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Endowment fund financial report 2019-20

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CONTENTS


Endowment at a glance
Endowment investments
Endowment spending
Building The Rotary Foundation Endowment: 2025 by 2025
How do I get more information?
Investment governance


Unless otherwise specified, the numbers in this report are as of 30 June 2020 and are unaudited. All figures in this report are in U.S. dollars.

Endowment at a glance

 

The Rotary Foundation created the Endowment in 1982 to give future generations of Rotarians the additional resources they need to design and implement sustainable projects year after year. While a gift to the Annual Fund helps people live better lives today, gifts to Rotary’s Endowment support the same life-changing programs forever.

Contributions to Rotary’s Endowment are invested and professionally managed to provide each year a source of funding to support Rotarians’ local and global philanthropic work. This year, the Endowment provided funding of $17.6 million in support for the work of the Foundation. This funding provided Rotary Peace Fellowships, contributed to global grant projects around the world, and enabled districts to address the needs of their own communities through district grants. As the Endowment grows, so does the good that Rotarians can do in the world.

Named endowment funds

With a gift of $25,000 or more to the Endowment, Rotarians or friends of Rotary may create a permanent legacy in their own name or in honor of a friend or family member. Rotary pools these gifts for investment purposes but maintains a separate accounting for each named endowed fund. Donors receive a personalized endowed fund certificate suitable for framing when their fund is established, as well as annual financial updates.

As of 30 June 2020, there were 2,029 named endowed funds within the Endowment, representing 51 countries and geographical regions around the world. The face value of named endowed funds totaled $287.7 million. In 2019-20, 210 new named endowed funds were established, with contributions totaling $17.6 million.

Visit rotary.org/legacy for information on endowed naming opportunities.

 

 

Endowment investments

Investment objective

The Rotary Foundation invests Endowment assets to ensure funding for today’s programs while sufficiently growing the portfolio to support Foundation programs in the future. Rotary seeks to generate an average annual investment return over time at least equal to the rate of inflation plus the average distribution rate. The following asset allocation strategy has been implemented to achieve this goal.

Investment management

The Trustees of The Rotary Foundation are responsible for setting overall investment policy, including the investment objectives and asset allocation strategy.

The Investment Committee is responsible for recommending to the Trustees changes to the Investment Policy Statement, overseeing the implementation of the investment policy, and reviewing and monitoring investment results.

The Office of Investment is led by the Chief Investment Officer and is responsible for the daily operation of the Endowment, the implementation of and compliance with the statement of investment policy and guidelines, decisions on how to allocate assets to the various investment strategies and investment managers, and the tracking and monitoring of investment performance.

External professional investment managers are appointed by the Office of Investment to invest the assets of the fund on behalf of The Rotary Foundation.

Investment performance

The Endowment’s investment return for Rotary year 2019-20 was -1.8 percent. The investment returns net of fees for each fiscal year since 2000 are shown below. The average annual rate of return during this period was 3.7 percent.

Endowment spending

Spending policy

The Rotary Foundation Trustees set spending rates for the Endowment each year. Spending from each named endowed fund is determined by comparing its market value as of 31 December with the principal amount contributed (the gift value).

This allows as many named endowed funds to support Rotary programs as is possible. Any named fund that has a market value that is at least 90 percent of the total contributions to the fund will provide spendable earnings for the fund’s designated programs. If a fund’s market value is less than 90 percent of the total gift value, distributions will be deferred in order to build the fund for the future. This policy allows the Foundation to maximize support for programs today while letting the Endowment grow so it can also support programs in the future.

Spendable earnings

The Endowment makes an annual distribution for programs and operating expenses equal to the amount of spendable earnings approved by the Trustees. For Rotary year 2019-20, spendable earnings totaled $17.6 million, of which $14.4 million was used for programs awards, $1.1 million was used for fund development, and $2.1 million for general administration expenses.

Spendable earnings are transferred to a spendable earnings account, and if they are not used in the year they are made available, they remain in the account to be used in a subsequent year. This protects spendable earnings from market fluctuation before they are utilized for the intended program.

Building The Rotary Foundation Endowment: 2025 BY 2025

Rotarians are working toward the goal of reaching $1.0 billion in net assets* and $1.025 billion in commitments† for future gifts, totaling $2.025 billion for the Endowment by 2025. As of 30 June 2020, net assets came to $500.5 million and commitments totaled $838.3 million, for a combined total of more than $1.3 billion.

Endowment growth

Named endowed fund example

A named endowed fund of $25,000 established in 1996 has provided spendable earnings since then of more than $34,000. In addition, the fair market value of the fund has grown to almost $33,000.

See how an Endowment contribution grows over time and continues to give.

Visit rotary.org/legacy to learn more about building a Rotary legacy that will save lives and enrich communities during this century and beyond.

How do I get more information?

If you are interested in learning more about the benefits of giving, life income gifts, or named endowed fund opportunities, please contact your district fundraising chair, endowment/major gifts adviser, or regional Rotary Foundation coordinator.

Send questions to the gift officer for your area:

Brazil: fr.brasil@rotary.org
Europe/Africa: eao@rotary.org
Japan: rijapan@rotary.org
Korea: rikorea@rotary.org
North America: philanthropy@rotary.org
South Asia: risao@rotary.org
South Pacific and Philippines: risppo@rotary.org

Rotary’s endowment priorities

Basic education and literacy
Community economic development
Disease prevention and treatment
Maternal and child health
Peacebuilding and conflict prevention
Rotary Peace Centers
SHARE
Water, sanitation and hygiene
World Fund

Investment governance

2019-20 Rotary Foundation Board of Trustees

Chair
Gary C.K. Huang, Taiwan

Chair-elect
K.R. Ravindran, Sri Lanka

Vice Chair
Kenneth M. Schuppert Jr., USA

Trustees
Jorge Aufranc, Guatemala
Brenda Cressey, USA
Hipólito S. Ferreira, Brazil
John F. Germ, USA
Per Høyen, Denmark
Jennifer E. Jones, Canada
Seiji Kita, Japan
Julia D. Phelps, USA
Ian H.S. Riseley, Australia
Gulam A. Vahanvaty, India
Michael F. Webb, England
Sangkoo Yun, Korea

General Secretary
John Hewko, Ukraine

The Rotary Foundation 2019-20 Investment committee

Chair
Michael F. Webb, England

Vice chair
Douglas W. Phillips, USA

Members
David W. Bahlmann, USA
Vinod Bansal, India
Debra L. DeMuth, USA
Garth Friesen, USA
John F. Germ, USA
Per Høyen, Denmark
Robert A. Kelly, USA
* As of 30 June 2020