Gifted: A profile of Frank Giustra

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Last June, Frank Giustra made an astonishing public announcement: he was donating $100 million and half of his future mining earnings to a radical global initiative to battle poverty.

Last June, Frank Giustra made an astonishing public announcement: he was donating $100 million and half of his future mining earnings to a radical global initiative to battle poverty. The event ushered in a new era of giving in B.C., one that thrives on publicity and competition. In other words, it’s all about business. Only this time it’s all about who gives, not gets, the most. Frank Giustra is a changed man. The mining magnate has emerged from a reclusive life in his chateau-like West Vancouver waterfront home with a new sense of purpose, pledging to devote his life and a considerable chunk of his fortune to an initiative that aims to eradicate poverty in the developing world. Basing the global initiative here in B.C., he has partnered with former U.S. president Bill Clinton to trumpet the endeavour as a way of spurring the world’s natural resource companies to financially back the plan, called the Clinton Giustra Sustainable Growth Initiative (CGSGI).

It all began two years ago over a bottle of wine with his wife, the persuasive human-rights activist Alison Lawton, who suggested that the mining financier use his influence to improve living conditions in developing countries. Today Giustra is tackling the biggest challenge of his 50-year lifetime: saving lives and feeding the hungry in the world’s poorest countries. No small task, even for one of B.C.’s most successful businessmen. As part of a jet-setting team, he and power-pal Clinton have become an unstoppable force for good works. This deal is huge news for B.C. and for philanthropy as a whole. It elevates Giustra to a new elite level of givers, paves the way for more sustainable mining practices and – perhaps most significantly – creates a whole new model for giving: be loud and proud, thus pressuring your worthy competitors in business to do the same, or be noticeably absent. Vancouver is the perfect base for this project, considering its mining muscle and, of course, the fact that Giustra lives here. The commodities boom has created a great deal of wealth right here on home soil and has given rise to a new burst in philanthropy tipping the hundreds of millions. “Vancouver happens to be one of the global capitals for mining and mining finance. The roots of this project are in Canada, but this is a global effort,” stresses Giustra, who close sources say is worth several hundred millions, but is not a billionaire. But more on the man later. His impressive plan is to bind the global extraction sector’s wealth and give it away to countries in need. Giustra has personally donated US$100 million plus half of his future earnings from the mining industry, and his contribution is being matched by Mexican telecom mogul Carlos Slim, who recently toppled Bill Gates from top spot on the list of the world’s richest people. Around 20 mining companies – most of them Canadian – have signed up as supporters so far. A dollar figure hasn’t been attached to the commitments, but Giustra says it could raise hundreds of millions, if not billions, over the coming years. Clinton will even be sending out one of his strategists to Vancouver to oversee the project.

Stats on giving
  • The top five countries that give a percentage of their gross national income to overseas aid are Norway, followed by Sweden, Luxembourg, the Netherlands and Denmark. Canada is 14th on the list. (Source: The Organisation for Economic Co-operation and Development)
  • In the U.S., those with incomes of more than $200,000 or assets in excess of $1 million represent 3.1 per cent of total households, but they are responsible for approximately 66 per cent of all household charity in the country. Their top motivations include: meeting critical needs (86.3 per cent), giving back to society (82.6 per cent), and social reciprocity – the feeling that those who have more should help those with less (81.5 per cent). Ways of donating include: 41.2 per cent have a provision in their will, 19.5 per cent established a foundation and 15.9 per cent use donor-advised funds. (Source: Bank of America Study of High Net-Worth Philanthropy [2006])
  • Canadians contributed $7.9 billion to charity in 2005, compared to $3.6 billion in 1995. (Source: Statistics Canada)
  • Fifty-one per cent of British Columbians make donations regularly and 43 per cent give occasionally (once or twice a year). British Columbians who are most likely to make a financial donation are those with household incomes of $75,000 or more. (Source: Ipsos Reid [2005])

Giustra, an immaculately dressed man with closely shaved, greying hair, speaks passionately about the initiative, calling it the most “fulfilling” thing he’s ever done. “This is the most important thing in my life so far,” he reflects. “It gives me a sense of purpose. I believe it will be a lifelong project where I can put my talents and influence to their best use. I feel like I have been presented an honour.” Giustra has been an active philanthropist for the past 15 years, starting out with a private foundation to support the health and well-being of children. His wife has been a tremendous influence over the years. The documentary producer, whose most recent work is Uganda Rising, has a particular desire to end the humanitarian crisis of war-torn northern Uganda. Giustra credits Lawton for “planting the seed” of his latest initiative in his mind over that fateful bottle of wine at their West Vancouver home. When asked what else motivates him to devote such time and money to philanthropy, Giustra, an avid book collector, cites philosopher Andrew Carnegie, author of The Gospel of Wealth, as a source of inspiration. “[Carnegie] spoke about the duties of a wealthy man,” he explains, “and what he said was: once he has cared for his own needs and the needs of his family, everything else is surplus capital. It is the duty of that person to deploy that surplus capital for the betterment of society. What I would encourage others to do is to think about this.” Duty? Certainly that’s part of it. But it may also be the razor-sharp businessman in Giustra that saw an opportunity to apply the same rules and strategies to philanthropy that led to his spectacular financial success in business.

