Rotary Foundations and Grants 1
An Introduction for Applicants and Rotarians
By Quentin Wodon
Copyright 2017 Quentin Wodon
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Table of Contents
FOREWORD to the series
This ebook is published as part of the series. The books in the series are short, typically at 15,000 words or less. They provide rapid and practical introductions to topics related to volunteer work, service clubs, nonprofits, and the six areas of focus of the Rotary Foundation of Rotary International. These areas of focus are promoting peace, fighting disease, providing clean water, saving mothers and children, supporting education, and growing local economies. Other topics will be considered as well.
The book series is associated with the launched in October 2014 on World Polio Day. The aim of the blog and its book series is to provide analysis that can help readers make a positive difference in the life of the less fortunate. If you would like to receive email alerts of new posts and resources made available on the blog, please provide your email through the widget at .
The editor and main author for the book series works at the World Bank. Although some of the books in the series may relate to topics that the author and co-author(s) may occasionally work on at the World Bank, the opinions expressed in the books are solely those of the individual author(s) of each book in the series and do not represent the views of the World Bank, its Executive Directors, or the countries they represent. This book series is not associated in any formal or informal way with the World Bank.
Similarly, it goes without saying that this book need not represent the views of the Rotary club(s) of which the author(s) may be members, their Rotary district(s), or Rotary International.
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Rotary International is a nonprofit service organization with 1.2 million members worldwide in more than 35,000 clubs. The organization was founded by Paul Harris in Chicago in 1905. While clubs exist today in most countries of the world, North America and the Caribbean remains the region with the largest number of Rotarians – some 355,000 of them at the time of writing this book.
Within North America and the Caribbean, the United States has by far the largest number of Rotarians and clubs, and thereby also the largest number of local Rotary foundations managed by clubs, districts, or other entities. This is also where Rotary International and its corporate foundation, the Rotary Foundation of Rotary International, have their headquarters, in Evanston, Illinois.
While the work of the Rotary Foundation of Rotary International is relatively well known, the work of close to 4,000 local Rotary foundations at the level of clubs and districts in the United States is less well known, even at times in their own local communities. But this work is no less important. Rotary clubs and districts are major providers of grants to nonprofits, in large part through their foundations. Clubs and districts also have a long tradition of supporting students for university studies, again through their foundations for the most part.
Together, it can be argued that local Rotary foundations in the United States have an assets base close to that of the Rotary Foundation of Rotary International. According to the latest information available from the Internal Revenue Service, the assets of the Rotary Foundation of Rotary International are just above one billion dollar. Local Rotary foundations filing forms 990 with the Internal Revenue Service have close to $775 million in assets. This does not include assets owned by 1,854 local Rotary foundations that do not file a form 990 because they have gross annual income/receipts of less than $50,000.
Charitable donations by local Rotary foundations in the United States may well exceed those of the Rotary Foundation of Rotary International globally, given that for club foundations without large endowments, most annual receipts from donations and fundraisers tend to be distributed the same year. In terms of donations by Rotary entities to nonprofits and students based in the United States, it is clear that local Rotary foundations are the main source of funding, simply because most clubs and districts focus their giving on local communities, while the Rotary Foundation of Rotary International focuses for the most part on projects implemented in developing countries. In that sense, the contributions of the Rotary Foundation of Rotary International and of local Rotary foundations in the United States nicely complement each other.
Navigating the world of Rotary foundations is not an easy task for grant applicants, whether they are nonprofits, students, or even Rotarians wishing to apply for funding for a service project implemented by their club. This book is the first in a set of two on Rotary foundations and grants. The main objective of the set is to make it easier for grant applicants to think about how and where to apply for grants. In addition, a second objective is to start to better document the charitable contributions that Rotarians provide to communities through Rotary foundations based in the United States.
In order to achieve these objectives, this first book provides a basic introduction to the world of Rotary foundations in the United States, considering first the Rotary Foundation of Rotary International, and next local Rotary foundations. The second book in the set (Wodon, 2017a) provides a comprehensive directory or listing of Rotary foundations located in the United States by state and by city within each state. The aim is to make it easier for potential applicants to identify foundations located in their geographic area, so that they can consider whether it makes sense for them to apply for a grant or scholarship to those foundations.
This first book is short on purpose. Its structure is straightforward. Chapter 1 provides an introduction to the work of the Rotary Foundation of Rotary International, the foundation operated at Rotary International headquarters in Evanston, Illinois. The analysis is based on published data, including data from annual reports. While the Rotary Foundation of Rotary International benefits from donations from Rotarians worldwide, and while it supports principally projects in developing countries, it does benefit from generous support from Rotarians based in the United States who contribute quite a bit of the funding.
Chapter 2 focuses on local Rotary foundations in the United States. The analysis relies on data from the Internal Revenue Service. Most local Rotary foundations in the United States – close to 4,000 of them – provide grants to local nonprofits, and occasionally to students. This book and the companion book providing a directory of those foundations are to the authors’ knowledge the first attempt at providing a comprehensive analysis of the number of local Rotary foundations in activity, as well as their geographic location and assets. The focus for the analysis of local foundations is on the United States because of data accessibility, but this type of work could be extended to other countries in the future provided that similarly comprehensive data could be accessed.
A brief conclusion wraps up the book, summarizing some of the main findings from the analysis and briefly suggesting future directions for both the analysis of the work of Rotary foundations and some of the priorities that the foundations could adopt.
The rotary foundation of rotary international
This chapter provides basic information on the Rotary Foundation of Rotary International (TRF hereafter), the charitable arm of Rotary International, and thereby a major player in the service work of Rotarians. The foundation has its headquarters in Evanston, Illinois, as does Rotary International. It is therefore part of the Rotary foundations active in the United States, but its reach is global.
What Is the History of TRF?
A history of the first hundred years of TRF has been published by Forward (2016). The idea of having a foundation for Rotary International was suggested in 1917 by Arch C. Klumph, then Rotary’s sixth President, at the Rotary International Convention in Atlanta in the United States. The objective was to create an “endowment fund for … doing good in the world in charitable, educational, and other avenues of community service.”
The first contribution to the foundation was made by the Rotary Club of Kansas City, Missouri, a few months later. The foundation was however formally named only in 1928, and the first grant was given in 1930 to the International Society for Crippled Children. The flow of contributions from Rotarians increased substantially after Paul Harris, the founder of Rotary International, died in 1947.
