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Last June, Frank Giustra made an astonishing public announcement: he was donating $100 million and half of his future mining earnings to a radical global initiative to battle poverty. The event ushered in a new era of giving in B.C., one that thrives on publicity and competition. In other words, it’s all about business. Only this time it’s all about who gives, not gets, the most.
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Frank Giustra is a changed man. The mining magnate has emerged from a reclusive life in his chateau-like West Vancouver waterfront home with a new sense of purpose, pledging to devote his life and a considerable chunk of his fortune to an initiative that aims to eradicate poverty in the developing world. Basing the global initiative here in B.C., he has partnered with former U.S. president Bill Clinton to trumpet the endeavour as a way of spurring the world’s natural resource companies to financially back the plan, called the Clinton Giustra Sustainable Growth Initiative (CGSGI).
It all began two years ago over a bottle of wine with his wife, the persuasive human-rights activist Alison Lawton, who suggested that the mining financier use his influence to improve living conditions in developing countries. Today Giustra is tackling the biggest challenge of his 50-year lifetime: saving lives and feeding the hungry in the world’s poorest countries. No small task, even for one of B.C.’s most successful businessmen. As part of a jet-setting team, he and power-pal Clinton have become an unstoppable force for good works.
- The top five countries that give a percentage of their gross national income to overseas aid are Norway, followed by Sweden, Luxembourg, the Netherlands and Denmark. Canada is 14th on the list. (Source: The Organisation for Economic Co-operation and Development)
- In the U.S., those with incomes of more than $200,000 or assets in excess of $1 million represent 3.1 per cent of total households, but they are responsible for approximately 66 per cent of all household charity in the country. Their top motivations include: meeting critical needs (86.3 per cent), giving back to society (82.6 per cent), and social reciprocity – the feeling that those who have more should help those with less (81.5 per cent). Ways of donating include: 41.2 per cent have a provision in their will, 19.5 per cent established a foundation and 15.9 per cent use donor-advised funds. (Source: Bank of America Study of High Net-Worth Philanthropy [2006])
- Canadians contributed $7.9 billion to charity in 2005, compared to $3.6 billion in 1995. (Source: Statistics Canada)
- Fifty-one per cent of British Columbians make donations regularly and 43 per cent give occasionally (once or twice a year). British Columbians who are most likely to make a financial donation are those with household incomes of $75,000 or more. (Source: Ipsos Reid [2005])
This deal is huge news for B.C. and for philanthropy as a whole. It elevates Giustra to a new elite level of givers, paves the way for more sustainable mining practices and – perhaps most significantly – creates a whole new model for giving: be loud and proud, thus pressuring your worthy competitors in business to do the same, or be noticeably absent.
Vancouver is the perfect base for this project, considering its mining muscle and, of course, the fact that Giustra lives here. The commodities boom has created a great deal of wealth right here on home soil and has given rise to a new burst in philanthropy tipping the hundreds of millions. “Vancouver happens to be one of the global capitals for mining and mining finance. The roots of this project are in Canada, but this is a global effort,” stresses Giustra, who close sources say is worth several hundred millions, but is not a billionaire.
But more on the man later. His impressive plan is to bind the global extraction sector’s wealth and give it away to countries in need. Giustra has personally donated US$100 million plus half of his future earnings from the mining industry, and his contribution is being matched by Mexican telecom mogul Carlos Slim, who recently toppled Bill Gates from top spot on the list of the world’s richest people. Around 20 mining companies – most of them Canadian – have signed up as supporters so far. A dollar figure hasn’t been attached to the commitments, but Giustra says it could raise hundreds of millions, if not billions, over the coming years. Clinton will even be sending out one of his strategists to Vancouver to oversee the project.
Giustra, an immaculately dressed man with closely shaved, greying hair, speaks passionately about the initiative, calling it the most “fulfilling” thing he’s ever done.
