Canadian Foundations | The Canadian Encyclopedia


Canadian Foundations

Foundations are "non-governmental, non-profit organizations with funds (usually from a single source, either an individual, a family, or a corporation) and program managed by (their) own trustees or directors, established to maintain or aid social, educational, charitable, religious, or other activities serving the common welfare through the making of Grants".

Canadian Foundations

Foundations are "non-governmental, non-profit organizations with funds (usually from a single source, either an individual, a family, or a corporation) and program managed by (their) own trustees or directors, established to maintain or aid social, educational, charitable, religious, or other activities serving the common welfare through the making of Grants" (the late F. Emerson Andrews, first president, The Foundation Centre, New York Center). Dwight MacDonald of the Ford Foundation coined a somewhat lighter definition: "A body of money completely surrounded by people who want some."

Generally, a foundation does not carry out a direct charitable activity but rather gives grants to operating CHARITIES for this purpose. Foundations are highly regulated, especially regarding the disbursement requirements to qualified donees. Money donated to a foundation becomes the property of the foundation and cannot be used for the personal benefit of the benefactor.

The Modern Foundation

Foundations have been known since the time of Aristotle; however, only since the nineteenth and twentieth centuries have they taken on particular importance. The most significant change may be that major foundations have begun to address the problems confronting humankind.

US-based foundations have often been recognized as forerunners seeking to confront the problems of modern society. Although the Rockefeller, Carnegie and Ford Foundations are often cited in this context, the fact is that there are foundations elsewhere in the world that began this work at a much earlier date.

As James Joseph, former president of the Washington, DC, based Council on Foundations, notes in The Charitable Impulse: "It would be a mistake to assume that the idea of civic duty has had national or cultural boundaries." He goes on to point out that "[a] new industrial elite - hard nosed but benevolent capitalists - emerged in the late nineteenth and early twentieth centuries. Set in widely different cultures and with few obvious similarities except success in business, they began to parcel out their fortunes in a voluntary redistribution of their wealth. " Examples of industrialists involved in this "voluntary redistribution of wealth" included Lord Nuffield in England; Calouste Gulbenkian, who distributed a fortune in support of Armenian communities around the world; Jamsetji Tata in India, whose family was later described as the "Rockefellers of Asia"; and Eugenio Mendoza in Argentina.

Past and Present Canadian Foundation Benefactors

The downsizing of the roles of federal and provincial governments has focused more attention on philanthropic giving by individuals, corporations and foundations. It seems inevitable that in this environment Canadian foundations have found themselves increasingly in the spotlight.

In Canada a number of corporate leaders and families are identified with the foundations they established: J.W. MCCONNELL (St. Lawrence Sugar, Montréal Star), R. Samuel MCLAUGHLIN (General Motors of Canada), Samuel Bronfman (Distiller), Lord BEAVERBROOK (industrialist and press magnate), Kahanoff (Voyager Petroleum), Max BELL (Calgary businessman), John EATON (department store proprietor), John MOLSON (brewer) and Willard WESTON (food manufacturer) are a few of the more prominent families that have established philanthropic foundations. Among current corporate leaders are Edward Bronfman (investments), Peter Munk (mining) and Charles Bronfman (distiller) (see BRONFMAN FAMILY).

The Number and Financial Assets of Canadian Foundations

The 15th edition of the Canadian Directory to Foundations & Grants (Canadian Centre for Philanthropy, 2001) identified 1 372 foundations with assets just under $7.8 billion and grants to charitable organizations totalling $810 million. The geographic distribution of funds showed Western Canada had 29% of the population and received 27% of grant money; Ontario with 37% of the population received 43.7%; Québec had 25% of the population and received 28.3%; and Atlantic Canada possessed 9% of the population and received 1.1% of the grant money.

In 2003 the Centre reported that the distribution of the number of foundations across Canada also reflected the population of the region:

• 68% Central Canada (QC, ON)

• 23.1% Western provinces (AB, BC)

• 5.6% Prairie provinces (MB, SK)

• 3.3% Atlantic provinces and Territories (NL, PEI, NS, NB, YK, NWT, NU)

Canada's Major Foundations

The distribution of wealth is generally concentrated within a small percentage of Canada's foundations. In 2001, the top 100 foundations by assets accounted for 78% of the wealth of all the foundations and 55% of the grant funds. Collectively these foundations reported assets of $6 billion and of the remaining 1 272 foundations, 22% held 1.6 billion. Interestingly, a 1995 study by the Canadian Centre for Philanthropy reported that of the foundations it tracked, 80% of the grants were for less than $5000.

According to the Canadian Centre for Philanthropy, by 2003 there were over 2290 active grant-making foundations in Canada and the 10 largest foundations included "public foundations." Public foundations receive the majority of their funds from a wide variety of donors rather than a single individual or family.

Types of Foundations

Family Foundations
Individuals or families have established many of Canada's foundations, and in 2003 86% of Canada's foundations were created by families. Although the majority of family foundations had assets under $10 million, 11 of the top 20 foundations by assets were family or private foundations. According to the Canadian Centre for Philanthropy, the six largest family foundations (by grants) made grants totalling over $91 million (2002).

