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Crystal Myths: Behind the ROM's philanthropic façade Add to ...

When the ROM embarked on an ambitious renovation 13 years ago it needed all the philanthropic help it could get. Today, the institution is mired in debt and some of its key donors still haven't paid out their pledges. Greg McArthur, Kate Taylor and Jacquie McNish report on the challenges at Canada's pre-eminent museum

Crystal Myths
When the ROM embarked on an ambitious renovation 13 years ago it needed all the philanthropic help it could get. Today, the institution is mired in debt and some of its key donors still haven't paid out their pledges. Greg McArthur, Kate Taylor and Jacquie McNish report on the challenges at Canada's pre-eminent museum
When the ROM embarked on an ambitious renovation 13 years ago it needed all the philanthropic help it could get. Today, the institution is mired in debt and some of its key donors still haven't paid out their pledges. Greg McArthur, Kate Taylor and Jacquie McNish report on the challenges at Canada's pre-eminent museum

In the fall of 2006, as construction workers were putting the finishing touches on Toronto’s most polarizing piece of architecture – the Royal Ontario Museum’s Michael Lee-Chin Crystal – administrators were scrambling to raise more money.

The Michael Lee-Chin Crystal on Nov. 27, 2006 while it was still under construction. (Fred Lum/The Globe and Mail)

Canadian Imperial Bank of Commerce, which had lent the museum more than $72-million to finance the Crystal, was concerned that charitable pledges to the ROM were not keeping pace with its skyrocketing costs. One of Canada’s wealthiest citizens was invited to a meeting where museum officials pleaded for more money.

“We really need pledges,” a fundraiser told the patron. “We don’t care how long you take to pay it off.”

A number of the pledges that the museum promoted, and banked on, during the peak fundraising years for the $300-million renovation have not fully materialized, a Globe and Mail investigation has found. Since then, Ontario taxpayers have assumed the debt the ROM initially owed to CIBC and filled a $23-million void left by these donors – all of whom were given substantial recognition for pledges that, a decade later, remain outstanding. (Read the backstory from our reporting team.)

These unpaid donations – which the ROM promoted as “gifts received” – have triggered many problems: The museum has incurred penalties for missed loan payments and paid more interest than it envisioned. On top of that, the museum’s debt threatens to discourage new donors who are reluctant to fund the lingering costs of a long-finished project.

The money trickling in has arrived at a slower pace than the ROM once anticipated; 2015 marks the first time in five years that the museum has not had to defer part of its annual payment to the province.

This financial burden stems from the museum’s reliance on charitable pledges that were anything but firm, Ontario government records obtained under the Freedom of Information Act show. These documents, as well as more than a dozen interviews with officials close to the ROM, have lifted the lid on the secretive world of big-money philanthropy, revealing a fundraising campaign that at times placed greater emphasis on the perception that money was being raised than the actual collection of funds. In the dozen years since breaking ground for the Crystal, the ROM has struggled to pay off the debt on a striking – and, to some minds, unsightly – steel-and-glass creation bursting onto Bloor Street.

It is not unusual for donors to take several years to honour significant pledges. It is rare, however, for one of the country’s most prominent cultural institutions – one that houses Canada’s largest museum collection – to have so many uncollected donations for so many years.

“In my experience, I have not heard of such large pledges going unfulfilled in Canadian philanthropy,” said Don Johnson, a Toronto philanthropist who sits on the boards of four charitable foundations, including the Toronto General & Western Hospital Foundation.

The museum refused to discuss the identities of donors with outstanding pledges, but several sources close to the museum agreed to name names in interviews. Some said they were increasingly uncomfortable with the public recognition these donors received; others said they believed the museum was doing a disservice to other donors. The Globe and Mail was a sponsor of the renovation and provided free advertising space for more than two years, valued at more than $2-million.

The New Century Founders tribute — a photo of donors who have pledged more than $5-million — is seen on a wall in the Thorsell Spirit House on Dec. 10, 2014. (Fred Lum / The Globe and Mail)

One outstanding pledge came from Shreyas Ajmera, a food-industry magnate who made part of his fortune with a baking company. A photograph of Mr. Ajmera and his wife is featured on a wall-sized picture, located near the museum’s entrance, celebrating the ROM’s “New Century Founders” – people who promised more than $5-million to the campaign to renovate the museum. In 2008, the ROM named a gallery of international artifacts after the couple.

