The Past, Present, and Future of Rotary's Endowment Fund

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The past, present and future of Rotary’s Endowment Fund

12 June 2017

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Panelists

Ron BurtonPRIP and 2018-19 Foundation Trustee ChairChair, Investment Committee

Richard ClarkeEndowment/Major Gift Advisor, Zone 25Past President of The Rotary Foundation – Canada

Eric JonesChief Investment Officer

Ravi VadlamaniEndowment/Major Gift Advisor, Zone 5

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Arch Klumph’s Vision - 1917

It seems eminently proper that we should accept endowments for the purpose of doing good in the world, in charitable, educational or other avenues of community progress …

— Arch Klumph, 1917

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Ways to Contribute to the Foundation

Term Gift/ Restricted

Giving

Annual Fund

Endowment Fund

PolioPlus

Secure the future

End polio now

Supporting communities today

Donor customized giving

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Endowment Fund Milestones

$1 billion

Today

Cash and

expectancies

$2.025

billion

by 2025

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Areas of Focus

• Water and Sanitation

• Peace and Conflict Resolution/Prevention

• Basic Education and Literacy

• Disease Prevention and Treatment

• Child and Maternal Health

• Economic and Community Development

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The Power of an Endowment Fund

• Contributions to the Endowment Fund are invested in perpetuity

• Earnings from investment are used to support Foundation programs

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Spendable Earnings Market Value

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Endowment Management Philosophy

Expected return of 8%

Distribute up to 5% in support of Rotary programs

Reinvest 3% to keep up with inflation

Needs of

today

Needs of the

future

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Endowment Investment Policy

Long-term investment strategy

Diversified portfolio

Equity orientation for growth and capital appreciation

Long-term return that exceeds the spending rate and the rate of inflation

Stocks36%

Bonds10%

Real Estate4%

Inflation Protection

12%

Hedge Funds10%

Private Equity10%

Global Balanced

18%

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Endowment Spending Policy

Total Spending

Above Gift Value

Below Gift Value

Spending rate is driven by expected future return on the portfolio

Spending amount is determined each year by formula based on the extent to which a fund has accumulated earnings to spend

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Endowment Fund Spendable Earnings

$5.7$7.2

$8.5$10.0

$11.7$13.3 $13.5

$15.5

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

$0

$2

$4

$6

$8

$10

$12

$14

$16

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Spen

din

g Rate

Spendable Earnings

Spending Rate

US$ in millions

ProjectedProjected

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Individual Endowment Funds

Global grants10%

Peace centers

18%

PolioPlus< 1%

SHARE41%

World Fund30%

Area of Focus< 1%

~1,400Individual named

endowments

supporting…

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Why the Endowment Fund?

Achieve Your Dream Of “Doing Good” In Perpetuity

• Establish your Rotary legacy

• Provide a permanent source of funds to support Foundation grants and programs that are important to you – starting now or in the future and

• Be a part of Rotary forever

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Rotary’s Endowment Fund

• Gifts can be made today or in the future (estate bequest or planned gift)

• Spendable earnings directed to programs

• Can establish individual fund in the name of the donor or other name selected by the donor

• The larger the gift, the more flexibility afforded

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How to make a gift to the Endowment Fund

Contributions in any amount provide crucial support for Rotary’s programs and can be funded through…

Appreciated securities

Cash

Real estate

Life income agreements

Estate bequests or planned gifts

$10,000 or greater major gift pledge

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Major Giving and Named Funds

Named Funds

$25,000Support

World Fund, SHARE or

Peace Centers

$25,000Support an

Area of Focus

$250,000Support Area

of Focus projects from

a district$500,000Establish an

Endowed Rotary World

Peace Fellowship

$750,000Endows a two-

year fellow approximately

every

$1,000,000Work with

TRF to meet your

philanthropic goals

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Making Dreams a Reality and a Legacy

WORLD FUND – make a gift and designate the World Fund and the Trustees will determine the highest and best use

SHARE – Support your District’s projects

DG Lyn and Alex Stroshin D - 5040 – new AKS members designated their gift in part to enhance District DDF for District Grants

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Areas of Focus

Doreen and Zen Moisey (D 5370) Rotary Endowment for Economic and Community Development for Ukraine

Global Grants

Liz and Herb Hezlop D 5300 –established a Vocational Training Team Endowment

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Named Funds

PRIVP Monty AudenartEndowment – designated to District 5360 SHARE

Rotary Club of Chicago 100 Years Endowment – to District 6450 SHARE


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Secure Your Vision for the Future

Tae-In Kim Endowed Global Grant

Original Gift Value: $1,216,999.31

Current Market Value: $1,445,853.87

Growth: 15.8% since 1996

Spendable earnings:• have funded three scholarships for District 3640

• continue to generate funding for additional scholarships; currently $166,113.16 remaining

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See Your Rotary Legacy at Work

PRD Hee Byung Chae has watched his legacy grow for 23 years while providing $39,000 in spendable earnings for Rotary programs

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Spendable Earnings Market Value

Initial gift:$26k

Cumulative Spending:

$39k

Market Value:

$46k

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See Your Rotary Legacy at Work

PRD Hee Byung Chae Endowed Fund

Original Gift Value: $26,000.00

Current Market Value: $47,084.93

Growth: 44.8% since 1994

Spendable earnings:• have provided $ 5,308.39 to World Fund since 2010

• have provided $5,308.39 in District Designated Funds for District 3650 since 2010

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• Pooled endowment funds – a new opportunity

• Major gift initiatives – an attractive option

• Endowments – the way forward

• Regular recurring gifts and pledges – an opportunity to invest in the future of Rotary

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Other Related Break-Out Sessions

• Rotary’s Tomorrow Depends on What We Do Today

June 12th at 2:30 pm EDT

Room B408

• Enhance Your Rotary Legacy With U.S. Tax-Wise Gift Options

June 14th at 2:30 EDT

Room B316

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Resources

• Your Rotary Legacy brochure

• Endowment postcards

• Additional resources and information available online at rotary.org/legacy

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Questions?

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The Past, Present, and Future of Rotary's Endowment Fund

Government & Nonprofit

Transcript of The Past, Present, and Future of Rotary's Endowment Fund