Formed in 1937, the J.W. McConnell Family Foundation, with assets of $527 million (1999), is one of Canada's largest family foundations, second only to the Vancouver Foundation in terms of its financial assets. Another example of a family foundation is the Richard Ivey Foundation. Established in 1947 in London, Ontario, by the late Richard G. Ivey and his son Richard M. Ivey, the third generation of the family is now active in the affairs of the foundation. In 1988 the assets were $15.9 million and by 2000 they were in excess of $74.7 million through a combination of investment growth and contributions by the family. The foundation has made grants totalling more than $57 million (2003).

The Chagnon Foundation Trust was established in 1988 to support the philanthropic activities of Le Groupe Vidéotron Ltée, which was owned by the Chagnon family. In 2000, after the sale of Vidéotron, the trust was restructured and became the Lucie and André Chagnon Foundation. The Chagnon family contributed $1.4 billion to the foundation to support projects that focused on early childhood development. Today, the private foundation partners with the Québec government to assist programs that improve the health of children in Québec. In 2011 the Foundation's annual endowment was $54 million, which, in partnership with the Québec government, funded three provincial projects that focus on children's health and wellbeing.

Areas of Interest of Foundations

The growth in the number of charitable organizations, the fact that computerization has facilitated the preparation of proposals to foundations, and the government cutbacks noted earlier are some of the factors that have resulted in foundations receiving a growing number of requests for funds. A consequence of this has been that foundations have sought to rationalize their granting policies. There has been a gradual move to more focused grant programs, particularly among the staffed foundations. However, there are still many smaller foundations whose giving is dictated largely by the interests of their benefactors. More focused grant programs tend to follow after the death of the benefactor, particularly in the case of the larger foundations.

Important Contributors to Canadian Society

Health, medicine, education, arts and culture, science, the social services, religion and other areas vital to society have benefited from the support of Canadian foundations. The changing pattern of government support seems likely to increase the importance and profile of Canadian Foundations. The hope is that other Canadians become involved in establishing and supporting philanthropic foundations either through community, family or other types of foundations. Richard M. Ivey, Honorary Chairman of the Richard Ivey Foundation, wrote, "The opportunity to preserve what is good on earth, to support what feeds the soul or stimulates the intellect, to encourage a talent or save an endangered species or keep alive the dreams and aspirations of others is not only a privilege but a sacred responsibility. For foundations, that responsibility is the source of incalculable satisfaction."

Community Foundations

Established in the communities whose names they bear, these foundations usually receive their funds from the bequests of their citizens. In 1921 William F. Alloway gave $100 000 to establish the Winnipeg Foundation, Canada's oldest community foundation. Alloway described why individuals like him make such gifts: "I owe everything to the community. I feel that it should receive some benefit from what I have been able to accumulate." In 2001 Randall Moffat of MOFFAT COMMUNICATIONS provided The Winnipeg Foundation with $100 million, the largest gift (to date) ever given to a Canadian community foundation. By the end of 2001 the Winnipeg Foundation had granted more than $100 million.

In the past, many community foundations achieved only modest growth, with the notable exceptions of the Vancouver Foundation, established in 1943, and the Winnipeg Foundation whose accumulated assets exceeded $608 million and $564 million, respectively. In 2003 the Vancouver Foundation was Canada's largest community foundation and the fifth largest in North America. Established in 1955, the Calgary Foundation was Alberta's first community foundation; the foundation reported assets of $3.7 million in 1990 and had grown to $168 million by 2003. The Edmonton Community Foundation, founded in 1989, has shown fast growth and reported assets in excess of $144.4 million (2003). The South Saskatchewan Community Foundation was established in Regina in 1969 and was the first foundation of its kind in Saskatchewan. Since incorporating with $60 000 in assets the foundation has grown to more than $5 million in 2003.

Until recently it appeared that community foundations were destined to be a phenomenon of Western Canada: efforts to establish community foundations east of the Manitoba/Ontario border met with little success. This too has changed. There are sizeable foundations in Hamilton ($74 million), Kitchener-Waterloo ($35 million) and Toronto ($50 million). The T.R Meighen Foundation in New Brunswick and the Thomas Sill Foundation of Manitoba combined a pool of funds to encourage the development of community foundations in their respective provinces. In 1990 the top 10 community foundations reported assets of $367.5 million and grants totalling $28.4 million, and in 2000 their assets were reported as $1 159 billion with grants of $54 million.

According to the Community Foundations of Canada, the number of community foundations has more than quadrupled over the past decade - from 32 in 1990 to almost 140 in 2004. These foundations have granted more than $95 million to local charitable causes and hold more than $1.8 billion in assets.

Corporate Foundations

Public opinion polls regarding attitudes toward companies have found that individuals are more likely to purchase products and services from generous rather than non-generous corporations. A 1998 national survey by the Canadian Centre for Philanthropy through its IMAGINE program found that 61% of Canadians said that corporations have a broad responsibility to contribute to society through charitable donations.