“This is the most important thing in my life so far,” he reflects. “It gives me a sense of purpose. I believe it will be a lifelong project where I can put my talents and influence to their best use. I feel like I have been presented an honour.”
Giustra has been an active philanthropist for the past 15 years, starting out with a private foundation to support the health and well-being of children.
His wife has been a tremendous influence over the years. The documentary producer, whose most recent work is Uganda Rising, has a particular desire to end the humanitarian crisis of war-torn northern Uganda. Giustra credits Lawton for “planting the seed” of his latest initiative in his mind over that fateful bottle of wine at their West Vancouver home.
When asked what else motivates him to devote such time and money to philanthropy, Giustra, an avid book collector, cites philosopher Andrew Carnegie, author of The Gospel of Wealth, as a source of inspiration.
“[Carnegie] spoke about the duties of a wealthy man,” he explains, “and what he said was: once he has cared for his own needs and the needs of his family, everything else is surplus capital. It is the duty of that person to deploy that surplus capital for the betterment of society. What I would encourage others to do is to think about this.”
Duty? Certainly that’s part of it. But it may also be the razor-sharp businessman in Giustra that saw an opportunity to apply the same rules and strategies to philanthropy that led to his spectacular financial success in business.
Canadians are eagerly handing over more money to charities and non-profit organizations than ever before. According to Statistics Canada, contributions by Canadians have skyrocketed by 120 per cent in the past 10 years, from $3.6 billion in 1995 to $7.9 billion in 2005.
Why the change of heart? A spring 2007 study by Toronto-based philanthropic consultants Ketchum Canada Inc. credits significant changes in Canada’s tax policy, beginning with the May 2006 federal budget’s removal of capital gains tax on gifts of publicly traded securities or ecologically sensitive lands. This policy was extended in 2007 to include donations of public shares to private foundations. Today many substantial donations to non-profit organizations involve a transfer of shares.
Here in B.C., an Ipsos Reid survey conducted in 2005 in co-operation with the Association of Fundraising Professionals found that nine out of 10 British Columbians are engaged in charitable giving to some degree.
An interesting trend is also surfacing, mirroring a similar pattern in the U.S. According to the Ketchum study, 25 per cent of Canadian donors are contributing 85 per cent of total donations. In the U.S., as much as two-thirds of total giving now comes from the wealthiest three per cent of American households.
Education is also a factor, with 62 per cent of those with higher education making regular charitable donations, compared to 39 per cent of B.C. residents with no more than a high school education.
It’s also the baby boomers who give the most. While 66 per cent of those aged 55 or older donate regularly, the number drops to 34 per cent for those in the 18-to-34 age group.
Giustra says today’s entrepreneurs don’t just write cheques and hope the money’s being spent appropriately. They want to see where their money is going and take a hands-on approach to ensure their investment is getting results.
“Around the world today, you’ve got a growing trend of philanthropists who are looking at [giving] in a very business-like manner,” he explains. “They want to tackle issues that will give them measurable results. When you can measure the results, you get things done. Philanthropists are now looking at specific issues in the same way.”
Barney Ellis-Perry, chair of Volunteer Canada and director of professional affairs at UBC Alumni Affairs, has also noticed that today’s givers are demanding a lot more accountability. They’re also more willing to go public with their causes, in the hopes of spurring others to do the same.
These people tend to be baby boomers who are just coming into money, either through an inheritance or through a business deal, and want to give it away, Ellis-Perry explains. Unlike their parents, however, they want to know exactly where the money’s going.
Of course, you don’t have to be rich to make a difference, Giustra stresses, adding that whatever you choose to do, the matter must be meaningful to you. “You have to have a passion for the cause,” he says.
What’s his passion? “My motivation lies in the fact that, as President Clinton often says himself, he has led an improbable life, coming from very humble beginnings to president of the U.S. and is now in a position to help so many in need all over the world,” Giustra replies. “I too feel I have led an improbable life. As a child, I would never have imagined I would have such an exciting and fulfilling life. I am privileged. And with privilege comes responsibility. I am now in a position to carry out that responsibility and feel honoured to do so.”
