Today, I am excited to share with you the Five Year Forecast News, a short video that provides an update regarding Rotary’s financial health. Before I show the video, I would like to provide you some information.

As you know, we are all about connectivity – It is the core of who we are as an organization. It’s important to understand that our dues provide funding for things that help us connect like technology, communication, leadership, youth programs, membership development and so much more.

It is my pleasure to share with you that Rotary has successfully concluded its 110th year and we are financially healthy.

Let me take a few minutes to provide you with some background for the video.

Bradford R. Howard
Director, Zones 25/26

Here is the link to the video, the password is 1560. There is an option to download the video in advance of your presentation so you don’t have to rely on internet connectivity on the day of your presentation. If you have any difficulty accessing or downloading the video, please contact Stuart Cleland, Senior Video Producer at 1-847-866-3420 or

It is important to note that Rotary has 3 main sources of revenue.

  1. Revenues from club dues:
    a. In 2017, membership dues are projected to be 70% of revenues – This makes it a very important revenue source!
  2. Net investment income is the second source
    a. As you know net investment returns are very volatile so Rotary plans conservatively for very little income from this source.
  3. Finally, Rotary receives other revenue from Services and Other Activities such as the International Convention, The Rotarian magazine, and the rental of One Rotary Center. These revenues are budgeted to cover the costs associated with these activities.



Rotary also has 3 basic types of expenses.

  • Club dues and net investment income are used to pay for the operating expenses – things like member services and programs, communications and marketing initiatives, the Board of Directors and District Governor allowances ––and compliance activities, like filing our annual financial statements.
  • Rotary has expenses associated with Services and Other Activities
    • For example the costs associated with the convention, The Rotary Magazine, and One Rotary Center. As mentioned before the revenues associated with these activities cover the costs.
  • It is important to note that the Board must pass a balanced budget each year. Expenses must be equal or less than revenues.
  • However, the by-laws provide that from time to time the Board can approve strategic spending from the reserves.

More about Reserves

  • In the past these reserve funds have been used to pay for regional membership plans, fund polio communications and fund contributions to The Rotary Foundation.
  • This reserve is also known as the general surplus fund.
  • In accordance with by-law 17.050.6, Rotary International should have a reserve equivalent to 85% of the highest level of expenses over the last 3 years. The by-law target is shown here as a blue line.
  • The Board of Directors sets a more conservative reserve target.
      • The Board includes a convention reserve – equivalent to the excess revenues from past conventions. Funds from this reserve can be used for future conventions that may not break-even.
      • The Board also includes an investment reserve that to ensure sufficient funding when investment returns are lower than budgeted.
      • As indicated earlier the Board can also designate some of the surplus funds to invest in Rotary’s future.
      • These 3 items, (1) the convention reserve, (2) the investment reserve and (3) the Board’s strategic investment cause the Board target – shown as the green line – to be higher, more conservative than the by-laws target.
      • Most importantly, the amount above the by-laws target is surplus that the Board can specifically approve with a ¾ (three quarter vote) to fund strategic plans.
      • As you can see by the end of 2016, Rotary is forecast to have a surplus of $15m above the Board target.

    With that as background – let’s see what the 5 year forecast shows for Rotary.