A timeline with milestones that marked TRF’s history is provided in an annex in Forward’s book. The foundation is probably best known for its support towards polio eradication. In 1980, Rotary’s Council of Legislation endorsed a proposal to eliminate polio through immunization. In 1988, Rotary International became one of the spearheading partners for the launch of the Global Polio Eradication Initiative (GPEI). Apart from Rotary International, the other core partners in GPEI are the World Health Organization, the US Centers for Disease Control and Prevention, the United Nations Children’s Fund and the Bill and Melinda Gates Foundation. To date, through TRF, Rotary has contributed $1.5 billion to polio eradication campaigns (more details are provided below).
How Large Is TRF in Terms of Assets?
A widely used measure of the size of a foundation is its assets. According to its latest annual report for 2015-16, TRF had at end of that year net assets of $930 million (versus $946 million at the end of the previous year). Rotary International had at the end of that year net assets of $127 million (versus $129 million at the end of the previous year). The combined assets were therefore of the order of $1,057 million ($1,075 million in the previous year). While there was a small drop in assets between 2014-15 and 2015-16, the general trend has been towards an increase in assets from one year to the next. The assets estimate based on data from files maintained by the Internal Revenue Service for the latest available year of a similar order of magnitude, at $1,073 million.
One billion dollars is no small change, but some other foundations are even larger. Within the United States, TRF would rank about 84th in terms of assets according to the Foundation Center database as of May 22, 2016 which reports data for 2014 in most cases (for some reason, TRF is not listed in the top 100 foundations put together by the Foundation Center, so the exact ranking is not available). The largest foundation in the United States is the Bill and Melinda Gates Foundation, which had more than $44 billion in assets at the end of 2014. A dozen other foundations have assets between $5 billion and $15 billion, and many more have assets between $1 billion and $5 billion.
In other words, in comparison to some of the largest foundations in the United States, TRF could be considered as mid- to large size, but it is clearly large in comparison to most other foundations that tend to be much smaller.
In comparison to foundations from other service club organizations, TRF is the largest by far. Lions Clubs International now has more members than Rotary worldwide, but the Lions Clubs International Foundation had net assets in 2015 of $283 million. This is still substantial, but quite a bit smaller than TRF. The Kiwanis International Foundation is much smaller in terms of net assets ($47 million in 2015), with Kiwanis also having a smaller membership base.
How Large Is TRF in Terms of Grant Making?
Another way to measure the size of a foundation is through its annual grant making. In 2015-16, according to its annual report, TRF gave $221 million in grants. Other expenses of the foundation included program operations ($25 million), fund development ($19 million), and general administration ($5 million).
With $221 million in program giving, TRF would have ranked about 29th among United States foundations according to the database of the Foundation Center. This is a pretty good ranking. By comparison, the Lions Clubs International Foundation provided $47 million in grants in 2015, and the Kiwanis International Foundation made $9 million in grants in 2015. Only one foundation in the United States – the Bill and Melinda Gates Foundations – gives more than one billion dollar in grants per year (it gives well over $3 billion per year).
Why is there such a jump in terms of the ranking for TRF among United States foundations when considering grants or contributions instead of assets? In large part because many United States foundations rely mostly on their endowments to make grants, without necessarily a lot of extra funding coming in annually through fundraising. By contrast TRF is able to rely on donations from Rotarians, among others through its annual fund. In 2015-16, donations to the annual fund reached $121 million. Donations for polio eradication reached $97 million, but this includes a $70 million “two for one” match from the Bill and Melinda Gates Foundation to complement funds raised by Rotarians (Rotarians donated $27 million for polio that year). The endowment fund received $17 million in donations, and other contributions amounted to $31 million. Annual giving by Rotarians, which is invested by the Foundation, is what makes it feasible for TRF to make more grants in a sustainable and long-term basis.
How Much Is Given to TRF by Rotarians in the United States?
Since annual contributions are essential for the future of TRF, it is useful to look at how much is given and who gives. For this book, which compares TRF with local foundations in the United States, it makes sense to provide a quick analysis of donations made by Rotarians in the United States to TRF.
The country that gives the most to TRF is the United States. This is not surprising because the United States has the largest membership in Rotary. The 2014-15 and 2015-16 reports from TRF do not indicate the share of donations received by TRF by country, but the 2013-14 report does. That year TRF received $174 million from donors in the United States. This however included again the $70 million match from the Bill and Melinda Gates Foundation for polio eradication, so that individual and other forms of giving in the United States reached approximately $104 million. Japan came in second, with $15 million in giving, followed by India with $13 million, Korea with $12 million, Taiwan with $9 million, Italy with $8 million, Canada and Germany with about $7 million each, Australia with $6 million, and Brazil with $5 million.
Another way to illustrate the role that Rotarians located in the United States play for TRF’s annual giving is to consider that there were in July 2016 some 325,463 active Rotarians in the United States. During the 2015-16 Rotary year, donations by Rotarians located in the United States to the foundation’s annual fund were of the order of $133 per person. This would result in total donations by American Rotarians to TRF’s annual fund of more than $43 million. This excludes donations made for polio and for Rotary’s endowment fund.
Polio as a Corporate Priority
Rotary International has played a major role in polio campaigns. Two books by Gibbard Cook (2013, 2015) tell the story of the role played by Rotary International and other organizations towards the eradication of polio.
Polio used to be a devastating disease worldwide, affecting 30,000 children per year in the United States alone in the mid-1950s. Thanks to vaccines and mass immunization, the number of polio cases has dropped to close to zero. In 2016, according to GPEI, only 42 cases of polio were confirmed worldwide versus about 1,000 cases per day still in the 1980s. This has been a great success built on public-private partnerships for both funding and implementation.
The first major grant by Rotary International towards eradicating polio was made in 1979 for the Philippines, with an investment of $6 million under the 3-H grant program (3-H stood for Health, Hunger, and Humanity). In 1988, as mentioned earlier, Rotary International became a leading force and a spearheading partner for the launch of GPEI. According to data from GPEI, the Bill and Melinda Gates Foundation and the United States have been the largest contributors to polio eradication campaigns, with a total of $2.9 billion in contributions and pledges from 1985 to 2019 from the Bill and Melinda Gates Foundation and $2.6 billion from the United States government. Rotary International through TRF is third, with $1.5 billion in cumulative funding. In addition, more than a million Rotarians have given their time and often their personal resources to participate in vaccination campaigns.
