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THE ROTARY FOUNDATION'S ANNUAL FUND AND FUNDING MODEL. Annual Fund contributions are the primary source of funding for The Rotary Foundation’s grants around the world. To ensure the organization’s ability to deliver impactful community service on an on going basis, The Rotary Foundation developed a funding model to manage and balance its resources to meet current and future funding needs. The funding model is linked to a contribution ,investment, and spending cycle. Contributions to the Annual Fund are invested for a period of three years. Each year, investment earnings(when positive) are used to support payment of fund development1and general administrative expenses. In addition to giving the Foundation the opportunity to generate earnings during the investment period, the funding cycle also allows districts time to strategically plan projects and activities for sustainable, high-impact out comes. The funding model also divides contributions to provide for shared decision-making between the Foundation and district leaders. After 5% of Annual Fund- SHARE contributions are allocated to operating expenses, the remainder is split50%to the World Fund and50%to the District Designated Fund. For example, a $100 contribution generates $5 for operating expenses and the remaining $95 is divided equally, with $47.50 for DDF and $47.50 for the World Fund. The World Fund portion pays for the worldwide grant and program opportunities available to all Rotary districts. Districts use the District Designated Fund (DDF) portion to fund the Foundation grants and programs of its choice. The funding model was updated after the2008global financial crisis, because the Foundation needed a policy to determine how to fund operating expenses when there is a shortfall in earnings. The policy was further refined effective 1 July 2021. There are three elements of the funding model: 1.Identify other sources of funding to cover operating expenses when investment earnings are not sufficient 2.Establish a mechanism to create and fund an operating reserve 3.Measurethe balance of the World Fund HOW DOES THE FUNDING MODEL WORK? The Foundation funds its operating expenses first from the following primary funding sources: Net investment earnings on the Annual Fund A portion of the spendable earnings from the Endowment Fund 5% of cash contributions sent directly to the Foundation for global grants 5% of the contributions to the Annual Fund At the end of each fiscal year, the Foundation's operating expenses are compared to the above referenced primary sources. If the primary funding sources are not sufficient, then funds from the operating reserve will be used to replenish the Annual Fund. The next priority is funding the operating reserve with up to two years of projected operating expenses. If the operating reserve is not fully funded and net investment returns were more than sufficient to pay operating expenses, then the operating reserve is replenished. Finally, the World Fund balance is measured and compared to the target balance based on the previous three years of contributions to the Annual Fund. Any surplus remains in the World Fund for future funding needs. As a key component of the funding model, the Annual Fund is the largest and most consistent source of funding for Rotary and is the central focus of The Rotary Foundation’s fund development strategy. Its importance is emphasized to district leaders and members worldwide through the Every Rotarian Every Year message ,which stresses that Rotary’s health and future flourishes when every member personally contributes to the Annual Fund and participates in a Foundation grant. The Trustees study historical performance and fundraising trends to develop a worldwide Annual Fund goal each year .Rotary leadership’s support for Annual Fund giving drives Rotary’s overall success. A healthy Annual Fund fuels the grants activities that distinguish Rotarians as community leaders that together create sustainable, positive change FIND OUT MORE
More information on the model is available on My Rotary and the World Fund Seminar Presentation. |
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