George Pocock Rowing Foundation
Funds, Income & Expense
For the year ending December 31, 2006

Mission
The George Pocock Rowing Foundation serves as a community resource for the support and advancement of the sport of rowing in the Northwest.

History & Progress
The Foundation was started in 1984 when a group of Lake Washington Rowing Club officers grew frustrated with the lack of both local and national responsiveness to the perceived needs of the sport. As a group they decided that the United States was a big place and needed a more decentralized infrastructure and decision making system, and that because all the power and influence in rowing resided on the east coast, little would ever be accomplished locally without an institution dedicated to local development residing in the Northwest. Despite the great success stories at the University of Washington, Lake Washington Rowing Club, and other Northwest programs, the rest of the country, including the national governing body would continue to ignore rowing in the NW until the Northwest established itself as a region that could not be ignored.

In 1984 we laid out four objectives:
1. To build a Seattle Rowing Center that could be the home to many rowing clubs and programs, and serve as a model for the rest of the region;

2. To create a mechanism to support post-collegiate, high-performance athletes in their on-going training for the National and Olympic teams;

3. To create an organization that could actively support the design and construction of boathouses, and the creation of rowing programs throughout the region. We believed then – and do today – that the most productive type of outreach to the rest of the non-rowing world is to simply create more opportunities to row. Success can be measured in the growth of the number boathouses, programs, and people rowing in the NW; and finally

4. To develop a Class A FISA racing venue in the NW that would be so good that crews from all over the world would want to come here to race.

The organization has grown and evolved, but these four goals remain the primary guiding principals underlying what we do. We are pleased with our progress to date, but there remains much to do. The Pocock Rowing Center opened in 1994, and now hosts a half dozen rowing programs, and hundreds of rowing athletes. The PRC high-performance program is respected at the national team level as a first class senior level training center. The number of rowing programs in the northwest has exploded since 1984, and while we cannot claim credit for all or even most of them, we were involved with the creation or nurturing of many. We have set another goal of assisting with the further growth of Northwest rowing so that within another 10 years there are twice the number of programs and four times the number of registered rowing members in the region as there are today. Although we have not yet completed the Class A FISA rowing course, we believe we are on track. Our current goal is to have a venue in operation at Lake Kapowsin by September of 2011.

For reasons mostly having to do with 'bandwidth', the majority of our efforts have been focused at the center of the geographic concentric circle centered on Seattle. Long term, the scope of our ambitions is truly regional, as the project at Kapowsin shows. In summary, we believe that we have delivered value to the rowing community in our region, and with your support we will continue to do so.

Our Funds
The Foundation is a 501(c)3 non-profit organization, with a number of funds that have been established to receive and hold monies for specific purposes in support of the Foundation's Mission.

In addition to the Foundation's General Fund, there are four permanent endowment funds, the Kapowsin Project fund, and the independently managed PRC funds that focus on activities within the Pocock Rowing Center. The funds, their purpose and policies are described below.

Ayrault Fund
The Ayrault Fund is named after Dan Ayrault, an original member of the Pocock Foundation Board, Headmaster of the Lakeside School, teacher, coach, and two-time gold-medal winning Olympic oarsman. Targeted donations, investment income, and a portion of principal appreciation of the Ayrault Fund are dedicated to a range of rowing 'outreach' activities. In keeping with the original Foundation Goals, Outreach volunteers and staff work with individuals in government, education, social service agencies, and other rowing programs to support the design and development of rowing facilities and programs, and the recruitment of athletes of all ages and abilities.

Interest and dividend income, plus a portion of a given year's capital gains may be invested in program grants. The fund is managed to ensure long-term growth.

Our 2006 unaudited results show Ayrault accounts had a beginning balance of $101,320 on 12/31/05 and an ending balance of $101,166 on 12/31/06. Outreach gifts and income totaled $19,400 and expenses were $28,562. Capital gains, dividends, and interest income totaled $9,008.

There are four primary areas involved in the GPRF outreach programs:

1. Health & Wellness: Through the efforts of its founding directors, the Foundation is involved in the creation of health and wellness programs that use both indoor (ergometer) and on-the-water rowing as a mechanism to foster both the teaching and the practice of good health, exercise, and dietary habits. There is an epidemic of obesity and poor physical condition in our country. We believe that rowing may be part of the cure. By focusing in this area, we believe that we can very effectively leverage the contributions of other funding sources that are focused on health and wellness, and in particular on obesity. We can show that rowing – even in schools where there is no nearby rowable water – is a highly effective way to increase the fitness of children from the middle school ages and up.

