Non-Profit Corporate Governance: The Rotary

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Alexis de Tocqueville In the United States associations are established to promote the public safety, commerce, industry, morality, and religion, wrote Alexis de Tocqueville in Democracy in America.

If Tocqueville were driving today into Anytown, U.S. of A., the first road sign he might see would be for local Rotary. And he would not be surprised at the mission of this civic organization.

The Business Monthly ‘Service Above Self’

In 1905, attorney Paul P. Harris gathered three friends together in downtown Chicago as professionals with common interests for the common good. The group expanded and began to rotate meetings among members’ offices, lending the name of “Rotary,” with a wagon wheel (now the familiar cogwheel) as the logo. As the membership grew, they realized that internal networking was not enough. Harris wanted to serve more than just that group.

Rotary International is recognized as the world’s first service club. The organization’s first contribution to the community was a horse. A local preacher’s “transportation” died and the congregation could not afford another. The Rotary stepped in. Harris’s Rotary then built the first public restroom in Chicago and the Rotary began to grow.

Rotary members donate their time, talent and treasure to the local communities.

Succession Management…

Thank you (foot)notes:

This article was orginally published in The Business Monthly as Rotary Governance this year.

Paul Harris went about building Rotary on sound principles.

Let us stimulate and encourage the constructive forces and place in their command the three greatest generals the world has ever known: Faith, Love and Courage.

Conversely, Harris said, “The three generals in command of the destructive forces are: Suspicion, Jealousy and Fear.”

As organizations grow and mature, leadership changes hands under set rules and philosophies. This sense of trust, and indeed, brotherly love, is communicated by founder Harris’s ethical framework as seen in the autonomy of the local clubs.

“The local clubs are given a lot of authority,” said Patricia Kasuda, Rotary district governor. She oversees 69 local Rotary clubs with some 2,800 members in the counties that surround the Baltimore-Washington corridor.

Rotary corporate governance reflects this philosophy of high ethical standards and accountability. This is seen clearly in the succession management, or the way leadership changes hands year to year.

The clubs operate with a “very fluid process without a strict chain of command and organized groups of candidates,” said Richard Carson, the district governor- elect, who runs his own firm developing strategic partnerships and new business development. “There are multiple levels of officers, from club presidents to district governors to zone directors to the head of Rotary International.” The local clubs vote for their own club presidents.

The district governor is elected from a slate of candidates from the clubs. A five-member selection committee accepts nominations beginning on Nov. 30 of each year. The committee, by a simple majority, selects the governor nominee, who the following year will become the governor- elect, then advance to the district governor position. The district governor nominee is elected at end of January. Office holders serve a single year, from July 1 to June 31, in each position.

A sense of humility pervades the process. “Candidates are not allowed to campaign,” said Carson.

Rotary Leadership

What does the Selection Committee look for in a future district governor? “Organization skills, understand[ing] Rotary, [and having] shown an interest for service,” are the primary considerations for Rotary leadership, said Kasuda. The selection committee meets and interviews each candidate. Kasuda was asked to join Rotary in 1993 and has held almost all the leadership positions. She has received a number of awards including the Governor’s Citation and Women of Distinction Award and is acclaimed as a Paul Harris Fellow. She retired from North Arundel Hospital as vice president of operations and the chief operating officer.

Surprisingly, money doesn’t matter. “Advancement is not based on contributions,” said Carson. “Membership is not based on contributions.”

Bette Lewis, a 15-year Rotary veteran and an adjunct professor at Goucher College in Baltimore, is the current district governor nominee and will succeed Rich Carson as district governor-elect. The governor-elect and governor nominee assist the district governor.

The district governor acts as the liaison between the local clubs and the International Rotary. Kasuda’s responsibilities include training leadership, organizing the District Conference and budgeting and financial management.

The Rotary carries Directors and Officers insurance. “We live in litigious times,” noted Kasula.

The district governor position can be a “full-time job if you let it be,” said Kasuda. Her secret is that she is “gifted with a talented leadership team” who she manages with a light touch.

The Future

The local District is considering strengthening the accountability, continuity and consistency of the District’s leadership. Kasuda is reviewing a strategic plan to move from a Council of Governors, which acts like a board of advisers, to a more formal board of directors.

Rotary is not for everyone, and is not meant to be. Carson says the biggest challenge in recruiting membership is finding individuals who will share the selfless vision of Rotary. A potential member must be invited to join. Member candidates must embrace the high ethical standards and have a desire to give back to the community.

