the rotary foundation Fulfill Your Rotary Dreams 2003-04 annual report The Mission Statement of The Rotary Foundation of Rotary International
The mission of The Rotary Foundation is to support the efforts of Rotary International in the fulfillment of the Object of Rotary, Rotary’s mission, and the achievement of world understanding and peace through local, national, and international humanitarian, educational, and cultural programs.
Front cover and inside front cover photos taken at the Little Meadow Kindergarten in the Pavlovskyi region, Russia, by John Adams. the rotary foundation • 2003-04 annual report
The Rotary Foundation 2003-04 Annual Report
Rotary Foundation Trustee Chair James Lacy (right) and U.S. Health and Human Services Secretary Tommy Thompson hold Indian children newly immunized against polio.
Rotarians in communities around the world supported The Rotary In added support for projects that benefit children, the Foundation Foundation in helping people to meet urgent needs and fulfill their Trustees established the Children’s Fund within the Foundation’s dreams of a better life in -. Permanent Fund. This fund is intended to encourage Rotarians to Since Rotary began its PolioPlus program, the number of polio- expand their help to children through the Foundation’s Humanitar- endemic countries has declined from over in to 6 at the ian Grants Program. end of . As announced in January 2004 by the ministers of Life-changing Foundation Educational Programs are helping to health of these countries, aggressive, widespread immunization build a firmer basis for achieving greater world understanding and campaigns would be launched to reach million children peace. The first class of Rotary World Peace Scholars, for example, multiple times during the year. graduated from the Rotary Centers for International Studies, Rotary clubs, districts, and individual Rotarians also seized expanded having gained field experience with organizations such as the opportunities provided by the relaunched PolioPlus Partners United Nations, The Carter Center in Atlanta, Georgia, USA, and program to support the efforts of Rotary International and its global Save the Children in India. partners to eradicate polio, as you will see on page of this report. A strong Rotary Foundation is essential to help fulfill the dream of It was a proud moment for Rotarians everywhere when, during the a world at peace. In these pages, you will also see the groundwork International Assembly, the American Academy of Pediatrics (AAP) being laid for strengthening our Foundation by encouraging every presented its Excellence in Public Service Award to RI for its work to Rotarian to contribute to the Foundation every year. eradicate polio worldwide. “You have led the charge for funding this I hope you will find this annual report an informative and inspira- critical [polio eradication] initiative and your army of volunteers tional look at our Rotary Foundation at work, pursuing its mission has literally put lives on the line to deliver vaccines in regions of of world understanding and peace. conflict,” said AAP Immediate Past President E. Stephen Edwards, who presented the award. “Indeed, your . million members personify and live each day the ‘excellence’ in public service.” Life-saving, sustainable Rotary Foundation humanitarian grants projects are bringing clean water to people in places around the James Lacy world, preventing the spread of disease; supporting microenter- - Chair prise projects that help people escape a life of poverty; giving more The Rotary Foundation Trustees people access to health care; and enabling people to read and write who never before had an opportunity to learn.
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the rotary foundation • 2003-04 annual report
PolioPlus Working to fulfill the dream of a polio-free world
The Global Polio Eradication Initiative — the world’s largest ever “Before this new wave of cases, Africa had made the most rapid public health effort — is zeroing in on the disease in six countries progress of any continent to secure a polio-free future for its where the wild poliovirus still circulates. The initiative is led by children,” said Rima Salah, UNICEF’s Regional Director for West Rotary International, the World Health Organization, UNICEF, and Central Africa. “It would be an unspeakable tragedy to allow and the U.S. Centers for Disease Control and Prevention. the virus to slip back in now.” On January in Switzerland, the ministers of health of the six Despite the outbreak, however, epidemiologists are convinced that polio-endemic countries and representatives of the four several high-quality Subnational and National Immunization Day spearheading partners signed the Geneva Declaration for the activities will bring the spread of the virus to a quick end. Eradication of Poliomyelitis, pledging to wipe out the disease by “Nigeria is determined to break the chains of polio transmission the end of . Polio transmission levels are at their lowest ever for the sake of our children, our neighbors’ children, and the chil- in four of the six countries: Afghanistan, Egypt, India, and dren of the world,” said Nigerian Health Minister Eyitayo Lambo. Pakistan. The other two — Nigeria and Niger — are renewing efforts to eradicate the disease. National PolioPlus Committee Chair Marie-Irène Richmond-Ahoua In addition, the Organization of the Islamic Conference in immunizes a child against polio in Côte d’Ivoire during NIDs in west October passed a landmark resolution to wipe out polio and central Africa. from its five member countries that are not yet free of the disease. “The Global Polio Eradication Initiative is a shining model of how we can all come together against a common enemy of human- kind,” said United Nations Secretary-General Kofi Annan at the January 2004 meeting of health ministers. “A final victory is within reach. You are the key to success. . . . You can count on the support of the United Nations family and its partners — especially Rotary International.”