2. 3rd Party Programs: One of the most visible and successful Committees in the Foundation is the Outreach Sub Committee for programs. This group and its paid program director dedicate countless hours to this activity. Because of our association with Dan Ayrault, shortly after the completion of the Pocock Rowing Center, the GPRF began offering students in a Lakeside sponsored, summer, educational enrichment program the opportunity to row. Since that beginning, GPRF outreach programs have been designed and delivered for homeless and street dependant youth, adults with physical and developmental disabilities, young women, and school groups. The GPRF is not a school or social service agency, but the Outreach staff works with such 3rd party agencies to create programs for their populations that make available rowing opportunities to leverage the inherent metaphors and lessons of rowing to address larger community needs. Our programs can offer rowing opportunities to groups who for economic, cultural, or other reasons may not otherwise have the opportunity to experience rowing. We have created and spun-off to other rowing organizations a number of successful programs, and have developed materials to assist others in doing the same.

3. Junior Program Scholarships: Another initiative is focused on building the endowment so that junior athletes and family members who may have been introduced to the sport through one of our introductory programs, or have come to it via another path, can participate fully in a regular junior program such as those operated by the Seattle Parks Department at Mt. Baker or at the Pocock Rowing Center. To gain the full benefit of participation in a junior rowing program, it is important for the athletes to have the full experience – which includes both 1) extended time together working and training with teammates and 2) racing. The benefit of working hard and measuring progress against another crew is an important aspect of the growth and development of a young person. The culture of the rowing 'meritocracy' where the best crew wins the race, and the others return home to train and strive to improve their own performance can only be learned from racing. Having their families present to witness the young athlete's triumphs and defeats is important as well. Most Junior rowing athletes go on to college, and a statistically insignificant number are ever involved in drugs, alcohol, or juvenile crime. The 'rowing culture' stresses excellence in all things, and this frequently carries over into the athletes' academic performance, and future aspirations.
Many excellent Junior programs already exist in the Northwest, so the goal of this initiative is to ensure that these programs can offer assistance to those in their communities who may have financial needs. This may be the best thing we are doing. A recent generous contribution has launched this new, exciting extension to the Ayrault fund, and the Ancient Mariners Rowing Club has recently stepped up and is partially sponsoring a junior athlete – who is a graduate of the Lakeside LEEP program, so that she can compete in the regular PRC Junior programs.

4. Program Growth: The Pocock Rowing Center was built to provide a home to multiple programs, but the Foundation's scope has always included the entire NW region. The fourth element of the outreach program is the support and development of boathouses and programs on every rowable body of water in the Northwest. We cannot build them all, but we can help local interests achieve their visions. We are focused at this time on developing programs, boathouses, instructional materials, and other supporting materials in the Seattle Metropolitan area with the ultimate goal of quadrupling participation in rowing throughout the region.
With our weather and topography we see no reason why the Northwest Region – by itself – cannot equal or exceed the rowing participation and competitive success of countries of similar physical size, population, and economic resources. Ultimately the best form of outreach will be to create many more programs around the region so that each of them can reach out to their own local communities and offer the benefits of rowing to participants of all economic and cultural situations. Putting more boats in more boathouses, and more people in more rowing seats is the best way to achieve the greatest good through our great sport.

The McWilliams Fund
The McWilliams Fund is named after Gordon McWilliams, a great supporter of high performance athletes and in particular of the program developed by Emil Kossev at the Pocock Center. Supporting the aspirations of potential Olympians has been a core objective of the Foundation since day one. Senior level, primarily post-collegiate, athletes dedicate themselves to the pursuit of excellence to the virtual exclusion of other endeavors, career goals, and economic rewards. They are primarily supported by their parents and friends, and by the High Performance Program at the Pocock Rowing Center. The Foundation contributes a part of its annual, general fund income to supporting a portion of the head coach's salary, and income from the Fund plus contributions raised to support the team are collected by the fund and expended on the training, travel, equipment, and other needs of the team. The endowment is not large, so the bulk of year-to-year expenses must be covered by contributions raised in the current year to fund current expenses.

A long-term goal of the High Performance program is to secure a major sponsor to better support the program, and to over time, increase the permanent aspect of the McWilliams Fund so that it can generate a more reliable income stream. Gifts to the McWilliams Fund that are restricted are used in the manner designated by the donor. Our 2006 unaudited results show McWilliams accounts had a beginning balance of $9,753 on 12/31/05 and an ending balance of $11,193 on 12/31/06. Total receipts to the McWilliams Fund totaled $86,066, of which $1,000 was a permanently restricted donation, $32,220 was restricted donations, and $52,106 was program income. (Athlete specific donations are not tax-deductible.) Dividends, interest and a grant from the PRF general fund totaled $22,624.

