The Toronto Star October 25, 1997
Right-wing causes find a rich and ready paymaster
CANADA 'TOO 'LIBERAL,' SO DONNER FAMILY IS
TAKING FOUNDATION DOWN A MORE
CONTROVERSIAL PATH
By Thomas Walkom
FOUR YEARS ago, a small but influential U.S. family decided that Canada
had become simply too liberal.
The Americans were descendants of the late William H. Donner, a
wealthy steel magnate who left the United States 39 years ago in a row
over income taxes and ended up starting the Donner Canadian Foundation.
The foundation is still controlled by Donner's American heirs. With
$134 million in assets and about $3.5 million to distribute annually, it is the
third largest private charitable fund in the country.
Only the J.W. McConnell Family Foundation and Charles Bronfman's
Chastell Foundation - both of Montreal - are bigger.
For the first 43 years of its existence, the Donner foundation was a
typical Canadian charitable fund, donating its money to the kinds of uncon-
troversial mainstream projects that are generally, and often uncritically,
deemed worthy - medical research, prison reform, studies on Canadian
unity.
Now it is known as paymaster to the right, a source of ready cash for
the favourite causes of the new, market conservatism.
A list of grants approved by the foundation over the past four years
reads like a neo-conservative wish list.
* More than $862,000 to the Fraser Institute, the British Columbia
anti-union think tank, to, among other things, study unions.
* $1.6 million to the Energy Probe Research Foundation to start up the
right-of-centre magazine, The Next City, and the market-oriented Con-
sumer Policy Institute.
* $515,000 to the Atlantic Institute for Market Studies to look at issues
such as privatization of the fishery.
* $70,000 to consultant Martin Loney, a vocal critic of employment
equity policies, to look at the impact of equity policies.
* $286,000 to the Society for Academic Freedom and Scholarship to
fight so-called political correctness at Canadian universities.
* $700,000 to the Society for Advancing Educational Research, an
organization interested in establishing charter schools to replace and/or
supplement the public education system.
* $400,000 to the Centre for the Study of State and Market to look at
how best to privatize state institutions such as the Liquor Control Board
of Ontario.
* $185,000 to academics at the University of Toronto to look at ways
to privatize the Canada Pension Plan and Ontario's social housing.
* $325,000 to the Work Research Foundation, a group with a
"Christian perspective" on industrial relations, to promote its opposition
to labour laws requiring the compulsory payment of union dues.
* $190,000 to the National Foundation for Family Research and Edu-
cation, an anti-child care organization based in Alberta.
What spawned the shift, says former foundation president Robert
Couchman, was the ascendancy of the more right-wing, West Coast branch
of the conservative Donner family.
The Donner heirs, all American, hold only four seats on the founda-
tion's nine-member board of directors. But they appoint the remaining five
outside Canadian directors.
By 1993 they already controlled an explicitly right-of-centre sister
fund, the U.S.-based William H. Donner Foundation. Then, with the West
Coast Donners in command, the family decided its Canadian charity should
follow a similar path and enlighten people in this country as to the virtues
of market discipline.
Patrick Luciani, now acting executive director of the foundation,
openly acknowledges the shift.
"We changed emphasis in 1993. It had been a classic Canadian founda-
tion, quite liberal. But the Donner family saw the country going through a
fiscal crisis and they wanted to fund projects that looked at more competi-
tion and less government. . . .
"You don't want to do the same projects over and over again. You
want to make a difference."
Recalcitrant board members were replaced with those more amenable
to a muscular right-of-centre approach. (The Donner board now includes
former Canadian ambassador to Washington Allan Gotlieb and Saturday
Night editor Ken Whyte).
The foundation also parted company with Couchman, former head of
Metro's Family Services Association.
"I left largely because of that turn to the right," says Couchman, now a
consultant based in Yukon. "The foundation was always fairly conserva-
tive. We did fund organizations like the Fraser Institute. But when I left it
was clear the family was interested much more in moving into ideological
issues."
Now, four years later, Donner has become notorious within the small
world of charitable foundations and their recipients.