Eradicating polio remains a corporate priority for Rotary International and TRF. While giving to polio campaigns by TRF varies from year to year, in recent years TRF has allocated at least $105 million for polio eradication each year, consisting in $35 million donated by Rotarians, and $70 million donated by the Bill and Melinda Gates Foundation under the “two for one” match.
Does it still makes sense to spend that much funding on a disease that now affects relatively few children? Studies suggest that ending polio is indeed a good investment, despite the cost of polio campaigns, simply because over time the cost of a spreading virus could be much higher than the cost of the polio eradication campaigns today. A brief by GPEI (2014, see also Tebbens et al., 2011) suggests that previous investments of $9 billion since the creation in 1984 of GPEI at the time had generated $27 billion in net benefits out of $40-50 billion in potential benefits estimated by researchers in an economic analysis of GPEI. While investments in polio eradication campaigns have higher initial costs than routine immunization, they may if successful have large payoffs over time.
Global and District Grants
TRF annual reports often provides great stories of impact in other areas of interventions apart from polio, as well as data on how funds are allocated by thematic area. Apart from polio eradication, TRF is active in six main areas of focus: 1) fighting disease, 2) providing clean water, 3) saving mothers and children, 4) supporting education, 5) growing local economies, and 6) promoting peace. Funding for these areas is typically provided through global grants, which are grants prepared by Rotary clubs around the world with support from TRF. While information on the process to prepare global grants is provided below, it is also useful to give a brief account of what is being funded under the program.
A total of 1,165 global grants were approved in 2015-16 with a total value of $76 million. Disease prevention and treatment received the largest allocation (378 grants for a total value of $27 million), followed by water and sanitation (272 grants and $19 million), basic education and literacy (173 grants and $10 million), economic and community development (165 grants and $9 million), maternal and child health (93 grants and $7 million), and finally peace and conflict prevention and resolution (84 grants and $4 million, excluding allocations to Rotary Peace Centers and Rotary Peace Fellows that are discussed below).
In addition to global grants, TRF also provides funding to Rotary districts according to a formula based on the previous contributions to TRF of Rotarians in the various districts. The funding provided by TRF to districts is used in large part to fund small grant proposals submitted by clubs for local projects, although there are exceptions. In 2015-16, TRF provided 494 grants to districts (so that most districts received such grants) for a total value of $25.5 million.
Information is finally available in some of the TRF annual reports on which regions benefit from the largest amount of funding all programs combined. Sub-Saharan Africa comes first, followed by South Asia and East Asia and the Pacific. Depending on the year, North America is next, followed by the Middle East and North Africa, Europe, Central America and the Caribbean, Latin America, and finally Russia, Georgia, and the Commonwealth of Independent States.
Grants for Students
For many years, a primary focus of TRF was the provision of Ambassadorial Scholarships to students. The program was created in 1947. Over more than 60 years, it funded full ride university and other scholarships to some 38,000 men and women from all over the world. The program was terminated in 2013 as a new “Future Vision” model took precedence in order to focus the foundation’s work on six priority areas as mentioned earlier.
While the Ambassadorial scholarships program was ended in 2013, the foundation kept a separate program launched a decade earlier and focusing on investing in leaders for peace. Under the Rotary Peace Fellows program, up to 100 fellowships are provided each year to selected applicants recommended by Rotary districts. Since the launch of the program in 2002-03, some 1,058 fellows from more than 120 countries have benefited from fellowships. In 2015-16, 89 fellows from 39 countries were enrolled in six Rotary Peace Centers implementing the program. The cost of the program that year was $4.1 million.
TRF provides funding for the scholarships given to Peace Fellows studying at six Peace Centers. The program also funds part of the operating costs of the Peace Centers. The scholarships provide a full-ride, paying for all fees related to the studies of the Peace Fellows. This includes matriculation and credit fees, transportation, travel, room and board, and insurance.
Five of the six Peace Centers and associated universities offer Master’s degrees, with up to 50 Peace Fellows selected each year to enroll in those programs (10 students for each of the five universities). These Peace Centers are affiliated with Duke University and the University of North Carolina at Chapel Hill in the United States (this is a joint Peace Center between the two universities which are located nearby each other), International Christian University in Japan, the University of Bradford in England, the University of Queensland in Australia, and Uppsala University in Sweden. The fellowships are for programs that take 15 to 24 months to complete.
The sixth Peace Center is affiliated with Chulalongkorn University in Thailand. It offers a three months Certificate program for up to 50 Fellows per year. Candidates are typically mid-career professionals. By contrast, candidates for the Master’s programs tend to be younger, but they must have a few years of professional experience at the time of their application for the program.
Separately, districts can use their district funds from TRF in part to provide scholarships to students. Finally, global grants can also in principle be used by clubs to provide scholarships to students. Overall, Rotary has for some time been, and probably remains one of the largest private funder of scholarships and fellowships for university students in the world, especially at the graduate level.
Ratings for TRF as a Charity
TRF is very well rated as a charity (which in technical terms means a 501c(3) organization with tax exempt status and to which donations made by individuals are tax deductible). In the United States, Charity Navigator is probably the most influential provider of ratings for charities. Three ratings are provided by Charity Navigator for financial performance, accountability and transparency, and a combination of both. Charities can get one to four stars overall. TRF has the highest possible rating (four stars). The foundation has a rating of 97.0 out of a maximum of 100 for financial performance, and a perfect rating of 100.0 on accountability and transparency, which yields a four stars rating overall. The latest rating was published in November 2016 and is based on data for 2015.
For financial performance, Charity Navigator considers seven main indicators: the shares of the charity’s budget spent on programs expenses, administrative expenses, and fundraising expenses, as well as a fundraising efficiency ratio, the program expenses growth, the working capital ratio, and liabilities to assets. For accountability and transparency, a total of 17 indicators are used. TRF matches all 17 criteria, which generates the perfect rating.
Process for Global Grant Applications
Nonprofits and students in most cases should not apply to TRF directly. They may however apply through Rotarians, or more specifically through clubs and sometimes districts. While funds for polio eradication typically are provided to government or multilateral agencies such as UNICEF, funds for global and district grants are provided to clubs and districts. The mechanisms for Rotarians to apply for both types of grants is different, so it may be worth explaining the process in some details, so that applicants to clubs and district understand it.
