Thursday, December 5, 2013

CKNW charity boosts corporate profits - REPLAY from 2012

The article following this update was published Nov. 25, 2011 (the first chart is revised with 2012 figures). In 2012, I reviewed the most recent Registered Charity Information Return filed by the CKNW Orphans' Fund and my arguments of a year ago stand. In fact, the administrative burden placed on the CKNW charity has grown worse as demonstrated by these charts.

Corus Radio is not any more pretending that it pays all of the administrative costs of the CKNW Orphans' Fund. It used to make that claim as demonstrated in this quote from a businesswoman who is also a director of the charity:
New Westminster The Record, December 20, 2006
" 'I am very pleased,' said Susan Cartwright-Coates. 'It shows all that chipping away, year after year, can make a difference.'

Cartwright-Coates said there's a good reason why the business donates proceeds from the Canned Critters to the CKNW Orphans Fund.

" 'Every cent goes to the children,' she said. "There is no administration costs."
However, CKNW has not gone out of its way to be honest with donors. Its current promotion is less than forthright, failing to disclose the growing administrative burden faced by the charity:

----------------- The following was first published November 25, 2011 -----------------

Added: A 5-year recap of financial reports to CRA: 2006, 2007, 2008, 2009 and 2010

In early December, Corus Radio holds its annual pledge day, raising money for the CKNW Orphans' Fund, a charity started when Bill Rea founded the station in 1944. A Northern Insights reader suggested I look at how financial management of the Orphans' Fund had altered in recent years, changes made with little notice to the public.

Through the years, CKNW provided administration for the charity without cost, proudly declaring that every dollar donated to the Orphans' Fund enhanced the lives of children. Others in the community helped because of the policy while the radio station gained only from goodwill generated in the community. Here is one example, another and another from a home products dealer who advertises:
"Nineteen years ago we started a tradition of making a charitable donation to the CKNW Orphan’s Fund. We chose this charity because CKNW absorbs the administration costs, so 100% of the funds donated go to help those in need."
The Corus policy quietly ended a few years ago and the Orphans' Fund now pays overhead, much of it directly to NW, of more than $200,000 a year, according to annual T3010 information returns available from CRA.

The change derives, I think, from attitudes in boardrooms of today's large corporations. The Vancouver radio station charity is small by itself but worth exploring as an example of modern business guided only by a desire to maximize profit. This attitude is an outgrowth of callous neo-liberalism, encouraged by Fraser Institute hero Milton Friedman who wrote that businessmen paying attention to social responsibilities such as eliminating discrimination or avoiding pollution are preaching "pure and unadulterated socialism."

Shirley Stocker, who managed the Orphan's Fund until her retirement, provided information in response to my inquiries. While the charity is membership based, it is not open to just anyone. Nor does it publish annual reports or make financial statements available to outsiders. According to Ms. Stocker,
"Members are admitted on the invitation of the President of the Society and the consent of not less than three firths (sic) of the members."
How the charity spends its funds and who it invites to join is not public information. That does not suggest improprieties; Ms. Stocker has been highly respected in Vancouver throughout her broadcasting career. However, I think Corus should not be the least bit proud of withdrawing its administrative support. Over $1-million has been diverted from children's programs, an unhappy situation in this province where child poverty, already the worst in Canada, continues to grow.

Corus Entertainment's aggrandizing press releases do not disclose the company is now pocketing money that used to go to the charity bearing the station's name. In fact, their promotional material would lead you to think the opposite.

By the way, when Corus stopped providing free administration to the CKNW Orphans' Fund, its annual revenues were $667-million. In fiscal 2011, during supposedly tough economic times, revenues had grown to $825-million, with income before taxes of $203-million, which is a thousand times the extra burden placed on the Orphans Fund. Good for the billionaire Shaw family, not so good for needy children.

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  1. My God..........well not really as most charities are nothing more than organizations that are on the take.

    Except for the Sally Ann or the Gospel Mission, most charitable organizations have well funded pay schemes and nepotism is rife.

    I once volunteered for a charitable organization and it left a very bad taste in my mouth. Laws (especially liquor % gambling laws) were routinely broken; lucrative contracts were given to insides who routinely padded their costs; lavish stipends were paid to the main organizers (the Chairperson's daughter was paid $200 a day to sell raffle tickets; etc.

    The semiannual event grossed well over $100K, yet less than $10K went to the charity.

    I soon left the organization. Oh, there is a lot more I can say but I can't.

    The shady '98 is just following how things are now done in BC as charities are fast becoming cheap yet well orchestrated ponzi schemes.

  2. I wonder if this news item will make it to CKNW News.

  3. I agree with Evil Eye.....the Salvation Army and Union Gospel Mission can be relied upon to do good works with monies they raise. Also the Mennonite Brethren run excellent programs world wide.

