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Rotary Club of Calcutta |
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| RI GENERAL SECRETARY'S REPORT | ||
| Update on RI Finances |
 Ed Futa |
GENERAL SECRETARY'S UPDATE ON RI FINANCES
________________________________________________________ GLOBAL FINANCIAL MARKETS AND THEIR IMPACT ON ROTARY 2 April 2009 Dear Rotarians, Since my letter on this subject on 12 February, the global economic climate has worsened, and the financial markets continued to lose significant value. As of 28 February, both RI's and The Rotary Foundation's investments had further declined in value in line with the markets, with investment losses of approximately US$26 million and $222 million, respectively. Although the markets reacted more favorably during the last two weeks in March, they remain extremely volatile. The current investment climate will continue to present challenges for all service and charitable organizations in the foreseeable future. It is difficult to predict the near and long-term impact that the U.S. Federal Reserve and Treasury policies will have on the financial markets. On a positive note, however, Rotary's cash flows remain strong, and we have not had to sell any investments to operate. RI's revenues from dues and other services and activities remain ahead of budget and prior year, and Rotarian contributions to the Foundation are up $6 million over last year. We have cut all nonessential and discretionary spending for the balance of this fiscal year, and I am taking every action possible to reduce costs next fiscal year with minimum impact on services to you and your clubs. The significant decline in the market value of our Foundation's investments has diminished the Foundation's operating reserve, requiring the Trustees to take specific steps needed to continue programs and operations during this economic crisis. At their January meeting, the Trustees reduced the current fiscal year's World Fund program awards budget by $16.3 million. Looking ahead, the Trustees will consider additional actions for fiscal 2009-10 and beyond to fund existing program commitments and to pursue the Foundation's strategic goals within the current financial constraints. In this regard, I would like to address several questions that Rotarians have raised about Foundation operations. Was Rotary's US$200 Million Challenge initiated to cover investment losses in the PolioPlus Fund? The answer is absolutely not. As we have consistently reported to you since the financial crisis began last year, the PolioPlus Fund is safely invested — principally in short-term U.S. Treasury securities — and continues to earn money for program purposes. Given the cutbacks in World Fund awards, will districts be allowed to roll forward their unspent District Designated Fund (DDF) from 2008-09 into the next fiscal year? The answer is yes. Although the current situation requires the Trustees to limit World Fund spending, the DDF assets are secure and available for spending as usual. Will the Future Vision Plan pilot be delayed due to the current financial situation? While many actions are being considered for next year and beyond, the Future Vision Plan represents a more efficient and cost-effective method of operation for our Foundation; the pilot is a strategic priority and is expected to proceed as planned. I hope that you will find the information I have presented here helpful. In writing letters such as this, I want to be transparent and provide an accurate picture of Rotary's financial conditions without overwhelming or confusing our members. Unfortunately, the volatility of today's markets means that the picture is continually changing. What remains constant is the vigilant response to the situation by our volunteer senior leadership, and our professional staff. The RI Board, the Foundation Trustees, and other leaders who are guiding Rotary through this economic turmoil are working to protect Rotary's assets as much as possible without compromising the organization's strategic goals. In addition to our fiscal responsibility, we are all keenly aware of the increasingly urgent need for Rotary's service and humanitarian aid. In such a time of crisis, Rotary has much to offer our troubled world, and we must remain strong and able to meet these growing needs. As essential as financial resources are to fulfilling our mission, it is our human resources, our 1.2 million members, who will ensure Rotary's continued commitment to serving its 33,000 communities worldwide. Sincerely, Ed Futa |
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to send mailURL: www.rotacal.org/ri/secretary_report.htm Updated: 16 Jan 2011 |