The system for global grants has been fundamentally revised in recent years in order to have fewer but larger grants, which should help in ensuring that projects have a larger impact on the ground and are well managed. Six areas of focus have been selected for the grants, which helps to narrow down the scope of what can be funded (even if this scope remains fairly broad, as mentioned earlier). The rules of the game for putting together global grants are clear, and TRF has recently revamped its grants portal to make it more user friendly.
Global grants are proposed by clubs, or sometimes districts. Clubs need to raise funding for the grants, but TRF provides up to $200,000 in matching funds, with the minimum match being $15,000. District funds are matched by TRF one-on-one, while funds provided by clubs and other parties are matched by TRF at 50 cents per dollar invested. Because of the rules for these matches, projects submitted by clubs must have a minimum size of $30,000 in overall cost/funding (if co-funded by district funds), and are often quite a bit larger.
Global grant projects are proposed to TRF by at least two Rotary clubs – an international club that often takes the lead in fundraising, and a local club that supervises the project on the ground, with both clubs playing a role in the design of projects. In many cases however, multiple clubs and districts collaborate on global grants, including to raise the necessary funds for the TRF match.
Many global grants are complex and require substantial expertise. For that reason, clubs often partner with local nonprofits to implement the grants. This is how nonprofits can potentially benefit from TRF funding through clubs. Note however that TRF releases funds to the lead club in the host country, and not directly to nonprofits. The host clubs then releases the funds to nonprofit partners (when there are such partners) based on a clear Memorandum of Understanding.
Clubs that may not have the expertise to design and implement a specific global grant may as part of their grant budget rely on external paid expertise, especially for large grants. But Rotarians can also get help from Rotarian Action Groups (RAGs) for designing projects. RAGs are led by Rotarians. They are approved by Rotary International and they report to the organization, but they function as independent entities. RAGs facilitate the exchange of ideas and experiences in their area of expertise. Even more importantly, as just mentioned they provide advice to clubs to help improve the design of projects. As of 2016, there were more than two dozen RAGs focusing on areas ranging from water and sanitation to health, economic development, and literacy. One RAG has more than 20,000 members and several have more than 500 members, Most RAGs however tend to be smaller, even if many are growing. A list of RAGs is available on Rotary International’s website, and all have their own website.
When a club proposes a global grant to TRF, TRF staff review the grant. Depending on the size of the grant, a local visit may be needed. In that case the assessment is typically done by a member of the Rotary Foundation Cadre of Technical Advisers. The Cadre consists of volunteer Rotarians with expertise in a specific area of focus of TRF. Larger grants must be approved by the board of TRF, which consists of Trustees who are Rotarian leaders. Once a grant is approved, clubs must keep detailed records of budget allocations and results, and report to TRF, including to avoid risks of corruption or funds being misused.
Global grants can also be used in principle by clubs or districts to provide funding for scholarships for university students, but the appetite to do so is limited in many clubs and districts. This is because a global grant represents a significant amount of funding, and many clubs and districts tend to not want to allocate that much funding to a single individual. There are however exceptions, and students can apply for smaller grants through district grants (see below).
Process for District Grant Applications
District grants are provided to districts by TRF essentially as block grants and on the basis of the level of contributions of Rotarians and clubs in the district to TRF in previous years. The districts then decide how to allocate their funds, with quite a bit of flexibility. This means that allocations of so-called “district designated funds” within a district depend on the district and possibly on the priorities of the District Governor and his/her team in any given year.
As an illustration, the process used in my district (7620) can be explained. A similar process is likely to be followed in most other districts. In a simplified way, four principal types of grants are made by the district using its funds.
First, the district makes grants to Rotary clubs for small projects. For this purpose, each year, the district calls for applications from clubs for district grants, typically in March or April. Clubs have to put in some of their own resources for a project, and they can benefit from a match from the district. In recent years, the maximum match from the district was of the order of $2,000 to $3,000 per project submitted by a single club, depending on the year. Matches are a bit higher when multiple clubs collaborate together and submit a joint proposal, which means that they also put in more funds to be matched. A grant committee reviews the applications, and a selection is made for the grants to be allocated. As always, the grant committee members are Rotarians with expertise in the various areas of focus of Rotary, including the six areas of focus of TRF.
Second, in addition to this call for small grant proposals to be submitted by clubs, the district also provides co-funding for global grants submitted by clubs to TRF. Again, proposals by clubs are reviewed by a committee, often with requests for improvements, and then approved – depending on the funds available. The amount provided by the district when co-funding a global grant is normally higher than is the case for the small grants proposals submitted by clubs.
Third, the district uses some of its funds to provide scholarships to university students who have been proposed for such scholarships by clubs. In most cases, these scholarships are of the order of $5,000 per student, but there may be exceptions. Although there is competition, this is an easier way for students to apply for a scholarship than an application for a global grant, simply because global grants are much more costly for clubs and districts to fund.
Fourth, districts may also have separate projects that they carry from one year to the next. These projects may absorb part of the allocation given to them by TRF, or they may rely on funds that districts raise by themselves. For example, for many years my district has been providing scholarships for university students who are death and study in Washington, DC at Gallaudet University, a worldwide leader for the education of death students.
The above list is not exhaustive of how districts use their funds, but indicative. In practice, external applicants such as nonprofits or students should normally first contact a club to try to benefit from the club’s support for a grant request before going to a district. As just one example, a year ago my club submitted a grant proposal to the district for a great nonprofit implementing research and writing programs in high schools. The application was successful. By combining our funds and those of the district, we were able to give $6,500 to the nonprofit as scholarships for some of the students who participated in the program and did especially well, especially in terms of the effort they put in.
As another example, this year my club benefitted from another small matching grant from the district in order to fund a pro bono initiative whereby club members provide strategic advice to local nonprofits. This is demand-driven, based on the challenges that local nonprofits identify and request advice for.
Applicants for Rotary Peace Fellows
A special final note is warranted for applicants for Rotary Peace Fellowships. As mentioned earlier, TRF provides up to 100 fellowships for individuals interested in obtaining a Master’s degree or a Certificate at one of six Peace Centers in leading universities across the world. Specific applications are needed to benefit from these fellowships, and applications must be submitted by a deadline, typically in May of each year.
