THE FINANCES OF THE ROTARY FOUNDATION FISCAL 2006-07 Permanent Fund Committee 12 February 2007.
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Transcript of THE FINANCES OF THE ROTARY FOUNDATION FISCAL 2006-07 Permanent Fund Committee 12 February 2007.
THE FINANCES OFTHE FINANCES OFTHE ROTARY FOUNDATIONTHE ROTARY FOUNDATION
FISCAL 2006-07FISCAL 2006-07
Permanent Fund CommitteePermanent Fund Committee12 February 200712 February 2007
OVERVIEWOVERVIEW
TRF Financial GovernanceTRF Financial Governance Revenues and SpendingRevenues and Spending Net AssetsNet Assets TRF InvestmentsTRF Investments Frequently Asked QuestionsFrequently Asked Questions
TRF’s Financial GovernanceTRF’s Financial Governance
Rotary International
Corporate Member
Board of Trustees
TRF Finance Committee
General Secretary
RI CFO TRF GM
Financial Services Staff
Rotary Foundation Staff
Revenues and Revenues and SpendingSpending
2005-06 Financial Results2005-06 Financial ResultsUS$(millions)US$(millions)
Investment Earnings$50.2
Contributions$111.9
Program Awards$91.1
Program Ops $16.9
Fund Dev $13.7
Expenses Revenues $162.1 $128.3
G&A $6.6
Net Increase
$33.8
The Rotary Foundation The Rotary Foundation Revenue TrendsRevenue Trends
US$(millions)US$(millions)
162161180
138
6041
118119
154155
-40
10
60
110
160
97 98 99 00 01 02 03 04 05 06
Contributions Investment Income (Loss)
The Rotary Foundation The Rotary Foundation Contribution TrendsContribution Trends
US$(millions)US$(millions)
AP
F R
eco
rd
0
18
36
54
72
90
108
126
144
97 98 99 00 01 02 03 04 05 06
Annual Programs Fund PolioPlus Permanent Fund
Disaster Recovery Flow Through
____PEFC____
2005-06 Designation of Contributions2005-06 Designation of ContributionsUS$111.9 millionUS$111.9 million
Permanent Fund11%
PolioPlus5%
Disaster Recovery
1%
Annual Programs
Fund83%
$92.6
$12.1
$5.6
Program OperationsProgram Operations
Scholarship & grant administration for EP, HP and PP Scholarship & grant administration for EP, HP and PP programs as well as support for Rotarians who implement programs as well as support for Rotarians who implement international activities.international activities. Fund DevelopmentFund Development
Personnel services, communications, public relations, Personnel services, communications, public relations, supplies, computer support, legal counsel and recognition supplies, computer support, legal counsel and recognition (ranging from awards to events).(ranging from awards to events). General AdministrationGeneral Administration
Personnel services, communications, computer support, Personnel services, communications, computer support, audit fees, Associate Foundations and Trustee services audit fees, Associate Foundations and Trustee services (administrative support, travel, meetings and committees, (administrative support, travel, meetings and committees, e.g., Future Vision).e.g., Future Vision).
