New Funding Model Simplifies Process for Clubs & Districts

8 November 2007 - In response to the new Rotary Foundation grant structure, the Future Vision Committee recommended a preliminary distributable funds model that was approved by the Foundation Trustees and then reviewed by the RI Board during the October/November meetings of both boards.
Under the new model, block grants will be funded by a percentage of District Designated Fund allocations. During the three-year pilot phase (2009-12), districts may use up to 40 percent of their available DDF to support smaller local and international projects, offering districts a great deal of flexibility. This percentage will be reviewed annually by the Trustees. SHARE will continue operating in its current structure, with 50 percent of district contributions going to the World Fund and 50 percent to DDF.
Club- and district-designed grants in the areas of focus (priority world needs identified by Rotarians in which the Foundation is directing its resources to have a sustainable and measurable impact that leverages the organization's financial and volunteer resources) are expected to be supported by a World Fund match of DDF. Grants offered by the Foundation and its strategic cooperative relationships, or SCRs (organizations that specialize in one of the strategic areas of focus and have an established relationship with the Foundation), will be supported by the World Fund, Foundation-earned income, contributions from SCRs, and other sources being studied further by the Future Vision Committee and Trustees. The Trustees envision the joint Foundation-SCR grants as the most effective and strategic use of Foundation resources in achieving sustainable outcomes. As such, these grants would be funded completely by the World Fund through a competitive process that does not require club and district financial support.
"This model greatly simplifies our current funding mechanism and gives districts better access and flexibility in using their contributions," said Trustee Ron Burton. "With strategic cooperative relationships, we also increase the level of funding available for large-scale projects in our areas of focus and continue to provide a choice to clubs and districts in their service interests with more resources at their fingertips."

At their October/November meetings, The Rotary Foundation Trustees and the RI Board approved the grant structure and strategic cooperative relationships models and a preliminary distributable funds model, all of which form the core of the Foundation’s Future Vision Plan.
Reflecting input from grassroots Rotarians, senior leaders, and outside consultants, the new models simplify Foundation programs and focus Rotarian service efforts where they will have the greatest impact. With a goal of full implementation by 2012-13, the plan provides program options designed to achieve both global and local goals and increase the sense of ownership at the grassroots level by transferring more decisions to the districts.
The new grant model offers two types of grants. The first type allows Rotarians greater flexibility to use funds to support their broad service interests and address immediate needs in their communities. The second type offers opportunities to participate in focused and sustainable activities with greater support from the Foundation and cooperative relationships to make the projects more successful and sustainable.
The first type are block grants to districts, modeled after the current District Simplified Grants program, that will allow clubs and districts greater flexibility in carrying out local and international projects. Districts will be able to use up to 40 percent of their District Designated Fund to support these grants.
The second type will fund larger, more sustainable projects in one of the three to five strategic areas of focus (the Trustees will determine these areas at their April 2008 meeting, based on demonstrated Rotarian interest and experience in current Foundation programs). Under this model, clubs and districts will select from two options: club- and district-designed projects and prepackaged projects with strategic cooperative relationship organizations. These grants will enhance funding opportunities and support efforts that will gain more prominence for the Foundation.
The Future Vision Plan will be implemented in stages as identified in the draft transition plan that will be finalized in April 2008. In 2008-09, the Trustees will select approximately 60 geographically dispersed districts to participate in a pilot program for 2009-12. The remaining districts will continue to use the current programs and grants processes.
In expressing his support for the new models, Foundation Trustee Chair Robert S. Scott applauded the more strategic approach to service embodied in the Future Vision Plan. “Being everything to everyone has left the Foundation struggling to realize its mission. The new structure allows us to build on our strengths and realize more sustainable outcomes,” Scott said.
“Rotarians have demanded a simpler, more accessible Foundation that makes better use of our resources,” said Past RI President and Future Vision Committee Chair Luis V. Giay. “Our new models for The Rotary Foundation all meet the established criteria of a ‘five-way test’: They are 1) simple, 2) cost effective, 3) require significant Rotarian involvement, 4) have sustainable outcomes, and 5) are consistent with the Foundation’s mission. We are in the process of gradually transforming our Foundation as we prepare to celebrate its first century in 2017.”

