|The Trouble with Billionaires by Linda McQuaig and Neil Brooks|
by Linda McQuaig and Neil Brooks, The Toronto Star
September 10th, 2010
On the campus of the University of Toronto, buildings bear the names of some notable Canadians: among them, literary giant Northrop Frye, public health pioneer John FitzGerald, inventor Sir Sandford Fleming, who introduced the concept of standard time. But the buildings named in honour of important intellectual figures typically date back more than three decades. In more recent years, campus buildings have been named almost exclusively after those whose distinguishing characteristic is the possession of lots of money.
There’s a reason for this. As universities have lost government funding in recent years, they’ve turned more and more to private donors. Universities are now heavily in the business of fundraising, devoting huge effort to wooing wealthy alumni. And the effort has paid off. In the past five years, U of T has collected an average of $120 million a year from benefactors.
In exchange for money, donors get their names on plaques, or auditoriums, or even whole buildings if they donate enough. The result is that affluent businessmen are honoured and commemorated throughout the university. Particularly prominent at U of T for instance are merchant banker Joseph Rotman, pharmaceutical entrepreneur Leslie Dan and businessman Peter Munk, chairman of Barrick Gold, the world’s largest gold mining company.
But if the university has become a showcase for the wealthy, there’s apparently no room at the university to honour someone who is the closest thing we have in this country to a genuine hero.
A group of U of T professors found this out when they approached the university in 2007 with the idea of naming the Health Studies Program after Tommy Douglas, considered the father of Canada’s public health care system. In 2004, Douglas was selected the Greatest Canadian of all time, following a nationwide contest organized by CBC-TV in which more than 1.2 million votes were cast over a six-week period. (Runners-up were Terry Fox and Pierre Trudeau.)
But, other than apparently being the most respected Canadian ever, what does Tommy Douglas have to offer the University of Toronto? Apparently not enough to justify getting a program named after him.
Paul Hamel, a biologist in the U of T Faculty of Medicine and one of the professors pushing for the Tommy Douglas program, says that the university simply wasn’t interested in the idea, seeing little potential in it for fundraising.
Hamel criticizes the university for adopting this attitude, which he sees as a function of the growing power exerted by its fundraising arm. “As a result, the priorities of the university have been skewed towards areas that interest the elites,” says Hamel, “rather than towards the priorities of faculty, staff and students who are engaged in critical analysis, research and teaching.”
This seems certain to undermine the role of universities and colleges as places of critical thought, where the prevailing policies and dogmas — championed by those wealthy business interests — are carefully scrutinized and debated.
This aspect of philanthropy is rarely mentioned in the public feting of wealthy benefactors. On the contrary, the role of philanthropy in funding universities — as well as hospitals, museums, art galleries, concert halls and opera houses — is typically advanced as one of the reasons we shouldn’t be concerned by the rise of billionaires. After all, we’re told, our public institutions need money, following the cutbacks of the 1990s.
Of course, the problem is circular. If governments hadn’t cut tax levels so deeply — particularly for those at the upper end — there would be sufficient revenue to sustain our public institutions, as there was in the early postwar years.
The public also has an inflated sense of how much financing wealthy donors actually provide through philanthropy. For instance, there was much celebration in April 2010 when it was announced that a new $35 million donation from Peter Munk would enable the University of Toronto to establish a school of global studies. The new Munk School of Global Affairs (incorporating the existing Munk Centre for International Studies) is to be housed in a century-old stone building on fashionable Bloor Street West, and feature an elevated pixel board flashing the latest world news headlines.
But, although it wasn’t mentioned in the announcement, Munk will receive a $16 million tax reduction for his $35 million contribution, reducing his actual personal contribution to $19 million. So he will really be paying just a little more than half the cost of his contribution, while the government (Canadian taxpayers) will be paying just a little under half. For that matter, if Munk made his donation in the form of shares in publicly traded companies — as most donors do — then his tax savings will be considerably larger (possibly by millions of dollars) and his personal contribution far smaller than $19 million.
The Ontario and federal governments also announced that they would each contribute $25 million to the new Munk school, bringing the total contribution of Canadian taxpayers to at least $66 million. But when it came to naming the building, the taxpayers’ $66 million simply disappeared; only Munk’s $19 million (or less) counted. Accordingly, the new school, with its flashy building on Bloor Street, has been named after Munk, ensuring that the thousands of people passing by daily will be confronted with a constant reminder of Peter Munk’s commitment to higher education and global understanding.
Probably few of them will realize that Munk’s contribution only amounts to about 20 per cent of the overall cost of establishing the new school. Indeed, since there will also be ongoing costs running the school — which taxpayers will cover — Munk’s share of the overall cost of the school will be well below 20 per cent. It would seem more accurate, then, to call it the Canadian Taxpayers School of Global Affairs, with Some Help from Peter Munk.
So, for $19 million (or less) of his own money, Munk has not only gotten his name on a prominent public building, but he’s managed to direct at least $66 million of public money towards a project of his choosing: a global affairs school. And it’s likely to be a global affairs school that will fit with the political views and sensitivities of Peter Munk.
U of T administrator Tad Brown insists that Munk will have no influence over what goes on at the school he is helping establish.
But, according to Munk’s written agreement with the university, the Munk donations will be paid over an extended time period, with much of the money to be paid years from now — and subject to the Munk family’s approval of the school. For that matter, the school’s director will be required to report annually to a board appointed by Munk “to discuss the programs, activities and initiatives of the School in greater detail.” This sure sounds like Munk will have influence over the school’s direction — and will indeed be able to withhold money if the school doesn’t please him.
Equally disturbing is the fact that the agreement stipulates that the school will also house the Canadian International Council — a right-leaning think-tank that has been pushing to replace Canada’s earlier role as a leading UN peacekeeping nation with a more prominent role in U.S.-led war efforts.
Philanthropy offers the wealthy an appealing option. Rather than simply handing money over to tax authorities, as all of us are obliged to do, the fabulously rich can afford to donate large sums in ways that allow them to increase their public influence, even as they’re honoured in the community for their virtue and generosity. Honourary university degrees and other public tributes are frequently bestowed on philanthropists; Peter Munk, Joseph Rotman and Leslie Dan have all been awarded the Order of Canada, the country’s highest civilian honour. And philanthropists receive highly flattering media attention for their donations.
Munk’s 2010 donation to the University of Toronto, for instance, merited a fawning front page news story in The Globe and Mail, which heralded the gift as the largest in U of T’s history, and celebrated his new school as a “vision of a global plaza reconfiguring Toronto’s downtown Bloor Street West and becoming the hub of Canada’s conversation with the world.” It’s impossible to buy publicity any better than that.
Whatever controversies may follow Munk abroad — his company has come under attack from environmental and indigenous groups in Chile, Argentina, Peru, the Philippines and Tanzania — at home Munk is associated with loftier things. His name is indelibly linked with good works, and emblazoned on important public buildings (to which he has contributed a relatively small portion of the costs).
Given the perks, it’s debatable whether this should even qualify as philanthropy at all. Individuals receive a tax credit when they make a gift to a charitable organization, but in cases like this, donors get something very valuable in return — their name publicly commemorated for all to see. This should be treated for what it is: not a gift to the community, but rather a business transaction purchasing that most treasured of items — a personal legacy.
From: The Trouble with Billionaires by Linda McQuaig and Neil Brooks. Copyright © Linda McQuaig and Neil Brooks, 2010. Reprinted with permission of Penguin Group (Canada).