I got a surprising amount of attention from a tweet I sent out following the news that Liberal Leader Justin Trudeau was responding to the scrutiny he’s been under for accepting fees from charitable organizations for speaking engagements. I was contacted by two major media outlets to see if I was interested in expanding on my comments. I’m not shy and would have love to contribute, but this presented two problems: 1) My career in the sector is almost exclusively with LiveWorkPlay, where we’ve never had occasion to hire a speaker in a fundraising role; and 2) I did not want to be confused with partisan politics.
My politics are totally partisan when it comes to advocating for affordable housing, employment, and an included life in the community for people with intellectual disabilities. I compliment or criticize government policy with those purposes in mind, but I don’t lobby or campaign for any candidate or party. In the past you’ll have seen me standing with Minister Meilleur of the Ontario Liberal government celebrating the closure of mass institutions, and the next day championing the news by Minister Flaherty of the federal Conservative government about the establishment of the Registered Disability Savings Plan (RDSP). And yesterday I thanked Bob Rae for his years of service (with Canada/Ontario NDP and Liberal Party of Canada). Politics is a tough business and we can’t expect to attract good people if we turn it into a truly thankless job.
All that being said, I think most people understood what I was trying to say about the Trudeau speaking fees issue in 140 characters, but I was planning to expand my comments at some point, and then I stalled. But then I saw that businessman and philanthropist W. Brett Wilson (of Dragon’s Den fame) had already communicated most of my thoughts in a National Post column and suddenly I was banging away at the keyboard. It’s late, so forgive the typos (I’m not collecting any fees for this).
I skip to his concluding remarks: I would suggest we use this lesson as a rather important opportunity to rethink the way we coddle inefficiencies and ineptitude in the philanthropic sector. Then, we might be debating something useful.
You nailed it Brett (Mr. Wilson, I hope it’s OK if I call you Brett).
This whole story is offensive and embarrassing. And I’m not talking about Justin Trudeau, his critics, or the media. I’m talking about my profession! I’m embarrassed that leaders of charitable organizations seem to have been automatically accepted as incapable decision-makers, perhaps lacking the competence to enter into contracts.
The Grace Foundation seemed happy enough…
The non-profit world I am proud to live in is full of risk-takers and innovators, often attempting to solve problems that others wouldn’t want to touch with a ten-foot pole. They deal with regulatory barriers that could bring an HMO policy wonk to their knees. They squeeze out financial efficiencies that are much more difficult than getting blood from a stone. They have professional degrees and are always keeping fresh with formal and informal training and networking.
And yet here we are in the national media as an entire sector of VICTIMS incapable of making the decision to contract for a paid keynote speaker, incapable of understanding that ticket sale revenues would need to exceed costs, and last but not least, incapable or accepting responsibility for our own mistakes.
I’ve put myself in the shoes of one of those non-profit representatives and considered the offer to have the fees returned. I hope the leaders of those organizations rally in solidarity as competent managers, and politely decline the offer, because although it would not be my decision alone to make, I really believe that is what LiveWorkPlay would decide.
If we willingly entered into a contract, and the services we requested were delivered, by what moral or legal principle should the money come back to us? I think we’d have some genuine warm fuzzy feelings about the offer. Maybe we’d take the opportunity to negotiate a future engagement. But I know we wouldn’t take advantage of third-party pressures to simply “cash in.”
As W. Brett Wilson points out (but doesn’t dwell on) in his article, fundraising events have all sorts of costs. From my perspective, I suggest you check out the costs on one of those charity lotteries you are supporting. I’m not telling you to stop buying the tickets, I’m telling you that any big fundraiser involves big costs – and big risks. It’s a highly competitive marketplace and there aren’t always thousands of people standing by to fill an arena and support the cause.
