THE FINANCES OF THE ROTARY FOUNDATION FISCAL Permanent Fund Committee 12 February 2007

OVERVIEW TRF Financial Governance TRF Financial Governance Revenues and Spending Revenues and Spending Net Assets Net Assets TRF Investments TRF Investments Frequently Asked Questions Frequently Asked Questions

TRF’s Financial Governance Rotary International Corporate Member Board of Trustees TRF Finance Committee General Secretary RI CFOTRF GM Financial Services Staff Rotary Foundation Staff

Revenues and Spending

Financial Results 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 Revenue Trends US$(millions)

The Rotary Foundation Contribution Trends US$(millions) ____PEFC____

Designation of Contributions US$111.9 million $ 92.6 $12.1 $5.6

 Program Operations Scholarship & grant administration for EP, HP and PP programs as well as support for Rotarians who implement international activities.  Fund Development Personnel services, communications, public relations, supplies, computer support, legal counsel and recognition (ranging from awards to events).  General Administration Personnel services, communications, computer support, audit fees, Associate Foundations and Trustee services (administrative support, travel, meetings and committees, e.g., Future Vision). The Rotary Foundation Expense Categories

What the Foundation Spent in 2006 US$128.3 million General Administration 5% Fund Development 11% Educational 22% PolioPlus 21%

The Rotary Foundation Total Awards & Expenses US$(millions) 84% 11% 5%

The Rotary Foundation Trends in Program Spending US$(millions)

Permanent Fund Spending US$(millions)

Trends in Total Operating Expenses – by Activity (in $millions)

Trends in Program Operations Expenses – by program (in $millions)

Net Assets

Net Assets at 30 June 2006 US$637.4 million $405.0 $52.6 $179.6 Other Restricted of.2 million not on graph

The Rotary Foundation Net Assets US$(millions)

INVESTMENTS

Parties Responsible for TRF Investments

Trustees’ Responsibilities Formulating investment policies Formulating investment policies Developing investment objectives Developing investment objectives Allocating assets among the managers Allocating assets among the managers Monitoring investment managers Monitoring investment managers Adding, replacing or eliminating managers when appropriate Adding, replacing or eliminating managers when appropriate Source: The Rotary Foundation Code of Policies – sections , , , , , , ,

Investments at 30 June 2006 US$674.5 million

Investment Structure U.S Equity Pool Index Fund 20% Enhanced Index Fund 20% Large Cap Value 20% Large Cap Growth 20% Small Cap Value 10% Small Cap Growth 10% Fixed Income Pool Active Manager 50% Non-U.S. Equity Pool Active Manager 50% Real Estate Active Manager 50% Private Equity Active Manager 62% Active Manager 38% Mellon Bank Custodian Bank Services Hedge Fund Pool Fund of Funds 100%

Asset Allocation of APF Investments* US$438.7 million at 30 June 2006 * Excludes RF (Canada)

Asset Allocation of Permanent Fund Investments US$153.6 million at 30 June 2006 * * Excludes Split-Interest Agreements

Asset Allocation of PolioPlus Fund Investments US$52.3 million at 30 June 2006

Frequently Asked Questions

Unique Qualities of The Rotary Foundation The Mission & Scope The Mission & Scope The Expenditures Cycle & SHARE Program The Expenditures Cycle & SHARE Program Recognition Programs Recognition Programs Volunteer Structure Volunteer Structure

Program Spending as a % of Total Spending Program Spending as a % of Total Spending

Why do the Trustees invest the Foundation’s assets in the equity markets? ….. and what have the results been?

The Rotary Foundation Investment Results - All Funds US$(millions)

The Rotary Foundation Investment Returns Annual Programs Fund

The Rotary Foundation Investment Returns Permanent Fund

The Rotary Foundation Investment Returns PolioPlus Fund

What expenses are covered by the SHARE three year investment cycle? SHARE three year investment cycle? Expenses

The investment income from the 3 year SHARE cycle covers ALL program operating, fund development and gen. admin. expenses

How was the World Fund spent in the last fiscal year (FY06)? How was the World Fund spent in the last fiscal year (FY06)? Annual Programs Fund

The Rotary Foundation Annual Programs Fund by Component (in $millions)

How was the World Fund spent in the last fiscal year (FY06)? the last fiscal year (FY06)? Annual Programs Fund World Fund was spent as follows: Humanitarian Programs$23.3M Educational Programs 4.5M PolioPlus 0.0M Total$27.8M Total$27.8M

How was the DDF spent in the last fiscal year (FY06)? fiscal year (FY06)? Annual Programs Fund District Designate Funds were spent as follows: Humanitarian Programs$18.7M Educational Programs 15.5M PolioPlus 1.5M Total$35.7M Total$35.7M