Exchange Rate Information
Prepared March, 2008
Question: What is an “exchange rate”?
An exchange rate is used to convert money (currency) from one denomination to another, for example, 1 euro will get you 1.54 US dollars.
A complex set of factors determine what the exchange rate will be for each currency at any point in time. Rates vary, sometimes significantly, from day to day, month to month, and year to year.
Question: Why is the exchange rate important to Shambhala?
Shambhala receives most of its revenue – individual donations, and transfers from centers – in US dollars. However, most of our expenses are in Canadian dollars. This means we have to exchange US dollars (USD) for Canadian dollars (CAD) in order to pay our expenses.
If the USD to CAD exchange rate stays the same, there is no impact. If it goes up, then we have more Canadian dollars to cover our expenses. However, if it goes down, we have fewer Canadian dollars.
Since 2002, the USD to CAD exchange rate has fallen from 1.60 to .99. This means a US dollar received in 2002 brought us 1.60 Canadian; now it brings us .99 Canadian. This is a 38% loss in value.
Question: If I am a US donor, how does this affect my donation?
Let’s suppose you have given Shambhala $100 every Shambhala Day for the last 7 years. Here is the impact of the exchange rate on your donation:
Year |
Canadian dollars received from $100 US |
Amount needed to get $160 CAD |
2002 |
160 |
$100 |
2003 |
151 |
$106 |
2004 |
133 |
$120 |
2005 |
121 |
$132 |
2006 |
115 |
$139 |
2007 |
117 |
$137 |
2008 |
99 |
$162 |
What this chart shows is that in order for your donation to have the same value now as it did in 2002, you would have had to increase it from $100 in 2002 to $162 in 2008.
Question: How has this affected Shambhala?
We have kept our recurring expenses tightly controlled at essentially the same levels.
We have been increasing our revenue, both individual donations and center transfers. However, each year we have needed to increase our revenue on average about 7% just to stay even, because the value of each dollar keeps decreasing!
Thanks to the success of the recent matching gift campaign, between September 2007 and Shambhala Day 2008 we raised our monthly donations and center transfers by $14,500 per month. However, nearly half of this went towards making up the loss in value of the existing revenue:
Monthly value of US revenue Feb 2007 |
56,000 |
Value by February 2008 |
48,500 |
Loss in monthly value from 2007 to 2008 |
-7,500 |
New recurring |
14,500 |
Net Increase |
7,000 |
We appreciate the generosity of the entire community and feel it is important for everyone to understand how the current economic conditions affect the Shambhala organization.
If you have comments or questions, please contact the Shambhala Treasurer Connie Brock conniebrockmn@yahoo.com or Terry Rudderham, Director of the Shambhala Office of Finance and Development, trudderham@shambhala.org
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