General Secretary Reports RI’s Financial Picture Continues to Improve
Posted by John Borst
on Nov 02, 2010
The following report was issued the 9 September 2010 by Rotary International’s General Secretary, Ed Futa.
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.
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.