The Rotary FoundationThe Rotary FoundationExpense CategoriesExpense Categories
What the Foundation Spent in 2006What the Foundation Spent in 2006 US$128.3 million US$128.3 million
Program Awards & Expenses
84%
Humanitarian41%
GeneralAdministration
5% FundDevelopment
11%
Educational22%
PolioPlus21%
The Rotary Foundation The Rotary Foundation Total Awards & ExpensesTotal Awards & Expenses
US$(millions)US$(millions)
128128
103108111116114
139
113
80
0
30
60
90
120
150
97 98 99 00 01 02 03 04 05 06
Program Awards Program OperationsFund Dev General Administration
84%
11%5%
The Rotary FoundationThe Rotary FoundationTrends in Program SpendingTrends in Program Spending
US$(millions)US$(millions)
108110
879495
102100115
95
61
0
20
40
60
80
100
120
97 98 99 00 01 02 03 04 05 06
Educational Humanitarian PolioPlus
Permanent Fund SpendingPermanent Fund SpendingUS$(millions)US$(millions)
2.7
3.7
4.7
6.1 6.3
0.9
4.64.9
0
1
2
3
4
5
6
7
1999 2000 2001 2002 2003 2004 2005 2006
3734
292726
242324
181916
0
5
10
15
20
25
30
35
40
45
96 97 98 99 00 01 02 03 04 05 06
General Administration Fund DevelopmentPrograms Operations
Trends in Total Operating Expenses –Trends in Total Operating Expenses –by Activityby Activity
(in $millions)(in $millions)
1.8 2.1 2.2 2.9 3.1 3.4 4.6 5.5 6.0 7.6 8.72.7 3.1 3.0
3.7 3.7 3.83.2
3.54.1
5.06.1
2.62.6 2.2
2.7 2.7 2.6 2.21.9
2.3
3.1
2.1
0
5
10
15
20
25
96 97 98 99 00 01 02 03 04 05 06
Humanitarian Educational PolioPlus
Trends in Program Operations Trends in Program Operations Expenses – by programExpenses – by program
(in $millions)(in $millions)
16.915.6
12.5
10.910.09.79.59.4
7.47.87.0
Net AssetsNet Assets
Net Assets at 30 June 2006Net Assets at 30 June 2006US$637.4 millionUS$637.4 million
Annual Programs
Fund 64%
Permanent Fund28%
PolioPlus Fund
8%
$405.0$52.6
$179.6
Other Restricted of .2 million not on graphOther Restricted of .2 million not on graph
The Rotary Foundation The Rotary Foundation Net AssetsNet Assets
US$(millions) US$(millions)
553607 587 593
537
466494
571603
637
0
200
400
600
97 98 99 00 01 02 03 04 05 06
INVESTMENTSINVESTMENTS
Parties Responsible for TRF InvestmentsParties Responsible for TRF Investments
Investm ent ConsultantHew itt Investm ent Group
Custodian BankM ellon Bank
Investm ent M anagers
Staff
TRF Finance Com m ittee
The Board of Trustees
Trustees’ ResponsibilitiesTrustees’ Responsibilities
Formulating investment policiesFormulating investment policies Developing investment objectivesDeveloping investment objectives Allocating assets among the managersAllocating assets among the managers Monitoring investment managersMonitoring investment managers Adding, replacing or eliminating managers Adding, replacing or eliminating managers
when appropriatewhen appropriate
Source: The Rotary Foundation Code of Policies – sections 18.020, 18.030, 18.040, 18.050, 18.060, 18.070, 18.080, 18.090
Investments at 30 June 2006Investments at 30 June 2006US$674.5 millionUS$674.5 million
Annual Programs
65%
Life Income Agreements
3%PolioPlus
8%Canada
1%
Permanent Fund23%
Investment StructureInvestment Structure
U.S Equity PoolIndex Fund 20%Enhanced Index Fund 20%Large Cap Value 20%Large Cap Growth 20%Small Cap Value 10%Small Cap Growth 10%
Fixed Income PoolActive Manager 50%Active Manager 50%
Non-U.S. Equity PoolActive Manager 50%Active Manager 50%
Real EstateActive Manager 50%Active Manager 50%
Private EquityActive Manager 62%Active Manager 38%
Mellon BankCustodian Bank Services
Hedge Fund PoolFund of Funds 100%
Asset Allocation of APF Investments* Asset Allocation of APF Investments* US$438.7 million at 30 June 2006US$438.7 million at 30 June 2006
U.S. Stocks48% Non-U.S.