Giustra won’t elaborate on his childhood, although it’s been reported that he was born in Sudbury, Ontario, and lived in Italy and Argentina as a child. He doesn’t speak about his personal life or how and when he met Lawton, but their matched interest in improving lives in Africa was what led them to later cross paths with Clinton.
Giustra and Lawton held an exclusive fundraiser at their home in 2004 to raise money for tsunami cleanup efforts, and they asked the former president if he would provide a videotaped message as a thank-you to the guests. The event generated a reported $1.7 million and a bond was formed. Today Giustra say he and Clinton are “good friends,” often travelling around the world together in Giustra’s private jet.
“I became a financial supporter and got to see first-hand how he got things done around the world,” Giustra says, further commenting on his admiration of Clinton’s work. “He finds creative solutions to complex problems.”
Giustra is treating his latest initiative as he would any business deal. He’s after maximum results. A proven success rate has elevated the mining financier to an elite league of global financial leaders. Giustra left Merrill Lynch & Co. Inc. in the early ’80s to join an upstart firm called Yorkton Securities, where he helped raise $3 billion in equity for the resource sector. He left Yorkton at the end of 1996 and entered the entertainment sector, founding Lions Gate Entertainment Corp. in 1997. In 2001 he began buying gold mines as chair of Vancouver-based Endeavour Financial Corp. He bought a $20-million shell company called Wheaton River Minerals Ltd. and built it into a $2.4-billion operation, which later merged with Goldcorp Inc. Today he is the chair of Endeavour Financial, a merchant-banking firm that finances mining companies.
Just one week after Giustra revealed his plan, the cogs began to turn. Here in Vancouver, Lukas Lundin, chair of the Lundin Group of Companies – which together are a major global player in the mining and oil sectors, with market caps totalling $17.2 billion – stepped up to the plate. He announced that he too would be pledging up to US$100 million to the Clinton-Giustra initiative over a period of 10 years in pre-approved stages. The money will come from his non-profit organization, Lundin for Africa (LFA), which he set up nearly two years ago with the goal of improving the lives of Africans in need.
You don’t have to be Bill Gates or Warren Buffett to dabble in philanthropy. A donation as small as $10 can make a difference in a region such as Africa.
If you’d rather foster free-market enterprise than make a cash donation, try Kiva, an organization that enables you to become a micro lender to overseas businesses. Visit kiva.org, pick the project you want to finance and in six months or a year you get your money back. You don’t get a tax receipt because it’s a loan, not a donation, but you gain the satisfaction of knowing exactly how your money will be spent.
Another service, born right here in B.C., is GiveMeaning, whose website (givemeaning.com) lists fundraising projects in the works on a local level as well as overseas.
Sometimes, deciding how to give is the biggest hurdle. John Kageorge, a communications manager for global engineering firm AMEC PLC, says he and his wife have been wanting to do more but aren’t sure how to go about it. They want to see their money make the most significant impact on a life or lives. But how?
“Everybody wants a good deal when they take money out of their wallet. However, we’re especially demanding when the money is designated for a good deed,” he says. “In the span of 10 months, we were gripped by the devastation caused from the Boxing Day tsunami, the Pakistan earthquake and Hurricane Katrina. These global-scale disasters desperately required help. They also surprised us by showing that we could give much more money than we had in the past. We committed to being more aggressive about our giving and began squirrelling away more for charity each month. However, to this day, we have not selected a charity or charities. We’d like to know how others choose.”
Experts say: first, find a cause that’s important to you. Whether it’s children, women, education, health or international development, find an issue that’s close to the heart.
Kevin Campbell, charity guru and VP of Haywood Securities Inc., has some advice for those searching for an appropriate foundation. Most importantly, look for financial transparency and make sure the organization has a presence on the ground. Campbell is particularly interested in improving the lives of people in Africa, so he wanted to find an organization with adequate resources there. He did some digging and discovered Plan Canada.