Shreyas Ajmera and his wife Mina are photographed at their home in Toronto on March 14, 2006. (Kevin Van Paassen / The Globe and Mail)

As of the beginning of this year, Mr. Ajmera had paid no more than a small portion of the money he pledged in 2006, five sources close to the museum said.

In an interview in February, Mr. Ajmera declined to specify how much of his $5-million pledge he had donated to the ROM. He said he had an agreement with the museum that allowed for contributions to be made at his discretion.

“When we pay, we pay,” he said.

Mr. Ajmera said that before the museum announced his gift, officials told him they needed more pledges to compensate for a lack of government funding. He said no one from the museum ever said to him, “You have to pay now.”

The sign for the Shreyas and Mina Ajmera Gallery of Africa, the Americas and Asia-Pacific at the Royal Ontario Museum is pictured on Jan. 20, 2015. (Fred Lum / The Globe and Mail)

On Wednesday of this week – one month after his first interview with The Globe – Mr. Ajmera said he was now in compliance with the two-year-old policy on naming rights, which stipulates that 25 per cent of a pledge must be paid before a space can be named. Mr. Ajmera said he has given the ROM more than $1.25-million, or one quarter, of his pledge. (An official close to the museum said Mr. Ajmera made a “significant payment” toward his outstanding pledge after his first call from The Globe.) In Wednesday’s interview, Mr. Ajmera said he was serious about meeting his obligation to the ROM.

In the nine years since the ROM announced Mr. Ajmera’s gift – which was heavily publicized, including in the pages of this newspaper – he has also served on the ROM’s board of governors. That organization, which is a separate entity from the museum, functions much like a hospital foundation and manages fundraising and donor recognition. This means Mr. Ajmera, like some other donors with outstanding pledges, helps oversee the organization responsible for soliciting his payments.

The ROM declined to answer questions about the terms of its agreement with Mr. Ajmera, citing its policies on donor privacy, but the pace of his payments has not affected his relationship with the museum. “Mr. Ajmera is in good standing with the museum and we are grateful for his support of the ROM,” Marnie Peters, a ROM spokesperson, said in a statement.

Alex Shnaider, a Russian-Canadian billionaire, has also received acclaim from the ROM for his contribution toward its revitalization. He and his wife, Simona, were identified in the museum’s 2007-08 annual report under the heading “gifts received” for having promised between $5-million and $10-million, and he was recognized at a museum gala as the annual donor of merit.

“The ROM would like to thank the following donors for their exceptional generosity.
GIFTS RECEIVED BETWEEN APRIL 1, 2007 AND MARCH 31, 2008
PRINCIPAL GIFTS ($5,000,000 TO $9,999,999)
Alex & Simona Shnaider

— A year of openings: Annual Report 2007/2008 (p. 28).

Simona and Alex Shnaider in the ROM's New Century Founders tribute photo. (Fred Lum / The Globe and Mail)

An image of the Shnaiders is also featured in the New Century Founders portrait. But that promotional material makes no mention of a key condition attached to Mr. Shnaider’s pledge. The billionaire’s donation was contingent on the success of his investment in Toronto’s Trump International Hotel and Tower, which has been mired in litigation and plagued by unsold units. Since Mr. Shnaider’s gift was announced and publicized, he has paid nothing toward his pledge.

In an e-mailed statement, a lawyer for Mr. Shnaider said that the ROM’s board of governors was aware his gift was contingent and that his client “did not request any public recognition.” Mr. Shnaider “remains committed to making a gift upon successful completion of the Trump project,” Symon Zucker said.

Mr. Shnaider’s lawyer said his client did not “execute any documents” in connection with the pledge. Even if he had signed a gift agreement, such records are not considered contracts and are not legally binding.

Like Mr. Ajmera, Simona Shnaider has served on the board of governors. She was appointed shortly after the Shnaiders received credit for their gift, and she left the board in 2012. As with Mr. Ajmera, the ROM refused to discuss the particulars of Mr. Shnaider’s pledge, but said he was “in good standing.”

The man who was in charge of the museum when the pledges were made, former CEO William Thorsell, told The Globe he had complete confidence in the pledges at the time and he retains that confidence now.

With each passing year, the effective value of these pledges has decreased: The ROM has had to pay the province $14.7-million in interest since taxpayers lent the museum $88.6-million eight years ago.

The pledges of these two men account for less than half of the $23-million still outstanding in pledges. The bulk of the missing donations can be attributed to one donor, Michael Lee-Chin, whose payments were delayed in the wake of the 2009 financial crisis.