Nigeria working to overcome immunization obstacles Ten African countries confirmed polio cases imported from Nigeria, following an outbreak in that country in October . The outbreak was sparked by the suspension of immunization in Nigeria’s northern states due to rumors that the vaccine was unsafe. Following intense advocacy efforts to encourage local government and religious leaders that the oral polio vaccine was safe, the government of Nigeria was able to resume immunization in March in most northern states. The March NIDs, in turn, were part of a -country joint campaign to immunize million children across west and central Africa to counter the spread of polio from northern Nigeria.
[opposite page] Otto Austel, a physician and member of the Rotary Club of Simi Valley, California, USA, administers oral polio vaccine to a child in an isolated desert area of Pakistan that was not reached by National Immunization Days. Immunization coverage in such parts of the country has improved with the involvement of more volunteers.
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Children in Varanasi, Uttar Pradesh, look at posters provided by Motorcycle taxi drivers promote polio immunization as part of a Rotarians, announcing India’s National Immunization Days. PolioPlus Partners project in Benin. Photo by Jean-Marc Giboux
India pulls out the stops in high-risk areas PolioPlus Partners program relaunched All across India, tens of thousands of health workers and After a one-year suspension during the polio eradication fund- volunteers immunized tens of millions of children during raising campaign, the PolioPlus Partners program resumed on National Immunization Days (NIDs) held in January and July with expanded responsibilities. PolioPlus Task Force February . The volunteers included many Rotarians from members helped promote Rotary’s role in polio eradication to India, joined by others from Australia, Canada, Germany, Italy, their local media and provided updates to local Rotarians. On and the United States. December , the program issued an Open Projects List to Rotarians took part in all phases of the NIDs, helping to deliver encourage support of projects submitted by Rotarians in vaccine, recruit volunteers, and staff immunization booths that polio-endemic and high-risk countries. In the - Rotary provided record coverage in the high-risk states of Uttar Pradesh year, seven National Immunization Day projects were funded in and West Bengal. Before the NIDs, they also used video vans and Benin, Cameroun, Côte d’Ivoire, India, Nepal, Niger, and Togo for puppet shows in both states to create awareness of polio and the a total of more than US,. need for immunization. In September , a polio surveillance laboratory, funded largely “On this occasion, dozens of polio-stricken children from NGOs through the PolioPlus Partners program and the Japanese govern- [nongovernmental organizations] based in Delhi along with ment, opened at the National Institute of Health in Islamabad, students from local public schools made an impassioned appeal Pakistan. PolioPlus Partners supported a , grant for the to parents to get their children immunized,” said Past District project. District (California, USA) had raised , for Governor Deepak Kapur, chair of India’s National PolioPlus the project as part of a , contribution to PolioPlus Part- Committee, referring to the country’s February NIDs. ners in -. “We have shown the world we have the capacity, resources, and “The remaining focal areas of transmission require extraordinary most importantly, the will, to vanquish this devastating disease,” efforts to reach all children,” said Abdul Haiy Khan, chair of said Sushma Swaraj, India’s former health minister. Pakistan’s National PolioPlus Committee. “The facility will not only play a very useful role in polio eradication efforts in Pakistan and Afghanistan, but also will be used for eliminating other diseases such as measles and for additional research and development.”
Recipients of the RI 2003-04 Polio Eradication Champion Award ● Hilde Frafjord Johnson, International Development Minister, Norway ● Russell D. Feingold, Senator (D), Wisconsin, USA ● Mamadou Tandja, President, Republic of Niger ● William L. Jenkins, Congressman (R), Tennessee, USA ● Sushma Swaraj, former Minister for Health and Family Welfare, India ● Janice D. Schakowsky, Congresswoman (D), Illinois, USA
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Students line up in the courtyard of the new Najmul Jahad Rotary School in Afghan girls prepare to begin their first day of class. Jalalabad, Afghanistan. Photo by David Trilling Photo by David Trilling
Humanitarian Grants Program Working to fulfill dreams of a better life
Rotarians lay a foundation of hope in Afghanistan When farsighted Rotarians in District (California, USA) Moini oversaw final development of the school, which will looked at the gamut of needs in post-Taliban Afghanistan, they eventually enroll , students. She also taught English as a had a clear vision for meeting one need that would help overcome second language at a high school in Jalalabad, helped develop and many of the others — education. install a satellite-based computer center at Nangarhar University Rotary Volunteer Fary Moini and Past District Governor Steve as another project of her club, and provided other humanitarian Brown spearheaded an effort by their Rotary Club of La Jolla service, all with the aid of a Foundation Individual Grant. Golden Triangle that raised US, to establish a school in Another initiative, the Afghan Women’s Development Center, Jalalabad, Afghanistan. Other supporters included The Rotary was supported by the Rotary Club of Encinitas, California, and a Foundation of RI with a grant for equipment, the Afghan gov- Foundation Matching Grant. In addition, District Rotarians ernment, local Abdul Haq Foundation, and U.S.-based Donner Steve Spencer and Farid Saydee are teaching in Afghanistan with Foundation. The Rotary Club of Uni Town Peshawar, Pakistan, the support of the Steve Brown Donor Advised Fund as part of helped coordinate the project locally. another Foundation program. “It was gratifying to see that over percent of the students were “It is clear that in the area of Afghanistan where we are working, girls,” said Brown, who attended the inauguration of the Najmul Rotary is making a measurable difference in lives,” said Brown. Jahad Rotary School in March . “This is really important, “We are doing things on the same or greater magnitude as for girls had been previously banned from attending school. [national] governments.” Education is so fundamental and these people have so little. The school is a symbol of hope for the future. All you had to do was look in the eyes of the kids.”
