Rotary International News
3 June 2009
I’m happy to report moderate improvement in Rotary’s financial situation since my last letter on this subject on 2 April. Both Rotary International and The Rotary Foundation saw positive investment results in March and April, marking the first consecutive two-month period of growth this fiscal year. As a result, our investment losses have dropped from US$26 million recorded through February to $18 million as of 30 April for RI and from $222 million to $187 million for the Foundation. Most of the year-to-date losses remain unrealized and should reverse as the markets recover.
Revenues from club dues remain slightly ahead of budget, and total contributions to the Foundation are comparable to last year. However, a dramatic shift in current fund contributions from the Annual Programs Fund to PolioPlus in response to Rotary’s US$200 Million Challenge has reduced the Foundation’s cash available to fund operations. As a result, we will soon be selling some investments to pay for the Foundation’s operating expenses. As mentioned in my previous communication, the District Designated Fund remains secure at this time. Also, operating expenses for both RI and the Foundation remain favorably below budget in most areas, with these reductions projected to continue through the end of the fiscal year.
In April, the RI Finance Committee thoroughly reviewed our proposed 2009-10 RI operating budget, which is balanced and will tightly control spending. The committee recommended that the RI Board of Directors approve this budget at their June meeting. At this time, it is projected that RI’s General Surplus Fund will remain above the 85 percent level targeted by the RI Bylaws through 2009-10.
Also in April, the Trustees of The Rotary Foundation approved an austere operating budget for fiscal year 2009-10. Read a summary here: Chairman Jonathan Majiyagbe's letter.
For more than 20 years, your Foundation has operated on earnings from Annual Programs Fund investments, enabling the Trustees to spend every dollar contributed by Rotarians on humanitarian, educational, and cultural programs and program operations. During this period, the Trustees also spent approximately $100 million of investment returns on PolioPlus, Children’s Opportunities Grants, and other humanitarian programs. However, the current financial situation may prevent us from funding the Foundation’s operations in this manner for the next several years. Therefore, at the request of the Trustees, Trustee Chair Jonathan Majiyagbe appointed a special committee to develop an equitable and effective multiyear plan to restore the Foundation’s reserves. Additionally, the Foundation’s Investment Advisory Committee is reviewing the Annual Programs Fund investment policy to ensure that the value of your contributions is protected and that the Foundation will have sufficient liquidity to meet program payments and operating expenses.
Our Foundation has thrived over the past few decades. The growth in our programs is due to your financial support. If you have not yet done so, I hope you will join those Rotarians who have made a contribution to the Annual Programs Fund by 30 June. Every gift, no matter the amount, counts. Your generosity will make a difference in the 33,000 communities that Rotary serves.
More in-depth financial information is available at www.rotary.org/financials. In addition, the annual Treasurer’s Report to the Convention will be posted on the RI Web site during the upcoming convention in Birmingham, England, along with the General Secretary’s Report to the Convention, which will provide information on many RI and Rotary Foundation activities over the past year.