Rotary's finances and the current economic climate
A
lthough the current economic climate presents challenges to The Rotary Foundation's finances, it has presented an opportunity to focus on our core mission and move forward in reinventing the Foundation.
The current economic climate has caused the Foundation's investments to experience an unprecedented decline in value. For the first time, all asset classes suffered losses.
Many Rotarians have understandably expressed concern and asked questions about Rotary's finances in this economy, which has been difficult for many for-profit and nonprofit organizations alike. The Foundation has addressed these in a list of frequently asked questions .
In addition, RI General Secretary Ed Futa has been providing, and will continue to provide, periodic updates about Rotary's financial situation. See his messages below for more information.
Steps taken to reduce expenses
As of April 2009, the significant decline in the market value of the Foundation's investments has eliminated the operating reserve and, therefore, its ability to fund operations. Actions taken in fiscal year 2008-09 to re-establish the reserves or reduce expenses have included:
- Reducing the fiscal year 2008-09 World Fund expeditures, which fund humanitarian grants, by US$16.3 million ( read more )
- Canceling all nonessential discretionary spending, including staff and volunteer travel, overtime expenses, temporary help, consultants, and staff development
- Reducing staff and volunteer costs while traveling on Foundation business
- Significantly reducing administrative expenses, which are projected to come in well under budget in fiscal year 2008-09
In addition, 2008-09 Foundation Trustee Chair Jonathan Majiyagbe announced in May that, effective 1 July 2009, the Foundation will no longer fund the following:
- Rotary Grants for University Teachers, except for grants already awarded
- Volunteer Service Grants
- Cultural and Multi-Year Ambassadorial Scholarships, except for grants already awarded
Read Majiyagbe's 6 May letter for more information.
Furthermore, the Trustees established a subcommittee in April to review methods to restore the operating reserve, which will report to them at the October Trustees meeting.
Future Vision and a stronger Foundation
The Rotary Foundation Trustees are committed to implementing the Future Vision Plan . Although this endeavor requires near-term funding, the Trustees expect the plan to offer greater efficiencies and economies of scale in the Foundation's services to its primary customers. Moving forward in reinventing the Foundation and improving business processes will help the organization to be even stronger in the future.
General secretary's letters about RI's finances