The Rotary Foundation is a quality organization that has supported Rotarian efforts to "Do Good In The World" for nearly 100 years. It has grown into a large, multi-million dollar enterprise with its own management, culture and a unique funding model. Rotarian contributions have traditionally been the centerpiece of that model, but recent problems in the world economy have placed the traditional model under a great deal of stress.
For this (and apparently other reasons), TRF Trustees have identified a need to cut cost, streamline operations, and run TRF in a more businesslike manner. With guidance from paid consultants (what could be more businesslike than hiring a paid consultant?), the Future Vision Plan was developed. Certain aspects of the plan are clearly designed to make TRF more appealing to organizations outside of the Rotary World. TRF has, in fact, stated an institutional desire to "become first choice for global partnerships" similar to its successful relationship with the Gates Foundation. Under this plan, TRF will be discontinuing many of the services it has traditionally provided including the corporate elimination of Group Study Exchange, Ambassadorial Scholarships, and Matching Grants. This signals a shift from an inward focus to an outward focus that might make sense from a corporate business perspective, but has serious implications for Club and District efforts to practice "Service Above Self".
From a corporate perspective, the primary benefits of Future Vision are operational streamlining and administrative cost reduction. TRF will only administer large, high impact Global Grants, while responsibility and administration of smaller projects is driven down to the Districts.
Under Future Vision, funding for large, high impact projects is provided through Global Grants. These grants require a minimum project size of US$ 30,000 (US$15,000 minimum grant award plus US$ 15,000 DDF allocation), must address one of RI's Six Areas of Focus, and meet sustainability requirements including monitoring and measurement. Funding is provided as a dollar for dollar match against DDF, and a one for two match against direct contributions. Districts with low DDF must partner with more affluent Districts in order to gain funding for their projects, or they must provide funding from their own resources and establish an even larger project budget (US$ 45,000 minimum if no DDF is involved--US$ 15,000 minimum grant award plus US$ 30,000 to qualify for the one for two direct contribution match).
A major selling point during the marketing of Future Vision is decentralization of control with greater decision making power delegated to Districts. This is enabled through creation of the District Grant. Under this program, the percentage of available District Desiginated Funds (DDF) is raised from 20% (old model District Simplified Grant) to 50%. This means that for every US$ 100 contributed by District Rotarians, US$ 25 is returned for use by the District, an increase from US$ 10 under the old DSG model. District Grants may be used to fund small projects that can be completed in less than a year, and may also be used to support GSE like programs and other scholarships. We believe District Grants to be a beneficial aspect of Future Vision provided that adequate funding is provided to meet the resulting demand. Our concern is that based on information contained in TRF's October, 2012 Future Vision Presentation and other information supplied by TRF, such funding is not available for the "average" district. TRF has reported the average project size funded by District Grants in 2011-12 was well under US$ 5,000.
The resulting Funding Pyramid, effectively leaves mid sized projects without Foundation support. Click here to learn more about serious implications of the project size gap
To participate in Global or District Grants, each District and participating Club is required to undergo training, become qualified, must set up an organization to ensure proper grant management, and execute a Memorandum of Understanding. This and the previously mentioned Funding Gap calls the decentralization claim into serious question.
In the name of streamlining and sound business management practices, the new model eliminates many services provided to Clubs and Districts. If our foundation intends to run itself like a business, it must be prepared to serve Clubs and Districts that choose to take the same approach.
Applying sound business management principles, Districts that have the required administrative capability along with sufficient DDF to gain funding for their projects should evaluate whether it makes business sense for them to filter their contributions through TRF. Districts that form their own foundations or otherwise self fund their projects would control all of their contributions versus US$ 25 per US$ 100 contributed under the current Future Vision Model. Such Districts would be able to make directed contributions to TRF if they desire (the above graphic shows US$ 15 based on clubs that are already engaged in the practice), but such contributions would no longer be built into the system.
As shown at the top of the page, a shift to this model would be a very small step for Districts that have developed the necessary resources and skill to manage the new structure. The only thing that would prevent such a move would be a District's good will and longstanding commitment to foundation giving; but this becomes a hard sell when TRF has turned its back on projects they prefer, mandated that Districts administer such projects on their own, and provided training to develop the necessary skills. Business is business!
From a worldwide perspective, diversion of funds into local foundations would starve The Rotary Foundation of badly needed revenue. This would more than offset the benefits of streamlined operations and cost reduction which means there would be minimal funding available for Global Grants and the high impact projects they target. Less affluent Districts would still be left to fend for themselves, and TRF would have to find additional ways to cut its overhead. The ultimate outcome would be disastrous for The Rotary Foundation, Rotary International, and many of the groups we serve.
If there is any doubt about the reality of this scenario, we call your attention to our Case Study which documents one club's organization of sister clubs to self fund its District's World Community Service project. Many of the team members (four of whom are major donors) have redirected their financial support directly to that project. Except for bypassing restrictive TRF guidelines, this is precisely the type of effort that is being encouraged so that small clubs may qualify for Global Grants.
We also note the following Linked In post by Dr. Kari Tallberg, PDG, PDRFC, Past CoL Representative, Major Donor, and RI Distinguished Service Award recipient from Finland:
Editors Note: English is a second language for Dr. Tallberg and we have not attempted to correct grammatical or typographical errors. We can only imagine how one of our messages might translate into his native language. Language difficulties aside, we believe his message is clear.
A very good observation. I have seen the development take place here.(Scandinavia). Clubs are joining together to fund projects and are directing their contributions to that goal. Therefore no money is beeing directed to TRF. The next step is that the district or several districts together create a local Foundation or Trust and operate througt that chanel. I my country we started a multidistict (six districts) Fundation some five years ago because the FVP was alreqady hen in the horizon.
Furthermore the frustration with the officialdom in TRF is concentrating too much time and effort on sustainability and measurability (metrics) that applications are returned time and time again because of some nitty- gritty detail. This has lead to a situation in which it is more efficient and much quicker to help the needy from funding that you can generate locally or jointly..
TRF seems to have realized that the risks of a mass exodus is in the offings and is surely taking steps to correct some of the anomalities that the "business consultants" have managed to write into the FVP-project. There is not much time.