In my opinion, the use of the word “laundering” is not appropriate when it comes to describing the work of Canadian charities. One may question how a registered charity spends its money but I think that is quite different than employing language which implies criminal activity. Charities are regulated by the Canada Revenue Agency with respect to any political activities. But even here, the government generally appreciates that the charitable sector can make a valuable contribution to public policy because of its grass roots perspective from the front line.

I am also a bit sensitive about a generalized suggestion that somehow foreign donations are not legitimate. A few years ago, we created The Winnipeg Foundation USA and in 2011, we received almost $300,000 through this source.  Of course, CRA requires that we report such gifts from outside of Canada. There is nothing improper about this practice.

As I said at the beginning, we will leave the development of good public policy in the hands of elected officials. But as they carry out their responsibility, one must hope that they will do so in a respectful manner. We work with dedicated charitable agencies every day; we constantly see the passion and impact of donors and volunteers. If some particular charity is engaging in illegal activity, government authorities should take appropriate action. Otherwise, let’s not make sweeping statements about charities laundering dollars from foreign sources. Instead, let’s appreciate the generous spirit that defines our country.

The fact that people who are interested in our inner-city have now heard of Centennial is likely a good place to start. Recently, a group of young students from Centennial visited City Hall to make the Mayor and Council aware of certain concerns. It is easy to reflect back on how extra-ordinary it was to see a similar delegation during the project timeframe. The area is now a City of Winnipeg Housing Improvement Zone, part of Neighbourhoods Alive, and involved with the Community Schools Partnership Program. The Central Neighbourhoods Community Association was also born in Centennial. Through all these forums, people have a stronger voice.

The Aboriginal Head Start Program, which operates out of Dufferin School, is likely still the only such early education effort of its kind in Winnipeg elementary schools. The CSI summer learning program which operates today in several inner-city schools was born in Centennial; the BUILD program which helps former inmates transition to jobs in the construction sector is a remarkable success, also born in Centennial. And obviously, the housing investments made between 2003 and 2008 will serve the community for years to come. So there clearly are legacies.

In terms of lessons learned, our conversation turned to the role of philanthropy and the importance of augmenting what public policy can provide. We all know government cannot do it all. But at the same time, the charitable sector does not have the resources to transition from short term projects to long term solutions on issues as complex as poverty.

At the Foundation, our vision is “a Winnipeg where community life flourishes”. If we want to live in a truly flourishing community, there has to be a sense of social equity. Everyone deserves a fair chance. Without question, the investment in Centennial made a meaningful difference but at the same time, many underlying issues still persist. Striking the right balance so everyone gets to fully share in Winnipeg’s quality of life is not easy when government budgets are being reined-in. All citizens need to ponder the kind of community we want to sustain and how best this can be accomplished.

One, entitled Confidence Men, written by Pulitzer Prize-winning author Ron Suskind, is about the first two years of the Obama administration and the financial crisis. As we now know, the unethical practices of leading American financial institutions prior to 2008, led to a meltdown on the markets that the world is still trying to recover from today.  Every organization and individual with investments was profoundly affected. Certainly, The Winnipeg Foundation has felt the negative impact.

There were a variety of causes, including a seriously weakened regulatory framework, the capacity of new technology, overly complex financial instruments which pushed legal limits, ill-advised compensation practices, weak private sector governance and a consumer-driven culture where people routinely bought what they could not afford.

I found one section of the book to be of particular interest. Goldman CEO Lloyd Blankfein is testifying before a government committee and talks about why there is such confusion about the role of banks. We see that in the mind of the public, banks are generally viewed as fiduciaries. They have a duty of care; the interest of the client comes first. When they sell an investment to a client, the client expects that the bank believes in the investment. But, in fact, that was not the case. The banks were selling investments they knew were of questionable value and, even worse, were betting through the market that these investments would soon rapidly decline in value.

That got me thinking about The Winnipeg Foundation. We unquestionably have a duty of care with respect to our donor’s gifts. Ever since 1921, generous people from all walks of life have contributed to “their” community foundation with an expectation that we would act prudently in good times and bad.

In these turbulent times, acting with a duty of care in mind is not as straight-forward as protecting the invested capital of the Foundation. Donors to endowments give money to provide sustainable support to the community and its charitable agencies. So there must be a balance between protecting capital for the long run and making annual grants for immediate impact.

Over the past five years, our investments have earned an annual average return of just over 2%. This is not enough to cover the cost of our distributions. We have traditionally granted 5% of our asset value, though in recent years, this rate has been gradually reduced. This year it is 4.4%. So, during these troubled years, we have been using some capital to continue grant distributions to the community.

In reflecting on the many policy discussions at our Committees and Board, I think we have struck the balance right. We are working to create a predictable revenue stream for the community while at the same time, building an investment strategy that will deliver long term sustainability. Every year, we model and review our assumptions as we apply our own “duty of care.”