Stocks18%
Bonds22%
Real Estate10%
Hedge Funds2%
* Excludes RF (Canada)
Asset Allocation of Permanent Fund InvestmentsAsset Allocation of Permanent Fund InvestmentsUS$153.6 million at 30 June 2006 *US$153.6 million at 30 June 2006 *
U.S. Stocks56%
Non-U.S. Stocks
19%
Hedge Funds2%
Bonds12%
Real Estate11%
* Excludes Split-Interest Agreements
Asset Allocation of PolioPlus Fund InvestmentsAsset Allocation of PolioPlus Fund InvestmentsUS$52.3 million at 30 June 2006US$52.3 million at 30 June 2006
Bonds100%
Frequently Asked Frequently Asked QuestionsQuestions
Unique Qualities of The Rotary Unique Qualities of The Rotary FoundationFoundation
The MissionThe Mission & Scope & Scope
The Expenditures CycleThe Expenditures Cycle & & SHARE ProgramSHARE Program
Recognition ProgramsRecognition Programs
Volunteer StructureVolunteer Structure
84%86%84%85%85%88%88%
90%90%86%86%
Minimum 65%
77%77%80%82%81%
85%83%79%81% 80%80%
0%
20%
40%
60%
80%
100%
96 97 98 99 00 01 02 03 04 05 06
Total Program Spending Benchmark Without Polio
Program Spending as a % of Total Program Spending as a % of Total SpendingSpending
Why do the Trustees invest the Why do the Trustees invest the Foundation’s assets in the equity Foundation’s assets in the equity markets? ….. and what have the markets? ….. and what have the results been?results been?
The Rotary Foundation The Rotary Foundation Investment Results - All FundsInvestment Results - All Funds
US$(millions)US$(millions)
42.750.2
-11.9 -10.5
-66.0
-49.1
27.1
1.4
73.6
5.4
-40.0
-13.8
44.751.3
86.784.3
16.4
62.4
18.9
30.1
-80
-60
-40
-20
0
20
40
60
80
100
97 98 99 00 01 02 03 04 05 06
The Rotary FoundationThe Rotary FoundationInvestment ReturnsInvestment Returns
Annual Programs FundAnnual Programs Fund
7.9%
-15%
-5%
5%
15%
25%
97 98 99 00 01 02 03 04 05 06
APF Benchmark Avg Annual Return
The Rotary FoundationThe Rotary FoundationInvestment ReturnsInvestment Returns
Permanent FundPermanent Fund
7.9%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
97 98 99 00 01 02 03 04 05 06
Permanent Fund Benchmark Avg Annual Return
The Rotary FoundationThe Rotary FoundationInvestment ReturnsInvestment Returns
PolioPlus FundPolioPlus Fund
5.2%
0%
2%
4%
6%
8%
10%
12%
97 98 99 00 01 02 03 04 05 06
PolioPlus Benchmark Avg Annual Return
What expenses are covered by theWhat expenses are covered by the
SHARE three year investment cycle?SHARE three year investment cycle?
ExpensesExpenses
The investment income from the 3 year SHARE The investment income from the 3 year SHARE cycle covers cycle covers ALLALL program operating, fund program operating, fund development and gen. admin. expensesdevelopment and gen. admin. expenses
91.1
16.9
13.76.6
0
45
90
135
06
Program Awards Program OperationsFund Dev General Administration
37.2
128.3
How was the World Fund spent How was the World Fund spent in the last fiscal year (FY06)?in the last fiscal year (FY06)?
Annual Programs FundAnnual Programs Fund
140 151 151 146 135
112 113 116 129189
104 50 3673
7381
149
151
0
50
100
150
200
250
300
350
400
450
01 02 03 04 05 06
District Designated Fund World Fund Earned Income Reserve
The Rotary FoundationThe Rotary FoundationAnnual Programs Fund by ComponentAnnual Programs Fund by Component
(in $millions)(in $millions)
356314 303
348373
405
How was the World Fund spent inHow was the World Fund spent in
the last fiscal year (FY06)?the last fiscal year (FY06)?
Annual Programs FundAnnual Programs Fund
World Fund was spent as follows:World Fund was spent as follows:
Humanitarian ProgramsHumanitarian Programs $23.3M $23.3M Educational Programs Educational Programs 4.5M 4.5M
PolioPlusPolioPlus 0.0M0.0M
TotalTotal $27.8M$27.8M
How was the DDF spent in the lastHow was the DDF spent in the last
fiscal year (FY06)?fiscal year (FY06)?
Annual Programs FundAnnual Programs Fund
District Designate Funds were spent District Designate Funds were spent as follows:as follows:
Humanitarian ProgramsHumanitarian Programs $18.7M $18.7M Educational Programs Educational Programs 15.5M 15.5M
PolioPlusPolioPlus 1.5M1.5M
TotalTotal $35.7M$35.7M