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The Past, Present, and Future of Rotary's Endowment Fund

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Since the first contribution of $26.50, our Endowment
Fund has grown to more than $350 million in net assets
and $770 million in promises of future gifts. Learn how the
endowment continues to grow, how it is invested, how it
supports grants, and how we are working to strengthen its
impact over the Foundation’s second century of service.
Creating your personal legacy within the endowment
is covered in two complementary sessions: “Rotary’s
Tomorrow Depends on What We Do Today” and “Enhance
Your Rotary Legacy with U.S. Tax-Wise Gift Options.”

Published in: Government & Nonprofit
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The Past, Present, and Future of Rotary's Endowment Fund

  1. 1. 1 The past, present and future of Rotary’s Endowment Fund 12 June 2017
  2. 2. 2 Panelists Ron Burton PRIP and 2018-19 Foundation Trustee Chair Chair, Investment Committee Richard Clarke Endowment/Major Gift Advisor, Zone 25 Past President of The Rotary Foundation – Canada Eric Jones Chief Investment Officer Ravi Vadlamani Endowment/Major Gift Advisor, Zone 5
  3. 3. 3 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
  4. 4. 4 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
  5. 5. 5 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Endowment Fund Milestones $1 billion Today Cash and expectancies $2.025 billion by 2025
  6. 6. 6 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
  7. 7. 7 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
  8. 8. 8 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
  9. 9. 9 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 Stocks 36% Bonds 10% Real Estate 4% Inflation Protection 12% Hedge Funds 10% Private Equity 10% Global Balanced 18%
  10. 10. 10 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
  11. 11. 11 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 $16 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 SpendingRate Spendable Earnings Spending Rate US$ in millions ProjectedProjected
  12. 12. 12 Individual Endowment Funds Global grants 10% Peace centers 18% PolioPlus < 1% SHARE 41% World Fund 30% Area of Focus < 1% ~1,400 Individual named endowments supporting…
  13. 13. 13 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
  14. 14. 14 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
  15. 15. 15 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
  16. 16. 16 Major Giving and Named Funds Named Funds $25,000 Support World Fund, SHARE or Peace Centers $25,000 Support an Area of Focus $250,000 Support Area of Focus projects from a district$500,000 Establish an Endowed Rotary World Peace Fellowship $750,000 Endows a two- year fellow approximately every $1,000,000 Work with TRF to meet your philanthropic goals
  17. 17. 17 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
  18. 18. 18 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
  19. 19. 19 Named Funds PRIVP Monty Audenart Endowment – designated to District 5360 SHARE Rotary Club of Chicago 100 Years Endowment – to District 6450 SHARE Making Dreams a Reality and a Legacy
  20. 20. 20 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
  21. 21. 21 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
  22. 22. 22 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
  23. 23. 23 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
  24. 24. 24 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
  25. 25. 25 Resources • Your Rotary Legacy brochure • Endowment postcards • Additional resources and information available online at rotary.org/legacy
  26. 26. 26 Questions?
  27. 27. 27 This presentation and others from throughout the convention are available through the convention mobile app and on SlideShare at www.SlideShare.net/Rotary_International.
  28. 28. 28 Rate this session in the Rotary Events app, available in your Apple or Android app store.

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