Trustees approve new Foundation funding model

 

The Rotary Foundation Trustees have approved a new model for funding the Foundation's operating costs. Effective 1 July 2015, the Foundation will direct 5 percent of Annual Fund donations to help pay administrative and fund development expenses and to build a strong operating reserve. The Foundation will also draw on other funding sources, including 5 percent of cash contributions for global grants and up to 10 percent of select corporate gifts. Our current method of using investment earnings to fund these costs is no longer financially sustainable in today's unpredictable markets....

Rotary News
 

Our Foundation has been Doing Good in the World for almost a century, thanks to the generosity and hard work of Rotarians. While contributions have primarily funded programs, strong investment returns over the years have been used to fund operating costs. This strategy of funding operating expenses from investment returns, year after year, was not sustainable throughout the recent financial crisis, mostly because we did not use all the returns from the good years to build up our reserves.

Our Foundation weathered the storm better than many nonprofits, but those "tough times" caused Rotary to consider what actions might be needed to ensure another century of strong programs. Recognizing financial markets will continue to be volatile, the Trustees have developed an enhanced strategy to achieve long-term financial sustainability.

OUR LONG-TERM STRATEGY

  1. The Trustees have agreed that our first priority must be to ensure that we have sufficient resources to operate our Foundation. Given the current environment of volatile investment markets, we need additional sources to provide sufficient and more reliable funding.

  2. Our second priority is to build a reserve to keep our organization operating if annual funding sources are not sufficient. Therefore, effective 1 July 2015, we will draw on the following new sources of funds to help operate our Foundation and build a strong reserve:

    • 5% OF ANNUAL FUND CONTRIBUTIONS (This 5% will not affect District Designated Funds (DDF).

    • 5% OF CASH CONTRIBUTIONS TO FUND GLOBAL GRANTS (Formerly known as "flow-through cash")

    • 10% OR LESS OF SELECT CORPORATE GIFT 

  3. Once the operating reserve has been fully funded, any surplus will be moved to the Endowment Fund.  The surplus will generate spendable earnings to fund the Foundation into the future and ensure that our Foundation can continue its good work in the world.

For More information on this new funding model see the "Securing our Foundation's Future" document in the home page download files section of our website or go to: 

https://www.rotary.org/myrotary/en/trustees-approve-new-foundation-funding-model..