There is an important discussion happening within the club: what is the best approach to the massive surplus that we have in the Charitable Trust. Currently, the Charitable Trust has around $500,000 in assets. We usually give away between $30k and $50k each year - so the current assets of the trust could cover our giving for 10 years without raising another penny.
There seems to be a number of schools of thought amongst club members on tackling this surplus.
- We should only distribute income and hoard the capital.
- We should distribute a fixed percentage each year (but only to quality worthwhile causes).
- We should have a plan to run down the fund over a number of years.
These are all very sensible strategies, but none of them has an ethical component - all are accounting considerations.
We really need to ask (and discuss) what the basic function of the trust is. Is it for long term investment, is it for distribution as soon as the money is raised?
The way I personally look at it is as follows: does having this large asset meet the 4 way test. For those who are not Rotarians, the 4 way test is the ethical code that all Rotarians seek to follow.
The 4-way test is as follows:
- Is it the truth.
- Is it fair to all concerned.
- Will it build goodwill and better friendship.
- Will it be beneficial to all concerned.
My feeling is that sitting on a large asset (especially if there is real need in the community) fails tests 2, 3 and 4. This makes me very uncomfortable. The fact that the Trust is sitting on such a large asset is, I feel, morally wrong. An active policy of distributing 20% of the asset each year to worthy causes would (to my mind) be a step in the right direction. However, I am only one member; with one vote, and the outcome is something that needs to be addressed by the Trustees of the Trust and ultimately by the Club as a whole. The Club, as a whole, needs to give a firm mandate to the Trustees regarding the strategic direction and disbursement procedure.
A report along these lines is being prepared. This report will be tabled and discussed by the Trustees and their recommendations will be presented to the Club for full discussion and guidance. This is a problem which needs a practical and ethical solution and needs the full attention and engagement of all members of the Club.
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