Given the troubling news from Wall Street over the past several weeks, we have received many inquiries about the impact these events will have on Rotary International and The Rotary Foundation. Although our investments have lost value in the short term, we believe they will recover when the financial markets stabilize. In addition, Rotary maintains a diversified portfolio that includes investments outside of the markets that were adversely impacted by recent events. Rotary's investment policies have proven to be sound through past down markets. This prudent management should allow our programs and projects to continue as planned. 

Many Rotarians have asked specifically about our investment holdings, insurance coverage, and reserves, so I would like to note the following:

  • Both The Rotary Foundation's and RI's investment portfolios have only minor exposure to the companies that were taken over by the U.S. government (Fannie Mae, Freddie Mac, and AIG), purchased by other financial institutions (Merrill Lynch and WaMu), or declared Chapter 11 bankruptcy (Lehman).
  • Although RI has some insurance coverage placed with AIG, AIG's insurance businesses are safe in that they are separate legal entities closely regulated by both state and federal agencies.
  • Both RI and the Foundation have strong cash balances, and year-to-date revenues from sources other than investments are ahead of last year.
  • All money in the PolioPlus Fund is invested in U.S. treasuries, the safest securities available.
  • Both RI and the Foundation have adequate reserves to operate without having to sell investment securities at a loss.

Last week, The Rotary Foundation Investment Advisory Committee met with Rotary's independent investment consultant and several money managers for its regular investment review. The committee confirmed that the current investment policies set by the RI Board and Foundation Trustees continue to be appropriate for the long term. The committee advised the Trustees to continue diversifying the portfolio to further mitigate the impact of losses in any particular market.

You can be assured that Rotary's senior leaders, the general secretary, the Financial Services staff, and Rotary's investment consultant are monitoring this situation very closely. We are confident our investment and reserve policies will allow the good work of Rotary to continue around the world.


Ed Futa, RI general secretary