In part this has led some companies to pay more attention to charitable donations. Research in the 1970s found that only a handful of companies were giving 1% or more of their pre-tax income to charities, but by 2001 over 550 companies had joined the list of Caring Companies through the IMAGINE program. The Canadian Centre for Philanthropy established the IMAGINE program in 1988 to encourage and recognize giving and volunteering. The program recognizes companies that have committed a minimum of 1% of their pre-tax profits to charitable activity. By 1999, corporate donations as a percentage of corporate pre-tax profits were 0.93%. Since IMAGINE'S launch in 1988, corporate donations increased from $64,891,000 to more than $1.2 billion in 2001. To bring more attention and effective management to donations there has been increased interest from the business community in corporate foundations. Many companies have begun to realize that the establishment of a well-managed foundation can lead to greater public recognition for their giving. Advertisements for the Canadian Tire Foundation for Families are an example of a company combining public relations and philanthropy.

For many years corporations generally separated their philanthropic giving from their core business activity. This has changed significantly in recent years. There has been a trend for companies to support charitable organizations that align more closely with their business and strategic plans. PETRO-CANADA, for example, supports environmental organizations and BELL CANADA supports the Kids Help Phone. The Hudson's Bay History Foundation (see HUDSON'S BAY COMPANY) was established to advance the knowledge of, and inspire interest in, Canadian history. Donating to projects related to Hudson's Bay history is among its granting priorities; however, it should be noted that there is also the Hudson's Bay Charitable Foundation, which gives to general charitable purposes.

In addition, companies are using their marketing budgets to align with charities and develop partnerships. Chapters, for example, provides annual grants to the literacy program of Frontier College, and has donated books to the program, encouraged customers of Chapters and related stores to be literacy volunteers, and raised funds through in-store promotions and special events.

In 2000 the National Survey of Giving, Volunteering and Participating reported that 67% of Canada's 6.5 million volunteers were employed, and of those volunteers almost one half (47%) had an employer that provided the employees with some type of support for their volunteer work. In 1990 the top 10 corporate foundations had assets of $35 million and granted $2.2 million. The 2001 Directory contained entries on 59 Canadian corporate foundations; the largest 10 reported assets of $520 million with $61 million awarded in grants.

Special Interest Foundations

Innovative approaches to establishing foundations have been taken in the medical and legal fields. When provincial governments replaced private medical insurance plans in Ontario, Manitoba and Alberta, doctors determined that the reserve funds that remained in the plans would be used to establish foundations instead of being distributed to doctors. The foundations now devote their funds to the medical field.

For example, the Physicians' Services Incorporated Foundation (Ontario) was established when doctors in the plan decided that the $16 million that was in their reserve following termination of the health plan would be used to establish the Foundation. Foundation assets in 1999 were $78 million and almost $3.6 million in grants were provided during that year. The real estate industry has established foundations in several provinces including British Columbia, Alberta and Ontario. The source of funds is the interest that accumulates from trust accounts that real estate agents are required to establish for trades in real estate; the earned interest is given to the foundations. In 1999 the British Columbia Real Estate Foundation gave grants totalling $2 million. The Ontario trucking industry has established the Ontario Trucking Association Education Foundation Inc. through funds from trucking companies who forgo Christmas gifts to customers, and the funds are provided as scholarships for higher education.

Service Club Foundations

Canada has a long tradition of service clubs. Over the years these clubs have collectively given millions of dollars to support the programs and services offered by charitable organizations. In 2001 the Directory identified 16 service clubs that established their own charitable foundations as a vehicle for raising and granting funds. One example is the Scottish Rite, established in 1998. This Charitable Foundation had $7.6 million in assets and granted $500 000 to the Canadian Association for Community Living. The Lions Foundation of Canada with assets of $6.7 million has granted almost $458 000. The Masons, Rotary Clubs and Kiwanis also have foundations (see FREEMASONRY). The Directory reported that in 2001 the top 10 service clubs, with assets totalling some $31.1 million, gave just under $2 million in grants.

Government Foundations

While not meeting Andrews' definition of a foundation, but because they have taken on many of the other characteristics of a foundation such as having lay volunteer boards and granting programs, government foundations should be noted. The usual source of their funds is the sale of LOTTERY tickets at the provincial level.

The Ontario Trillium Foundation receives $100 million annually from government funding of Ontario's charity casinos. In 2000, it gave $84.5 million toward social services, environment, arts and culture, sports and recreation programs. The same year the Alberta Foundation for the Arts gave grants totalling over $8.2 million to individual performing, visual, and literary artists, filmmakers and arts organizations.

Staffed Foundations

A study of foundation activities quickly identifies that staffed foundations generally have a different pattern of giving than non-staffed foundations. Staffed foundations often have defined fields of interest to which they allocate sizable grants, often for periods of three or more years. Their granting programs also tend to have a national, or at least a provincial focus, rather than being confined to a more modest geographic area. Many of them produce regular reports describing their areas of interest and examples of past grants. For this reason they also have a higher profile than their non-staffed counterparts and receive more requests for funds. There is also a greater emphasis on receiving progress reports and measurable results from the recipients of their funds. Information sharing between foundation staff and with their corporate counterparts is also increasing.

Further Reading