I’ll leave it to others to debate in detail the issue of whether or not politicians should have second incomes, but I will say this: it’s going to get complicated to change the existing rules. Are MPs that come from a family farm going to have to move off the land? A small business owner who gets elected will need to liquidate his restaurant holdings? I don’t know. Good luck with figuring out which types of second incomes are acceptable and which are not. For the record, Trudeau voluntarily disclosed all of his activities years ago, even though he could not possibly have anticipated this manufactured issue. By “manufactured issue” I don’t mean that the issue of whether or not politicians should have second incomes isn’t worthy of debate – what I mean is, Trudeau wasn’t hiding anything, and this issue came to the fore in a disingenuous and partisan manner.
In the meantime, while greater minds hash out the finer ethical details and possibly codify them into new parliamentary rules, I’m with W. Brett Wilson on this one. The way the charitable sector has been represented (and to this point, represented itself) in this controversy is HURTING us all. With many charities experiencing declines in funding and relying increasingly on donations, this portrayal as passive parties to a contract does nothing to inspire donor confidence. It’s time we take a stand on principle – free of the politics – and simply say this:
“When we sign a contract and we receive the good or service we paid for, we consider that the contract has been honoured – in full!”
I’d love to hear from other non-profit leaders on this issue, or if they’ve already been speaking out and I’ve missed it, please send me links!
Keenan Wellar 
Very well put.
My first reaction to these series of stories was to question the choice of having any speaker at an event at a cost of $20,000: it is a rare event which could sustain such a cost and bring in a reasonable return for the charity.
I truly hope that an outcome of this whole discussion is donors looking more carefully at the organizations which they support and the financial choices they make.
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Thanks Megan. I am not sure it’s all that rare. Check out this TED talk by Dan Pallotta “The way we think about charity is dead wrong.” To be clear, I’m co-leader of a charity that doesn’t have a fundraising strategy involving events with large scale expenditures. But I don’t think we can really make judgements based on that one aspect of the balance sheet alone.
There are a great many much-loved fundraising events in my community and elsewhere that have costs exponentially higher than $20,000. We aren’t debating those costs, because the events are successful with their net proceeds, and people have become attached to them. But believe me, other attempts have come and gone, and taken a loss. That’s not always an indication that the charity has failed in some way. There are no guarantees especially when trying something new. And if charities don’t adapt and experiment, in most cases their financial capacity will vanish. I’m definitely not encouraging waste, but sometimes it is possible a charitable organization had a good fundraising plan and there were various forces that made it crash on the rocks anyway.
I am hopeful as well that this will lead to a different type of donor engagement. I do worry however that the messages from this story have taken it in an unhelpful direction, and although I don’t think my little blog can make a dent in that debate, I wanted to put a different perspective out there.
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Fair point: my work with organizations has never been on a scale which could justify $20,000 speaker costs, but it is certainly true that many organizations can organize around such a draw.
I have a lot of concern about donor fatigue and I feel (as a current Director on a Foundation Board) that we can, and should, be answering for the costs of fundraising and looking more carefully at returns. This isn’t to suggest that innovation in fundraising is not welcome – in fact I would suggest that it is crucial. My personal fatigue (as a donor) is with large-scale, high infrastructure and cost events where donors are asked to support events or organizations up front without an understanding of what percentage of the funds raised are expected to go to the overhead of the event itself. I would love to see organizations start making that sort of information available to donors (even in a “projected” format) rather than that information only being available in year-end, organization-wide aggregates.
I realize that large events hold value other than the actual funds raised for that particular event, and that should also be part of the discussion. I think that greater transparency on these issues is likely one of the next steps in best practices, if not actual accounting rules.
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Agreed, agreed Megan. You’ve identified some of the challenges inherent in getting excited solely about “costs” which has resulted in the current obsession with “charity overhead” for which (almost unnoticed, unfortunately) some of those who bear some responsibility for creating that problem are trying to correct it:
The percent of charity expenses that go to administrative and fundraising costs—commonly referred to
as “overhead”—is a poor measure of a charity’s performance.
We ask you to pay attention to other factors of nonprofit performance: transparency, governance,
leadership, and results. For years, each of our organizations has been working to increase the depth and
breadth of the information we provide to donors in these areas so as to provide a much fuller picture of
a charity’s performance.
