BC Business
Giver Philanthrocapitalism. Impact Investing. Social enterprise. Is business now in the business of saving the world?
Trevor Linden keeps on giving
Trevor Linden has kept giving back to the community since he retired from the Vancouver Canucks in 2008.
Simply put, he’s an icon. Drafted second overall by the Vancouver Canucks in 1988. Thirty goals in his rookie season, 867 points over the span of a storied career. And perhaps most memorably, in 1994, in a nail-biting Game 7 of the Stanley Cup final against the New York Rangers, Trevor Linden, small-town Alberta kidcumwunderkind hockey star, took the team he’d be associated with for most of the next three decades as close as possible to Lord Stanley’s $50 silver punch bowl. He scored both Vancouver goals in a 32 loss that ignited provincial passions and a pointlessly devastating riot, the latter remembered painfully even today.
But No. 16’s real legacy is twofold. First, as arguably the most beloved and respected player ever to slap on a Canucks jersey. (In recognition of Linden’s contributions, the team retired his sweater in 2008.) But also as someone whose charitable efforts on behalf of the community had a profound, resonant effect.
Through his eponymous foundation, Linden has helped raise hundreds of thousands of dollars for everything from BC Children’s Hospital to, more recently, at-risk youth. “The last several years we’ve been working with kids that need direction and mentorship, and who have maybe aged out of the foster care program,” he explains.
From bedside visits to terminally ill kids during his playing days to his ongoing work with the annual Trevor Linden Community Spirit Scholarship awards, Linden has always leveraged his public profile for social good. He’s just one of scores of British Columbians who give generously of their time or money, or both.
Some, like Army & Navy Stores heiress and CEO Jacqui Cohen, are high-profile; although her annual charity gala is perhaps best known for attracting visiting air-kissers like Tom Jones, over the course of its 29-year existence, Cohen’s Face the World Foundation has tapped her society connections to the tune of $18 million.
Similarly, real estate developer Joseph Segal and his wife, Rosalie, are well known for their generosity: like Cohen, the Segals have also reached out to celebrities, enlisting musicians such as David Foster and cellist Yo-Yo Ma to help raise charity dollars. A $12-million donation by the Segals, which aided in funding the Joseph & Rosalie Segal & Family Health Centre at Vancouver General Hospital, is one of their more notable, and lasting, gifts.
However, some of our most generous citizens fly under the radar. Since being forced to leave Idi Amin’s Uganda in the 1970s and landing in West Vancouver, the Lalji family have given millions of their $3-billion fortune back to the community. One of their recent contributions: a $7-million gift to Lions Gate Hospital.
From Vancouver developer Ryan Beedie, who celebrated his 50th birthday last November by earmarking $50 million for individual education grants, to Port Alberni born Eric Peterson, founder of the Tula Foundation (an organization focusing on preserving the coastal environment, among other causes), whose mission in life is “to die penniless,” an extraordinary number of British Columbians are using their money to promote social good. It’s a time honoured effort whose spirit in North America has its roots in the first families of the Industrial Revolution: storied names that, in some cases, have outlived the fortunes once attached to them.
But the philanthropic landscape is shifting. Using models that have long been associated with private business, today’s do-gooders are reimagining the way giving is, well, given. Driven by a desire to effect change—but also to do more than simply throw money at social problems—the new philanthropists are in the business of doing good works. Call it impact investing, or maybe philanthrocapitalism. Either way, it’s changing how charity is delivered in B.C.
In his eighth-floor office overlooking a busy downtown stretch of Granville Street, Manny Padda leans back in his chair. He’s dressed a notch or two below business casual, in jeans and a funky shirt. A few minutes earlier, Padda administered an impromptu tour of his space, a warren of offices that, like him, is a long way from ostentatious: drained of inflated self-importance, this is a place to get work done.
Born in Duncan in 1983, Padda is a rapid-fire talker who is acknowledged as one of Canada’s most successful angel investors. He started his first multimillion-dollar company, PM Search Partners, a boutique personnel agency specializing in placing high-level executives and board members, almost a decade ago, at age 26.
Today, under the banner of New Avenue Capital, he helms a three-pronged venture: in addition to C-suite recruitment, he provides funding and debt investment to promising new ventures, while also seeking companies that might benefit from impact investing—mainly startups that marry business ideas with a social payout.
Padda’s portfolio contains a smorgasbord of causes: from ChopValue Manufacturing, a Vancouver-headquartered company that recycles chopsticks into furniture and interior finishings, to Ensibuuko, a Uganda-based outfit that “provides cloud-based micro-finance software for community-level financial entities in Africa,” according to its website. With his social impact investments, the upshot is significant: Padda plows 25 percent of his profits back into other projects that are intended to create positive change. “I’m long on people,” he says.