  4. What about Community living, taking bonuses for cheating these people's services, which is funded by our tax dollars?

    The entire country is a vast pit of corruption. We are now living in a dictatorship regime. Canadians can save up to 50%, by shopping in the U.S. You can save mega bucks, by gassing up in the U.S. as well. Canada has been called, the rip off country.

    BC is the most corrupt province in Canada. Price gouging is rampant in BC. This is the worst province to live in, if you aren't. wealthy. BC has the worst poverty stricken citizens, in all of Canada.

    I know citizens who have stopped donating to charity, because of the corruption and thieving.

    My friends and I, adopted a family of five. We provide the family with x-mas dinner with all the trimmings, presents, baked goodies and all. All through the year, the kids get birthday presents, and a cake. An Easter ham, and Easter eggs for the kids. Valentines day presents and goodies. Thanksgiving dinner, and for every occasion. That's the only way you can be sure, your money isn't stolen.

  5. There are worthwhile charities but they are not usually the ones that advertise heavily. I once observed an overseas aid agency editing and preparing a half-hour "infomercial" and they were working hard to include as many "money shots" as possible. Doe-eyed starving children with insects on their faces were the favourites. I was appalled at the insensitivity of the people doing the video.

    Before donating to any charity, visit the CRA Charities website and look at their financial information. It is very basic and even unreliable (it is not vetted by CRA) but you can see indicators that provide information.

  6. This is pretty bad news for me Norman. Other than the Sally Anne Bubble, I donate to one charity only. I have done so fro more than 50 years. And thet is the NW orphans fund. One of the reasons I chose this one was that ALL my money went to the fund. Now I feel compelled to find a charity, hopefully for the orphans, that will put my money to good use. Thanks for the advise on the CRA Charities. I will begin there right now.

  7. This below appears on the CKNW Orphans Fund Website.

    "And because radio station CKNW absorbs all promotional and administrative costs, we can guarantee that 100% of every dollar raised goes straight back into the community, to those who need our help."

    This below appears on the Canada Revenue Website as reported by the organization for 2010

    Total expenditures on charitable programs $407,777
    Total expenditures on management and administration $ 174,064
    Total expenditures on fundraising $ 58,870
    Total amount of gifts made to all qualified donees $ 514,727
    Total expenditures $ 1,155,438
    Total revenue $ 1,618,858
    What...CKNW lying to everybody again?

  8. thanks paisley. You said it more clearly than I did. I was trying to limit damage to the charity because they've done lots of good work over the years. It is in recent years that Corus has squeezed the charity by sliding ever more admin costs onto them. I wonder what rent is being charged for a single desk at 700 West Georgia Street and who exactly was paid for expenses like $58,870 fundraising. Was that air time on NW?

  9. Interesting that you posted this today as I have always wondered how some of these charities operate. I have suspected that Safeway must have some profit motive on their charitable work. Wondered where all the till donations went and I can't help thinking that since non-receipted donations were $1.682 million last year that they might be claiming this as their own charitable donation but I see on the same year Safeway foundation claimed $812,000 for advertising and promotion with total revenue being $1.910 million for that same year. I just can't imagine corporations doing things out of the goodness of their hearts considering the greed factor.

  10. I was made cynical about charities decades ago when, as a young auditor, I was assigned to a rehab foundation that had long raised money for polio research. After the disease was largely defeated by vaccine, the charity carried on raising and accumulating money. Fighting disease and helping victims was no longer their business. Raising money was their work.

    Similarly, I did audit work at the BC Lions Society for Crippled Children when surplus funds were used to fund mortgages on real estate speculations conducted by a senior officer.

    We should beware though about lumping the good with the bad. There are many good charities, you simply need to investigate carefully before you write a check.

    BTW, I suggest you look at for the article by Andrew Leonard, Are U.S. corporations Good Citizens?

  11. Steel Gate said...
    I wonder if this news item will make it to CKNW News.

    I game here from something posted on twitter. i imagine someone at CKNW also saw it. Let's see if there is a response to Mr Farrell ...

  12. I sent it to NW early this morning, after it was published. I'm not expecting a response although I'd love to hear one that said Corus is going to pick up all the future administration costs of the Orphans' Fund. In other words, revert to the situation they led people to believe was operative.

  13. I was recently interested in volunteering for a charity that ostensibly provided aid to orphans and needy families in Africa, so I sent an email of inquiry. The reply shocked me. The charity required a commitment of one month minimum; I was responsible for the cost of travel there and back, and all other living expenses once I got there; and they wanted me to pay them for the privilege of volunteering there. (I thought the least they could do was fund my room and board while I was there giving them my time and sincere effort.)
    When I read the reply I sent a second email asking how much of the money they collected was spent on administration and how much on helping families. Of course their reply was that the money was spent responsibly, but who's to know?
    Yes, count me as another cynic.

