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James Wright, the chief of surgery at Toronto's Hospital for Sick Children, in an operating room that was built with funds he raised personally. (Kevin Van Paassen/The Globe and Mail/Kevin Van Paassen/The Globe and Mail)
James Wright, the chief of surgery at Toronto's Hospital for Sick Children, in an operating room that was built with funds he raised personally. (Kevin Van Paassen/The Globe and Mail/Kevin Van Paassen/The Globe and Mail)

Science for sale: A new kind of donor is transforming medical research Add to ...

This is part of The Globe and Mail's in-depth look at the evolution of philanthropy. Read more from the series here.

The operating rooms at Toronto's Hospital for Sick Children run like an airport. Patients roll in as patients roll out – up to 60 elective surgeries a day, 11,000 a year. They flow through 18 rooms where surgeons remove tumours, save limbs, vision and babies the size of their palms.

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In 2005, the hospital's chief of surgery, James Wright, had to close four of them. He was tortured. “What if a school bus crashed off the Gardiner? What then? What would happen to the emergency cases?”

Closing the four rooms cut the hospital's capacity to operate by 25 per cent. But Dr. Wright felt that he had no choice. They were ancient ruins by modern medical standards, built in the 1950s for cart-and-trolley tools, not lasers and robotics. Even the air within them was a hazard, their antique ventilation increasing airborne exposure to infection and dangerous gases.

Dr. Wright had to find the money to renovate. But hospital budgets do not cover infrastructure, so he called the SickKids Foundation, the muscular fundraising arm of the institution.

Freddy DeGasperis Jr. happened to be a board member. One of the city's top builders, the DeGasperis family, and the family of real-estate developer Alex Muzzo put up $2.5-million off the bat. But it was construction – their business – and the business of many of their friends, and they could, they said, do more.

So began a two-year campaign over private dinners in homes around the city. Someone would call Dr. Wright with an address and tell him to show up. There would be engineers, architects, carpenters, drywallers, and Mr. Muzzo prepped him for the pitch like a prize fighter: “You've got to show passion, Jim. Passion!”

When the dinners were done, donors from the construction industry and beyond had given the hospital an additional $6-million. Dr. Wright's story typifies the new age of giving: donors championing a project of personal interest to plug the funding gaps of the 21st century.

“We couldn't be what we want to be, which is world-class, without community support,” Dr. Wright says.

Yet public institutions now rely on largesse not just to be leaders in their fields, but to keep the lights on. Drug companies are cutting support as their profits falter. Government grants are ever harder to get and many require researchers to find private backers. And as the need for philanthropy grows, so do uneasy questions about the power of wealthy donors to drive research agendas, by pushing pet projects or elevating others that have not earned funds on merit.

The fierce competition for philanthropic dollars has spurred doctors and scientists to become more savvy in wooing the wealthy, creating a system in which the best salesmen can win big and some causes lose out. Universities and hospitals have taken to schooling their staff in the art of selling – and figures suggest that it is paying off.

The Association of Health Care Philanthropy Canada reports that donations to hospitals and health-care facilities have swelled over the past 10 years, hitting $1.2-billion in 2010, a 7-per-cent jump from 2009 and the largest gain since the recession.

Donations and endowments to universities have grown 12 per cent over the past decade, to $1.2-billion in 2009, according to the Canadian Association of University Business Officers. About a quarter of these funds are directed to research.

The contributions still account for a small proportion of total revenues. But the benefits of philanthropy are striking – shiny new buildings, clinics, cutting-edge equipment, reductions in certain wait times and research projects that may well lead to future cures.

“[Fundraising]is becoming a huge part of what I do, huge,” says Samuel Weiss, a neuroscientist and director of the Hotchkiss Brain Institute at the University of Calgary. “A day does not go by where it's not part of my agenda, and some days, it's my whole agenda.”

Winners and losers

Benefactors have played a big role in science and medicine at least as far back as the Renaissance and those on the receiving end say they are grateful to have the freedom charity can buy.

Instead of spending weeks writing up grant applications and waiting months to find out if they have been approved, “I can just move forward,” says Stephen Scherer, director of the Toronto Centre for Applied Genomics, which focuses on autism and human-genome research.

At Dr. Scherer's $20-million centre, connected to the University of Toronto and the Hospital for Sick Children, philanthropy accounts for 5 to 10 per cent of his budget – including “hundreds of thousands” a year for 10 years from an anonymous donor, money from Canadian businessman Galen Weston, whose donation came after he and Dr. Scherer hit it off at the bar during an autism event, and $2-million from the family of tech billionaire Lee Lau.