“Plan has been unbelievable,” he says. Others worth checking out are Care Canada and Water Can, which delivers water to schools. “You really have to do your research to know what you’re getting into,” Campbell cautions. “I was involved in it step by step. I try to dedicate as much time as I can.”
When it comes to making your donation, a number of vehicles are available. Here are some options:
- Stock donations. If you want to maximize your tax benefit, rather than selling stock and donating the money to charity, it may be beneficial to donate the stock itself to charity. You have to pay capital gains tax when you sell a stock that’s appreciated. But if you donate the stock directly to the charity, you avoid the tax.
- Donor-advised funds. These are investment accounts that let you deposit assets for an up-front tax deduction and then make donations to charities of your choice. However they are controversial because they require a minimum donation and have annual fees, so speak to your financial adviser before heading down this path.
- Private foundations. Setting up a private foundation is complicated and costly; unless you have millions to donate, you may wish to avoid this route. The bonus to setting up a foundation is that they have more flexibility and can continue for future generations.
- Provisions in your will and/or your life insurance. Speak to your bank,financial planner, estate planner or lawyer to discuss these options further.
At that time, to raise funds and gather awareness about the beauty and people of Africa, Lundin organized a motorbike expedition from Cairo to Cape Town with his brother Ian and famed rider P.G. Lundmark, raising $1.5 million.
On a recent sunny afternoon, Lundin and Paul Conibear, president and CEO of newly founded Suramina Resources Inc. and director of LFA, sat for an interview in Lundin’s impressive downtown glass office with bird’s-eye views of the West End. They were keen to discuss LFA ’s projects – 11 currently in the works across five countries – while disclosing details of their generous donation to the Clinton-Giustra initiative. Conibear speaks with enthusiasm about the foundation’s ongoing projects, which include expanding orphanages, building a training centre and creating a refuge for street kids.
When asked about his donation to the Clinton-Giustra project, Lukas Lundin – a youthful 49-year-old who has spent considerable time seeing the sights of Africa from the seat of a motorbike – jokes that he decided to contribute because Giustra asked him to. Oh yes, and he’s also a firm believer in the cause.
“It’s important to find a project that makes sense. If not, the whole exercise is a waste of time,” he says, in his matter-of-fact style. “We’ve been doing a lot of business [in Africa] over the years. Africa’s a good place to be. We are in the resource business and we are trying to improve people’s standard of living.”
When discussing mining magnates and philanthropy, it’s impossible to overlook Ian Telfer, chair of Vancouver-based Goldcorp Inc., who is keeping his earnings invested in Canada by giving back to the university that served him so well. In May this year, Telfer announced he would be giving $25 million to the University of Ottawa, the largest single donation ever given to a business school in Canada. In return, his legacy will be remembered in the name of the business school (Telfer School of Management).
In the past five years, along with the Canadian economy and commodity prices, Telfer has had enormous success. Last year the mining tycoon led the biggest deal of his career by completing a merger with Glamis Gold Ltd. to create the world’s third-largest gold producer. Now 61, Telfer felt it was his duty to give back to the university that he says changed his life for the better.
Telfer, whose announcement came one month before Giustra’s initiative was revealed, said he was going public in order to “raise the bar” for other philanthropists to give donations of a “major transformational nature.”
“A lot of people are very generous but are sometimes shy about publicizing [their gifts], and I would encourage them to make it public because it makes other people think about it,” Telfer urged.
Clearly the boom in B.C.’s extraction sector is resulting in an explosion in the ranks of the wealthy, elevating philanthropy to a whole new level. Vancouverites working in mining, and mining finance in particular, are finding themselves with more money than they can spend, and the benefits of tax breaks – plus the good feeling of being able to give back to society – are motivating them to give their money away.