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Residents of U-Thong, Thailand, receive vision examinations and Orphans in Irkutsk, Russia, investigate a shipment of dental supplies. are fitted for eyeglasses as part of a District Simplified Grant project supported by the Rotary Club of U-Thong, Supanburi.
One grant helps meet many needs in Thailand ● A playground created by the Rotary Club of Sritapee is con- Rotarians in five Rotary clubs in District (Thailand) used tributing to the physical and social development of children a District Simplified Grant to help meet a range of compelling in the community. “The playground helps children enjoy their needs in their communities. spare time, thus keeping them away from drug abuse,” said - club president Duangkamol Goprapatpong. ● The Rotary Club of Teparak, Samutprakarn, provides powdered milk to mothers with HIV to give their HIV- Dental care reaches orphans in Russia positive infants until they are months old. “[The club] also The Rotary Club of Irkutsk-Baikal, Russia, and District persuaded other Rotary clubs to contribute to this project (Washington, USA) teamed up to provide an urgently needed and initiated a Matching Grant project for HIV-positive dental unit for children at the Center for the Development of moms for their self-support,” said club member Somjadd Orphans in Irkutsk. “The equipment is simply invaluable for Nuuysirithadss. preventive dental care, treatment, and education,” said club ● In Phuket Province, taxi drivers are learning to speak president Sergey Alpatov in describing the project, which received English through a self-study project sponsored by the Rotary a US, Rotary Foundation Matching Grant. Club of Phuket South. “They learn how to communicate with Rotarians purchased the equipment in Russia at lower prices tourists, which helps their career development,” said club than would have been available outside the country, resulting in President Veerachai Ungtrakul of the project, which provided considerable project savings. cassette tapes and practice handbooks to the drivers. “This [project] teaches the general public what volunteering in ● The Rotary Club of Nakorn Srithamarat improved literacy action is, what Rotary is about, and how children can be taught among students and the community at large by furnishing oral hygiene,” said Alpatov. books to establish the Rotary Centennial Library at a primary school.
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Educational Programs Working to fulfill the need for greater world understanding
Rotary Foundation Trustee Chair James Lacy (top row, third from left) congratulates the first class of Rotary World Peace Scholars upon graduation from the Rotary Center for International Studies at the University of California-Berkeley, California, USA, during a special ceremony. Bottom row, from left: Patricia Hewitson, Australia; Ian Wadley, Australia; Nani Mahanta, India; Nagarjun Devaraj, India. Top row, from left: Sergio Alejo Rapu Haoa, Chile; Zewdineh Beyene Haile, Ethiopia; Chairman Lacy; Laura Clennon, Rotary Centers Coordinator, The Rotary Foundation; Michel Huneault, Canada; Simona Pinton, Italy; Tenzin Bhuchung, India. (Not pictured: Alison Bond, New Zealand.)
First class of Rotary World Peace Scholars graduate The end of the - Rotary year marked the graduation of the Zewdineh Beyene Haile, sponsored by the Rotary Club of Addis first class of Rotary World Peace Scholars. The inaugural class of Ababa West, Ethiopia (District ), studied international law at students from countries studied during - at the seven the Rotary Center for International Studies at the University of Rotary Centers for International Studies in peace and conflict California-Berkeley, California, USA. During his field experience, resolution. Zewdineh researched the role of intergovernmental organizations Even before graduating, the scholars made notable contributions such as the African Union in addressing peace and security in east toward world understanding and peace, gaining field experience Africa. Under the auspices of the Inter-governmental Authority with organizations such as the International Committee of the on Development, an organization representing several African Red Cross; United Nations Development Programme; Interna- countries, he developed a pilot project to establish a conflict early tional Criminal Tribunal for Rwanda; Commission for Reception, warning system in Ethiopia and Sudan. The scholar spoke to Truth and Reconciliation (East Timor, Sierra Leone); UNESCO; Rotary clubs in Ethiopia to raise awareness of the Rotary World The Carter Center (Atlanta, Georgia, USA); and Save the Children. Peace Scholarship program, and he linked the Rotary Club of Addis Ababa-Bole with his host Rotary Club of Mill Valley, California, to partner on future projects.
