2006 Rotary International Convention Treasurer's Report

Jocelyn I. Bolante, Treasurer, Rotary International Report to the RI Convention, Malmö, Sweden, and Copenhagen, Denmark June 2006 It is my honor to serve as your treasurer during this first year of Rotary's second century. It is also my duty, under the RI Bylaws, to report to you on the current state of Rotary International finances. Thus, I will comment based on the audited financial results of our fiscal year ended 30 June 2005, Rotary's centennial year, which are summarized in Rotary's 2004-05 annual report. I will also apprise you of the current status of this year's performance and the financial outlook for the coming years. All dollar references are in U.S. dollars. Rotary's Centennial Year 2004-05 Results Revenues totaled $78.6 million, $7.4 million more than budgeted. Revenues from services and other activities were $4.5 million more than budgeted, primarily because attendance at the 2005 RI Convention was higher than anticipated in the budget. The net investment return of 7.5 percent exceeded the 5% budgeted rate and contributed $5.4 million in revenue, resulting in a $2.4 million positive variance. Revenues were $1.5 million less than the previous year, when the assessment for the Council on Legislation recorded an additional $3.3 million. Revenue from dues increased $4.4 million as a result of a $4 per capita increase in annual dues. However, this increase was offset by a $3.0 million decrease in revenue from services and other activities, primarily due to lower attendance at the 2005 international convention as well as the absence of the Council of Legislation. In addition, investments generated $2.9 million less in revenue as the markets reverted to a more normal return environment. In 2004-05, approximately 59 percent of our revenues, or $46.3 million, came from membership dues. Services and other activities generated 34 percent, or $26.9 million: publications ($7.9 million), One Rotary Center ($4.7 million), the international convention and meetings ($9.6 million), and licensing and other sources ($4.7 million). Investment return represented 7 percent of total revenues. Overall, expenses totaled $69.7 million, $3.8 million less than budgeted. Expenses related to operations were $5.8 million lower than budgeted, due primarily to the continued efforts of senior leaders, volunteers, management, and staff to control spending. Expenses related to services and other activities were $2.0 million higher than budgeted, which can be attributed primarily to increased expenses for the 2005 convention. Overall, expenses were $2.7 million less than the previous year. Expenses related to operations were $3.4 million higher than the prior year, chiefly as a result of increased 1 of 3 spending on communications to promote Rotary's centennial and public image. Expenses related to services and other activities decreased $6.1 million, which can be attributed to the absence of the Council on Legislation and lower convention costs. Net assets increased by $7.8 million over the previous year. Fiscal year 2004-05 was the first year that reflects the $4 per capita dues increase approved by the 2004 Council on Legislation. This additional revenue enabled RI to revitalize services provided by the Secretariat and reinstate essential information systems projects that had been deferred. RI was also able to launch its award-winning Humanity in Motion public image campaign in time to take advantage of expanded publicity during Rotary's centennial year. Status of Current Year's Financial Performance Revenues for the 10 months ended 30 April 2006 are $2.4 million higher than budget, primarily as a result of favorable investment returns. Dues revenue totaled $50.5 million, which is in line with the budget. Furthermore, all expense areas are under control, and positive budget variances continue. Assuming stability in the financial markets for the balance of this fiscal year, revenues will exceed expenditures for the full year, making it unnecessary to access RI's reserves. During this second year of dues increases, the Secretariat is maintaining a high level of support and services to Rotarians. The increased dues revenue has allowed RI to improve communications, enhance training and development tools, and provide increased membership support. Future Financial Outlook Finally, let me comment briefly on the financial outlook for the future. The per capita dues increase and a return to normal spending following the centennial year have allowed RI to balance the budget for fiscal year 2006-07. The five- year financial forecast anticipates revenues exceeding expenditures through fiscal year 2007-08. However, the forecast, which reflects stable membership, net investment returns of 5 percent, and low inflation, projects that expenditures could begin to exceed revenues in fiscal year 2008-09. In an effort to continue RI's support of the programs and needs of Rotarians while maintaining a balanced budget, the Board will use RI's available operating reserves and, if necessary, may recommend to the 2007 Council on Legislation a modest increase in per capita dues beginning in fiscal year 2008-09 or later. I am pleased to report that Rotary International's financial position remains strong and that the Board and management consistently and conscientiously address current and future challenges. I am confident that Rotary International can and will be able to support and strengthen Rotarians' service efforts throughout the world for many years to come. I wish to thank my fellow RI Board members for their full support and the general secretary, the general manager-chief financial officer, and all the staff involved in Rotary International financial matters for their dedication and cooperation. I also thank the members of the RI Finance Committee for their very valuable advice and support. Share your ideas on Rotary's 2006 Treasurer's Report, in approximately 100 words, and earn a credit toward Make-up To top Website Copyright © 2003-04 Rotary eClub D7150 NY1 Design & Maintenance of this site by TechnoTouch e-Strategists