Giving in B.C. Canadians are eagerly handing over more money to charities and non-profit organizations than ever before. According to Statistics Canada, contributions by Canadians have skyrocketed by 120 per cent in the past 10 years, from $3.6 billion in 1995 to $7.9 billion in 2005. Why the change of heart? A spring 2007 study by Toronto-based philanthropic consultants Ketchum Canada Inc. credits significant changes in Canada’s tax policy, beginning with the May 2006 federal budget’s removal of capital gains tax on gifts of publicly traded securities or ecologically sensitive lands. This policy was extended in 2007 to include donations of public shares to private foundations. Today many substantial donations to non-profit organizations involve a transfer of shares. Here in B.C., an Ipsos Reid survey conducted in 2005 in co-operation with the Association of Fundraising Professionals found that nine out of 10 British Columbians are engaged in charitable giving to some degree. An interesting trend is also surfacing, mirroring a similar pattern in the U.S. According to the Ketchum study, 25 per cent of Canadian donors are contributing 85 per cent of total donations. In the U.S., as much as two-thirds of total giving now comes from the wealthiest three per cent of American households. Education is also a factor, with 62 per cent of those with higher education making regular charitable donations, compared to 39 per cent of B.C. residents with no more than a high school education. It’s also the baby boomers who give the most. While 66 per cent of those aged 55 or older donate regularly, the number drops to 34 per cent for those in the 18-to-34 age group.

Giustra says today’s entrepreneurs don’t just write cheques and hope the money’s being spent appropriately. They want to see where their money is going and take a hands-on approach to ensure their investment is getting results. “Around the world today, you’ve got a growing trend of philanthropists who are looking at [giving] in a very business-like manner,” he explains. “They want to tackle issues that will give them measurable results. When you can measure the results, you get things done. Philanthropists are now looking at specific issues in the same way.” Barney Ellis-Perry, chair of Volunteer Canada and director of professional affairs at UBC Alumni Affairs, has also noticed that today’s givers are demanding a lot more accountability. They’re also more willing to go public with their causes, in the hopes of spurring others to do the same. These people tend to be baby boomers who are just coming into money, either through an inheritance or through a business deal, and want to give it away, Ellis-Perry explains. Unlike their parents, however, they want to know exactly where the money’s going. Of course, you don’t have to be rich to make a difference, Giustra stresses, adding that whatever you choose to do, the matter must be meaningful to you. “You have to have a passion for the cause,” he says. What’s his passion? “My motivation lies in the fact that, as President Clinton often says himself, he has led an improbable life, coming from very humble beginnings to president of the U.S. and is now in a position to help so many in need all over the world,” Giustra replies. “I too feel I have led an improbable life. As a child, I would never have imagined I would have such an exciting and fulfilling life. I am privileged. And with privilege comes responsibility. I am now in a position to carry out that responsibility and feel honoured to do so.” Giustra won’t elaborate on his childhood, although it’s been reported that he was born in Sudbury, Ontario, and lived in Italy and Argentina as a child. He doesn’t speak about his personal life or how and when he met Lawton, but their matched interest in improving lives in Africa was what led them to later cross paths with Clinton. Giustra and Lawton held an exclusive fundraiser at their home in 2004 to raise money for tsunami cleanup efforts, and they asked the former president if he would provide a videotaped message as a thank-you to the guests. The event generated a reported $1.7 million and a bond was formed. Today Giustra say he and Clinton are “good friends,” often travelling around the world together in Giustra’s private jet. “I became a financial supporter and got to see first-hand how he got things done around the world,” Giustra says, further commenting on his admiration of Clinton’s work. “He finds creative solutions to complex problems.” Giustra is treating his latest initiative as he would any business deal. He’s after maximum results. A proven success rate has elevated the mining financier to an elite league of global financial leaders. Giustra left Merrill Lynch & Co. Inc. in the early ’80s to join an upstart firm called Yorkton Securities, where he helped raise $3 billion in equity for the resource sector. He left Yorkton at the end of 1996 and entered the entertainment sector, founding Lions Gate Entertainment Corp. in 1997. In 2001 he began buying gold mines as chair of Vancouver-based Endeavour Financial Corp. He bought a $20-million shell company called Wheaton River Minerals Ltd. and built it into a $2.4-billion operation, which later merged with Goldcorp Inc. Today he is the chair of Endeavour Financial, a merchant-banking firm that finances mining companies.


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Finance & Investing | Philanthropy | Social Good

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