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GSE team raises funds to fight AIDS — A Group Study Exchange (GSE) team from District 9300 (South Africa) brought their hosts in District 1140 (England) gifts of beaded “Topsy” dolls made by people with HIV/AIDS. After receiving many compliments about the dolls from their hosts, the GSE team arranged for a shipment of the dolls and sold them at the district conference in Plymouth to raise funds for AIDS orphans in South Africa. [opposite page] Erica Poeschel plays with children at the Holy Family AIDS Orphanage in Tzaneen, South Africa.
Scholar masters global language of service “I consider this extraordinary and unimaginable opportunity a While studying speech language pathology at the University of major contribution of Rotary International to Africa,” said Pretoria, South Africa, Ambassadorial Scholar Erica Poeschel of Zewdineh of his experience as a - Rotary World Peace District (Missouri, USA) also became fluent in the interna- Scholar. “I will carry the rest of my life, in my heart and in my tional language of service. profession, Rotary ideals.” When Limpopo Province suffered a severe drought, Poeschel Carmen Strigel (District , Germany), who studied at the contacted her sponsor Rotary Club of Kirksville for help. The Rotary Center for International Studies at Duke University and club donated US to purchase an electric water pump. the University of North Carolina at Chapel Hill (North Carolina, Poeschel also helped local Rotarians renovate an elementary USA), had her field experience with the United Nations school and teach classes, and joined other university students on a Development Programme (UNDP) in Azerbaijan. “The UNDP church outreach to feed homeless people in several Johannesburg- gave me a chance to acquire firsthand experience in a developing area communities. In addition, she took part in a polio eradication country and to use information and communication technologies fundraiser and other Rotary projects not only in South Africa but in various fields of development such as educational reform and in Botswana, Swaziland, and Mozambique. poverty education,” she said. “People from all over the world join hands in the motto of Service The other five Rotary Centers, in addition to the two mentioned Above Self and instead of just talking about doing things, they above, are International Christian University, Tokyo, Japan; actually get their hands dirty and do them,” said Poeschel. Sciences Po, Paris, France; Universidad del Salvador, Buenos Aires, “I cannot wait to be a Rotarian! I want to be able to give to Argentina; University of Bradford, West Yorkshire, England; and someone what Rotary has given me.” the University of Queensland, Brisbane, Queensland, Australia.
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Rotary World Peace Scholar Simona Pinton (far right) of Padova, Italy, Walter Felman, of the Rotary Club of Mill Hill, England, visits a looks over legal documents in Arusha, Tanzania, with attorneys from seven-month-old Palestinian girl recovering from heart surgery at a the International Criminal Tribunal for Rwanda (ICTR). The ICTR was hospital in Holon, Israel. The girl had just breathed without created by the United Nations to prosecute perpetrators of the assistance for 24 hours for the first time in her life, monitored by a genocide in Rwanda. Pinton gained field experience with the ICTR servoventilator, which delivers oxygen and nitric oxide in an emergency. during the summer of 2003 and graduated from the Rotary Center The US$60,000 device was provided to the Save a Child’s Heart for International Studies at the University of California-Berkeley, charity through a project of District 1130 (England) and other California, USA, in 2004. Rotarians in Great Britain and Ireland, the Rotary Club of Holon, and a Rotary Foundation Matching Grant.
An immunization team, including National PolioPlus Committee Chair Adedehin Adefeso (second from right), takes every available route to reach children in Nigeria with oral polio vaccine.
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Students in Vietnam are developing the ability to read, thanks to a library established by Rotarians in District 5690 (parts of Kansas and Oklahoma, USA), a Rotary Foundation humanitarian grant that supplied books, and support from 11 Kansas churches and individuals in both the USA and Vietnam.
These and many other women and their families in El Alto, Bolivia, are enjoying a better quality of life, thanks to a revolving loan fund project launched with the help of a Rotary Foundation Matching Grant. Group Study Exchange team members from District 7090 (parts of The project was supported by District 5080 (part of British Columbia, Ontario, Canada, and New York, USA) are interviewed by a local Canada; parts of Idaho and Washington, USA), and the Canadian television station during their study tour of District 3060 (India). Rotary Committee for International Development.
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Fund Development Working to fulfill the dream of a peaceful world
The Howey family is honored in The Rotary Foundation’s Arch C. Klumph Gallery. From left: Paul Howey, president, Rotary Club of Monroe, Michigan; Major Donors Dolores Gorno and Charles O. Howey; Rotary Foundation Trustee Chair James Lacy; Beth Dixon (daughter); Michelle Hanson (daughter); John Howey, president, Rotary Club of Trenton, Michigan; Bob Howey, member, Rotary Club of Trenton; Sarah Thewes (daughter); Mike Hanson (son-in-law). (Not pictured: Skip Howey, vice president, Rotary Club of Trenton.)
