The Plague-Ground – When does a donor tour become a junket?

There are endless tentacles to the WE-Trudeau-Morneau inquiry. One that remains curiously unprobed is this:

Should donors to international charities pay their travel expenses or should the charity pay them?

The obvious answer is, the donor pays. Always. Of course!….. which I wrote about last week.

But it seems I was wrong.

Last Wednesday, just hours after Bill Morneau wrote his cheque for $41,366 to pay the remaining expenses (he had already paid $52,000)  of his family’s trips to WE-funded projects in Kenya and Ecuador, the Kielburgers issued a press release.

This is how it began:

“From time to time, on a complimentary basis, WE Charity invites potential supporters to see the impact of its global projects: current and potential major funders, celebrity ambassadors, philanthropists, and those doing due diligence on behalf of companies or possible future funders. Many international charities and humanitarian agencies operate in a similar manner.” 

Who’s right here? Do many charities pay the travel costs for their donors?

Since I’ve been confidently wrong before, I called a couple of friends who head up international humanitarian agencies and asked them. One of them has worked in the field for 20+ years in Africa, Asia and northern Canada. The other has chaired a major charity which operates where even the most intrepid donor might hesitate to go.

When I asked if their organizations ever invite donors “on a complimentary basis,” their response was basically: “Are you kidding?”

They acknowledge that these tours can ‘work’ because donors see first-hand how much good their generosity creates. But because hosting donors can be so disruptive to their day-to-day operations in some of the most isolated and dangerous places in the world, they ask those donors to pay their travel costs, including room and board, as well as the disruption costs.

They also said their organizations try to make the donor tours always about the beneficiaries, not about the visitors.

So were the Kielburgers confabulating?

It’s complicated. I heard that it’s never okay for donor travel to be paid from restricted funds, that is to say by a project funded by another donor or government agency, which limits how the charity can hold, invest or spend the funds. But it is sometimes okay for international charities to pay for donor travel out of unrestricted funds, meaning funds the charity can use for any purpose.

This is a gray area and is based on your definition of your donor promise to the general public who generally give unrestricted funds, and how much you believe you have to spend money to make money.

So let’s go back to the Kielburgers’ press release and its very odd final paragraph:

“Yesterday, the Morneau-McCain family reached out to us to ask if, in fact, their trip had been complimentary. We confirmed that it was. They then reimbursed WE Charity for what they would have been charged if they had paid at the time: USD $ 4,395 per person.”

This leaves me with two questions:

1. If Bill Morneau knew the trip was complimentary, why did he pay anything for it?

2. If he didn’t know but discovered this on July 22nd when the release was made public, why would he apologize so profusely for having forgotten to pay?

The answer is that Mr. Morneau knew that donors pay, which is why he’d already paid most of the travel expenses.

I also don’t think he was expecting a free junket from WE Charity, an organization that his family had already donated large sums to. But he was forgetful and careless in not enquiring about the total cost before, during and even years after his family’s trips.

WE Charity, on the other hand, has more to answer for.

The Kielburgers testified at length yesterday to a Commons Committee.

The question they should have been asked is:

“Who else, beyond the Finance Minister, did WE offer donor trips to, “from time to time, on a complimentary basis?”

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17 replies
    • Bob Ramsay
      Bob Ramsay says:

      Lynn — Yes, this falls into the ‘how can such bright people act so dumb?’ category,
      one that seems rife with possibility !
      Cheers.
      Bob

      Reply
  1. Avatar
    Linda book says:

    When I invite guests to my house for a dinner or party, I don’t pay for their gas. Perhaps a banal and coarse comparison but charities can’t afford to “spend money to make money”. By that I mean, the donor pays for his own expenses to experience the charities need and organization. Morneau was correct to reimburse the charity for his travel costs.

    Reply
    • Bob Ramsay
      Bob Ramsay says:

      Linda — That’s a wonderful comparison around dinner guests. I don’t think Morneau was craven, just careless.
      The Kielburgers are a different matter. My fear is that they comp-ed lots of high profile people.
      Cheers. Bob

      Reply
  2. Avatar
    Louise says:

    The comparison of dinner party expectations is a good one.
    While it may be possible that Mr. Morneau thought he had paid his experience bill in full, in my mind, WE was completely remiss for not having sent him an invoice for the unpaid expenses. Their books should be looked at along with their accountant.

    Reply
  3. Avatar
    Doug Jure says:

    Bob, yesterday I couldn’t listen or watch the brothers testimony for very long. (It was just like watching Attorney General Bill Barr.) The smirks, the body language. Do we really believe that no one could question their intent? Apparently they do.

    Reply
  4. Avatar
    Wendela Roberts says:

    I really enjoy your posts, Bob. Wish you had a ‘like’ button, both f
    or your posts, and the replies!

    Reply
  5. Avatar
    Anita Blackwood says:

    Bob..brilliant as usual..and exactly…who else was comped by WE? The Kielburgers don’t pass the smell test..they are, as usual smug and self righteous. As they have always been. Michele Douglas’ testimony was alarming…imagine a board chair being denied access to the financials. I feel the Trudeau’s have been used..as many others have…like the Minister of Finance and family.

    Reply
  6. Avatar
    Cornelia says:

    Another point of view. Yes a donor who can afford to pay should pay. But I once sat on a Board whose funds went to support many urgent causes in Africa. It’s very hard to get Canadians excited about giving to Africa or it was at the time. However one donor who has actually been there could convince many more donors of the importance of the cause.
    The wealthy donors on the Board didn’t have time to go so once a year the charity funded one Board member with time to go to Africa but not sufficient funds. It was hardly a pleasurable trip. We recovered much more than the cost of the trip from donors that the Board member was able to convince about the importance of the support.

    Reply
  7. Avatar
    Doug says:

    Bob. Thanks for the discussion. Regretfully I have ignored the controversy but finally caught it after having purchased a news paper for the first time in a long time.Interesting.read and you covered the issues nicely. If I go on a charity sponsored event and pay for the expenses, you can bet that I’m going to get a charitable receipt for the donation. How WE chooses to spend is their problem.Effectively, it was the Cdn taxpayer (less tax collected ) who funded a portion of the trip expenses. Creative accounting eh?

    Reply
  8. Avatar
    Ian Yolles says:

    Bob, Thanks for the as usual lucid commentary. I Chair a national nonprofit Board in the United States. We have Board members all over the country. When the Board meets in person (remember the days) all board members pay their own travel expenses to attend the meetings. Furthermore, in a previous life I ran a nonprofit in Canada that you know well – Outward Bound. We invited people like you (dare I say people of influence) to participate in a five day Outward Bound experience. We did so with the belief that they’d experience our mission firsthand and than choose to support the organization in myriad ways. You yourself are a shining example of the efficacy of this approach. I mention it here because participants had to fly to get to the location of the course. In all cases they paid their own travel expenses. As somebody who has dedicated significant time to the nonprofit community, I can’t imagine doing it any other way. Seems straightforward to me.

    Reply
    • Bob Ramsay
      Bob Ramsay says:

      Seems ultra-straightforwad to me too. But not to them. I think WE Charity will have to disgorge its list of ‘complimentary’ donors
      someday soon — and we will be very surprised who’s on that list.

      Reply

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