“Our Future” Lafayette Rotary Club Finances

1. “Our Future” Lafayette Rotary Club Finances June 14, 2011

2. Why? • Member concerns on amount of dues • Rotary International and District costs • How the Lafayette Rotary Club Foundation could help • Our declining membership numbers • Board of Directors appointed a task force John Corey, Jack Kelley and Don Gentry

3. Goals • To review current club financial system and its relationship to the Lafayette Rotary Club Foundation and The Rotary Foundation (Rotary International). • To identify issues and recommend changes to better meet the needs of the membership.

4. Club Finances Review • Assets • Income/Dues • Budgeted Expenditures • Issues and Recommendations

5. Club Assets • Total Assets as of June 30, 2010 $129,543 • Total Assets as of June 30, 2011 $124,310 • Sources of reserves • Policies that lead to these sums of reserves

6. Dues/Income 2010-2011 2011-2012 • Total projected income $55,316 $54,412 • Dues and fees $51,384 $49,208 • Misc. Income $ 5,963 $ 2,400 • Salary from LFCF $2,709 $ 2,804 • Carry over for Back Pack Program $15,626 $ 0

7. Dues 2011-2012 • Breakout of $252 per member • Rotary International Dues- $50 • Legislation Levy $ 1 • District Dues- $28 • Rotary Magazine- $12 • Insurance $ 3 • Total $9437%of each member’s dues

8. Projected Budget 2011-2012 • Total Budget 2010-2011- $77,418 includes $15,037 for Back Pack Program from Gus Macker • Projected Budget for 2011-2012- $75,394 includes $19,369 for Back Pack Program • Club Operations and Administration: for 2011-2012 $55,837 or 74% of budget • Includes Committee and Board, Adm., RI and Dist. Dues, other • RI, Magazine and District Dues is 26% of total budget • Projected Budget Deficient of $20,982

9. Issues • Member understanding of finances and concern for constant fund raising • Support of local and international projects from dues • Sizeable operating reserve • Member recognition and tax deductions • Not a Balanced Budget for 2011-2012 without spending reserves, raising large sums of new funds or changing funding sources

10. Lafayette Rotary Club Foundation • Mission- “The LRCF enables and encourages Rotarians and others to support the philanthropic ideals of the Lafayette Rotary Club by funding local community projects and humanitarian causes.” • 501 (c) (3) corporation

11. LRCF Assets • 2005-2006 $326,695 • 2006-2007 $425,984 • 2007-2008 $389,742 • 2008-2009 $341,035 • 2009-2010 $405,426

12. LRCF Receipts • 2005-2006 $19,595* • 2006-2007 $25,777* • 2007-2008 $40,902* • 2008-2009 $36,572* • 2009-2010 $42,359* *includes pass-through to RI plus interest and dividends Most contributions from Birthday Table

13. Distribution Policy • “Based on a three-year moving average of total return (dollar income plus dollar gain or loss) divided by a three-year moving average of investment market value. From that, a three-year moving average of inflation is subtracted to give a real return that reflects protection of the LRCF funds over time. The resulting real return is applied to the latest market value of investments to obtain the allowable disbursement for the next fiscal year.”

14. Distribution • Not easily understood • Formula provided for task force that is much easier to understand • Although conservative, the policy protects the corpus; and a Board guarantee to provide at least a $10,000 per year distribution for projects • Yearly commitment of $2,000 for camperships

15. Distribution History • 2005-2006 $16,000 • 2006-2007 $14,000 • 2007-2008 $43,745 • 2008-2009 $15,697 • 2009-2010 $14,540 • 2010-2011 $10,000 • 2011-2012 $10,000

16. Current Member Recognition • Golden Service Awards- “are awarded to recognize contributions to the LRCF which support the growth of the corpus of the Foundation, thereby enhancing the Foundation’s ability to award grants in the future.” • Other contributions considered “pass through” are not eligible for award.

17. Issues • Need for projects funding beyond current distribution from endowment • Member Golden Service Award and tax deduction for all contributions for Rotary projects • Eliminate pass through funds

18. Lafayette Rotary Club Foundation Actions • Will set up a projects fund in addition to endowment fund • Will fund club projects by the clubs determined priorities from funds available from endowment calculation and the projects fund • All contributions to the LRCF will be counted for Golden Service Awards and eligible for tax deduction

19. Contribution Process • Club members will be encouraged to support the endowment fund and the projects fund with their contributions by designating the fund • Projects fund will be allowed to accumulate for one year prior to funding projects • Club Board of Directors may choose to utilize club reserves to fund projects beyond the LRCF distribution amount during the transition • Eliminates the need for and confusion on pass through funds

20. Actions by the LRC Board • Provide financial updates to members • Target fund raising efforts on encouraging members to support the LRCF and TRF • Charge Budget Committee to monitor the implementation of system changes • Utilize cash reserve to support the transition to new projects funding system and to lower or maintain dues levels • Appoint task force to determine priority club projects and recommend action to Board of Directors; goal of no more than four per year plus camperships

21. LRC Continued Actions • Collect Salvation Army contributions and send directly to Salvation Army, no pass through to LRCF • Not cost effective at this time to install a credit card or pay pal system for dues collection, but encourage members to use electronic means from their bank if desired • Did not recommend differential dues for over 80 year old or under 40 year old members • Review mailing costs

22. LRC Actions Continued • Appoint committee to review the current high school scholarship program in relationship to current financial aid environment • Review dues level in relationship to new projects funding system

23. Rotary International Issues • Member contribution processing • Local record keeping for direct contributions • Matching points system confusing • Requests for addition support from clubs during the year

24. Actions for Rotary International • Provide members with process including assistance for contributing to The Rotary Foundation • Ask TRF for clarification on the matching points system • Respond to the additional requests for funds thought the annual budgeting process

25. Our Future Membership and Contributions To LRCF and TRF Questions?