Kevin Campbell is another case in point. The VP of investment banking at Haywood Securities Inc. says the business has rewarded him and, rather than splash out on sports cars and a swanky downtown pad, the civic-minded 32-year-old devotes his time and energy to bettering entire communities in Africa.
When asked why, Campbell simply replies: “I can, and I should. What that boils down to is: I have the resources and the obligation. It’s something I feel that should be done. I’d rather put my money into those places than drive a Mercedes.”
In 2005 Campbell approached Plan Canada, a development organization with locations in 45 countries. He provides financing to Plan to develop projects on the ground in Mali, including the creation of two health clinics in the villages of N’Gouraba and Samakele, which provide such things as pregnancy care, child immunization, rehydration therapy, malaria treatment and contraception.
Campbell is also planning to support the villagers’ cotton industry. “We worked out a plan to increase their agricultural yields. We are going to subsidize the fertilizer and introduce new irrigation techniques. We are zeroing in on one community. Our ambition is to double the crop yields,” he explains.
Last September Campbell travelled to Mali to see first-hand how his gifts are making a difference. When he visited the communities where the two new health centres were built, he was greeted with fanfare by families, local leaders and Plan staff and volunteers. “I had asked to go incognito, but when we showed up the whole community was out to greet us,” he says.
Campbell could represent the next generation of B.C. resource-industry givers and another integral element of this new movement, whose roots are here in Vancouver. Giustra, Clinton, Lundin and an ever-growing clan of financial supporters are creating an influential team that’s already made its mark on the world of business and is poised for a repeat performance.
Other B.C. philanthropists
Here are just a few of B.C.’s elite donors who have graced the headlines recently.
Stewart Blusson: In May this year, the diamond mogul gave $12 million to SFU to support its faculty of health sciences. In exchange, SFU will name its new health sciences building Blusson Hall. In 1998 Blusson also donated $50 million to UBC. In 2002 he granted a block of shares in his company, Archon Minerals Ltd., worth $30 million, to the new private Quest University Canada in Squamish.
Gordon and Leslie Diamond: In June 2006 the couple gave $20 million to Vancouver General Hospital. In return, a new building at Oak and 12th will be named the Gordon & Leslie Diamond Health Care Centre. The Diamonds are big supporters of local health care, having donated to the YWCA, the Aurora Centre, BC Women’s Hospital & Health Centre and the new BC Cancer Research Centre. Gordon, born and raised in Vancouver, was awarded the Order of B.C. in June for his business and philanthropic efforts.
Michael Audain: The chairman of Polygon Homes Ltd. is a supporter of the local art scene and recently donated $2 million to the Vancouver Art Gallery, of which he is a former president. He is also chair of the Vancouver Art Gallery Foundation and has set up a family trust, the Audain Foundation for the Visual Arts in British Columbia, to support local artists. He was awarded the Order of B.C. in June for his success in local business and support of visual arts and culture.
Milton Wong: Order of Canada and Order of B.C. recipient, chair of HSBC Investments Canada Ltd. and chancellor of SFU since 1999, Wong is known for his extensive community involvement and philanthropy. He is the founding chair of the Canadian International Dragon Boat Festival and served as deputy chair of the BC Cancer Foundation Millennium Campaign. He has been awarded numerous awards for his efforts in fundraising for various non-profit organizations.
Martha Lou Henley: Henley is arguably the city’s greatest benefactor of the arts, having donated to dozens of Vancouver associations. She donated $1 million to the Vancouver Opera in 2004, another $1 million to the Vancouver Symphony in 2005 and the same amount again to the Opera in 2006, to be received over five years. She has received numerous awards for her dedication to supporting the arts.
Jack Poole: The chair of Vancouver’s Olympics Organizing Committee recently gave Vancouver General Hospital $3 million to establish a surgical robotics program.
Jimmy Pattison: The Vancouver-based entrepreneur gave $20 million to Vancouver General Hospital and in return got his name on a building. He is a recipient of the Order of Canada and the Order of B.C.