“A lot of the experiments we've done, experiments that really led to new discoveries, we couldn't have done without [philanthropy]”

Not all researchers are as fortunate at earning the favour of philanthropists and donations do not always go to those most deserving, says Janet Rossant, chief of research at the Hospital for Sick Children. “We try to make sure it does, but that's not always possible,” says Dr. Rossant, a leading stem-cell researcher. “Let's say people want to give to Dr. X – he has the patients, he knows the families, he has the connections, and so [the donors]might say, ‘We're only giving to Dr. X.' Now Dr. X may be fantastic, but he may not be.”

As well, certain conditions, tend to get smaller pieces of the philanthropic pie. Peter St. George-Hyslop, a leading Alzheimer's researcher with labs at the universities of Toronto and Cambridge, notes that “people give for children, cancer, AIDS, heart disease, all good things. But there are other diseases that are less sexy in the public eye, osteoporosis, arthritis or Alzheimer's, … that don't get enough support from the donor pool.”

About half the donations the Hospital for Sick Children receives are restricted, or earmarked, for specific projects and part of the challenge, Dr. Rossant says, is persuading donors to allow the money to be used broadly.

But in the age of the Bill and Melinda Gates Foundation, where private interests set the health agenda on a global scale, donors also have higher expectations of what their money should buy. They are less likely to have inherited their wealth and more likely to be younger, particularly in Western Canada, and the more they give, the more input they expect to have over how their money is spent.

“Some of the most involved donors, who contribute the most, come with a wanting to drive the system,” Dr. Rossant says. “And it shouldn't be: ‘Oh give us your money and go away.' The institution does want their involvement – their input could be valuable and it can be awkward [to limit it]because the more involved the donor feels, the more likely they are to give again. It is the biggest balancing act,” she says.

Terry Burton, the Windsor-based publisher of the Major Gift Resource Centre, who has researched trends related to fundraising for 25 years, says it is history that has partly shifted donor attitudes: “The non-profit sector doesn't have the greatest track record of doing what they said they were going to do with the money.”



Rob and Cheryl McEwen have given more than $20-million for stem-cell research and apply corporate-style goals in the Toronto labs they fund. Scientists at the McEwen Centre for Regenerative Medicine are working within a two-year time frame to put their research on the road to the clinic, a plan the centre dubs an “Accelerated Discovery Initiative.”

Mr. McEwen, chairman and chief executive officer of U.S. Gold Corporation, articulated their approach in a Globe and Mail commentary this year: “I believe there exists a mindset and culture that allows hospitals, research institutes and laboratories to say: ‘Thanks very much for your donation … and we'll get back to you in 15 years.'”

Shot-callers

It was 15 years ago that Steven Wise changed his charitable ways. The CEO and chairman of the KRG Insurance Group, and head of the KRG Children's Charitable Foundation, had been a regular donor to the Hospital for Sick Children when he found he “had some disagreement with the areas that were being focused on.” He took his concerns to Michael Strofolino, hospital president at the time, and took away a key message: “Those who write the cheque call the shots.”

“If you are walking through emergency and you think it needs an X-ray machine,” Mr. Strofolino told him, “buy an X-ray machine.”

So began Mr. Wise's regular walks through the downtown hospital to see for himself where his money might have the most impact. After he came across kids waiting in the hall for appointments at the burns-and-plastics unit, as if they were on display, he modernized the clinic to include its own waiting room.

“I feel like an investor in the hospital,” says the 56-year-old Mr. Wise, who has donated more than $10-million to various children's charities.



A few years ago, Mr. Wise took a keen interest in autism. He had often heard Stephen Scherer's name as a key scientist trying to solve the genetic mystery behind the neuro-developmental condition and in 2008, Mr. Wise offered to fly him up to his Muskoka cottage. Dr. Scherer decided to drive and it was well worth the trip.

Mr. Wise had expected “a geeky science guy,” but instead he met an easygoing hockey dad. “We became friends,” he says. “I think he's brilliant.” After that meeting, Mr. Wise gave Dr. Scherer's lab $500,000 for autism research.

It was the perfect “blind date” – a euphemism in fundraising circles to describe a first meeting between recipient and potential donor. The foundation works hard to play matchmaker, Dr. Scherer says. Scientists get briefing notes with personal information about a prospect to help them find a connection during conversation, and the foundation people, he says, “are like private detectives,” able to find out if someone has a child or relative with a certain disease, or a personal connection to the hospital.



