Alternate Finance Presentation
Posted by Vi Hughes on Feb 02, 2017
On Tuesday, our President, Dimitri Papanicolas, gave a presentation on the research he has recently done regarding various alternate funding options for our club. His research was initiated following the submission of the Alternate Report from the four-member Committee (copy of report previously provided to all members). A meeting between the Board and the Committee did not yield any specific recommendation, but rather differing opinions from the committee members were expressed.
This outcome triggered his research. He presented information from his reading of various articles on this topic, and information learned from talking to three other local Rotary clubs that have endowment funds. The goal of this type of funding are to give the club a base that will provide secure future funds for donations to the charities of our choice, and not for operational purposes.
One of the papers indicated that there are good reasons to have an endowment fund, and good reasons not to have one. The only way for a non-profit organization to decide whether to pursue one is to fully educate the Board and the members, so that a satisfactorily decision can be achieved with an open mind. The paper also mentioned that a charity should put aside some money to hedge against uncertainty, and we have that with the $ 20,000 restricted fund invested in GIC. It continues by stating that an endowment can also be a very positive symbol that shows the community that the organization plans to be around for a very long time and that can attract potential donors.
President Dimitri, mentioned that he agrees with what was presented in June 2016 about the endowment fund not being appropriate for generating funds for club operations. However, his research showed that the endowment funds can be an additional funding option to generate funds for charities in perpetuity. This type of funding could be considered if there is a risk that the present fundraising options disappear or are drastically reduced. In our club’s case these fundraisers are the AGLC casino fund and the flag program. However, there are on-going talks that the casino money may be curtailed or disappear whereas the flag project shows signs of reduced income, and more effort from our club should made to increase revenue from the flag project.
He also said that the number of members contributing to The Rotary Foundation from our club are low in relation to the total membership, and that a few members contribute largely and consistently. Some members had expressed that they prefer to donate to local charities, as they do not completely associate with TRF.
In addition, he mentioned that since June 2016, there has been a windfall in the 2016-17 club budget, and this was presented in spreadsheets detailing this year’s club revenues and expenses. The additional moneys came from a CDN $ 10,000 casino amount that was due to go the Dominican Republic for the WPAC project, now cancelled, and the US $ 17,000 remaining amount, following returns of funds to donors of WPAC. This leaves a surplus of about CDN $ 20,000.
In addition, he indicated that AGLC allows casino funds to be used for a local endowment fund. If there was an issue, it would not have been authorized. The literature review also mentioned that alternate funding options should be considered when charity finances are doing well, which is the present case of our club.
The aforementioned are new data/information to what was presented in June 2016. Combining the above financial information and the long-term success of local Rotary Clubs, the creation of an endowment fund for charities for our club (not for club operation) may be feasible without impacting the operation of the club or its charity commitments in the near future.
A discussion ensued in the club where members in favor and not, presented their views.
President Dimitri indicated that based on the presentation of this new information, and the discussion from members, the Board should come up with a plan on how to proceed.