President Ashish and Fellow Rotarians
Presentation to Club Membership, January 12, 2016, by Norman Herbert
President Ashish and Fellow Rotarians,
Representing the Endowment Development Committee, we first want to add our thanks to those of President Ashish for the recent contributions to both the Club’s Endowment and the Rotary International Foundation through the Every Rotarian Every Year gifts!
The Ann Arbor Rotary Endowment is completely separate from the Rotary International Foundation, it is a perpetual Charitable fund initiated in 1985 within the Ann Arbor Rotary Endowment structure, qualified as 501( c )( 3 ) organization under the IRS rules, so that contributions are tax deductible. The endowment fund is managed by a board of trustees. Its primary purpose is to provide annually additional funds for our club’s support of nonprofit community organizations, activities, and projects over and above that provided by our annual member assessment for charitable activities.
Our Endowment is both a true endowment holding funds in perpetuity and using the income therefrom to support designated charitable activities and our club’s tax-exempt vehicle through which we raise and distribute other funds in support of such activities. The annual Golf and Tennis Outing and community allocations disbursements that are funded in large part from Outing proceeds are good examples.
It must be remembered, however, that the activities and causes funded through the Endowment, primarily focused on youth, are those adopted by the club as official club projects.
The Endowment currently has a Spending Policy that requires an annual distribution of 4.25% of the assets each year, based on the average market value for the preceding 20 quarters.
As a result of contributions to the Endowment, as well as good investment results, the amount distributed over the last 12 years totals $487,718. The average increase in the annual distribution approximates 6.7%.
The Endowment Fund currently has a market value of $1,639,345 and now provides about 26% of our annual Community Service Budget. Increases in future years will be based on the market value of the fund.
To illustrate my point of the power of the Endowment Fund and its role in the Club’s financial structure, look at the exhibit on the screen, which is the 2015-16 Community Service Fund Flow (budgeted numbers).
On the left side of the exhibit, you’ll notice that the Community Service Fund sources consist of:
- Member Community Service Fee - $63,000
- Endowment Spending Policy - $60,023 (up 10.7% from last year’s $54,232)
- Annual Fundraiser (Golf & Tennis) - $85,000
- Funds unspent from prior years - $16,000
- Other - $4,035
Total Community Service Budget - $228,058
Uses:
- Community allocations - $58,000
- Scholarships
- Washtenaw Community College $19,000
- STRIVE - $12,500
- International Humanitarian Grants - $30,000
- All Other - $108,558
Bottom Line:
Funds for the Community Service Budget are derived from the Club members Community Service fee, the Club’s endowment spending policy and proceeds from our annual fundraising activity. The Club’s endowment is supported by voluntary charitable contributions primarily Club members, memorial gifts and bequests.
•Your Rotary Club has a goal, as established in the five-year strategic plan, to increase the contributions to the community from the Endowment to $60,000 annually.
•2015 contributions (156) to the Club’s Endowment Fund was a total of $24,305; $19,880 contributions to the endowment fund and $4,425 memorial gifts which are added to the endowment fund.
While our annual Community Service fees are critical in the support of current programs, our gifts to the Endowment help secure those programs for tomorrow. We invite each of you to invest in the future by making a gift from your current assets or by designating a portion of your estate for distribution to the Endowment upon your death, a bequest. Donated funds are invested permanently to build long-term, stable support for our many humanitarian projects--saving lives and improving health and well-being of those less fortunate abroad, and providing educational opportunities and other improvements in the lives of our young people locally.
The Endowment Development Committee is made up of the following Club members: David Anderson, David Schmidt, David Keosaian, Susan McClanahan, Carol Sewell and Brooks Sitterley.
Cc: Rotary\Endowment presentation to Club 01-16