  14. It is sad to see major corporations profit on the backs of the needy and poor and that Bill Boring condones this charade is another reflection of his lack of moral fibre.

    This reflects poorly on the shaw family, where lust for money, seems their only goal in life - what a sad, sad way to live, stealing monies from those who most need it.

    This is only the tip of the iceberg and that the provincial government condones private charities raping the proceeds for their personal profit is detestable.

    I have become aware of another charitable organization where the chair person collects well over $75 K annually, yet she is from one of the wealthiest families south of the Fraser and wants for none.

    I call this blood money.

    Mr. Farrel, I have also sent your post to many of the "Eyes" friends as I think it one of the most important done. I now know of three people who have read your post are now stopping donating to the Orphan's Fund and directed those monies elsewhere.

    BC's Charities Act and how money is collected and disbursed needs a complete overhaul.

    1. Evil Eye, the corruption begins with the legal industry - that's who writes the legislation and oversees the regulation of the laws governing societies and charities. Anon Nov 24 at 10:00 AM is right. Canada is a cesspool of corruption, and BC is the worst province in that regard. You're simply asking for the fox to fix the henhouse rules. Why would they overhaul what they've created, it's doing exactly what they want.

  15. I think claiming Corus Entertainment "profits" from the Orphans Fund is a stretch too far. However what is entirely believable to me as a former employee, is that they have gone Scrooge on the Orphans Fund in recent years by no longer absorbing the admin costs. This fits the pattern of thinking at Toronto HQ. "As cheap as possible".
    I would venture a guess the talk hosts apeaking for the Orphans Fund on Pledge Day are completely unaware of any change.
    The headline shouldn't be that Corus profits from this, but rather "Profitable Company Cheaps out on Storied Charity".
    You can bet neither of the Shaw owned media in town (CKNW & Global BC) will touch this one unless someone else (CTV, Vancouver Sun, or CBC) does it first.

  16. I thought about your first point before putting that title up. The fact is, Corus started shifting costs onto the charity for one purpose, to increase their own profits.

    They are entitled to do so but nowhere could I find any public notice of the change. When I discovered the policy had been revised, it was a great surprise. I've learned since this article was published that it surprises many others as well. Corus applied this policy change beyond the CKNW charity too.

  17. Since Shaw also owns Global TV does it also earn fees from the Children's Hospital Charity?

  18. Toby, CKNW Orphans' Fund is quite unique, not I think comparable to BC Children's Hospital Foundation, since Corus long claimed that the O.F. operated with Corus paying administration. Even people employed in the radio business have been shocked to learn that over $1 million of contributions have been diverted from charitable work to administration. Insiders knew the policy had changed but it was not publicized to any extent. It was the Corus' hypocrisy that led me to this report.

    The hospital foundations are another, far larger, can of worms. Tens of millions are going into fundraising efforts and hundreds of millions in assets are "not used for charitable activities or administration."

    Hospital charities should be carefully examined and if we had a vital press, that would occur. It is too big a job for an independent blogger to investigate fully. I have been trying to research particular elements related to hospital lotteries. There are a few professional fundraising organizations growing rich while the charities carry the primary financial risks.

  19. Over $1.2 million...

    That's the unofficial total from Friday's 34th annual CKNW Orphans' Fund Pledge Day -- a new record.

    So....based on earlier Financial much of that actually gets to Orphans?

  20. Compared to other children's charities, the Orphans' Fund puts a reasonably high proportion of donations toward its charitable purposes. My criticism of Corus is that it changed the policy on administration costs with little notice to the public. They were happy to have the idea linger that "every penny went to the kids." That is dishonest and unethical.

    Since the policy change, over $1 million has been diverted from charitable work to pay for services previously provided by Corus and its corporate predecessors. Additionally, I think the closed "invitation only" membership is inappropriate. It means the charity management perpetuates itself without challenge from anyone.

    Additionally, they refuse to provide detail to outsiders about how the millions in assets are invested or about how and to whom the money is distributed. Why do they worry about being transparent? Often, when people keep information from the public, it is because revealing it would be embarrassing.

  21. When it comes to most charities, I think most people would think twice about giving to them when they realize how much of their donation goes to overhead. Charities such as the United Way and the Salvation Army spend upwards of 20% on administration costs!!!

    For Corus/Shaw to benefit financially from their listeners generousity is shameful.


    Here is some of the " good " work done by the salvation army

  23. I checked the numbers myself on the Charities website. One additional note you might have added was that in 2011, the fund`s revenue was DOWN by 21%.

    The amount they paid out for salaries and consulting was UP by 51% in the same year.

    At that rate of gouging, there will be no Orphans`Fund in a very short time.

    There really is no honour at that place anymore.



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