RI’s focus on zero-based budgeting

Rotary International will sustain its zero-based budgeting with all expenses justified and approved before the start of the financial year. “But we may expect a deficit year in fiscal 2028 and the RI Board is working to overcome it taking into account the rising inflation and other expenses,” said PRID Manoj Desai presenting the Rotary’s five-year financial forecast at the ­Bengaluru zone institute.

With presence in over 200 countries and geographic areas, Rotary caters to the needs of its 1.4 million Rotarians and Rotaractors in just over 46,000 Rotary and Rotaract clubs. “We operate over 100 bank accounts in 68 currencies through our eight regional offices and depend ­primarily on three types of revenues — membership dues (71 per cent of the RI’s income); investment returns (2 per cent, but it depends on the market ­volatility); and services and other avenues (27 per cent), but this is offset by expenses incurred in ­holding Rotary ­conventions and events,” explained Desai. After RI dues came into force from July 2022 for Rotaract, “membership bills were raised for 10,700 Rotaract clubs ­having around 1,68,000 Rotaractors in 180 countries and till June this year, around 60 per cent of them have paid their RI dues,” he noted.

For the fiscal 2024, membership dues will contribute $90 million, investment returns will chip in with $2 million, and services and other avenues will bring an income of $35 million. “Thus the projected income for the current year is $127 million, with around 70 per cent of it coming from members’ dues.”

As Rotary members contribute directly to the growth of RI, “around 58 per cent of its operating costs are meant for funding leadership events and assisting Rotary clubs in many ways in their service projects,” said Desai. At least 20 per cent of its income is being spent on enhancing its public image worldwide; and the rest 22 per cent is set aside for administrative cost, regulatory compliances, office rent and legal support.

It will be a challenge to manage the next two financial years as the RI Board will be trying its best to avoid a deficit budgeting by using part of its reserves in fiscal 2028. “It is up to the Rotary leaders to come together at the Council on Legislation (CoL) to take vital decisions and steer Rotary so that we continue our journey with sound financial health,” added Desai.