He’s not doing it alone. Padda has worked with everyone from the B.C. Social Venture Partners Foundation, a philanthropic facilitator network, to Ryan Holmes, founder of Vancouver-based social media management firm Hootsuite. (In 2017, Holmes and Padda joined forces in the League of Innovators, a national charity that is essentially a business incubator for young entrepreneurs.) “We’re building things using a business model to make the world a better place,” he says, smiling. “As my kids are growing, I see that there’s a bigger purpose than just me and making capital. I find that it’s easy to put these pieces in place while you’re building a business.”
While impact investing is growing in popularity, so is another related model for blending business principles with social good: the social enterprise, a sort of boots-on-the-ground version of the new philanthropy—except that it’s not really new at all. For years, non-profit organizations like Goodwill Industries International and the Society of Saint Vincent de Paul have resold used clothing and other household items to fund their outreach programs; the YMCA and YWCA are engaged in similar pursuits.
So what exactly is a social enterprise? “For me,” says Marcia Nozick, CEO of EMBERS, a non-profit based in Vancouver’s Downtown Eastside, “a social enterprise is a business whose purpose is to produce good. It has a double bottom line: a social and an economic mission.”
Founded in 2001 by Nozick, a former Winnipeg music instructor and the author of No Place Like Home: Building Sustainable Communities, EMBERS was initially set up as a staffing agency serving the temporary employment needs of some of the city’s more difficult-to-place residents. “The idea came from a community member who said, All of my friends go to these temp companies and they’re exploited. They pay them minimum wage. Then they charge them for boots and they charge them for travel,'” Nozick recalls. “At the end of the day, they’re lucky to get $40.”
Working mostly with construction companies, EMBERS Staffing Solutions provides labour, charging the firms and directly paying their clients a decent wage—workers draw an actual paycheque, not a watered-down per diem. “It was a community solution to a social problem,” Nozick says, “but it was also a business solution for us.”
Although it had been used in the U.S., EMBERS‘s initial model was a first in Canada. It can claim a measurable impact: in 2017, EMBERS Staffing Solutions found temporary work for 1,900 clients, paying out $6.4 million in wages and benefits. (Nozick and her 30-member team also provide venture capital for fledgling east-side entrepreneurs—called the EMBERS Venture Program, it’s helped kick-start roughly 800 small businesses—and are partnering with Corrections Canada to help recently released prisoners move back into the workforce.)
There’s a soft Calvinist underpinning to Nozick’s approach. “I feel that nothing is worth anything unless you sacrifice,” she says. Even if a client is on welfare, EMBERS charges a nominal fee for participating in its Build a Business course, for example. “Work itself is a transformative process,” Nozick asserts. “I think working is really important for people, and not just for the income. It gives a sense of purpose. It builds self-esteem, competency.” Her clients need “skin in the game,” she says. So does Nozick: EMBERS rolls all profits back into its programs.
Not everyone embraces philanthrocapitalism. Critics contend that quantifying social good is difficult, maybe impossible; even trying to assess a measurable social impact can be a problem. Another pitfall: off-loading social service delivery onto the private sector absolves government of its historical responsibility—an attitude that some feel underlies a stark difference in giving patterns between Americans and Canadians.
By now, it’s a cliché in return for paying higher tax rates, Canadians expect government to provide a robust social safety net; our southern neighbours don’t necessarily have those expectations. Whatever the underlying reasoning, Americans out-donate Canadians two to one as a percentage of gross domestic product.
For Canada’s roughly 86,000 registered charities, this is hardly cause for celebration. According to 30 Years of Giving in Canada, a joint 2018 report issued by the Rideau Hall Foundation and Imagine Canada, a nationwide advocacy group for charities, the outlook is bleaker than ever before. Donation rates are falling, and the newest generation is less likely to give to charity.
But when it comes to those in their 20s and early 30s, that may not tell the whole story. “I see a very engaged generation,” says Montreal-based Hilary Pearson, president of Philanthropic Foundations Canada, a national group representing mainly family foundations. “They’re socially engaged, they’re participating, they’re loyal to organizations—they’re doing things,” she says. “The fact is, millennials don’t have as much money as 65- to 70-year-olds.
“Among the findings coming out of a recent survey by non-profit Vancouver-based polling firm the Angus Reid Institute was that people weren’t strategically planning their charity contributions. “Basically, people’s intentional giving muscle has gone slack,” says Shachi Kurl, the institute’s executive director. “People are giving, but they’re giving in a very unintentional way; they give in a prompted way.” Instead of being deliberate with donations, there’s often a spontaneous element to our charitable contributions—a cash register donation, for example.
What to do? Some, like Vancouver-based CHIMP (short for “charitable impact”), a public foundation that co-funded the Angus Reid study, may offer a solution. Founded by former corporate finance worker JohnBromley (whose father, Blake Bromley, is a well-known charity lawyer), CHIMP is an online donation platform providing donor-advised funds (DAFs), a charitable investment vehicle initially developed as an alternative for those who wanted to actively give but who didn’t have the means to, say, set up a costly private foundation. It’s working: since its start in 2014, some 110,000 donors have used CHIMP to contribute more than $400 million to charity.
