General secretary reports on RI's finances
Although the financial markets have dropped somewhat since my last update on 20 May and our financial workshops at the convention in June, both Rotary International and The Rotary Foundation made significant financial gains over the previous year and finished the 2009-10 fiscal year in line with our projections.
Our unaudited figures show that RI finished the fiscal year ending 30 June with total revenues of more than US$95 million and total expenses of about $82 million. RI investments finished the fiscal year with $10.7 million in returns, recovering about 75 percent of the 2009 losses. Revenues from dues and other activities remained on budget during the 2009-10 fiscal year, and we were able to bring expenses down from the previous year, after adjusting for the $3.7 million cost of the 2010 Council on Legislation. RI’s General Surplus Fund ended the year with a balance of $106.6 million, well above the 2009-10 minimum RI Bylaws requirements of $67 million. RI’s successful convention in Montréal resulted in a $528,000 surplus of revenue versus expenses, which can be attributed to careful monitoring of expenses and greater than expected onsite registration revenue.
On The Rotary Foundation side, I’m happy to report that contributions totaled $158.4 million, nearly $15 million greater than the previous year, excluding funds received from the Bill & Melinda Gates Foundation grant. Annual Programs Fund contributions came to $100.4 million, $1.1 million higher than 2008-09, and PolioPlus contributions, excluding Gates grant funds, were $41.5 million, $12.1 million over last year. As I write this letter, contributions to Rotary’s US$200 Million Challenge exceed $145 million. Such generosity reflects Rotarians’ confidence in their Foundation and its power to do good in the world.
With investment returns of $54.3 million in 2009-10, the Foundation recouped about a third of its losses in the previous year. Based on this improved investment performance, the Trustees approved an initial funding of $20 million in cash and short-term fixed securities for the operating reserve. The Trustees were also able to significantly increase funding this year for Matching Grants, while effectively supporting the Future Vision pilot.
At their June meetings, the RI Board and Foundation Trustees approved new investment policies for the RI General Surplus Fund and the Foundation’s Annual Programs Fund, respectively. The new policies are designed to reduce equity risks in the funds’ portfolios and increase protection against the risk of inflation. The Permanent Fund investment policy was modified to add inflation-protection assets such as Treasury inflation-protected securities, commodities, and real estate. The Trustees also modified the spending policy for the Permanent Fund to allow for more flexibility in spending from individual endowment accounts whose market values exceed their accumulated gift values.
The continued volatility of the financial markets requires consistent vigilance on the part of Rotary’s senior leadership and management. Careful monitoring of expenses and more strategic investment policies have played a key role in maintaining financial stability over the past year, and we will continue to apply these successful tactics throughout the current fiscal year.
Audited financial statements for both RI and The Rotary Foundation will be available on the RI website in November after the RI Board and the Foundation Trustees have approved them. In the meantime, if you want more information on Rotary’s finances, I refer you to the finance section of the website at www.rotary.org/financials.