“Beneath Rotary’s many and varied activities, there is the unchanging undertones of goodwill, goodwill, goodwill,” wrote Rotary founder Paul Harris.

101 Years of Service

In February 1905, lawyer Paul P. Harris and three business colleagues met in a downtown Chicago office to enjoy the camaraderie and discuss ways for members of the group to expand their circle of business contacts. The club met weekly, and although the term “Rotary” was not used initially, that first gathering is widely regarded at the genesis of Rotary.

As membership quickly expanded from four to 30, the club’s original function as a social group matured into the service-oriented goals of the modern Rotary.

In 1907, the Rotary Club of Chicago performed its first charitable act: donating a horse to a poor preacher. Despite its humble beginnings, the revolutionary concept of a service club did not go unnoticed, and Rotaries soon sprang up from coast to coast in other major cities. The Rotary adopted the motto “Service Above Self,” establishing an international base.

Today, over 32,000 clubs thrive in more than 200 countries and membership has grown to 1.2 million business and professional leaders. The club exchanged the practice of rotating gathering places between members’ offices (from which the term “Rotary” was derived) for meetings in larger venues, like hotels and restaurants. In emulation of the changing times, the Rotary’s original wagon wheel emblem evolved into a many-pronged cogwheel.

Global Good Deeds

The Rotary continues its tradition of serving small communities, but now also tackles large-scale international goals, such as eradicating polio worldwide and providing disaster relief. It shares the honor of holding one of two seats for service organizations in the United Nations.

In 1917, the Rotary Foundation was established when Rotary International’s sixth President, Arch Klumph, proposed creating an “endowment fund” for international projects. This fund was specifically earmarked for Rotary to do good in the world through charitable, educational and other forms of community service.

The Rotary Foundation is supported by contributions from Rotarians and friends of the Foundation, and its expenses are funded solely by the interest earned. Over the past nine decades, the Rotary Foundation has been an important organization worldwide.

Help has been provided in many forms: a life-saving immunization for a 5-month-old in Afghanistan; a loan to a woman with seven children in Malaysia to start a sewing business; an ambulance to North Korea that helped equip a hospital; the opportunity extended to thousands of college students in almost every nation to study abroad with all expenses paid.

These are just a few of the projects funded by the tens of millions of dollars spent each year. The Humanitarian Programs of the Rotary Foundation help to improve quality of life, primarily in the developing world, by providing health care, clean water, food, education and other essential needs.

Rotary International’s search to find a humanitarian program in which all of its worldwide members could participate culminated in a crusade against polio. In the 1970s, Rotary International forged a partnership with the World Health Organization to jumpstart PolioPlus.

Polio is a paralyzing disease, but a vaccine is an effective defense against its onset; PolioPlus continues to distribute vaccines to needy locales. Thanks to the Rotary’s outreach, the Western Hemisphere is now polio free.

Joining PolioPlus on the Rotary’s agenda is the Solidarity in South Asia Fund, which relieves nations battered by the 2004 tsunami.

In addition to global relief projects, Rotary International awards humanitarian grants and sponsors peace and conflict studies centers. An important facet of the Rotary’s educational efforts is Group Study Exchange (GSE), an opportunity for new businessmen and women to travel to different countries and experience their host destinations’ institutions and ways of life.

Rotary International fosters a commitment to service in the next generation of leaders by awarding scholarships to rising youth and sponsoring Interact, a high school club. A student exchange program mirrors GSE’s ambition to produce culturally literate professionals.

Service At Home

There are 69 clubs in the local District 7620 alone, and 10 of these serve the communities of Howard and Anne Arundel counties. Rotary paves the way for other organizations by leading with a hands-on, action-oriented approach to its philanthropic efforts.

Each club contributes to the local area in its own way but, collectively, they donate thousands of dollars to local nonprofits. Some clubs participate in Christmas in April; another club has a Thanksgiving dinner for more than 300 local senior citizens. An Ellicott City club donates time and money to local youth organizations, and a Columbia club helps transport durable medical equipment to local citizens in need.

While fun and friendship are shared each week, the theme of Rotary — service above self — is never far from each member’s mind. For all of its unparalleled expansion, Rotary maintains its time-tested traditions of meeting in local restaurants and ringing a bell to signal the start of a meeting. Above all else, it continues its commitment to service.