A Foundation that works for you

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LCP Sylvester Co

When we were young, we hear our parents say study hard so that you can find a better job. Work hard so that you can earn enough to provide for your family. Other parents might have taught us to go into business and save every penny so that we can have a good life. These are the lessons that our elders have taught us and inculcated to us whenever they have the chance to do so.

When I got into college our professors taught us the concept of making our money work for us. They say it is not enough to work, earn and save hard. We have to know how to make our hard-earned money grow more to fit our goals and to prepare for our retirement.

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In Rotary, we have a saying “He who profit most, serves best”. This was Rotary’s second motto adopted in 1911, inspired by the speech of Rtn. Arthur Frederick Sheldon, during our first convention. As Rotarians, we rely on our earnings and contributions from friends and family to do community service projects. A club president is expected to show example to the members and be the first to shell out money for projects and activities. No matter how small or big, this may result in donor fatigue when done too much.

In the early years of RCUDM, the club formed a foundation, with the purpose of raising money to help the club fund its service projects. Through the years, the foundation flourished as bank interest were high. The foundation financially supported club projects from the interest earnings. When the pandemic shook the world out of our comfort zone, Interest rates plummeted so low that it became insignificant or zero in the worst case. The Board of Directors of the Club Foundation had a series of meetings to determine how to prudently invest our hard-earned savings to work for the club and still earn to support the club in funding service projects.

The Board considered several proposals that would suit the financial needs of the club. We have established guidelines to help us decide which investment is suited for the club.
Tenure – We have to decide how long the foundation investment will be held. A combination of short to medium term investment was chosen.
Risk Assumed – We have to choose an investment that will optimize our income and at the same time protect our principal, or would have lesser market volatility.
Interest Rates – Interest income was heavily considered, since this will determine the outcome of the investment. It should be sufficient to support the club projects
Liquidity – Cash payouts were also considered to provide funding to club projects and enough readily available cash when needed.
Diversity – Foundation resources should not be put in a single investment; it must be put in several investments to spread the risk.

Having a stable club foundation that can support a club president’s plans and programs and a collective effort of the club members can avoid draining our personal resources for Rotary Service Projects. The author would like to recommend seeking advice from professionals who best understand investments,