Governments are taking a lead role in nurturing these relationships. The Canada Foundation for Innovation, which helps to pay for research infrastructure costs, Genome Canada, the national agency that funds large science projects, and the $100-million Canada Brain Research Fund the Conservative government created in April all require researchers and institutions to find private-sector support to gain access to public funds.

For Arthur Schafer, the blossoming romance between philanthropy and public institutions is nothing to celebrate. Director of the Centre for Professional and Applied Ethics at the University of Manitoba, Prof. Schafer considers it a marriage born after 40 years of chronic underfunding to universities and hospitals.



“This money doesn't come free,” he argues. “There are always strings, and not just strings, but some pretty heavy clanky chains.”

Most institutions will resist donors' attempts to direct research, he suspects. “But the real danger is that the recipients will want to please these donors, that they will censor themselves to anticipate what the donors would want.

“After all, you want your donors to keep donating, you want them to be happy … so that they will tell their peers or associates over golf, or over lunch or while socializing on the Bridle Path, that you were wonderful to work with.”

New frontier

In Calgary, Dr. Weiss, who has raised more than $100-million in seven years to support brain research at his institute, says discussions around donor influence have barely begun. “There is a broad spectrum around this stuff, in terms of what people might think is acceptable,” he says. “It does happen in Canada that donors have influence – but you wouldn't get many volunteering to say, ‘Hey, yeah, it's happening here.'”

And, he notes, it happens subtly: “If someone comes to you prepared to make a major donation and says, ‘Oh, by the way, we also want this or that,' you might try to work out the details of this or that. But the devil really does get into the details.”

Dr. Weiss believes that institutions should give donors regular reports on how their money has been spent. “But beyond that, it is not appropriate for donors to be involved in how research is conducted. If that's allowed to happen, the sanctity of academic freedom becomes very much at risk.”

He once had a major donor say, “If you will create a program in this area, I will give you the money for it.” The institute did not have an expert in the field, he says, and putting together a new program would have meant taking resources away from another area. He turned the gift down.





The SickKids Foundation, which raises about $100-million a year, has walked away from large donations. “As soon as a gift becomes one in which involvement turns to influence, then it's not really a gift any more,” says Ted Garrard, CEO of the foundation.

To make the most of the donations, a gift has to jibe with the hospital's priorities – as it did with the renovation of the operating rooms. Detailed agreements are then negotiated and signed that set out the obligations of donor and recipient.

Mr. Garrard feels that most donors are not interested in “control” so much as “engagement and involvement.”

Major donors no longer just come to the table with accountants and lawyers, he says. Some have even hired independent scientists to assess the work of researchers they are considering funding.

“They want to be seen to be associated with a cause and feel like they are a part of the solution,” Mr. Garrard says. “They don't write a blank cheque any more.”

SIDEBAR: The art of the ask

Canada is a small pond and its pool of philanthropists even smaller. Competition for major gifts pits the pleas of patients against the poor, students against scientists. Diseases go head to head.

With “fewer donors giving more money” says Ted Garrard, CEO of the SickKids Foundation, one of the country’s largest and most successful fundraisers, having central control over “the pitches” and “the asks” is crucial. This way the hospital can be sure donations flow where they’re needed.

Having staff members make their own arrangements with private patrons can muddy the fundraising process for everyone, says Mr. Garrard.

“You don’t want (staff members) asking out of context, asking for things they shouldn’t. You don’t want rogue asks,” he says. “You don’t want every scientist in the country running to (Canadian businessmen) Seymour Schulich or Rob McEwen …asking for too much, or for the wrong thing.

“If you ask too early, you can scare off a potential donor, or get a lower amount than you would have otherwise if you had waited. It is sort of an art.”

To that end, hospitals and universities offer communications seminars and coaching sessions to teach staff how to sell their work to potential donors, to appeal to their particular motivations and to listen. In some cases, they run through scripts to ensure the meeting moves the prospect forward.

“It is so critical to involve the researchers,” says Mr. Garrard. “These are the people who can tell their stories, describe what they need and why they need it.”

After all, turning a prospect into a patron - the “cultivation cycle,” as they call it in the fundraising business - has never taken so long. More than a decade can disappear between cold call and deal closure, blind date and commitment.

The historic $30-million the Garron family gave for cancer care and research to Sick Kids last fall, believed to be the largest single gift to a pediatric centre anywhere in North America, began with a telephone call 11 years ago and a decade of continued contact. The hospital made its initial contact, Mr. Garrard said, knowing that Myron and Berna Garron had a personal connection to the hospital, since their 13-year-old son Michael, who died of cancer in 1975, had been treated at Sick Kids for many years.

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