What impact did the 2008-09 economic environment have on the Annual Programs Fund?
A. Due to the 2008-09 world economic climate, The Rotary Foundation’s investments experienced an unprecedented decline in market value. This decline in value is reported as an investment loss in the Foundation’s statement of activities, in accordance with U.S. accounting rules. The market loss was so severe in fiscal year 2008-09 that it eliminated the full value of the operating reserve. Historically, the Foundation has controlled risk by having well-diversified portfolios comprised of assets that behave differently in different types of markets. Unfortunately, in periods of extreme market distress, as experienced this fiscal year, diversification did not work. All asset classes suffered losses. The Foundation’s Investment Advisory Committee will be reviewing the investment policy statements for the Annual Programs Fund at its September meeting and for the Permanent Fund at its March 2010 meeting. Having experienced the results of this extreme market environment, the Foundation needs