A family of Rotary invests in Rotary and its Foundation Charles “Chuck” and Dolores “Dee” Howey were inducted into the “This has got to be one of the happiest days of my life,” said newly designated Arch C. Klumph Gallery (formerly known as The Charles Howey, who challenged his children to carry on the legacy Rotary Foundation’s Hall of Honor) on April . Their gift to of helping to better people’s lives through the Foundation. The Rotary Foundation will help fund a polio surveillance lab in The Howeys and their children are a family highly dedicated Mumbai, India. Surveillance confirms the presence or absence of the to Rotary International and its Foundation. A past president of wild poliovirus in a given area, revealing where immunization efforts the Rotary Club of Trenton, Michigan, USA, Charles Howey has must be intensified. In , the Mumbai lab examined , samples over years of perfect attendance. All four of the Howey’s sons and confirmed that were polio cases. are Rotarians and one of their three daughters, Michelle Hanson, recently participated in a Rotary medical mission to Haiti. Her trip was funded by the Howey Family Foundation.
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Major Donors Naohiro and Ayako Tsuchiya Contributors to The Rotary Foundation help people around the world pursue their dream of a better life, including families like this one in Uganda who receive dairy cows through a microenterprise project.
“We operated for more than hours straight,” Michelle, a nurse Rotary clubs gear up for Every Rotarian, anesthetist, wrote to family and friends in describing the first day Every Year effort of the mission. “The last patient was an emergency C [cesarean] As one of The Rotary Foundation’s - goals, the Foundation section who would not have survived without surgery, and her Trustees encouraged every Rotarian to make an annual contribu- baby definitely would not have.” tion to the Foundation. For the first time in the Foundation’s “I’m proud of all my children, because I really think they live Rotary history, Rotary clubs worldwide were asked to set an Annual — Service Above Self,” said Dolores Gorno Howey. Programs Fund goal for -, in preparation for kickoff of the Rotary World Peace Scholarship endowed Every Rotarian, Every Year initiative on July . Inspired by the success of The Rotary Foundation’s The goal of the initiative is US in annual per capita giving, Ambassadorial Scholarships program, Past District Governor which was unanimously endorsed by every district at the Naohiro Tsuchiya and his wife, Ayako, have endowed a Rotary Council on Legislation. The Council on Legislation, meeting World Peace Scholarship. Income from the endowment will in Chicago, Illinois, USA, adopted a resolution reaffirming the enable Rotary World Peace Scholars to study at the Rotary Every Rotarian, Every Year marketing plan to achieve this goal by Centers for International Studies in peace and conflict resolution , Rotary’s th anniversary. in support of the Foundation’s mission to further world By achieving the per capita annual giving goal, the understanding and peace. Foundation will be able to meet the need for humanitarian and A member of the Rotary Club of Onoda, Japan, Tsuchiya is also educational programs identified by Rotary clubs and districts. a member of his country’s Permanent Fund Committee. “I feel Children’s Fund created happy to have the opportunity to work for Rotary,” Tsuchiya said of his involvement in the committee’s efforts. To support projects that benefit children and offer them hope for a brighter future, The Rotary Foundation’s Trustees established a “I joined a Rotary club because I wanted to contribute to world Children’s Fund within the Permanent Fund. Trustee Chair James peace and human happiness,” said Tsuchiya, who is a physician. Lacy expressed the hope that the fund would encourage Rotarians “Without The Rotary Foundation . . . I would not be able to and other donors to expand their help to children through the achieve my purpose.” Foundation’s humanitarian programs. The Foundation began accepting outright contributions of US, or more and Bequest Society commitments to the Children’s Fund.
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Financials
Foundation Total Contribution History US$ millions 150 PEFC PolioPlus Campaign 120
90
60
30
0 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Contributions and Pledges US$ millions 80
60
40
20
0 2004 2003 2004 2003 2004 * 2003
Permanent Fund PolioPlus Fund Annual Programs* Funds Fund raised by the Polio Eradication Fundraising Campaign went to the PolioPlus Fund.
What the Foundation Received Contributions and Pledges Investment Income Contributions and pledges, including US$7.8 in flow through The Foundation’s investments contributed US$73.6 million to contributions, totaled US$113.8 million, reflecting the highest 2003-04 total revenue of US$179.6 million. This is up sharply from contribution level ever to the Annual Programs Fund and the third the prior year’s net investment return of US$5.4 million, and offsets highest year of contributions to the Foundation in its history. investment losses totaling US$54.0 million in fiscal 2001-02 and Per capita annual giving by the top 20 giving countries rose by an 2000-01. average of 42 percent from the prior year, and both Korea and Taiwan exceeded the annual giving per capita goal of US$100.
