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THE PERMANENT FUND
OF THE ROTARY FOUNDATION
ROTARY INTERNATIONAL
DAVE BERRY
ROTARY CLUB OF ALA MOANA
DISTRICT 5000, HAWAII, USA
There are two ways of contributing to The Rotary Foundation (TRF). One is through the Annual Program Fund (APF) and the second is through the Permanent Fund (PF).
Contributions to the APF are invested for three years. The interest earned during that time pays for all of the operating costs of TRF. At the end of three years, all of the principal is spent for TRF programs.
Half of the funds are returned to the Districts in the form of District Designated Funds (DDF). The other half is retained by TRF in the World Fund (WF).
Contributions to the PF are never spent. Instead, the earning on investments of the fund are spent each year. If Rotarians making contributions to the PF designate those contributions as SHARE, then half of the earnings are returned to the District in the form of DDF.
As the PF grows, it will become more and more of a factor in the humanitarian projects of TRF and in the District programs funded through DDF.
A goal of $1,000,000,000 by 2025 was established for the PF. The first step towards that goal,
$200,000,000, was reached in 2005, six years ahead of schedule.
District 5000 currently has approximately $3,000,000 pledged to the PF. If our commitments as a
District are made at the same rate as is projected for the PF, by 2025 we will have made commitments of approximately $12,000,000. When those commitments are fulfilled they will generate $600,000 per year based on an expected annual return of 5 percent. If all of those contributions are designated as SHARE, then our District would receive $300,000 per year in DDF, or one and a half times what we currently receive on average as our DDF share of the APF. So you can see the importance of the PF in the future.
There are many ways you can contribute to the PF. One way is cash. Cash contributions to the PF earn Paul Harris recognition on the same basis as contributions to the APF, and earn the same levels of Major Donor recognition.
Contributions also can be made through becoming a benefactor, merely signing a benefactor card that pledges $1,000 or more to the PF at the time of your death. Or you can become a member of the Bequest Society by making a bequest of $10,000 or more. The Bequest Society has the same levels of Recognition as the Paul Harris and Major Donor recognition.
There are many ways to make contributions through the Bequest Society.
CHARITABLE GIFT ANNUITIES
A donor may make a gift of publicly traded securities and receive annual payments for life that will not change in size regardless of changes in the economy.
Deferred gift annuities act in the same manner, but payments are postponed for a specified period of
time. The size of the payments depends on the principal amount, the income beneficiary's age and the length of the deferral.
Charitable Remainder Trusts can be established by irrevocably placing assets with TRF in exchange for guaranteed income, either for life or a specified number of years. The trust will pay an income at an agreed upon rate but with a minimum of 5 percent of the initial principal.
Mutual Fund shares, Closely Held Securities and Restricted Securities also may be used but only after review by the Gift Acceptance Committee. TRF has experts on their staff to assist potential donors in making the best plans that will give them the best tax advantage and best income on their donations.
REAL ESTATE
Gifts of real estate are accepted when the undeveloped value is at least $25,000 or the developed value at least $100,000. Real estate also may be used to establish a charitable remainder trust if the value is at least $100,000.
LIFE INSURANCE
Whole life policies are usually assignable and can be accepted by TRF. Term insurance is not accepted.
TRF must be named the irrevocable owner and beneficiary of the policy. For policies that are partially Paid, the donor must continue to pay the premiums. For paid up policies, TRF liquidates the policy for Its cash value.
GIFTS OF TANGIBLE PROPERTY
Art, jewelry and collectables are accepted on a case by case basis. The suggested minimum for jewelry is $10,000, and for art or collectables, it is a minimum of $25,000. Gifts in this category must have a qualified appraisal with photographs and other supporting material.
IRA ACCOUNTS
TRF can be named as the beneficiary of Individual Retirement Accounts.
BEQUESTS
Donors may make bequests by specifying a specific dollar amount or by a percentage of their estate.
TRF will provide the necessary language to be used in codicils to a will. Any amount can be left by
bequest and may be cash or real property that can be converted to cash.
A Donor Advised Fund may be established with TRF with a minimum contribution of $20,000. The donor may take an immediate charitable tax deduction and may make grant recommendations to the TRF. Upon the death of the account holder, at least 50% of the account balance will be transferred to the PF.
TRF will also professionally manage funds that are contributed to pooled accounts. This is for a group of contributors who each contribute a minimum of $5,000. Additional contributions of $1,000 or more may be made at any time. Each contributor receives a regular share of the funds earnings based on the number of units they have in the pooled fund.
For Rotarians who are 70 and one half years old or older, the current tax laws allow them to draw up to $100,000 annually from their IRA accounts for contributions to TRF. Such withdrawals are not subject to taxable income.
TRF will also consider gifts of intellectual property such as: royalties on copyrights and patents,
timeshare units that have a market value of $100,000 or more, or oil, gas or mineral rights that
generate at least $3,000 a year in income.
Details on all of these various means of contributing to the PF are available through your District
Permanent Fund Chair, and brochures for each category of giving are available for download at the RI Website. Rotary.org. Click on Rotary Foundation and then Contribute.
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