Skip to main content
managing great wealth

In this file photo from 2002 are Dick Haskayne and his wife Lois, who gave more than $16-million to the University of Calgary business school that now bears his name.Larry MacDougal/The Globe and Mail

Home to 65,000 pieces of art, the National Gallery of Canada bears works by the greatest names in the world, from Canadian icons Emily Carr and Tom Thomson to international masters Sandro Botticelli and Claude Monet.

Now, as it celebrates the country's 150th birthday, the gallery is looking to bring in names of a different sort: those of major donors.

The museum's foundation is aiming high. It wants to raise enough money to completely reimagine the Canadian galleries and create a "Masterpiece Fund" to acquire exemplary works from around the world. That will require lots of cash.

For philanthropists, the returns are many, and they include naming rights. Gifts to the museum of $1-million or more can secure donor recognition on galleries and public spaces. Depending on the size of the room and the art within it, some command $10-million or more.

"People like the association with the premiere arts institution in the country. There's this real sense of permanence and legacy," says Karen Colby-Stothart, chief executive officer of the National Gallery of Canada Foundation. "It's a beautiful way for some families to engage." Among the big-name donors are Ash K. Prakash and Ronald Mannix.

The gallery is certainly not the only Canadian institution to offer naming rights. Hospitals, schools, arts groups and non-profits also find ways to recognize individuals for major gifts.

Consider the $20-million donation by the Larry and Judy Tanenbaum family to the Montreal Neurological Institute and Hospital, affiliated with McGill University, in December. With Prime Minister Justin Trudeau in attendance, the university announced the creation of the Tanenbaum Open Science Institute to advance neuroscience research and technology.

Business-transition tsunami coming for aging baby boomers

A big inheritance can do more harm than good

How these all-too-human errors could sink your assets

In Alberta, Jack and Joan Donald recently donated $3-million to Red Deer College, money that will go toward construction of the Donald Health & Wellness Centre, which will house the postsecondary institution's School of Health Sciences. Assiniboine Park in Winnipeg, meanwhile, received a $2.5-million gift from Shirley Richardson and her family last fall. Ms. Richardson's donation will be recognized with a butterfly garden named after her.

Not to be confused with sponsorship – in which a corporation attaches its name to a place for a fixed term, as in the case with Toronto's Air Canada Centre – philanthropic naming rights are handled in a variety of ways. Whether a high-net-worth Canadian chooses to leave a lasting legacy or reap tax benefits or both, there's much for potential donors to consider before handing over a cheque.

Crucial is whether a donor's values align with those of the institution they're considering supporting. Another factor is valuation: How are donation-recognition thresholds established, especially when it comes to major gifts that may come along unexpectedly?

Corporate-sponsorship valuations are linked to tangible measures such as foot traffic, website visits or television rights, says Vincent Duckworth, partner at the Calgary-based fundraising consultancy ViTreo Group.

But with philanthropy, "it's a little bit different because it's more intrinsic. It's a longer-term alignment between two philosophies. It's rarely about the eyeballs, but it might be about prestige," he says.

The University of Northern British Columbia in Prince George is one of the top-ranked undergraduate institutions in the country, he says, but it's not going to command the same values as something in Toronto.

"But it's not going to be that far off. It varies less than you'd think," said Mr. Duckworth, who also works with organizations, helping them establish valuation in advance of their fundraising efforts.

Generally speaking, it takes $15-million to $30-million to name a business school and anywhere from $90-million to $120-million to name a medical school, he says.

Longevity also affects naming rights. The naming of a school is forever, but the naming of a room or wing within one may last only for the duration of a facility's existence. "A building life might be 80 years or 50 years," Mr. Duckworth says. "What are they going to do at the end of that?"

Another tactical detail that might not cross a philanthropist's mind is how the relationship with the organization will be maintained over time. Who will be in contact with a multimillion-dollar donor once the current president, chancellor or board members move on?

"There needs to be a written agreement between the parties," Mr. Duckworth says, and it's more of a moral agreement than a legal one. "If you want to make a $10-million gift, it has to be no strings attached. The continuity of the relationship needs to be considered so that 10 years from now that history of the original gift is still in people's minds.

"Dick Haskayne has people walking up to him thanking him for the gift he made in Calgary 15 years ago," Mr. Duckworth says of the Alberta petroleum executive who, along with his wife, gave more than $16-million to the University of Calgary business school that now bears his name. "It's not just write a cheque and walk."

Both parties must also consider how each would exit the agreement if it comes to that – say, the school is involved in a major scandal. Do donors have the right to remove their name?

Major donations can also result in awkward situations when a donor's name has been tainted. Take the 2005 case of David Radler, who, despite a donation of $1-million to Queen's University, had his name removed from a business school hallway after he pleaded guilty to fraud. His donation was also returned.

Often, donors don't seek out naming rights to begin with, nor do organizations actively woo donors to name buildings or programs after. Rather, such opportunities come about organically.

"We find donors are rarely motivated by naming opportunities, per se, but the actual project and purpose for the gift," says Richard Fisher, chief communications officer of development and alumni engagement at the University of British Columbia. "Typically, facilities that directly support the students, faculty, research or the community are more attractive. Donors tend not to give to administrative entities."

Individual philanthropists typically have some kind of pre-existing relationship with the university through a shared passion, for example the environment, health, or human rights, he adds. "It is a very natural relationship."