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Top 20 Giving Countries
Rank 2003-04 Total Annual Giving 2004 2003 Country Contributions Per Capita 1 1 USA US$46,634,454 US$69.25 2 2 Japan 15,395,364 93.71 3 3 Korea 6,515,423 112.12 4 7 Canada 4,169,923 67.11 5 5 UK 4,111,794 42.78 6 6 Italy 3,842,002 56.48 7 4 Germany 3,319,901 59.18 8 8 India 3,083,122 27.40 9 10 France 2,674,214 57.12 10 11 Taiwan 2,639,036 102.42 11 9 Australia 2,566,621 50.89 12 15 Netherlands 2,332,609 30.87 13 13 Brazil 1,661,924 27.57 14 14 Switzerland 1,457,563 29.21 15 19 Mexico 1,036,413 57.59 16 21 Sweden 905,148 14.80 17 18 Belgium 859,983 42.30 18 17 Denmark 696,470 24.20 19 22 Philippines 652,308 29.56 20 25 South Africa 603,279 78.98
Asset Allocation of Annual Programs Fund Asset Allocation of Permanent Fund Asset Allocation of PolioPlus Fund
Real Estate 5% Real Estate 5%
Bonds 25% Bonds 15% Bonds 100%
U.S. Stocks 50% U.S. Stocks 60%
Non-U.S. Stocks 20% Non-U.S. Stocks 20%
The Annual Programs Fund and Permanent Fund posted invest- The return on the PolioPlus Fund of 0.06 percent reflected the ment returns of 17.4 percent and 19.3 percent respectively in fiscal overall low interest rates on short-term investments. Additionally, 2003-04. These returns were driven by strong returns in the U.S. rising interest rates during the fourth fiscal quarter reduced the stock market, which rose by 21.2 percent, and the non-U.S. stock market value of the securities held in the PolioPlus portfolio. markets, which rose by 32.5 percent, coupled with relatively high Experienced, professional investment managers who are appointed allocations to these market segments. The fixed income markets by the Foundation’s Trustees manage the Foundation’s investments. generated only 0.3 percent and contributed marginally to the The Trustees closely monitor the performance of the investment overall returns. managers and their compliance with policy guidelines.
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Foundation Expenses US$ millions 50
40
30
20
10
0 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 Fund PolioPlus Humanitarian Educational Programs Administration Grants Program Development
What the Foundation Spent Educational Programs
Program Spending ● 827 Ambassadorial Scholars in 70 countries — US$16.5 million ● 426 Group Study Exchange teams — US$2.9 million Total program spending declined from US$94.1 million in 2002-03 ● 62 Rotary Centers for International Studies scholars — to US$86.7 million, primarily due to planned reduced spending on US$3.9 million eradicating polio. ● US$0.4 million spent on other Educational Programs ● US$4.2 million spent on program operations PolioPlus ● 400 million children vaccinated in 2004 Spending on Educational Programs rose to US$27.9 million from US$29.3 million spent on eradicating polio US$26.9 million the prior year. This increase was due to the in- ● US$2.3 million spent on program operations creased cost of higher education and study abroad-related expenses. Spending to eradicate polio comprised 36 percent of the Founda- Operating Expenses tion’s program expenditures with US$12.0 million spent in India and Expenses of US$11.6 million for fund development, which included Pakistan and most of the remaining US$19.6 million spent in Africa. US$1.9 million for donor recognition, were about the same as the Humanitarian Grants Program prior year. ● 1,946 Matching Grants approved totaling US$16.2 million Administrative expenses of US$4.9 million rose by 7 percent ● 383 District Simplified Grants approved totaling US$5.2 million or US$0.3 million from the prior year primarily due to increased ● 322 Individual Grants approved totaling US$1.1 million expenditures for information systems and volunteer travel. ● US$0.3 million spent on other humanitarian programs ● US$6.1 million spent on program operations Operating expenses include travel-related expenses (airfare, hotel, ● US$1.7 million related to 3-H returned and meals) of US$148,000 for the chair and US$63,000 for the in- Spending on humanitarian programs declined to US$27.2 million coming chair of the Trustees. These travel expenses are incurred to from US$28.4 million the prior year. This decline was due primarily promote the programs of The Rotary Foundation, to raise contribu- to a reversal of prior period expenditures related to 3-H Grants. tions and awareness for The Rotary Foundation, and to attend the This reversal included 3-H Grants that were unutilized and returned International Assembly, the RI Convention, Trustee meetings, and to the Foundation by sponsors upon project completion, surplus Rotary zone institutes. (RI Bylaws 22.070.) funds that had been budgeted but not required to complete moni- Foundation Net Assets toring activities, and funds returned for grants that were cancelled by the Foundation or relinquished at the request of the sponsors. The Foundation’s net assets increased by US$77.1 million over the prior year primarily due to strong investment earnings. On the Without this reversal, Matching Grant payments increased by opposite page is a chart that shows 2003-04 activity in each of the US$0.5 million over the prior year. 2003-04 marked the first year Foundation’s funds. for District Simplified Grants, in which 70 percent of the districts participated.