‘DREAM BIG’

This fall, guests at the “Dream Big” gala for the Joseph Brant Hospital were treated to wild halibut from Northern British Columbia, an acrobatic performance and what the program described as a “historical and visionary” surprise announcement.

Michael Lee-Chin in Waterloo on June 12, 2012. (J.P. Moczulski for The Globe and Mail)

The Burlington, Ont., hospital used the gala as an opportunity to reveal the largest charitable gift in its history, a $10-million donation from the family of Mr. Lee-Chin, a billionaire investor. The hospital’s fundraising team called the donation from the businessman – who owns a sprawling estate not far from Burlington and a bank in his native Jamaica – “a true testament to the family’s philanthropic spirit.”

But for several sources close to the ROM, as well as the Ontario ministry monitoring the museum’s debt, the announcement was perplexing: Mr. Lee-Chin has yet to pay the museum more than $10-million of the $30-million he promised more than a decade ago.

When that gift was announced in 2003, it was heralded as an important step in Canadian philanthropy – an example of new money taking on a civic duty that had traditionally fallen to the old. It was a transition engineered by one of old-money’s most celebrated figures, Hilary Weston, chair of the campaign and the wife of Canada’s second-richest man.

Michael Lee-Chin's name on the sign outside the main entrance to the ROM. (Fred Lum / The Globe and Mail)

Mr. Lee-Chin told interviewers at the time how Ms. Weston came knocking on his door, appealing to a first-generation immigrant’s desire to make his mark. As the Crystal became a reality, Mr. Lee-Chin’s star shone the brightest: The ROM didn’t announce the Westons’ gift of up to $25-million until nearly a year after Mr. Lee-Chin’s. And while the Weston gift was recognized on the old wings of the building facing Queen’s Park, the ROM named the splashy new Crystal after Mr. Lee-Chin.

But six years after the announcement of Mr. Lee-Chin’s donation, an unforeseen storm spoiled the coming-out party for a new generation of philanthropists.

Mr. Lee-Chin’s then-mutual fund company, AIC Limited, was walloped by the global financial crisis, which sources said resulted in him temporarily suspending his payments toward the Crystal. He has since entered into a payment plan of approximately $600,000 a year, two sources said.

Mr. Lee-Chin declined to respond to numerous phone messages, e-mails sent to him through his assistant, and letters couriered to his home and office. Like Mr. Ajmera, Mr. Lee-Chin serves on the museum’s board of governors.

The individuals interviewed for this story had conflicting views on the billionaire’s partly fulfilled pledge. Several said the payments are slow but the donor is committed. “The museum is well disposed toward Michael Lee-Chin,” one source said. “He’s acting in good faith.”

Others said they were taken aback by the new pledge to the hospital. One source close to the museum said: “It’s not something that I understand.”

In a 90-minute interview at her museum office, Janet Carding, the ROM’s outgoing chief executive, invoked the “global financial crisis” as an explanation for the ROM’s donation challenges. She used the expression a dozen times in the interview. Ms. Carding declined to discuss individual donors, citing the importance of privacy for donor arrangements.

She said she believes the campaign to build the Crystal was a success, and said the museum continues to work with donors to ensure their gifts are paid at “times that work for them.” Stickhandling the museum’s debt obligations and the needs of its donors “has been a challenge,” she said. “This has not been an easy situation for the ROM.”

Nobody was expecting such a predicament 15 years ago, when several civic-minded businessmen partnered with the provincial and federal governments to remake Toronto’s arts institutions.

‘A GREAT LEAP FORWARD’

At the start of the new millennium – as flashy cultural attractions were increasingly recognized as key to the economic success of a city – Toronto joined the megamuseum building boom. The provincial Progressive Conservative government pledged about $100-million from its SuperBuild fund toward six of the city’s cultural institutions, and the federal Liberals followed suit with more funding. The third funding pillar was the city’s philanthropic ranks.

Private donors to Toronto’s SuperBuild cultural projects often stretched their payments over a number of years, so it was standard practice to take out large bridge loans to cover the cost of construction. The Canadian Opera House Corporation and the Art Gallery of Ontario retired their respective loans in 2012.

The ROM, however, was the largest of these projects and ran into the biggest cost overruns. Fundraisers had to keep raising their targets, and a board of governors made up of establishment figures worked to broaden their membership.