Under the new grant structure model for The Rotary Foundation, all grants will fall into one of two categories and consolidate educational and humanitarian programs. The grants will allow Rotary clubs and districts to continue to support their broad service interests and address immediate needs in their communities, while participating in projects with proven results that allocate greater resources to larger and more strategically focused projects.
The first type of grants, modeled after the current District Simplified Grants, are block grants managed by the districts. Designed to give clubs and districts a greater sense of ownership, these grants also provide more flexibility in carrying out local and international projects that will preferably be completed in less than 18 months. A broad scope of activities are eligible, provided they relate and conform to the Foundation’s mission. Clubs and districts may form international partnerships to address needs in their local communities or abroad and partner with local organizations on community projects.
Although sustainability isn't required, clubs are encouraged to consider long-term outcomes in their plans. "We envision that some grant projects will serve as a laboratory at the local level for projects that could develop into larger and more sustainable efforts supported by the more focused grant types," said Trustee Ron Burton, a member of the Future Vision Committee.
In the pilot phase, districts will use available District Designated Fund allocations to support the block grants, giving districts more control over their DDF. Some examples of projects that might be funded include books for a local literacy project, travel expenses for a Rotarian providing volunteer service abroad, and tuition costs for a scholarship for a local college student.
The second type of grants are more focused and support larger, more sustainable projects related to one of the three to five strategic areas of focus (to be established by the Foundation Trustees at their April 2008 meeting). An area of focus is defined as a priority world need identified by Rotarians in which the Foundation is directing its resources to have a sustainable and measurable impact that leverages the organization’s financial and volunteer resources. Based on demonstrated Rotarian interest and experience, these areas of focus will offer a long-term commitment with potential for sustainable beneficiary outcomes. This grant type does not include the current corporate project, PolioPlus, or any future one; corporate projects will be independent and the highest priority of Rotary International and The Rotary Foundation.
Clubs and districts may apply for this type of grant with an international partner, club, or district to support a focus area project of their choice. Or they may apply for a grant established with a strategic cooperative relationship organization designated by the Foundation. In an effort to also consider Group Study Exchange and Ambassadorial Scholarships in a more strategic way, it is possible that the grants will fund participants whose professional or study fields relate to the areas of focus. Specific strategies for activities and projects are still being developed for review by the Trustees in April.
"These larger grants are designed to use Rotary Foundation resources more strategically and to address Rotarians' interests," said Trustee Sakuji Tanaka, member of the Future Vision Committee. "By building on our strengths and concentrating our organizational efforts, we can make far more impact, attract new interest from potential strategic cooperative relationship organizations, and greatly enhance our Foundation’s public image."
In addition to the areas of focus, other details about the grant structure require further clarification from the Trustees. "Many questions still need to be answered on how to apply, approve, disburse, and report on these grant types," said Trustee Chair-elect Jonathan Majiyagbe, who is vice chair of the Future Vision Committee. "The Trustees have asked the Stewardship Committee to outline the stewardship needs of the new model."

A key feature of The Rotary Foundation's Future Vision Plan involves forming strategic cooperative relationships (SCR) with organizations that can help the Foundation accomplish its mission and the goals of each area of focus. Under the SCR model adopted by the Foundation Trustees and RI Board, the Foundation will strategically cooperate with organizations that specialize in one of strategic areas of focus to be selected at the April Trustees meeting and endorsed at the June Board meeting.
Areas of focus are defined as a priority world need, identified by Rotarians, in which the Foundation is directing its resources to have a sustainable and measurable impact that leverages the organization’s financial and volunteer resources. The SCR organizations are expected to provide financial support, technical expertise, or advocacy efforts in projects and activities that are designed jointly with the Foundation and include Rotarian participation.
The Trustees anticipate significant benefits in cooperating with other organizations to support the projects and activities of the Foundation. The relationship is expected to promote a holistic approach in providing sustainable outcomes in projects and activities of Rotarians worldwide. The SCR model provides unlimited opportunities to spread the message of Rotarians' service focus.
The SCR model will focus on a collaborative approach in projects with financial, technical, and advocacy resources involving Rotarians, clubs, districts, and other Rotary entities. The final outcomes provide a significant benefit to the communities that both organizations - Rotary and the strategic cooperative relationship organization - are serving.
"Like our partnership in the Global Polio Eradication Initiative, strategic cooperative relationships will enable The Rotary Foundation to address larger needs," said Trustee Chair Robert S. Scott. "We expect to partner with organizations that are recognized worldwide for their work in our areas of focus and who can contribute financial, technical, or advocacy resources."

To ensure that the new models for developing and funding grants meet the Future Vision Plan objectives, the Rotary Foundation Trustees and the RI Board approved a preliminary three-year pilot program that begins 1 July 2009. The Trustees will finalize the transition plan and pilot program at their April 2008 meeting. Clubs and districts will receive more information about the program in the coming months, and districts interested in being considered for the pilot will be invited to submit applications during the 2008-09 Rotary year.
The Trustees will select approximately 60 geographically dispersed districts to participate. During the pilot phase, the Foundation will operate along parallel tracks, with the pilot districts following the guidelines for the new models and the remaining majority of districts seeing little, if any, change in the way they participate in Foundation programs.
"This transitional pilot stage will allow us to identify and work out any issues that we might not have anticipated," said Trustee Chair-elect Jonathan Majiyagbe, who is vice chair of the Future Vision Committee. "We can also use this period to develop strategic cooperative relationships needed to work with 530 districts." The transitional period will also give Rotarians time to adjust to the many changes underway.
Past RI President Luis V. Giay, who chairs the committee, recognized that the magnitude of change involved may be difficult for some Rotarians to accept quickly. "Our Rotary culture is slow to change and must be given time," Giay said, "but change is imperative for our Foundation’s health. I believe that ultimately we will experience a broader and deeper commitment to our Foundation as Rotarians see the measurable outcomes of their work."