Back in 1917, Rotary President Arch C. Klumph had proposed that an endowment be set up "for doing good in the world." In 1928, this endowment became a not-for-profit corporation known as The Rotary Foundation. Upon the death of Paul Harris in 1947, an outpouring of Rotarian donations made in his honor, totaling US$2 million, launched the Foundation's first program — graduate fellowships, now called Ambassadorial Scholarships. Today The Rotary Foundation improves the lives of people in every corner of the world by promoting world understanding and peace through local, national, and international humanitarian, educational, and cultural programs.

Since 1947, the Foundation has awarded more than US$1.1 billion in humanitarian and educational grants, which are initiated and administered by local Rotary clubs and districts. Started in 1965, Matching Grants for International Humanitarian Projects is a Rotary Foundation program that matches contributions raised by Rotary clubs and districts for international service projects involving clubs in two or more countries.

The Group Study Exchange program, also begun in 1965, has provided grants for more than 11,000 teams of men and women in the early stages of their business and professional careers to travel abroad and share vocational information with the representatives of their respective professions in another country. Team members spend four to six weeks studying the host country's institutions, economy, and culture while observing how their own professions are practiced abroad. More than 500 exchanges between paired Rotary districts occur each year, advancing the program's ultimate goal of promoting international understanding and goodwill.

The Foundation initiated Health, Hunger and Humanity (3-H) Grants in 1978. 3-H Grants are awarded to fund long-term, self-help grassroots development projects that are too large for one club or district to implement on its own. Projects must be self-sustaining after the 3-H grant funds have been expended.