Nonetheless, the museum promised it would be prudent even as it signed on with star architect Daniel Libeskind to build a provocative modern addition to the historic museum that, when first proposed, called for engineers to invent a new cladding material that would somehow change seamlessly from glass to steel. Mr. Thorsell, a former editor-in-chief of The Globe and Mail who went on to become the museum’s chief executive, said the startling architecture would reinvigorate the institution responsibly.

In a 2003 ROM publication, he explained that to get its SuperBuild funds, the museum had to demonstrate that the project would strengthen the ROM’s finances, “rather than expose it to greater risks.” He later told the media that the funding, which eventually totalled $42-million from Ontario and $30-million from Ottawa, would “stimulate a great leap forward in the ROM’s self-sufficiency, ensuring the ROM continues to operate at the first rank of international museums.”

Instead, the soaring cost of this controversial and intricately engineered building triggered a cascade of problems that the ROM has struggled to contain.

Spring 2003
“[Ontario government’s] SuperBuild requires that new capital spending strengthen the economic security and vitality of an institution, rather than expose it to greater risks.”
ROM director William Thorsell in a museum publication

Today
The ROM owes $33.3-million in long term debt left over from the renovation. As of March 31, 2014, the museum also carried $11.6-million in operating deficits accumulated since construction began and had drawn an additional $4.4-million on a $5-million line of credit.

As the Crystal neared completion during a period when the price of steel skyrocketed, CIBC became nervous that pledges weren’t in line with expenses. A source familiar with the loan said the bank intended to hike the museum’s interest rate.

In October, 2007, the provincial government stepped in. Several months after the Crystal’s grand opening gala, Ontario assumed the debt through its lending arm, the Ontario Financing Authority, or OFA.

The museum is an agency of the province. A spokesperson for the Ministry of Tourism, Culture and Sport said in a statement that the ROM requested the refinancing “to reduce its interest charges and improve its long-term ability to meet its debt obligations.” The records released through Freedom of Information show that the OFA was involved from the outset, helping the ROM secure its initial loans from CIBC based on a business case that “reliable donor pledges would be collected.”

“In October 2006, with ministry support and Ministry of Finance approval, the ROM increased CIBC financing for RenROM... The government's support of increased financing was based on a business case submitted by the ROM outlining that RenROM would increase in museum attendance to 1.5M visitors annually and reliable donor pledges would be collected towards the project.”

— Ministry of Tourism, Culture and Sport briefing note, March 8, 2013 (p. 4).

The same business case, using averages achieved at other large North American museums, also predicted a spike in ticket sales to 1.5 million annual visitors, attendance the museum has never come close to reaching. (The ROM’s best numbers for post-renovation attendance date to the period of 2009 to 2011, when two popular exhibitions, Dead Sea Scrolls and China’s terracotta warriors, helped attract an annual 1.1 million visitors.)

The museum hasn't come close to reaching the 1.5 million annual visitors it predicted the Crystal would attract. (Jeremy Agius / The Globe and Mail)

In 2009, only two years after agreeing to take on the debt, bureaucrats were sounding the alarm about the ROM’s unfulfilled pledges. In a confidential briefing note to the then-minister of culture, Aileen Carroll, ministry officials explained that the museum had received only 50 per cent of the donations promised that year.

“Many factors contribute to the ROM's financial issues:
[redacted] Dwindling private-sector fundraising for RenROM.
... This year, pledge receipts lag commitment forecasts by 50% and donors are stretching their payments over a longer time period."

— Royal Ontario Museum's Financial Sustainability Challenges, Draft, Confidential Advice to Minister, February 2009 (p. 4).

By 2010, the ministry was aware the ROM had doubts about some pledges, raising concerns about the museum’s ability to pay its debt. “In some cases pledge payments have been delayed and in other cases ROM is determining whether payments are still collectible,” Alexandra Bent, a ministry official, wrote in a November, 2010, briefing note. (Ms. Carding told The Globe that the museum never considered writing off these pledges.)

“The current economic challenges have had a significant impact on pledges being realized. In some cases pledge payments have been delayed and in other cases ROM is determining whether pledges are still collectible."

— Ministry of Tourism and Culture INFORMATION NOTE, Nov. 9, 2010 (p. 2).

