Act as a not-for-profit corporation. As of May 1996, NCF is owned by over 56,000 members. Anyone can become a member simply by completing the registration procedure, at no charge. Most members live in the Ottawa-Hull area, Canada's National Capital region, straddling the border of the provinces of Ontario and Quebec. NCF enjoys the support of many tens of thousands of donors and many local organizations and corporations. NCF is owned by the community to operate basic network communication services and create a public place on the internet for people of the community to put content; NCF operates the platform, but it is the community who use it and fill it with value. NCF has a board of fifteen directors elected by members at the online Annual General Meeting (see 'go agm'). Directors have a 3-year term, and one-third of the board (5 director positions) are elected by members at each Annual General Meeting. The Board sets policies that guide the organization. Day-to-day operations are managed by an Executive Director. The Board is assisted in its work by Board Committees, including the Executive Committee, the Finance Committee, the Planning Committee, and other committees as required. Directors and people appointed from the community serve on these committees. The Executive Director (ED) is employed by NCF to manage day-to-day operations. The ED is assisted by staff, contractors, community partners, and volunteers. NCF relies on donations. Also, there are many opportunities to help by getting involved. Over 500 volunteers maintain online menus and content. There are many 'task forces' to join in all sorts of areas (see 'go operations'), and NCF is always happy for people to add new content that would benefit the community. See 'go ncf' for more information. Directors welcome your comments about NCF policies, direction, and community partnerships -- see 'go board' -- and the Executive Director welcomes comments and questions about operations, services, and getting involved – see 'go operations'. Appendix K Summary of responsibilities Board of Directors Executive Director (ED) People reporting to the ED ======================= ======================= ========================== Is accountable and Manages day-to-day Carries out the work of legally responsible for operations of the the organization the organization organization Promotes the Seeks community support Are representatives of organization in the and understanding the organization in day-to- community day interactions with the community Interprets the Identifies needs the Understands the clients community to the organization can meet and the organization organization Determines long and Drafts long and short Contributes concise and short term plans and term plans accurate information to ensures the means to the planning process carry them out Establishes a structure Is an ex-officio member Assists the Board to carry out the of all Board committees committees with their Board's work work Sets personnel policy; Implements personnel Accepts conditions of hires, counsels and policy; hires, work as outlines in evaluates Executive supervises and evaluates personnel policy; works Director staff as a profession in the team Sets budget and ensures Prepares budget with Identifies resource sufficient funds to Treasurer and manages needs and accounts for meet it the money expenditures Approves/sets policies Formulates/recommends Identifies policy gaps policies and implementation pitfalls Ensures procedures are Directs policy Makes decisions within established to implementation and the policy guidelines implement policy administers the and established organization procedures Serves as a review Provides professional Provides professional panel, providing expertise and objective expertise and objective expertise, wisdom and reactions to the Board reactions to the Board an objective viewpoint and Executive Director Maintains and builds Supports the Board in Stimulates and informs the Board fulfilling its role the Board Monitors the Reports to the Board and Maintains required organization's acts as liaison between records and reports on operations Board and staff program implementation Evaluates the Evaluates program Provides feedback on organization's achievements program impact operations Appendix L Example of Operational Manual Insuring open communications for planning & implementing NCF functions In order to maintain open lines of communications between ALL interested parties, the following guidelines must be adhered to at all times. 1. Bring your idea or plan to the Staff person that you normally report to FIRST. Do not make plans with other volunteers without involving ALL interested parties from the outset. 2. When planning an NCF function, i.e. help-desk session, volunteer meeting, task force meeting etc... please cc the Executive Director, the Office Administrator and the Volunteer Coordinators. 3. Once plans are finalized, inform ALL interested parties three (3) weeks prior to said function taking place. (This was agreed to at the last Key Volunteers meeting.) 