That’s from a joint letter by Guide Star, Charity Navigator, and BBB Wise Giving Alliance.
At LiveWorkPlay we have on average 1 “large event” per month. These are generally what most anyone would consider to be of a “low cost” variety, and in most cases have more to do with community-building (2/10 are definitely mostly about fundraising). However, the return on our fundraisers is and always will be limited because they will never attract any significant number of Ottawa’s big donors. In other words, while we get hundreds of people every time, we don’t attract any bigwigs.
A lot of people see it is a strength that we have low-cost well-attended events, and certainly there is a lot to be happy about. But I’ve got no problem with rich folks and would love to see more of them directing their generosity to LiveWorkPlay, but the reality is, we aren’t currently doing anything to attract them, so while I gladly accept the praise for how we conduct ourselves, I also recognize that there is a risk-reward equation and charities that manage to significantly grow their revenues via donor contributions have likely taken some significant risks and put a lot of work into making that happen.
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Dear Keenan: I am a leader of a Canadian charity and unfortunately I simply can’t speak out publicly using my name or the name of my organization, but I agree with you 100%. I hate this patronizing dialogue. Now the Grace Foundation says they never authorized anyone to complain about the $20,000 but it took them several days to say so. Were they not watching the news? Wouldn’t you be on the 11 news the very night the story broke explaining the error? It makes us all look like fools. To much of the public (and the media) already think the non-profit sector is some place for people that can’t succeed “in a real business.” You are bang on, not only do we have those skills, but we manage to grow and create without benefit of profit motive! Great article. Thanks for writing it. Congratulations that you are with an organization that is not afraid to be on the leading edge.
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Thanks. There are more than 80,000 charities in Canada, and we’d benefit a lot by breaking them down into different categories so the public is less confused. There’s a lot of talk these days about the “middle class” as pertains to individuals, but we’ve also got a shrinking middle class of charitable organizations, which is harmful to innovation in the sector. What we’ve got is a big pile of charities with almost no infrastructure at all who are in a constant battle for survival, and a big pile of charities with massive infrastructure and operations that are often so big nobody really understands their impact or the quality of their work beyond what they might see in a paid commercial.
In my opinion a lot of the best work in producing real social change comes from that small group of charities that have moved beyond scratching out an existence but are not at a point where they see big cheques as clients and the mission is nothing but a means to that end. They might even REFUSE funding opportunities that would require mission drift.
So many major funding programs (whether corporate, government, or foundations) will only work with “national organizations” but a lot of the most important work that needs doing in communities is a local affair, with the best of it (in my opinion) often being done by smaller (but stable) highly-motivated charities. I don’t know how to shift this. There are great gobs of money going to charities that already have great gobs of money, and the applications are set up such that those are pretty much the only types of organizations that can get at the funding.
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In my naïeveté, I thought “VIP’s attend charitable events “for free” – that is what I would expect them to do. That would be truly helping charities.
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Hi Catherine. The very point of my article is that any competent charitable organization understands the difference between hiring someone to speak and having someone speak for free. It is not like Trudeau showed up to speak at the Grace Foundation fundraiser and only notified them afterwards that there was a cost. At the time of this engagement Trudeau was a backbench MP, he fully disclosed his business and earnings as a professional speaker (beyond what was required, and long before this surprisingly became a public issue) and so unless we believe that the executive or charities are incompetent to enter into contractual obligations, there’s no scandal and there’s no story here. They hired him, and he did what he was hired to do.
If you read Brett’s article, he addresses your point in some detail. He is much wealthier than Trudeau but he does charge charities for speaking engagements, and is in fact widely recognized for his philanthropy.
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Keenan,
Even from my myopic viewpoint as a recovering Liberalaholic, I found your arguments to be eloquent and well thought out. I certainly agree that the money paid should not be returned… That is quite beside the point. In my mind, the Trudeau issue is far greater than the $20,000 he was paid, or the collateral damage done to big-charity by the fallout. You come to your conclusions from your perspective as a champion of LiveWorkPlay and the non-profit NGO sector. I get that. I do take exception to a few subtle things (there’s that subtle word again!).