Writing in the leftish cultural magazine Canadian Forum, journalist
Krishna Rau refers to it as "the new sugar daddy for the right."
Patrick Johnston, president of the Canadian Centre for Philanthropy, an
umbrella organization for charities, chooses his words more carefully.
"In terms of having a very clear ideological position and shifting its
funding toward that position, it is unique in Canada," Johnston says.
But, he adds, the Donner foundation may not stay unique. As govern-
ments get out of the business of funding research into public policy, the
way is open to a more American system, one where wealthy individuals
operating through private foundations determine the country's intellectual
and political direction.
..... snip ........
But in part, Donner's unique position stems from the early recognition
by conservatives that key political struggles must first be fought on the
plane of ideas.
In doing so, the new conservatives took advantage of two elements of
the Canadian landscape - the ease with which politically motivated organi-
zations can qualify for charitable status under the federal Income Tax Act
and the growing army of underemployed academics and others anxious for
research money.
Canada is chock-a-block with dubious charities, from the near-penniless
Red Maple Foundation, publisher of the small left-wing This Magazine, to
the corporate-funded, right-wing Fraser Institute to the country's most elite
private schools. All have won the right from Ottawa to issue tax-deductible
charitable receipts.
In effect, the ability to issue such receipts allows organizations en-
gaged in what is euphemistically known as political and economic educa-
tion to have their activities subsidized by all taxpayers.
It also makes them eligible for money from bodies such as the Donner
foundation that are allowed to fund only registered charities.
All come together in a pact of mutual convenience. The charitable
sponsor, knowing the result it wants, will favour the underemployed aca-
demic or researcher sure to produce such a result. The charity can simply
play the role of middleman, as the University of Toronto does for the So-
ciety for Academic Freedom and Scholarship.
Or the dubious charity can play a more active role by attracting to its
bosom the kinds of researchers and academics sure to produce the results
that will please potential donors.
The results (which, not coincidentally, tend to match the values and
ideology of the sponsor) are then trumpeted to the general public through
media which, by and large, accept uncritically anything a self-styled think
tank produces.
"We aren't a mainstream Canadian foundation in that we do safe proj-
ects," says Luciani. "We fund projects that are a little more controversial."
Luciani is careful to point out that the Donner's three staff members,
who propose potential projects to the foundation's board and who are hired
by that board, are all Canadian. He says the U.S. members of the board rely
on the advice of the outside Canadian directors (who, he acknowledges,
the Americans appoint).
And he notes that Donner has not abandoned entirely more traditional
charitable and academic projects. For example, it is funding a five-year
$440,000 project by the Canadian Institute for Advanced Research to help
troubled teenaged girls in Montreal and has donated $183,000 to the
Clarke Institute of Psychiatry to look at homelessness.
Carleton University is receiving $209,000 to study Canada-Russia rela-
tions and the Toronto Addiction Research Foundation $147,000 to look at
the effect of the Niagara Falls Casino.
Nor must all applicants hew to a hard-right political line. In 1995, for
example, the foundation gave $143,552 to University of Toronto professor
Don Moggridge, an economic historian of Keynesian bent, to write a biog-
raphy of the late Canadian economist Harry Johnson.
Still, there is a definite political flavour to the new Donner foundation -
an emphasis on projects that promote a minimal role for government while
maximizing the importance of free markets, private ownership and eco-
nomic individualism. A look through the foundation's recent annual reports,
for instance, shows these more libertarian projects receive by far the bulk
of Donner's funding.
All of this probably would have been looked at favourably by William
Henry Donner, the man who began the foundation.
In his 1953 obituary, the New York Times describes Donner as a mul-
timillionaire, an associate of the great capitalist barons of early 20th cen-
tury America and a man who, in 1938, abandoned his native land for the
more congenial political climes of Canada and Switzerland "after a dispute
with the federal (U.S.) government over income tax matters."
As Luciani says: "The philosophy of this foundation is to encourage
self-reliance, not look to government to solve problems."
