The Toronto Star                                October 25, 1997 

Right-wing causes find a rich and ready paymaster


        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 
        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 
        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."

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