FINANCIAL DISCUSSION
COVID-19 IMPACTOWASP Board of Directors
April 2020

TMSECURING THE WORLD’S SOFTWARE

Financial Modeling
Board requested staff to model SF Cancellation• Developed three models for Board review•••••

Model A: Original Budget
Model B: COVID No Change of Spending
Model X: COVID with Reductions in Discretionary Spend
Model Z: COVID with Reductions and Income Development

Expanded to cancellation of all remaining 2020 events• Events return to calendar = full upside•SECURING THE WORLD’S SOFTWARESlide 2

Financial Models
Model A

Model B

Model X

Model ZBudget

COVID-NC

COVID w/cuts

COVID w/cuts+income

Income$4,886,532$1,106,000$1,106,000$1,621,000

Expenses$4,534,668$2,181,200$1,598,800$1,891,800

Net$351,864($1,075,200)($492,800)($270,800)

Cash on Hand

$1,647,595$220,531$802,931$1,024,931

Fall events cancelled
No spending cuts

Fall events cancelled$240K cut Travel$180K cut Marketing$100K cut Chapters$55K cut Bank Fees
$25K cut Projects

Fall events cancelled$240K cut Travel$180K cut Marketing$100K cut Chapters$55K cut Bank Fees$25K cut Projects+$240K AppSec Days+$300K Virtual SF(end of year)

Recommendation: Adopt Model Z
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Slide 3

Income Development•

Virtual AppSec Days
•
••
•

•

$75K-100K Income, $40-60K Expenses
Repeat every other month for rest of calendar year
Estimated $225K-300K income on $120K-180K expenses
Target $150K net profit

Virtual SF/LiveStream/Training•••

Decision July BOD Meeting
Mix of off/on event in Oct SF
Target $150K net profit

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Slide 4

Income Development Ideas Dismissed•Fundraising Campaign•••

Increase Membership Dues••Audit found fundraising for humanitarian causes (Food, shelter, economic
relief, first responders, healthcare, local impact)
Determined optics unfavorable
Not the time to make this change

Placed Advertising on website••

Not in the scope/DNA of OWASP
Decreases value for existing Supporters

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Slide 5

Recommendations (1 of 3)•Approve Model Z••

Reduce spending limits by $600,000 to identified budgets
Cap 2020 Expenses at $1,891,800••••••(Original 2020 was $4,575,668)

Moratorium on contractual commitments for Regional/Local events
Notify impacted constituents
No cuts to staffing plan (current, Community & Events Mgr)
Plan, Schedule, and Execute no less than three Virtual AppSec Days
Develop Virtual/Hybrid/In-Person SF Global AppSec Days Plan

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Slide 6

Recommendations (2 of 3)•

Approve Board Motion for SF Global AppSec 2021••••

Negotiated favorable cancellation penalty for 2020
In return we are committing to repeat venue in 2021
Force Majeure still option with gathering size limitsPlan, manage, and execute as if SF is going to happen in October•

Also plan for Virtual/Hybrid options if needed

Plan, manage, and execute Dublin for February• Plan and source location for 3rd Global AppSec in 2021
• July Board Meeting make Go-No-Go SF Decision•SECURING THE WORLD’S SOFTWARE

Slide 7

Recommendations (3 of 3)•

Quarterly revisit spending limits••

June Board Meeting
September Board Meeting

Execute lower risk ideas now to maintain financial integrity• Plan to diversify revenue streams in 2021•••

Certificate ProgramGrants

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Slide 8

Likely Questions
How does this impact Chapter Balances? We would cap chapter spending to $150K regardless ofchapter balances which is our expected 2020 spend with COVID related meeting impacts
Why would we add more staff now? The Board has already discussed the need for these roles andthe rest of the Operating Plan remains essentially unchanged. Technically our events plan is actually
expanding with Virtual AppSec Days, along with the need to assume SF will occur from apreparation point of view we should continue our effort to “get ahead of the calendar”
What is getting cut from Marketing? The original 2020 Budget had funding for far more aggressive
event marketing ($50K), substantial funding for PR of Top Ten ($50K), Online ($25K), andPartnerships ($65) of which most all of these items will be cut.
What from the Operating Plan is changing? Outside of events, not much. The Fall Projects Summit
would be postponed, and we would remove the Travel Assistance Program.

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Slide 9Model Z is Lowest Impact to 2020 PlanOperations

Community

Projects

Growth & Partnering

Single Source of Truth

Build Community

OWASP Top 10

Branding

Retool Business Operations

Chapter Operations

Project Operations

Website 2.0

Planning and Budgeting

Individual Membership

Project Nurishment

Corporate Sponsorship

Financial Controls

Corporate Membership

Project Summits

Global Partnerships

Expense Policies

Local Partnerships

Travel Assistance Budget

Community Outreach

EventsGrant Funding

Trademark Registration

Town Halls

Global AppSec Events

20th Year Anniversary

KPI Dashboard

Global Program Teams

Online Training

Committee 2.0

AppSec Days

Certificate Program

Regional Events

Underserved Communities

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Marketing Plan

Slide 10

Likely Questions #2
What is getting cut from the Travel Budget? The Travel Assistance Program, Board F2F Meetings,
the Fall Projects Summit, and most all additional staff travel.
We’re only talking about not doing events, why is the financial so bad? Over the past three years
Events-related income has risen from 75% to 86%. Over 55% of that income comes fromSponsorships. Unforeseen events, like a global pandemic can stress organizations that lackdiversified revenue streams. 2020 Plan was to get these numbers back to pre-2017 levels withfurther diversification in 2021.
Are you forecasting any impact on Membership? Since our individual membership is only $50 andour key benefit is networking - which is even more important in a tight job market - no we do not
expect a negative impact. However, Corporate Membership has been downwardly revised to stayflat year on year forgoing forecasted growth in 2020.

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Slide 11Likely Questions #3
How will Model Z impact the 2020 Goals?
Promote updated version of OWASP Top 10 set to release in October 2020.
Continue to optimize business operations to overachieve financial and membership targets.
Manage two successful global conferences planning three in 2021.
Launch Project Summits and AppSec Days to over 500 attendees
Increase relevance and reputation of OWASP measured by 10% increase in web traffic.
Improve satisfaction with OWASP by survey measured a 10% increase.
Increase corporate and individual membership by 25%

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Slide 12

Backup Slides

SECURING THE WORLD’S SOFTWAREHistorical Revenue Trends

Accounting rules and practices changes in2017 impacted the classification ofSponsorships and Gifts for US non-profits.
These changes explain the percentage changeof income for Gifts and Contributions.

Since 2017, over 75% of yearly revenue is from Conferences
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