Applicants need to be endorsed by their Rotary district to be considered by TRF. A selection among the final pool of applicants is made first by members of Rotary’s Peace Committee, and next by the universities themselves on the basis of the list of applicants approved by the Peace Committee.
Applicants do not need to be supported by a Rotary club (although this does not hurt), but as mentioned they do need to be supported by a Rotary district. A number of other considerations also apply, such as a minimum number of years of professional experience. Detailed information is available on Rotary International’s website on how to apply for this specific program.
LOCAL Rotary Foundations in the United States
While the work of the Rotary Foundation of Rotary International is relatively well known, there are close to 4,000 other Rotary foundations in the United States alone that are operated by clubs, districts, and other Rotary entities at the local level. These smaller foundations are major providers of grants to nonprofits and occasionally students in the United States. This chapter provides a rapid account of these foundations from a statistical point of view before illustrating their work with a case study for Washington, DC.
To my knowledge, this book and the companion volume providing a directory of Rotary foundations in the United States is the first to provide comprehensive information on local Rotary foundations in the country. A note on how the data were obtained is warranted in order to explain the limits of these data as well as the limits of the simple analysis carried for this chapter.
The data were compiled from public records maintained by the Internal revenue Service on all charitable 501c(3) organizations in the United States. The filter used for inclusion of charitable organizations in the list of local Rotary foundations is simply the fact that a foundation has “Rotary” in its name.
Two caveats should be mentioned. First, based on a rapid assessment as opposed to a detailed analysis of each foundation listed, a number of foundations with “Rotary” in their name were identified as not being related to Rotary clubs or districts. This was mostly the case for foundations related to a Rotary plaza or housing programs, several of which have Rotary in their name but are not actually related to Rotary clubs or districts. These foundations, when identified, were not included in the analysis and the directory, but it could still be that some of the foundations included may not actually be related to Rotary clubs or districts. When using the directory provided in the second volume in this set on Rotary foundations, readers should be able to figure this out simply by searching a foundation’s name through the web. Hopefully, these cases are rare.
Second, and conversely, some local Rotary foundations may have been excluded from the analysis in this chapter and the directory provided in the second volume in this set because they do not have “Rotary” in their name. It is unlikely however that there would be many such cases, because Rotary foundations typically make their association with Rotary clear through their name. But there may be still be some omissions.
Because of these two caveats, the list of Rotary foundations included in the analysis for this book and in the companion directory should be considered as tentative. In addition, it is important to note that this book considers only Rotary foundations located in the United States, simply because accessing data for other countries has not yet been done and is likely to be a complex endeavor, at least for some countries.
In what follows, basic information is first provided on the order of magnitude of the role played by local Rotary foundations in the United States. Thereafter, a discussion is provided of patterns of giving by Rotarians to both local Rotary foundations and the Rotary Foundation of Rotary International. Finally, a case study of how local foundations work is provided.
Number and Assets of Local Rotary Foundations
Together, it can be argued that local Rotary foundations in the United States have an assets base close to that of the Rotary Foundation of Rotary International. As discussed in chapter 1, the assets of the Rotary Foundation of Rotary International are just above one billion dollar. Local Rotary foundations that are filing forms 990 with the Internal Revenue Service have close to $775 million in assets. This does not include the assets of another 1,854 local Rotary foundations or charitable organizations that do not file a form 990 because they have gross income/receipts of less than $50,000 per year. These foundations instead file a simple postcard which does not include data on assets.
It is also worth noting that many Rotary clubs in the United States do not have a foundation, but still provide grants, albeit in that case without the possibility for donors to benefit from a charitable deduction in their tax returns.
An annex to this book lists the 40 largest Rotary foundation by assets. These foundations all have assets above $3 million according to their latest available filing with the Internal Revenue Service.
There are major differences between states in the number of Rotary foundations and their assets. As expected, California is by far the state with the most local Rotary foundations, and the largest assets base. The state has close to 600 local Rotary foundations, and the assets base of those that file forms 990 is above $170 million (again, this does not include the assets of hundreds of local Rotary foundations in California that do not file forms 990).
After California come Texas and New York in terms of the number of local Rotary foundations in these states, again not surprisingly. But the states of New York and Texas lag well behind California, with more than 200 foundations for Texas and just under 200 foundations for New York. Both states have more than $30 million in assets for the local Rotary foundations that file forms 990.
In terms of the number of local Rotary foundations, Ohio is behind New York and Texas, but the assets base of Ohio foundations filing forms 990 is higher, with close to $50 million in assets. This is also the case for Washington State where local Rotary foundations filing forms 990 have close to $50 million in assets. Missouri does even better with more than $70 million in assets for foundations filing forms 990, but this in part is because of one especially large local foundation (the Rotary Charities of Traverse City). Not counting the Rotary Foundation of Rotary International, Illinois has just above 130 foundations. Those that file forms 990 have just above $21 million in assets.
By contrast, a number of states have few local Rotary foundations, at least according to the criteria used to identify them. Two states (Alaska, and North Dakota) as well as the District of Columbia have less than 10 local Rotary foundations. This is also the case for territories such as Guam, Puerto Rico, and the Virgin Islands.
In terms of areas of focus, it is worth noting that quite a few local Rotary foundations, including some large ones, focus in part on education. For example, the third largest foundation in the top 40 annex is the Georgia Rotary Student Program Inc., with $12 million in assets. The fifth largest foundation is the Long Beach Rotary Scholarship Foundation, with almost $9 million in assets. These foundations allocate substantial funding to scholarships for students. Another interesting finding is that several local Rotary foundations focus on housing, in some cases for seniors. It would be interesting to study what local Rotary foundations focus on as there may be a few surprises in the results. But this is best left for future work.
Financial Contributions by Rotarians
The work done by local Rotary foundations in the United States complements the work done by the Rotary Foundation of Rotary International globally. But it also begs the question of whether contributions by American Rotarians to their local club foundations are of a similar order of magnitude, or possibly larger, than contributions made to the Rotary Foundation of Rotary International (referred to as TRF hereafter, as done in chapter 1).