The Frances Pocock Fund
The largest single asset of the Foundation is currently the Pocock Rowing Center. Like any building, it has both regular annual operations and maintenance needs, but like any building it also has long-term capital maintenance or 'replenishment' needs. Everyone is familiar with the concept of deferred maintenance, and everyone has seen the effects on structures of too much of it. To guard against this, the initial capital gifts by Mrs. Frances Pocock that enabled the construction of the Rowing Center also specified that an endowment fund be established and maintained at a sufficient level to ensure that long-term capital maintenance could be performed on the building. In 100 years, the founders want the Center to be as sound and attractive as it is today. In the intervening period there will be earthquakes, floods, and the ravages of both time and the wear and tear of hundreds of users. We will have Global Warming, light rail, traffic congestion, and Presidents worse than Jimmy Carter, Bill Clinton, or George Bush. Based on an engineering study conducted for the Board, it is estimated that, including cost inflation, over the next 50 years it will cost slightly over six million dollars to maintain and rehabilitate the capital structures to keep them in their current condition.
Because of the foresight and successful fund raising of the Founders, the PRC sits on land owned by the Foundation, it has no long term debt, and is large enough that it should be able to generate sufficient income to support its own capital maintenance. A permanent endowment of approximately $2.5 million would completely fund the annual contribution requirements necessary to fund the 6 million, but we do not have that amount in a permanent fund yet. However, it is a reasonable and achievable financial goal for all operating and maintenance costs, as well as an annual contribution to the capital maintenance fund, to be produced from income from dues, fees, and Center operations. The people who use the building currently, will save currently for its eventual restoration. Rent from the 3rd floor offices, in addition to funding some program operating expenses, covers its share of operating costs, as well as its prorated annual contribution to the long-term capital maintenance fund. The remaining contribution must come from PRC operations which are on a growth path toward being able to support not only rowing program activity, but also the Center's full short and long term operating and maintenance costs. At this time, the Foundation is underwriting most of that necessary contribution, but efforts are underway where by the PRC membership will, over time and as income grows, assume its full responsibility for the maintenance of the rowing floors of their home.

Plans are for the Frances Pocock Fund to receive an annual contribution from either a permanent fund or the operating income of the building sufficient to amortize the full estimated 50-year cost of the capital maintenance and replenishment of the Pocock Rowing Center building, as periodically reviewed and established by the Board. Funding day to day operating costs and operating maintenance of the PRC is the responsibility of the office tenants and the PRC membership, not of the Foundation, thus the monies in this endowment are not to be used for day to day costs, or any other non-capital maintenance expenses incurred by the Foundation. In extraordinary circumstances the Board may borrow from the Fund, provided that the Fund is repaid with interest at the market rate avoided by borrowing from the Fund. Funds in the this endowment may only be used for capital maintenance activities approved by the Board of Directors.

Our 2006 unaudited results show Pocock accounts had a beginning balance of $135,804 on 12/31/05 and an ending balance of $157,903 on 12/31/06. Transfers from the PRF General Fund plus interest and dividends totaled $54,442, while expenses associated with capital maintenance totaled $32,344.

The Zesbaugh Fund
The Robert Zesbaugh Fund is a capital fund established in the memory of Bob Zesbaugh to complete the capital campaign for the construction of the Pocock Rowing Center, with the residual to supplement the Foundation's General Fund.
Pocock Rowing Center Operating Funds
The Pocock Rowing Center is an asset of the Rowing Foundation, thus its financial results are combined for tax reasons with the Foundation's Balance Sheet and Income Statement. However, the annual operations and maintenance, staffing, and program costs of the PRC are funded by membership dues and fees & targeted donations, and are controlled by the PRC Management Committee (MC) and their sub-committees and staff. The Center maintains a General Fund as well as several dedicated funds for Junior rowing, equipment, and other functions. We show them here in summary form.

Treasurer's Report

Where Our Income Came From
The GPRF accepts both unrestricted and designated gifts from our donors. It is our policy to use unrestricted gifts and unrestricted endowment income to support the three major initiatives outlined above, including: the high performance team, Kapowsin venue, and Outreach. Gifts that are restricted are used in the manner designated by the donor.
In 2007 we will begin the development of an $8 million capital campaign to fully fund the development of the FISA venue at Kapowsin. These will be restricted to that activity. In addition we will be soliciting "permanently restricted" donations for the Ayrault and McWilliams Funds to increase our ability to support our athletes and our outreach efforts. Unrestricted donations allow the Directors to determine whether those funds should be allocated to one of our endowments or used for current grants.

2006 in aggregate, total sources of income were $474,796, while total expenses were $511,009.

Sources
PRF General Fund Income - $15,036
Real Estate Income - $63,048
PRC Consolidated Income - $218,648
HP Team Contributions & Fees - $85,626
Jr. Team Contributions & Fees - $40,925
Outreach Contributions - $19,400
Row For The Cure - $21,500
Kapowsin - $2,000
Investment income - $8,613
Total - $474,796

Uses
General & Administrative - $24,535
Building Repair & Maintenance - $32,344
PRC Consolidated Expense - $278,896
HP Team - $106,810
Jr. Team - $29,508
Outreach - $28,562
Row For The Cure - $10,100
Kapowsin - $253
Total $511,009