The museum made its first three annual payments to the province, in part by using proceeds from the sale of its planetarium building, which it sold to the University of Toronto for $22-million. In 2011, when incoming donations failed to cover the year’s payment, museum officials and the OFA restructured the loan. Not only did the new terms extend payments until 2027, they allowed the ROM to pay a penalty and defer its annual fixed-rate payment whenever there was a shortfall – a safety net that the ROM has availed itself of four of the five years since the loan was renegotiated. This special provision has kept the museum from going into default, but it has also created an ominous spectre in the years 2023 to 2027. During that period, the ROM is scheduled to come up with $29.6-million, according to a payment plan prepared by the Ontario government last summer. That plan accounts for the $23-million in outstanding pledges and an additional $10-million the ROM borrowed.

date,value1,value2,value3,type
'08,10,0,0,null
'09,15,0,6.8,null
'10,8,0,0,real
'11,6.4,6.6,0,real
'12,5,2.3,0,real
'13,2.3,2.1,0,real
'14,2.7,2.3,0,real
'15,2.2,0,0,projected
'16,0,1,0,projected
'17,0,0.4,0,projected
'18,0,0.4,0,projected
'19,0,0.4,0,projected
'20,0,0.4,0,projected
'21,0,0.4,0,projected
'22,0,0.4,0,projected
'23-'27,0,29.6,0,projected
date,value1,value2,value3,type
'08,0,10,0,projected
'09,0,15,0,projected
'10,0,8,0,projected
'11,0,13,0,projected
'12-'15,0,38.6,0,projected
'16,0,4,0,projected
date,value1,value2,value3,type
'08,10,0,0,projected
'09,15,0,6.8,projected
'10,8,0,0,projected
'11,6.6,6.4,0,projected
'12-'15,0,38.6,0,projected
'16,0,4,0,projected
date,value1,value2,value3,type
'08,10,0,0,projected
'09,15,0,6.8,projected
'10,8,0,0,projected
'11,6.6,6.4,0,projected
'12,0,7.3,0,real
'13,0,4.4,0,real
'14,0,5,0,real
'15,0,2.2,0,projected
'16,0,1,0,projected
'17,0,0.4,0,projected
'18,0,0.4,0,projected
'19,0,0.4,0,projected
'20,0,0.4,0,projected
'21,0,0.4,0,projected
'22,0,0.4,0,projected
'23-'27,0,19.6,0,projected
date,value1,value2,value3,type
'08,10,0,0,null
'09,15,0,6.8,null
'10,8,0,0,real
'11,6.4,6.6,0,real
'12,5,2.3,0,real
'13,2.3,2.1,0,real
'14,2.7,2.3,0,real
'15,2.2,0,0,projected
'16,0,1,0,projected
'17,0,0.4,0,projected
'18,0,0.4,0,projected
'19,0,0.4,0,projected
'20,0,0.4,0,projected
'21,0,0.4,0,projected
'22,0,0.4,0,projected
'23-'27,0,29.6,0,projected

The ROM’s fixed payment schedule

Scheduled
Overpaid
next
ROM fixed payment schedule as of 2014
ROM fixed payment schedule from 2007
ROM falls short on 2011 payment
ROM restructured payment schedule in 2011
ROM fixed payment schedule as of 2014
As of 2014, the ROM has deferred the bulk of its loan payments to the years 2023 to 2027, according to a schedule of payments prepared by the Ontario government. How did the museum get here?
In 2007 the Ontario Government assumes $72.4-million of the ROM's debt to CIBC. The government lends the museum an additional $16.2-million for a total loan of $88.6-million. The repayment schedule requires the ROM to pay the loan in full by 2016.
The ROM made its first three payments under this agreement, in part because of the $22-million sale of the planetarium. In 2011 the museum fell short of its fixed payment by $6.4-million. The museum was forced to restructure the loan with the Ontario government.
The new terms extended the loan to 2027 and created a floating interest portion as well as a fixed payment schedule. A large part of the loan was scheduled to be paid in the years 2023 to 2027.
Missed payments between 2012 and 2014 forced the ROM to defer about $10-million to the floating interest portion. This year the ROM is set to make its scheduled payment of $2.2-million and says extra payments will help it reduce the amount owing between 2023 and 2027 by more than half.

The museum said that it expects to make more payments than the ones outlined in that schedule, because it has firmed up some donor pledges, and that the amount owed in the final years should be half that. A spokesperson for the tourism ministry said: “We are confident that they will be able to pay back the loan in its entirety by the 2027 deadline.” However, one source close to the ROM said: “It’s pie in the sky to figure out how we could possibly pay this on time.”