CHIMP‘s donor-advised funds are accessed through an online platform. In return for their contributions, donors receive an immediate tax receipt—even though they have the luxury of deciding where to apply the funds at a later date, making for more considered choices, and donors who are therefore more engaged. (The “basic” CHIMP account, which doesn’t pay out interest, is free to set up and use. The charitable investment account tier—donations are actively managed and invested—charges fees.)
But donor-advised funds also have their critics.Because tax receipts are immediately issued—but the actual funds can be distributed later—DAFs (and private foundations) can potentially create a funding logjam, where money destined for charity remains invested, but outside of any charity. In Canada, unlike in the U.S., there’s a disbursement requirement, but it’s low: like all charities, DAFs are only obliged to spend 3.5 percent of their war chest annually.
It’s called “warehousing wealth.”Bromley admits that it’s a legitimate concern—but. “My personal view and experience is that donors who are engaged, donors who are developed, who care about what they’re doing and are doing it according to a plan, do not warehouse wealth,” he says. “The ones who are more likely to warehouse wealth are the ones that are going, Oh, man, I just sold my company for a lot of money, and this is a good way to get a tax credit.”
Anchoring Main and Hastings streets in Vancouver, the Carnegie Community Centre, like a dignified society matron who got off at the wrong bus stop, always seems a little out of place. The 1903 Romanesque Revival structure, one of roughly 2,500 libraries funded by industrialist Andrew Carnegie, would become both a landmark and a metaphor: today the Carnegie is ground zero for a community that could certainly use a charitable hand.
A gift from an earlier, gilded age, the Carnegie represents the transformative power of philanthropy, a process that continues today. Chinese artist Yue Minjun’s A-maze-ing Laughter, the “laughing men” sculpture overlooking English Bay, might never have found a permanent home if not for the intervention of Lululemon Athletica founder Dennis (Chip) Wilson and his wife, Shannon, whose $1.5-million donation to the Vancouver Board of Parks and Recreation in 2012 ensured a permanent home for a beloved piece of public art.
Besides altering the built environment, philanthropy plays a role in preserving the natural world. In B.C., organizations like Greenpeace, the Western Canadian Wilderness Committee, Tides Canada and the David Suzuki Foundation transcend their good works with a value that is almost existential. To that end, contemporary benefactors are championing environmental concerns, using methods that in some cases bear a remarkable resemblance to turn-of-last century philanthropy.
Since landing in the East Kootenay town of Invermere back in 1992 at the age of 23, Toronto native Elana Rosenfeld has gone from running a restaurant and café to, in 1996, co-founding Kicking Horse Coffee Co. In 2017, she got an offer she couldn’t refuse and sold 80 percent of the company to Lavazza, the Italian-based coffee multinational. (She maintains her position as CEO.)
Instead of hoarding her spoils, Rosenfeld, whose love of nature drew her to the wilds of B.C. in the first place, cut a personal cheque for $3.2 million to the Nature Conservancy of Canada. Part of an ongoing philanthropic effort by Rosenfeld and 130-employee Kicking Horse Coffee, the money will help fund the acquisition of the Darkwoods Conservation Area in B.C.’s Selkirk Mountains, protecting the area in perpetuity.
It wasn’t just about doing good, Rosenfeld says. There was also a business case to be made—sort of. “As you choose your philanthropic partnerships, you’re making a statement around your values,” she maintains. “What does the business stand for? What does the brand stand for? Who are they going partner with? What did they work with?”
Still, it’s not all about brand buoyancy. “The fun piece of it is uniting goodness with prosperity,” adds Rosenfeld. “Not just financially. The more good you can do, the more good you create; more good you create, the more good you can do. It’s just like this cyclical thing that is creating a lot of good on many different levels.”
Trevor Linden agrees: “You do it because you want to make a difference to other peoples’ lives. But at the end of the day, you realize that you probably get as much out of it personally.”
It’s a sentiment that may have been shared by the turn-of-last-century benefactors. But there is a difference. For so-called robber barons Andrew Carnegie and John Rockefeller, their business practices were predatory, verging on brutal—by burying the competition and overseeing monopolies (and then exploiting those who had the misfortune to work for them), they created misery as a byproduct of wealth. In a sense, philanthropy was their atonement for lives spent actively opposing social good.
For many of the new philanthropists, things couldn’t be any more different. “We’re building things using a business model to make the world a better place going forward,” notes entrepreneur Manny Padda, who, at the behest of his parents, began a lifetime of giving back by volunteering when he was 16 years old.
He doesn’t see this as an isolated thing, not among his demographic. It may be true that, compared to previous generations, they’re donating less to charity. But they may be doing more good. “The new generation, their belief is that you can make money and do good at the same time,” Padda says. One can hope.