Rotarians volunteer their time, but they also contribute funding for service work, including for their club foundations. In order to give an illustration of these efforts, data from a membership survey implemented in 2012 in Rotary district 7620 can be used (see Wodon et al., 2014, for more details). The membership survey suggested that more than four in five Rotarians in the district contributed individual donations to their club or club foundation with an average gift of $409 per year per Rotarian who gives. In addition three in four Rotarians contributed to TRF, with average contributions of $386 for those who give. When scaled up by the number of Rotarians in the district (about 2,400), this yields combined annual donations to club foundations and TRF of $1.5 million per year.
District 7620 is located in a relatively wealthy area, and as a result per capita (more precisely, per Rotarian) donations in the district are higher than is the case nationally for the United States. Still, the data from the membership survey suggests that Rotarians are even more likely to contribute funding to their club foundation than to TRF. In addition, the amounts contributed by Rotarians tend to be larger for their club foundation than is the case for TRF. In other words, contributions by American Rotarians as a whole to their club foundations are likely to be higher than contributions made to TRF.
In addition, as noted by Wodon et al. (2014), the amount not only donated but also raised by Rotarians for club foundations is likely to be larger than suggested by membership surveys, and thereby higher that donations to TRF. This is because many clubs organize fundraising events for their club’s charitable work, and the funds raised through fundraising events come typically mostly from non-Rotarians and therefore are not accounted for in the estimation of donations by individual Rotarians that can be obtained through membership survey.
To consider my district again (Rotary district 7620), one example of such fundraisers in the district is the Crab Feast of the Rotary Club of Annapolis, the largest such event in the world, now in its 71st edition. This is an all-you-can-eat feast with a reasonable admission fee. More than 2,500 people attend every year. The event generates more than $50,000 in funding for local charities and nonprofits, as well as great publicity and community recognition for the club.
Another successful fundraiser is the Octoberfest organized jointly by four clubs (Carroll County–Sykesville South Carroll, Mount Airy, Bonds Meadow, and Westminster). Activities for children and families include face painting, pumpkin painting, scarecrow making, magic shows, balloon sculptors, and many games. The festivities include a “Roll out the Barrel” ceremony with local dignitaries. Funds raises through the event are again donated to charitable organizations.
Still another successful fundraiser is the duck race organized by the Rotary Club of Washington, DC for the first time in 2016. The event will be repeated annually. Families can purchase tickets for a race held in April on the Anacostia River with rubber ducks – providing great family fund. In its first year, the fundraiser generated $25,000 in proceeds after the investment made to buy the ducks. Net proceeds are expected to increase in subsequent years.
Allocation of Funds: A Case Study
Different local foundations may allocate their funds differently. While acknowledging such differences, it may be worth providing a case study to illustrate how local Rotary foundations tend to work, and the type of programs they may support. The case study is that of the foundation of the Rotary Club of Washington, DC, with the discussion adapted from Wodon et al. (2014).
The Rotary Club of Washington, DC, is a large club founded more than 100 years ago that today has about 170 members. The club foundation is also large, and ranked eighth in the top 40 ranking provided in the annex to this book.
The foundation of the club has more than $7 million in assets. It disburses about $250,000 annually (sometimes more) in support to nonprofits and club activities. The foundation’s assets include not only a permanent fund to which annual donations by club members are added, but also the Jelleff Fund that is being used for grants specifically to the Boys and Girls Clubs of Greater Washington. In addition, the foundation’s Eccleston Fund provides annual funding for the club’s dictionary project whereby every third graders in the District of Columbia public and charter schools receives a dictionary.
Some of the funds allocated by the foundation are earmarked – this is the case for the annual donation to the Boys and Girls Clubs of Greater Washington from the Jelleff Fund and the dictionary project from the Eccleston Fund. But most of the funds are allocated annually based on proposals submitted by Rotarians and nonprofits every year for both local and international projects.
The largest share of the funds is allocated to local projects, under either small grants (under $5,000) or larger grants (at about $25,000 per grant). About 10 percent of the funds are allocated to international service projects.
The club has a committee that vets local grant requests, and another committee that vets international grant requests. The committees perform an advisory role and submit their recommendations to the club board first, and the board of the club foundation next. The foundation board has the final say, but in practice it tends to follow the recommendations of the two committees and the club board. Typically, decisions in the committees are made by consensus. To facilitate that consensus, and in order to have a transparent process for selection, ratings are used in order to assess the quality of proposals.
For local grant requests, nonprofits can apply directly to a call for proposals launched every year. Apart from submitting a proposal, nonprofits must submit their latest form 990 in order for the committee members to assess their financial health and how they spend their resources.
In practice, grant proposals have a higher likelihood of funding if they have a champion Rotarian (or two) in the club. Some club members are actively involved in local nonprofits and help them to submit proposals. Apart from whether a grant is likely to make a difference in the community, one of the criteria used by the club, at least implicitly, is that of Rotarian involvement – namely whether club members can volunteer to help. But this is not a necessary condition. Typically, smaller nonprofits have a higher likelihood to benefit from grants because it is felt that a small grant makes more of a difference for them than is the case for larger nonprofits. There are, however, exceptions.
The process for international grants is a bit different, as those grants tend to be more complex, and require a bit more vetting as well. In addition, for international grants, proponents of a project must ensure that a locally based Rotary club has agreed to supervise the project on the ground in the host country. The international grants committee meets several times a year in order to discuss and select grant proposals, often with proposals being revised in order to improve their quality, and especially their sustainability. Even more than for local grants, international grants need a champion in the club to lead them. In some cases the club is the lead club for global grants, but in other cases, the club is a contributor to global grants led by other clubs. Most of the grants are however small, and thereby not eligible for co-funding by TRF (for details on global grants and their minimum size, see the discussion in chapter 1).
Parts of the funds allocated every year by the foundation also fund on-going service projects implemented by club members. As already mentioned, the foundation funds the dictionary project whereby third graders in the District of Columbia public and charter schools receive a dictionary. It also funds a program to plant cherry trees in the city in partnership with the National Park Service. Another project funded by the foundation is the Walter Reed Bingo whereby club members organize a monthly bingo session with prices to be won by military veterans receiving care at the Walter Reed Hospital (as the hospital closed in 2012 this program is now taking place in the Fort Boyer facility). Funding is also provided for an annual career fair for a small number of local high schools, as well as other commitments, including small allocations provided to the Interact and the Rotaract clubs sponsored by the Rotary Club of Washington, DC.