But this was not the kind of message the ROM wanted to deliver to the public when it created this new flexible loan structure in 2011. A draft of an undated internal ROM communications strategy, which was also released as part of The Globe’s Freedom of Information request, details how the museum deliberately decided not to issue a media release about the new terms. Its primary concern at the time was ensuring that “donor confidentiality … remain paramount.”

“The ROM must be able to communicate that the Museum is not in serious financial difficulty and that the Renaissance ROM campaign was successful,” the document states. The author of the strategy is not identified.

“While the new OFA agreement has been discussed with the ROM Trustees, ROM Governors, and senior staff, it will not be formally publicly communicated through a media release or other means. However, the media may come to be aware of this agreement and ask the ROM for details, particularly an explanation of why it was necessary. The ROM must be able to communicate that the Museum is not in serious financial difficulty and that the Renaissance ROM campaign was successful."

— CONFIDENTIAL, Changes to the ROM's credit agreement with the Ontario Financing Authority, BACKGROUND FOR MEDIA SPOKESPERSON (p. 1).

The document also includes a mock question-and-answer session with a hypothetical journalist. Reporters inquiring about donors in default were to be told: “Some donors have requested their pledge payment schedules be extended. We have a 98-per-cent fulfilment rate for Renaissance ROM pledges.”

Question: Has the ROM had any donors default on their pledges?
Answer: As is common in the charitable environment in the last few years, some donors have requested their pledge payment schedules be extended. We have a 98% fulfillment rate for Renaissance ROM pledges."

— CONFIDENTIAL, Changes to the ROM's credit agreement with the Ontario Financing Authority, BACKGROUND FOR MEDIA SPOKESPERSON (p. 1).

Other records released by the ministry tell a different story. In 2012, $30-million in pledges were still outstanding – a fulfilment rate of 86 per cent on the $220-million the ROM says it raised privately. Asked to explain the 98-per-cent figure, a ROM spokesperson said it referred to both money received by the museum and “pledges on track to be paid.”

“Outstanding: $40 M
Pledges: $20 M
Verbal pledges: $10 M

To be raised: $10M”

— Feb. 16, 2012 email (p. 1).

The draft communications strategy also instructed ROM officials to deliver a short and emphatic answer if asked about specific donors stopping payments.

“Question: Did a [named donor] stop paying?”

“Answer: No.”

The tourism ministry had a different view of the museum’s finances. In 2012, then minister Michael Chan wrote to Sal Badali, the chair of the museum’s board of trustees – a body that oversees the museum’s operations, and is a separate entity from the board of governors, which oversees fundraising.

In the March 23, 2012 letter, which has been heavily redacted by government officials, Mr. Chan explains that he is “concerned at the extent of the museum’s current financial challenges.” He cites “delayed donor pledge payments” as one of those challenges.

I am concerned at the extent of the museum's current financial challenges. The combination of delayed donor pledge payments [redacted]”

— Letter from Minister Michael Chan to Sal Badali, chair of the ROM's board of trustees, March 23, 2012 (p. 7).

Meanwhile, bureaucrats closely monitored the pace of incoming donations and received updates from the ROM. In a March, 2013, presentation, the ROM explained that, a month earlier, it had taken “special effort” to encourage donors to speed up payments in advance of its scheduled loan instalments to the province. The initiative netted $120,600.

“Accelerated Pledges:
In February 2013, a special effort was made to encourage individual donors to accelerate pledge payments. This initiative resulted in $120,600 in accelerated payments by March 31, 2013.”

— Renaissance ROM Debt Repayment, Ministry Update, March 13, 2013, CONFIDENTIAL (p. 7).

A few months later, on June 3, 2013, ministry officials exchanged e-mails when they learned the ROM had received a donation from a donor whose name has been redacted from the documents. The next day, when they learned the amount paid – which has also been redacted – Diane Wise, a ministry director, couldn’t hide her surprise.

“That’s all?” she wrote. “I don’t think that is what OFA expected when they were told there were payments being made.”

That's all? I don't think that is what OFA expected when they were told there were payments being made.

Diane,
I just heard from Glenn and he stressed that there is no signed contract between the ROM and [redacted]. The donation is not legally enforceable; they have an "understanding" with [redacted].”

— June 2013 email conversation between ministry officials (p. 1).

‘THEY WILL NOT LET US DOWN’

A few weeks ago, after The Globe’s initial interview with Janet Carding, museum officials did something that at least one donor had been demanding for some time: It covered up the large photographic collage of its New Century Founders.