4. When you have received approval of your plan of action, post the specifics in ncf.announce and ncf.admin.status.operations, (preferably in BOTH official languages). Failure to stick to these procedures can result in miss-information, overlap of functions and a breakdown in the lines of communications. --------------------------------------------------------------------------- 1995-12-18 Lisa K. Donnelly am412@FreeNet.Carleton.CA Appendix M Organizational Structure NCF Organizational Structure ============================ Committees ===============> Board <========> Executive Committee |-----------| | | Complaints| | | Finance | Executive Director |Francophone| /|\ | Planning | / | \ ----------- / | \ >------->------>-----------------------<------<--------< | | | | | | | | | VolCoord Team | | | | | --------------| | /|\ | /|\ | /|\ Technical Services | Administration | Fundraising - PR ------------------ | -------------- | ---------------- | | Staff | Staff | System Administrator | Administrative Coordinator | -------------------- | -------------------------- | Modem Team | AGM Team (Seasonal) | Fundraising Team News Admin | Boutique Admin. | Auction Team Oracle Admin | Help Desk | Public Relations Team Postmaster | Info Man. Team | SysAdmin Team | | Testing & Doc. Team | | WWW-Eval Team | Office Admin Team | | Speakers' Team | | Time Limits Team | | Training Team | | Translations Team | | Web Page Team | ---------------------------------------------------------------------------- 1997-04-02 A revision to the organizational structure would include a staff person under the “Fundraising” function to fulfill the new Marketing and Fundraising function. The staff person would work with the board and a three-member volunteer team. Appendix N Announcement: New NCF Executive Director The NCF is pleased to announce that Christopher Cope will be joining us as our new Executive Director. Chris will be working with Lisa Donnelly for the first three weeks of June to allow for a smooth transition. Working in property management and related fields, Chris brings with him over 20 years experience in the most crucial areas for an Executive Director: managing many different groups of people and a wide array of projects. In addition, Chris' expertise in forging new corporate and community partnerships will serve the NCF well as it seeks new ways to partner with organizations to enhance our services. As the NCF enters this important stage in its growth, Chris has shown his eagerness to take the organization to the next level. On behalf of everyone at NCF, welcome aboard Chris! -- Dave Sutherland Chairman of the Board, National Capital FreeNet Appendix O Resource Gap Analysis Functional Areas Current Resource Required Resources Resource Gaps Filling the Gaps: Tactics and Risk Financial Financial Accountant Cash Surplus Free Office Space Annual Renewal System Capital Equipment More Phone Lines Corporate Funding $35,000 + benefits for an additional staff person dollars for additional phone lines and equipment HR needed to fills the marketing, public relations and fundraising role increasing corporate sector support Research & Development * 1 technical director (on volunteer basis) (see below for a detailed description 1 or more technical personnel with the experience at the technical director level proficient technical volunteers; eventual need for additional technical personnel Tap into the volunteer HR base from NCF members Recruit co-op students from universities, community colleges, and even high schools Human Resource Board of Directors Three staff Over 500 volunteers Dedicated fund- raiser Additional employee dedicated to fundraising and marketing Hire a qualified individual for fundraising and marketing. Procurement 14 key partners 22 line sponsors (see below for the list of sponsors) expanded base of partners and sponsors more local partners and sponsors who is willing to sponsor line or donated equipment Have a focused strategy to elicit donations from local corporations Position NCF as an effective media to reach the certain market segment (given the demographic of NCF members) to elicit line sponsorship from corporations Functional Areas Current Resource Required Resources Resource Gaps Filling the Gaps: Tactics and Risk Operations 1 administrator 9 regular volunteers 169 modems,7 servers, 4 terminal servers and various networking and office computers equipment (see below for a detailed list) additional resources to achieve registered- member-to- modem ratio of 100-to-1 > 300 modems triple the current computer and networking resources additional system administration to manage the additional operational resource Tap into the volunteer HR base from NCF members Recruit co-op students from universities, community colleges, and even high schools Marketing National Public Relations support as ‘pro bono’ PR agency for NCF Advisory group of selected board members, staff and users ‘On-line” publicity area Monitor magazine column Production of NCF publications (5- min. guide) Salaried individual specializing in marketing and fundraising National Public Relations assist in an advisory role only; monthly meetings suggested with marketing individual to ‘touch base’ Advisory group to include representation from stakeholder groups On-line publicity area Monitor magazine Production of NCF publications (5-min. guide) Salaried, full- time marketing/fund- raising person Representation from community, suppliers, and government in Advisory Group Change role of NPR to that of an advisory role Tap into the membership base for recruiting qualified individual Recruitment requires careful selection given limited dollars available to hire a qualified person * Research & Development NCF currently only has one R&D/operation salary staff, the system administration. The rest of the R&D resource is volunteer. There is one technical director who performs most of the evolution work on the NCF network infrastructure and nine other volunteers who cover the maintenance of the news groups, modem pools, system operations. Each of the 9 volunteers contributes, on the average, 10 hours per week. Procurement The following is the list of 15 key partners: Carleton University * RMOC Dantek Computers Fulcrum Technologies Inc. Gandalf Technologies Inc. Hardware Canada Computing Ingenia Communications Corporation Loran International Technologies Inc. Microsoft Corporation Netscape Corporation Newbridge Networks Corporation Oracle Corporation Canada Inc. Ottawa Public Library Plaintree Systems Inc Sun Microsystems U.S.Robotics / Keating Technologies Inc. Government regulation prohibits phone company from donating times on their phone line. Thus, NCF has to raise the funds to pay for the phone line charge of which a portion is raised through sponsorship. NCF Connection Sponsors support the NCF by donating $700 per year. This covers the cost of maintaining one public telephone line so that the community can have better access to our system. In recognition of their support, sponsors' names appear on login screens, and they can use the title "FreeNet Connection Sponsor" for as long as they sponsor the line. All FreeNet telephone lines are provided in co-operation with Carleton University. The following is a list of current sponsors: CKCU (93.1 FM) Cyberus Online Inc. Dantek Computers Embassy of Japan Embassy of Spain Fisheries and Oceans Science Directorate of DFO/ la direction generale des sciences peches et oceans du MPO FreeNet Boutique / la boutique Libertel Goldberg, Shinder, Gardner & Kronick - Barristers & Solicitors KPMG Peat Marwick Thorne Microsoft Canada Monitor Magazine National Aviation Museum / Musée national de l'aviation NATIONAL Public Relations - Ottawa Ottawa Computes Pierre Bourque and Rosaleen Dickson - Authors The National Transportation Agency / l'Office national des transports Ottawa-Carleton Police Services Board Ottawa Regional Cancer Centre Professional Engineers Ontario - Ottawa Chapter Regional Municipality - Ottawa-Carleton - Municipalité Régionale Softgate Current Operation Resources NCF physical operating resources includes computers, modems and terminal servers which service user dial-up requests. The following table summarizes the current physical resource available (Note that some equipment are on loan from Carleton University). Current Operation Resource Modem Pool Speed (and limitation) 32 at 1200 bps to 12.0 Kbps (with some 300 bps to 14.4 Kbps) 112 at 300 bps to 14.4 Kbps 15 at 300 bps to 14.4 Kbps (limited to 10 minutes per session) 10 at 300 bps to 33.6 Kbps (limited to 30 minutes per session) Total 169 Computer (freenet users/news servers) 1 Sun Sparc 10 1 Sun Sparc 20 1 Sun Sparc 5 1 Sun Sparc 2 1 Sun Sparc IPX 1 Sun Sparc IPC 1 PC (dx486/66) Terminal servers 3 64-port Xylogics Annex terminal servers 1 36-port (max 72) Xylogics Annex 4 terminal server Local network and switching equipment EtherSwitch from PlainTree Amazon router from Newbridge Networks Two 8-port ethernet hubs Office equipment 1 Macintosh PC (on loan from Carleton) 1 IBM PC clone running Big Mouth phone software 1 Compaq PC (Office manager) Various PCs for office volunteers 1 Linux PC for sysadmin On the personnel side, day-to-day operation is carried out by the system administrator with the help of 9 volunteers who cover the maintenance of the news groups, modem pools, system operations. The volunteers contribute, on the average, 10 hours per week. Preferences & Strategic Gap Analysis Management (Board of Directors & Executive Director) - Carroll, Jim and Rick Broadhead, The 1996 Canadian Internet Handbook. Scarborough: Prentice Hall Canada Inc., 1996, p.99. - Ibid. p.100. - Henry, Shawn, Canadian Free-Nets: At a Crossroad on the Information Highway. Calgary: Canada West Foundation, 1997, p.5. - Ibid., p.6. - Network Services & Interface Design Laboratory Communications Research Centre, Industry Canada, 1994. http://debra.dgbt.doc.ca/services-research/survey/demographics/vic.html. - Industry Canada. Strategis: Information Highway. http://strategis.ic.gc.ca