Finally, the foundation also funds on occasion larger projects. As an example, for its Centennial, the club sponsored the construction of a LEED (Leadership in Energy and Environmental Design) certified passive energy house with the District of Columbia chapter of Habitat for Humanity.
The procedures and allocations of funds used by the foundation of the Rotary Club of Washington, DC, are peculiar to that club and foundation. Other clubs may have different and possibly simpler procedures because of their smaller size. At the same time, many of the same principles are likely to apply. Grant applications from nonprofits, and occasionally from students, are likely to be reviewed first by a club or foundation committee, with final decisions made by the foundation board, often on a competitive basis.
Nonprofits (or in some cases students) wishing to apply are well advised to contact club Rotarians ahead of application deadlines, so that the level of interest of the club, or at least of Rotarians who are willing to support a grant application when the selection committee meets, can be gauged. This also allows Rotarian input into proposals to be incorporated by applicants, if appropriate. Such input, based on knowledge of local circumstances and priorities of club foundations, can be valuable not only to increase the likelihood of approval, but also potentially to improve proposals themselves.
Another important point to emphasize is that Rotary is a secular and non-partisan organization. Many Rotarians practice a faith, but clubs do not. Rotarians are from many different backgrounds, including in terms of their political views. Clubs normally do not take positions in those matters. This means that proposals that are overtly political or religious in nature are unlikely to be approved by local Rotary foundations. There may, as always, be exceptions, but proposals for charitable purposes are more appropriate than those for political or religious purposes.
One last point to emphasize from the point of view of local clubs and foundations is the fact that club and foundation boards like to see their contribution recognized, simply because this helps to show the good work of the club or foundation in the community. Some level of visibility for the contribution of local Rotary foundations is encouraged, even if not required. This is not however an onerous requirement for nonprofits because visibility can be achieved in many different ways, often at virtually no cost, for example by simply mentioning a foundation’s contribution at a public meeting or in a newsletter. Pointing to ways to provide this visibility for Rotary should ideally be included in grant proposals.
A substantial part of the impact that Rotarians have in communities takes place through their financial contributions to both the Rotary Foundation of Rotary International (TRF) and local foundations. Many Rotarians also volunteer long hours, but financial donations do matter. The objective of this first book in a set of two on Rotary foundations and grants was to provide an introduction to the work of TRF as well as that of local Rotary foundations in the United States.
TRF has a rich history, with the Centennial of the foundation celebrated in 2017. TRF’s support for polio has been instrumental in the near eradication of the disease. The focus on polio has also helped Rotary in getting a seat at the table with major partners such as the World Health Organization and the Bill and Melinda Gates Foundation. Perhaps even more importantly for Rotarians involved in service projects, the matching system whereby TRF co-funds global grants enables clubs to implement larger projects in developing countries. In addition, funding provided by TRF to Rotary districts enables those districts to support clubs through small (often matching) grants for local projects.
While the role of TRF in Rotary is essential, most activities organized by Rotary clubs, and indeed most service projects, are implemented without support from TRF. In the United States especially, many clubs have their own foundations, and the analysis in this book has shown that the resources of these foundations are substantial. Rotarians in the United States tend to give more to their local foundations than is the case for TRF, and the impact that these local foundations have in their communities through grant making is likely to be large. The estimates provided in this book constitute a first step towards better measuring the contribution of Rotarians to their communities in the United States.
Perhaps it makes sense to conclude this short book with a few simple recommendations, not so much for grant applicants, but rather for Rotary International as well as club and districts. Two recommendations are made here.
The first recommendation for Rotary International is to start using and collecting data such as those reported in this book in order to better document the impact that the organization is having in local communities. This would be good not only for the organization’s image, but also for clubs and districts who could then learn from what other clubs and districts are achieving, and even benchmark themselves against what other clubs and districts are doing.
A second recommendation, which goes beyond the analysis provided in this book, consists in emphasizing the need for more partnerships, innovation, and evaluation in the projects implemented by clubs. As argued in a separate book in this series (Wodon, 2017b), even though the total contribution to communities of Rotary foundations is large, it remains small in comparison to other organizations that have deeper pockets. While not all Rotary projects need to rely on partnerships, be innovative, and benefit from an adequate evaluation, the organization would benefit from more projects with such characteristics in order to make an even larger difference in the lives of the less fortunate.
top 40 annex
u.s. Rotary Foundations with $3 million in assets ($)
The Rotary Foundation of Rotary International (1,073,589,879)
Rotary Charities of Traverse City (47,477,545)
Georgia Rotary Student Program Inc. (12,362,050)
Madison Rotary Foundation (10,976,862)
Long Beach Rotary Scholarship Foundation Inc. (8,531,108)
Rochester Rotary Charitable Trusts Inc. (7,845,380)
Rotary Club of Los Angeles Foundation (7,797,077
Rotary Foundation of Washington DC (7,535,597)
Naperville Rotary Charities Inc. (7,484,489)
Rotary Foundation of Indianapolis Inc. (6,996,869)
Rotary Foundation of Cincinnati (6,754,350)
Rotary Club of Birmingham Foundation (6,657,520)
Novato Rotary Endowment (6,656,263)
Rotary Manor (6,456,643)
Moriches Rotary Health Camp Inc. (6,101,703)
Rotary Club of Eagle Grove Home Inc. (6,093,794)
Hawaii Rotary Youth Foundation (5,962,757)
Bridgeport Rotary Club Housing Corporation (5,595,635)
Kansas City Rotary Club Foundation (5,464,986)
Rotary Club of San Jose Foundation Inc. (5,020,946)
Visalia Rotary Community Foundation (4,752,047)
Rotary Camp for Children with Special Needs Inc. (4,640,469)
Union City Rotary Foundation Inc. (4,539,161)
Rotary Housing Corporation (4,181,594)
Bristol Rotary Scholarship Fund Inc. (4,158,736)
Thomas Brown McClelland Rotary Scholarship Foundation (4,145,542)
Toledo Rotary Club Foundation (4,046,817)
La Jolla Rotary Foundation (3,864,750)
San Francisco Rotary Foundation (3,828,400)
Everett Rotary Youth Foundation (3,544,164)
Stockton Rotary Endowment (3,447,403)
Oakland Rotary Endowment (3,435,392)
Rotary Club of Tulsa Foundation (3,350,523)
Rotary Club of Milwaukee Community Trust (3,287,644)
Dallas Rotary Club Foundation (3,238,611)
Rotary Camps & Services of Traverse City (3,229,594)
Rotary Club of El Paso Foundation Inc. (3,133,903)
Portland Rotary Charitable Trust (3,115,191)
Rotary Club of Sacramento Foundation (3,081,778)
Denver Rotary Club Foundation (3,067,178)
Forward, D. C., 2016, Doing Good in the World: The Inspiring Story of the Rotary’s Foundation’s First 100 Years, Evanston, IL: Rotary International.