I disagree with the “manufactured issue” statement that closes out your article. It implies that the unethical behaviour of politicians is fodder, like some of the stuff manufactured by Sun Media or the Toronto Star. While partisanship is certainly always present in politics, unethical behaviour remains unacceptable on any side of the political spectrum. We are inundated with current examples of unethical behaviour, with scandals of ever-growing severity and previously unimaginable consequence. Canadians are manipulated by politicians and lied to, while the public purse is fleeced of billions of dollars.
What could those billions do for the greater good? How many social programs could we fund, how much infrastructure could we fix, how could we improve healthcare, or support such things as LiveWorkPlay with billions more? Instead, they are spent on Senate Housing Expenses, Green Energy fraud, greasy mayors and to pay the Leader of the Liberal Party a hefty wage, while he parades around the country selling speeches.
Most Canadians do not have an issue with charities covering costs associated with their fundraising. Even over-compensating the glitterati is understandable. We are all intelligent enough to understand the constructs of big events planning and the cost of organizing “nerd balls” at the NAC or Charity Golf Tournaments to replenish coffers. My closets are full of silent auction items, bought in support of some good cause.
What offends many Canadians is a Liberal leader who skips work as an MP (for which he is handsomely paid by taxpayers) in order to earn outrageous amounts of money… speaking. Anyone who has had the pleasure of hearing Justin Trudeau speak will tell you that the substance of any such discourse can’t possibly be worth much more than a Tim Hortons coffee. Perhaps that fact speaks loud and clear to the motivation behind why he’s the one being overpaid. That he double dips at the expense of charities is a more complex issue, but that he accepts payment from organizations who then lobby him as a politician… Unacceptable!
We should all be outraged… but we’re not. We have been trained by years of McGuinty et al to expect nothing but dishonesty and manipulation. The political industry has supplanted Bay Street as the money centre but with far less regulation or oversight. While SROs like IIROC hold financial industry professionals to increasingly high standards, politicians seem satisfied with simply “not breaking the Law”. I make no apology for my distaste for Justin Trudeau and what he represents, but I would feel the same way about a member of any political stripe using his office for such brazen profiteering. Im a big fan of yours and of LiveWorkPlay and what it stands for. Charities can hire celebrities of all kinds. Corruption of elected officials has to stop, even if non-profits limit who they can hire as the draw…
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Thank you for your detailed comments Peter.
I described this particular story (not the issue of ethics) as “manufactured” because I think that’s what the evidence supports. There is no scandal. As you acknowledge, charities contract for all sorts of goods and services all the time, including professional speakers. In some cases, that might result in a net financial loss. I would never think to blame the caterer or the speaker for this. If hearing about such a loss gave me pause for concern, it would be with respect to my support of the charity. Simply put, if you think hiring Trudeau to speak was (there is no “is” because he stopped doing paid speaking engagements well before this issue recently came to light) a bad decision by a given charity, then I don’t think there’s much to be done except to ensure your support doesn’t go to them, and goes to one that demonstrates what it is you value.
I definitely share your concerns about waste and corruption. Every tax dollar is precious and needs to go to critical needs including health care, and yes, supporting marginalized people like those who have intellectual disabilities to have a decent quality of life in our communities.
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Really well said. I too was aghast at the poor behaviour by the npo until I read further. My conclusion now is that the situation is being exploited by members of the Conservative Party who are also connected to the npo. Once again the governing party demonstrates poor leadership and continues on its quest to eradicate civil society. It’s a good thing that we won’t go quietly and that leaders like Trudeau have said they will do what it takes to make it right.Thanks for bringing up such a good discussion point.
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I find it rather odd it took so long for the charity to object – wouldn’t you think with all the national attention that someone from the organization would have found out within minutes, and then quickly acted to say “Hey, wait a minute, we didn’t ask for a parliamentary intervention!” I’m just trying to understand why it would take so long to set the record straight.
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