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Endowment fund financial report 2020-21

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CONTENTS


The Rotary Foundation
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 2021 and are unaudited. All figures in this report are in U.S. dollars.

The Rotary Foundation

The mission of The Rotary Foundation helps Rotary members to advance world understanding, goodwill, and peace by improving health, providing quality education, improving the environment, and alleviating poverty. More than 100 years ago, Rotarians took bold action to empower generations to come — they established The Rotary Foundation to secure a better future.

Today still, The Rotary Foundation transforms gifts into projects that change lives close to home and around the world. As the charitable arm of Rotary, the Foundation benefits from a global network of Rotary members who invest their time and expertise to ensure that projects are high-impact and sustainable and meet the most pressing needs of the communities they serve. Strong financial oversight, a stellar charity rating, and a unique funding model mean that Rotary makes the very most of your contributions.

Endowment at a glance

The Rotary Foundation created the Endowment in 1982 to give future generations of Rotary members the 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 a source of funding every year to support Rotary members local and global philanthropic work. This year, the Endowment provided funding of $21.1 million in support of 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 Rotary members can do in the world.

Named endowed 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 2021, there were 2,261 named endowed funds within the Endowment, representing 51 countries and geographical regions around the world. The face value of named endowed funds totaled $314.2 million. In 2020-21, 240 new named endowed funds were established, with contributions totaling $17.9 million.

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

 

 

Endowment investments

Investment objective

The Rotary Foundation invests Endowment assets to provide funding for today’s programs while 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 overseeing Rotary’s investments, the implementation of the investment policy, reviewing and monitoring investment results, and recommending changes to the investment policy and asset allocation strategy.

The office of investment is responsible for the daily management 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 2020-21 was 30.5 percent. The investment returns net of fees for each fiscal year since Rotary year 2011-12 are shown below. The average annual rate of return during this period is 7.5 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. For Rotary year 2020-21, spendable earnings totaled $21.1 million, of which $17.3 million was used for program awards, $1.3 million was used for fund development, and $2.5 million for general administration expenses.

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 2021, net assets equaled $666.1 million and commitments totaled $882.2 million, for a combined total of more than $1.5 billion.

Endowment growth

Named endowed fund example

A named endowed fund of $25,000 established in 1997 has provided spendable earnings since then of more than $30,000. 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
Environment
Maternal and child health
Peacebuilding and conflict prevention
Rotary Peace Centers
SHARE
Water, sanitation and hygiene
World Fund

Investment governance

The Rotary Foundation 2020-21 Board of Trustees

Chair
K.R. Ravindran, Sri Lanka

Chair-elect
John F. Germ, USA

Vice Chair
Michael F. Webb, England

Trustees

Jorge Aufranc, Guatemala
Brenda Cressey, USA
Marcelo Demétrio Haick, Brazil
Per Høyen, Denmark
Hsiu-Ming Lin, Taiwan
Geeta Manek, Kenya   
Aziz Memon, Pakistan
Barry Rassin, Bahamas
Ian H. S. Riseley, Australia
Dean Rohrs, Canada
Gulamhusein A. Vahanvaty, India
Sangkoo Yun, Korea

General Secretary
John Hewko, Ukraine

The Rotary Foundation 2020-21 Investment committee

Chair
Michael F. Webb, England

Vice chair
Douglas W. Phillips, USA

Members
Jacob Duffy, USA
Garth Friesen, USA
Robert A. Kelly, USA
Benjamin Linford, USA
Larry Lunsford, USA
Joelle Mevi, USA
Barry Rassin, Bahamas
Ian Riseley, Australia