Visitors to the Thorsell Spirit House can no longer view images of the 17 donors who pledged $5-million or more – most of whom have paid out their pledges. Instead, they are greeted by a promotional poster for the museum’s upcoming exhibition on Pompeii, the Italian city buried in a volcanic eruption 1,700 years ago.

Out of sight

After The Globe's interview with the ROM's chief executive, a promotional poster for an upcoming exhibition covered the New Century Founders tribute — the photo of donors who have pledged more than $5-million.

before
after
INTERACTIVE BY CHRIS MANZA AND LAURA BLENKINSOP / THE GLOBE AND MAIL; PHOTOS BY FRED LUM / THE GLOBE AND MAIL AND MATTHEW SHERWOOD FOR THE GLOBE AND MAIL

Ms. Carding leaves the ROM next week to take on new post as director of the Tasmanian Museum and Art Gallery. Her interim replacement, Mark Engstrom, is a 27-year veteran of the museum.

He takes the helm of an institution that has seen its curatorial ranks shrink since it embarked on its quest to remake itself through grand architectural changes. The museum now has positions for 34 curators and assistant curators, compared with 46 around the time of the groundbreaking.

The ROM Governors – the museum’s fundraising arm – is also in a period of transition. New director Susan Horvath, who began her job on Dec. 1, 2014, takes control of an agency under scrutiny. Records released to The Globe show that the Ontario government was concerned it had no control over the arm’s-length governors. “As a private charitable foundation, the ROM Governors is not accountable to the government or the OFA. The ROM has not implemented a formal agreement between the museum and the foundation to ensure accountability over annual commitments to the OFA,” a 2013 briefing note states.

As a private charitable foundation, the ROM Governors is not accountable to the government or the OFA. The ROM has not implemented a formal agreement between the museum and the foundation to ensure accountability over annual commitments to the OFA.”

— Ministry of Tourism, Culture and Sport briefing note (p. 2).

As for its debt, the ROM says the horizon looks brighter than it did a few years ago. New donations are coming in and the museum expects to make its $2.2-million loan payment to the province at the end of the month. But major new donors will not be given recognition so easily. Since 2013, the ROM has belonged to a new philanthropic-sector accreditation program that requires firm policies around granting naming rights to galleries or wings.

The visionary behind the Crystal assures Ontario taxpayers that the uncollected pledges will be fully paid. Mr. Thorsell, who was director of the ROM from 2000 to 2010, defends the initial public recognition for donors. “We properly celebrated their pledges when they were made and created appropriate recognitions,” he said in an e-mail.

Although he is far removed from the museum now, he said his faith in the patrons has not wavered: “They will not let us down.”


Backstory

The Globe and Mail has been researching the Royal Ontario Museum’s record of charitable donations for eight months. The investigation was prompted by a tip in June, 2014, that some museum patrons received substantial public recognition for donations to build the Michael Lee-Chin Crystal that had not materialized.

Initial inquiries to current and former senior ROM officials were met with resistance. The Globe persisted, requesting documents under the Freedom of Information Act from Ontario’s Ministry of Tourism, Culture and Sports, which oversees the museum. Five months after the request was made, The Globe received 290 pages of ministry briefs, e-mails and financial statements. These documents revealed a disturbing portrait of a publicly funded institution that was financially handicapped by debts accumulated as a result of uncollected donations it continued to trumpet.

Over the next four months, a team of reporters interviewed more than 30 former and current officials from the ROM, the Ontario government and the philanthropic sector. The research cast a much darker light on the Crystal project that the ROM celebrates as the “largest and most successful cultural fundraising campaign in Canada’s history.”

THE REPORTERS

Greg McArthur is a member of The Globe and Mail’s investigative team. His reporting has been recognized by all of Canada’s major journalism awards: He has won a National Newspaper Award, several National Magazine Awards and the top prize awarded by the Canadian Association of Journalists. gmcarthur@globeandmail.com

Kate Taylor is a senior feature writer and columnist in Globe Arts. She is a two-time National Newspaper Award nominee and the author of two novels, Mme Proust and the Kosher Kitchen and A Man in Uniform. ktaylor@globeandmail.com

Jacquie McNish is a Senior Writer with The Globe and Mail. She is the recipient of seven National Newspaper Awards and the author of four books, two of which won National Business Book Awards. jamcnish@globeandmail.com

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