the past, present, and future of rotary's endowment fund
TRANSCRIPT
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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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Making Dreams a Reality and a Legacy
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
Making Dreams a Reality and a Legacy
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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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Making Dreams a Reality and a Legacy
• 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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This presentation and others from throughout the convention are available through the convention mobile app and on SlideShare at
www.SlideShare.net/Rotary_International.
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Rate this session in the Rotary Events app,
available in your Apple or Android app store.