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Top 10 Recipients of Matching Grants Top 5 Recipients of District Simplified Grants US$ millions 3.0
2.5
2.0
1.5
1.0
0.5
0
India BrazilKenya Haiti USA Japan Korea Taiwan Mexico Thailand Argentina England South Africa Guatemala Philippines
Top 10 Recipients of PolioPlus Grants US$ millions Top 10 Sponsors of Educational Grants * 7
6
5
4
3
2
1
0
India Niger BeninGhana USA Japan Korea Brazil Italy India Pakistan Nigeria Germany AustraliaCanada Argentina Afghanistan West AfricaCentral CôteAfrica d’Ivoire * Scholarships, Rotary Grants for University Teachers, and Group Study Exchange teams.
US$ millions Annual Permanent PolioPlus Programs Fund Fund Fund Total Net assets @ 30 June 2003 $ 302.5) $ 112.6) $ 78.5) $ 493.6) Contributions and pledges 70.5) 9.3) 26.2) 106.0) Investment earnings 53.3) 20.2) 0.1) 73.6) Program awards and operations (55.1) (31.6) (86.7) Development (11.0) (0.6) (11.6) General administration (4.9) (4.9) Transfers between funds (7.4) (0.8) 8.2) 0.0) Other 0.6) 0.1) 0.7) Net assets @ 30 June 2004 $ 348.5) $ 141.3) $ 80.9) $ 570.7)
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Fiscal Year Financial Statement Data Five Year History (US$ millions)
2003-04 2002-03 2001-02 2000-01 1999-2000 What The Rotary Foundation Received Contributions 1 Annual Programs Fund $ 70.5 $ 55.8 $ 67.5 $ 61.1 $ 61.0 Permanent Fund 9.3 5.2 8.7 11.2 10.1 PolioPlus 26.2 72.0 5.0 1.9 1.9 Temporarily Restricted (0.2) (0.3) 0.7 Total Contributions $ 106.0 $ 133.0 $ 81.0 $ 73.9 $ 73.7 Investment Income Annual Programs Fund $ 53.3 $ 2.8 $ (31.0) $ (14.4) $ 29.6 Permanent Fund 20.2 0.4 (12.7) (4.9) 9.0 Children’s Opportunities Grants 0.1 0.3 PolioPlus 0.1 2.2 3.5 5.4 5.8 Total Investment Income $ 73.6 $ 5.4 $ (40.2) $ (13.8) $ 44.7
Total Revenues $ 179.6 $ 138.4 $ 40.8 $ 60.1 $ 118.4
What The Rotary Foundation Spent Program Awards and Expenses Humanitarian Grants Program $ 27.2 $ 28.4 $ 41.5 $ 38.3 $ 31.4 Educational Programs 27.9 26.9 24.2 26.7 28.6 PolioPlus 31.6 38.8 29.7 36.6 40.2 Total Program Awards and Expenses $ 86.7 $ 94.1 $ 95.4 $ 101.6 $ 100.2 Operating Expenses Fund Development $ 11.0 $ 9.3 $ 10.3 $ 9.6 $ 9.6 Polio Eradication Fundraising Campaign 0.6 2.2 1.0 General Administration 4.9 4.6 5.0 4.4 4.3 Total Operating Expenses $ 16.5 $ 16.1 $ 16.3 $ 14.0 $ 13.9
Total Awards and Expenses $ 103.2 $ 110.2 $ 111.7 $ 115.6 $ 114.1 Fund Transfers from Rotary International $ 1.5 Minimum Pension Liability Adjustment 2 $ 0.7 $ (1.0) (Decrease)/Increase in Foundation Assets $ 77.1 $ 27.2 $ (70.9) $ (55.5) $ 5.8
page 18 the rotary foundation • 2003-04 annual report
2003-04 2002-03 2001-02 2000-01 1999-2000 Rotary Foundation Assets 3 Investments $ 579.5 $ 518.2 $ 520.6 $ 595.2 $ 658.5 Cash and other assets 40.8 46.1 21.5 25.8 19.6 Total Assets $ 620.3 $ 564.3 $ 542.1 $ 621.0 $ 678.1
Rotary Foundation Liabilities and Net Assets Liabilities Grants approved for future payment $ 33.0 $ 53.7 $ 51.0 $ 59.1 $ 55.5 Other accounts payable and liabilities 16.6 17.0 24.7 24.6 29.8 Total Liabilities $ 49.6 $ 70.7 $ 75.7 $ 83.7 $ 85.3 Net Assets 4 Beginning of year $ 493.6 $ 466.4 $ 537.3 $ 592.8 $ 587.0 Current year (decrease)/increase 77.1 27.2 (70.9) (55.5) 5.8 Total Net Assets $ 570.7 $ 493.6 $ 466.4 $ 537.3 $ 592.8
Total Liabilities and Net Assets $ 620.3 $ 564.3 $ 542.1 $ 621.0 $ 678.1
Flow Through Contributions Matching Grants $ 6.7 $ 9.6 $ 11.6 $ 12.3 $ 8.3 Disaster Relief 2.7 PolioPlus Partners 0.7 1.7 3.5 2.7 Other Restricted Contributions 0.4 0.2 0.5 0.5 Total Flow Through Contributions $ 7.8 $ 9.8 $ 13.8 $ 16.3 $ 13.7
1 Flow through contributions are not included. These funds pass through the Foundation for donor recognition, but are not reported as contributions in the financial statements.
