The Rotary Foundation The Rotary Foundation in the 21in the 21stst Century Century

Good News

ProgramGood News, 2006-07

Program Achievements• PolioPlus $633/23.7million• 3H Grants 18/$4.2 million• Matching Grants 2008/$34.3 million• DSGs 379/$5.1 million• Volunteer Service 202/$1 million

ProgramGood News, 2006-07

Program Achievements• Peace Fellowships 50/27/$4.3• Ambassadorial 822/50/$13.9• Teachers 29/9/$.4• GSE 558/$4.3

Financial ResultsGood News, 2006-07

Investment Earnings$105.4

Contributions$125.3

Program Awards$98.0

Program Ops $18.6

Fund Dev $12.6

$135.5Expenses

$230.7 Revenues

G&A $6.3

Net Increase

$95.2

The Rotary Foundation Revenue Trends

US$(millions)

154

119 118

180161 167

231

60

138

41

-40.0

10.0

60.0

110.0

160.0

210.0

260.0

98 99 00 01 02 03 04 05 06 07

Contributions Investment Income (Loss)

Record Year!

The Rotary Foundation Contribution Trends

US$(millions)

AP

F R

ec

ord

0.0

18.0

36.0

54.0

72.0

90.0

108.0

126.0

144.0

98 99 00 01 02 03 04 05 06 07

Annual Programs Fund PolioPlus Permanent Fund

Unrestricted Other Temp Restricted Flow Through

____PEFC____

The Rotary Foundation Total Awards & Expenses

US$(millions)

113

138

114 116 112 110103

128 128136

0

30

60

90

120

150

98 99 00 01 02 03 04 05 06 07

Program Awards Program OperationsFund Development General Administration

86%

The Rotary Foundation Net Assets

US$(millions)

607 587 593537

466 494

571603

637

738

0

200

400

600

800

98 99 00 01 02 03 04 05 06 07

Net Assets at 30 June 2007US$738 million

Annual Programs

Fund 65%

Permanent Fund30%

PolioPlus Fund5%

Other<1%

$475$37

$220

Good News, 2006-07

• Arch Klumpf Society 26

• Major Donors 1,251

• Bequest Society Committed 592

• Benefactors 3,473

• New PHFs 57,190

Good News, 2007-08

TRF Annual Goals• Polio Eradication is realistic• Every Rotarian, Every Year• Rotary Centers For International

Studies in peace and conflict resolution

• Reconnecting with Foundation alumni

Good News, 2007-08

Future Visions1. Simplify all programs/operations2. Align program outcomes3. Increase participation/ownership4. Provide sufficient resources5. Develop a business model

Keeping the Trust--Keeping the Trust--Stewardship MattersStewardship Matters

Stewardship

What is Stewardship? Why is Stewardship important? Who has responsibility? Have there been problems? How are problems resolved? What’s being done for the future? What can we do?

What is Stewardship?

StewardshipStewardship is defined as financial management and program management.

AA Steward Steward is a person or entity that manages another's property (The Rotary Foundation) or financial affairs (grant funds); one who administers anything as the agent of another or others.

Why is Stewardship important?

• Increased giving

• Financial Accountability

• Organization Reputation

Increased Giving

The Development Relationship Cycle

Prospective Donors

Identify Qualify Cultivate Solicit “No”

“Yes”

STEWARDSHIP

Reporting on gift impact -

Accountability

Financial Accountability Necessary to keep charitable tax status

Organizational Accountability Important for maintaining partnerships

with other organizations Affect rankings when for non-profit

organization reports (Guide Star)

Who is responsible?

Everyone from individual Rotarians to the RI President

Corporate responsibility Districts are accountable for the member

clubs Clubs are responsible for their members

Have there been problems?

Over 100 allegations of misuse or mismanagement in the last 5 years

Problems range from lack of understanding of grant guidelines to intentional embezzlement of funds

In the last year allegations reduced from 100 to 25

What types of Problems?

Diversion of Funds False Documentation Conflict of Interest Irresponsible Management Ineligible Contributions Individual Monopolizing Grants Falsified Membership Records

How are allegations addressed?

Requesting additional information from the sponsors

Requiring problem remediation for the beneficiaries

Assistance from district or zonal leadership Sending Cadre members Contracting audit firms

Resolving Allegations Substantiated

Clubs/Districts required to return funds Termination of Clubs Sanctioning of Officers Litigation

What’s being done for the future?

2006-2008 Stewardship Plan Conflict of Interest Policy

Stewardship Plan 2006-2008

Goal #1

Expand Zonal coverage in providing stewardship training tools to district leaders

Goal #1Stewardship Seminars

2006-2008 District 3280 (Bangladesh)* District 4450 (Peru) * Zone 9 (Korea)** Zone 14 (Germany) ** Los Angeles Convention**

*grant management focus AND **best practices focus

Goal #2Increase the technical capacity of thecadre, particularly in the auditing area.

Meeting of the Cadre Chairman and Technical Coordinators

Specialized Auditor initiative

Stewardship Plan 2006-2008

Goal #2Humanitarian Grants Cadre

Over 250 Rotarians serve as Cadre members

Rotarians help each other strengthen projects

Specialized Auditors are a subset of the Financial and Auditing Sector

Goal #3

Leveraging Rotary/zonal leaders to work with districts that are found to be struggling to maintain compliance with reporting. World Reporting

Stewardship Plan 2006-2008

Goal #3World Reporting

To increase the percentage of current andcompliant reporting for all RI Districts A world reporting analysis will be compiled

twice a year tracking each district’s % of reporting on open grants.

Districts with reporting below 70% after 2 consecutive analyses may be suspended from participating in the grants program.

Goal # 4

Addressing all allegations quickly and fairly Address allegations Random audits

Stewardship Plan 2006-2008

Goal #4Allegations Focus

Mismanagement irresponsible execution of a grant

Misuse intent to wrongfully benefit from a grant

Goal #4Investigations

Issues regarding conflicting political and personal agendas are sent to Club and District Support (CDS)

Misuse or mismanagement issues with ample “evidence” sent to general secretary to review options for resolution.

Additions to the Code of Policy

NEW Conflict of Interest NEW October 2006 Trustee decision

Supports transparency in business transactions to avoid any actual or perceived conflict of interest by requesting disclosure of Rotarian involvement

What can we do?

Facilitate and encourage Rotarians to fulfill:

Legal obligations to TRF Stewardship responsibilities Reporting responsibilities Partnership obligations

What can we do?

Assist the Foundation in evaluating project sites facing challenges

Be aware of the projects in your districts Report misuse and suspected misuse of funds to

TRF Lead by example Educate about appropriate fundraising and

contributions

“Where large sums of money are concerned, it is advisable to trust nobody.”

Agatha Christie

“Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.”

Albert Einstein