Gibbard Cook, S., 2013, Rotary and the Gift of a Polio-free World, Volume 1: Making the Promise, Evanston: Rotary International.
Gibbard Cook, S., 2015, Rotary and the Gift of a Polio-free World, Volume 2: Almost Every Child, Evanston: Rotary International.
Global Polio Eradication Initiative, 2014, Economic Case for Eradicating Polio, Geneva: World Health Organization.
Tebbens, R. J. D., M. A. Pallansch, S. L. Cochi, S. G.F. Wassilak, J. Linkins, R. W. Sutter, R. B. Aylward, and K. M. Thompson, 2011, Economic Analysis of the Global Polio Eradication Initiative, Vaccine, 29: 334-43.
Wodon, Q., 2017a, Rotary Foundations and Grants 2: Directory by State for the United States, Washington, DC: .
Wodon, Q., 2017b, Partner, Innovate. Evaluate: Increasing Rotary’s Impact, Washington, DC: .
Wodon, D., N. Wodon, and Q. Wodon, 2014, Membership in Service Clubs: Rotary’s Experience, New York: Palgrave Macmillan.
about the author
Quentin Wodon is a Lead Economist in the Education Global Practice at the World Bank where he leads work programs among others on equity and inclusion in education, child marriage, out-of-school children, and the wealth of nations. Previously, he managed the World Bank unit on values and development, served as Lead Poverty Specialist for West and Central Africa, and as Economist/Senior Economist in the Latin America region.
Before joining the World Bank, he worked among others as Assistant Brand Manager with Procter & Gamble, volunteer corps member with the International Movement ATD Fourth World, and (tenured) Assistant Professor of Economics with the University of Namur. He has also taught at American University and Georgetown University. A lifelong learner, he holds graduate degrees in Business Engineering, Economics, and Philosophy, as well as PhDs in Economics, Environmental Science, Health Sciences, and Theology and Religious Studies.
Quentin has more than 500 publications. Books published since 2014 include Water and Sanitation in Uganda (World Bank), The Economics of Faith-based Service Delivery (Palgrave Macmillan), Climate Change Adaptation and Social Resilience in the Sundarbans (Routledge), Investing in Early Childhood Development (World Bank), Infrastructure and Poverty in sub-Saharan Africa (Palgrave Macmillan), Education in sub-Saharan Africa (World Bank), Faith-Based Schools in Latin America (World Bank), Climate Change and Migration (World Bank), and Membership in Service Clubs (Palgrave Macmillan).
A recipient of the Prize of Belgium’s Secretary of Foreign Trade, a Fulbright grant, and the Dudley Seers Prize, Quentin has served on several advisory boards for non-profit organizations and university programs, and as Associate Editor for academic journals. A past President of the Society of Government Economists, he is currently serving as President of the Association for Social Economics.
Quentin is actively involved in Rotary with his club (currently serving as President), District (former Evaluation Adviser and Interact Chair, among others), and Rotary International (committee member for the Rotary Foundation and other roles). His father was a Rotarian. His daughters founded the Interact Club of their High School. Quentin launched the in 2014 on World Polio Day and the series in 2017.
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Rotary International is a nonprofit service organization with 1.2 million members worldwide in more than 35,000 clubs. The organization was founded by Paul Harris in Chicago in 1905. While clubs exist today in most countries of the world, the United States has the largest number of Rotarians and clubs, and also the largest number of local Rotary foundations managed by clubs, districts, or other entities. This is also where the Rotary Foundation of Rotary International has its headquarters, in Evanston, Illinois. While the work of the Rotary Foundation of Rotary International is relatively well known, the work of close to 4,000 local Rotary foundations at the level of clubs and districts in the United States is less well known, even at times in their own local communities. But this work is no less important. Rotary clubs and districts are major providers of grants to nonprofits, in large part through their foundations. Clubs and districts also have a long tradition of supporting students for university studies, again through their foundations for the most part. Together, it can be argued that local Rotary foundations in the United States have an assets base close to that of the Rotary Foundation of Rotary International. According to the latest information available from the Internal Revenue Service, the assets of the Rotary Foundation of Rotary International are just above one billion dollar. Local Rotary foundations filing forms 990 with the Internal Revenue Service have close to $775 million in assets. This does not include assets owned by 1,854 local Rotary foundations that do not file a form 990 because they have gross annual income/receipts of less than $50,000. Charitable donations by local Rotary foundations in the United States may well exceed those of the Rotary Foundation of Rotary International globally, given that for club foundations without large endowments, most annual receipts from donations and fundraisers tend to be distributed the same year. In terms of donations by Rotary entities to nonprofits and students based in the United States, it is clear that local Rotary foundations are the main source of funding, simply because most clubs and districts focus their giving on local communities, while the Rotary Foundation of Rotary International focuses for the most part on projects implemented in developing countries. In that sense, the contributions of the Rotary Foundation of Rotary International and of local Rotary foundations in the United States nicely complement each other. Navigating the world of Rotary foundations is not an easy task for grant applicants, whether they are nonprofits, students, or even Rotarians wishing to apply for funding for a service project implemented by their club. This book is the first in a set of two on Rotary foundations and grants. The main objective of the set is to make it easier for grant applicants to think about how and where to apply for grants. In addition, a second objective is to start to better document the charitable contributions that Rotarians provide to communities through Rotary foundations based in the United States. In order to achieve these objectives, this first book provides a basic introduction to the world of Rotary foundations in the United States, considering first the Rotary Foundation of Rotary International, and next local Rotary foundations. The second book in the set provides a comprehensive directory or listing of Rotary foundations located in the United States by state and by city within each state. The aim is to make it easier for potential applicants to identify foundations located in their geographic area, so that they can consider whether it makes sense for them to apply for a grant or scholarship to those foundations.