2 United States Financial Accounting Standards require minimum pension liability adjustments to be made when the fair value of retirement plan assets is less than the plan’s accumulated benefit obligation. The minimum pension liability adjustment allocated to The Rotary Foundation by Rotary International was based on the Foundation’s proportionate share of payroll expense.
3 Certain reclassifications have been made to prior years’ balances to conform with the 2003-04 presentation.
4 The difference between a company’s total assets and its liabilities; another way of saying “net worth.”
Information is taken from the Audited Financial Statements, which are available through RI’s Web site, www.rotary.org.
page 19 fulfill your rotary dreams
The Rotary Foundation Trustees 2003-04
Front row (seated, from left): Luis Vicente Giay, Vice Chair Carlo Ravizza, Chair James Lacy, Frank J. Devlyn. Second row (standing, from left): Irving J. “Sonny” Brown, John Kenny, Jayantilal K. Chande, Theodore D. Griley II, Fumio Tamamura. Third row (standing, from left): Kalyan Banerjee, José Alfredo Pretoni, Dong Kurn Lee, Ray Klinginsmith, RI General Secretary Edwin H. Futa.
page 20 the rotary foundation • 2003-04 annual report
Donor Recognition
Every year, Rotarians contribute millions of dollars to The Rotary Benefactor Foundation’s Annual Programs Fund and the Permanent Fund. ● Qualification: An individual or couple who names the The Annual Programs Fund supports the Foundation’s humani- Permanent Fund in his, her, or their estate plan and notifies tarian, educational, and cultural programs; while the Permanent the Foundation in writing; or any person who makes an Fund serves as an endowment, guaranteeing that the Foundation’s outright gift of US, or more to the Foundation’s work toward international understanding and peace will continue Permanent Fund. for decades to come. Without the ongoing support of Rotarians, the Foundation and its vital programs to alleviate suffering, foster ● Recognition: A personalized Benefactor certificate and cultural understanding, and eradicate polio worldwide would Benefactor insignia to attach to a lapel pin. cease to exist. Listed below are some ways The Rotary Foundation recognizes its generous donors. Multiple Paul Harris Fellow ● Qualification: Individuals with a recognition credit of Arch C. Klumph Gallery US, or more. ● Qualification: An individual or a couple whose cumulative ● Recognition: Eight recognition levels for contributions of personal contributions are US, or more. US, to , are reflected by Paul Harris Fellow pins ● Recognition: Donor’s portrait is hung in the Arch C. Klumph decorated with one to five sapphire stones and one to three Gallery during a ceremony at Rotary International World ruby stones. Headquarters. Paul Harris Fellow Major Donor ● Qualification: Individuals with recognition credit of US, ● Qualification: An individual or a couple whose cumulative or more. contributions are US, or more. ● Recognition: Paul Harris Fellow medal set (lapel pin and ● Recognition: An engraved crystal piece and a Diamond Circle medallion in a presentation box) along with a personalized pin (see the contribution ranges in “Bequest Society Member” Paul Harris Fellow certificate. below). Rotary Foundation Sustaining Member Bequest Society Member ● Qualification: An individual who contributes US or more per year to the Annual Programs Fund. ● Qualification: An individual or a couple who names The Rotary Foundation in his, her, or their estate plan for ● Recognition: A membership sticker to affix to his or her club US, or more and notifies the Foundation in writing. name badge; a new sticker is issued each year.
● Recognition: A Diamond Circle pin in the appropriate % Paul Harris Fellow Club commitment level (see ranges identified below) and an engraved crystal recognition piece. ● Qualification: percent of dues-paying members are Paul Harris Fellows. Diamond Circle pins now identify recognition levels for both Major Donors and Bequest Society members. The crystal ● Recognition: A recognition banner (issued one time only recognition for Major Donors reflects the appropriate giving level. upon initial certification); the club’s name and year of There is a single crystal recognition for all Bequest Society recognition placed on a plaque in the Arch C. Klumph commitments. Gallery at World Headquarters. Level One: US, — , Level Two: US, — , Level Three: US, — , Level Four: US, — , Level Five: US, — , Level Six: US million and above
page 21 the rotary foundation of rotary international One Rotary Center 1560 Sherman Avenue Evanston, IL 60201-3698 USA www.rotary.org
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