You've probably noticed that Canada's rich are giving away fortunes.
Prospector Stewart Blusson handed $50-million he made from finding a diamond mine to the University of British Columbia. Cable magnate Randy Moffat of Winnipeg pledged $100-million to needy kids. Gold tycoon Peter Munk plowed $37-million into a cardiac centre at a Toronto hospital. Gifts on this scale seem to be in the headlines each week.
This is giving on a scale Canada has never experienced. Entrepreneurs are helping good universities become great, grafting new wings on hospitals, getting opera houses built. It's all because of a simple change in the way the rich are taxed, a change that came about because investment banker Donald K. Johnson wouldn't take no for an answer.
The Globe and Mail's Nation Builder for 2007 is a fellow from small-town Manitoba whose tireless, 12-year campaign for more generous tax treatment on charity donations has opened the philanthropic floodgates from coast to coast.
As a Bay Street deal-maker, Mr. Johnson spent his career convincing chief executive officers that he could help build their companies. But he spent almost as much time convincing a series of skeptical finance ministers that a particular tax break for the wealthy could be good for all Canadians.
Now, as billions pour into charities, those finance ministers are staggered by what he has wrought.
In honouring Don Johnson - who at the age of 72 still goes to work each day in crisp blue shirts with white collars as an adviser to BMO Nesbitt Burns - The Globe and Mail is not just saluting what he has achieved on the philanthropic front. It's also serving notice on the unimaginable benefits his generation's gifts can bring to other Canadians.
"Don Johnson opened the door to a new perception on charitable giving. He's redefined what charity means in our society," said one-time doubter Paul Martin, the former finance minister and prime minister.
It all started in 1994 because Mr. Johnson wanted to please his wife, Anna McCowan Johnson. They'd first met in 1981 when, after an amicable split, Mr. Johnson's first wife introduced her to him as their younger daughter's ballet teacher. Now the National Ballet needed someone to lead a $12-million campaign fundraising for its new home.
Ms. McCowan Johnson and her friend Karen Kain (then a principal dancer with the National, now its artistic director) coaxed Mr. Johnson into the job.
That is when he realized there was a problem: Like most people, he spent the bulk of his cash income each year. Like most wealthy people, he was sitting on a whack of stock - Bank of Montreal shares he had acquired when the bank bought the investment dealership he co-owned. He wanted to donate shares to the National Ballet.
Americans don't pay capital-gains tax on such gifts, a tax break that has fostered, among other things, the billion-dollar endowment funds that support great universities, such as Harvard and Yale. Canadians, on the other hand, would trigger punishing capital-gains taxes when they gave away shares. So no one donated stock to charities.
Across this country, rich folks funded philanthropy out of their income, not their investments. Mr. Johnson thought that was bad policy. "I realized if you changed the policy," he says, "you would open the door to all kinds of donations from entrepreneurs, whose wealth was tied up in the companies they owned."
Ottawa bureaucrats were opposed from the start. Mr. Johnson says there were two main reasons: "The bureaucrats objected to any tax cut that would cost the government revenue. And they really objected to a policy that would see wealthy individuals directing taxpayers' money to their favourite charities, at the expense of other worthwhile causes."
Without the support of Finance Department mandarins, the politicians seemed unlikely to hand a tax break to the rich.
"The argument against Don's policy had merit," Mr. Martin says. "The fear was you would have a situation where Hospital A in downtown Toronto would be better able to attract donations than Hospital B in a small, poor town."
After futile rounds of meetings with bureaucrats, Mr. Martin and prime minister Jean Chrétien, most part-time fundraisers would have thrown in the towel. Mr. Johnson simply dug in for a longer battle.
His wife describes him as an "obsessive-compulsive workaholic." She says it in the kindest way. Mr. Martin takes the same admiring tone when he says: "Don is the most tenacious, stubborn, dedicated advocate I have ever met."
The tenacity reflects a hardscrabble upbringing. Mr. Johnson grew up in Lundar, Man., where his father ran a trucking firm and a small dairy. His dad passed away while Mr. Johnson was still in grade school and his mother moved the family - two brothers and a sister - to Winnipeg, where Mr. Johnson used student loans to pay for an electrical engineering degree at the University of Manitoba.
On graduating, he landed a job at General Electric, with internships in marketing and finance as well as engineering assignments on radar equipment. He enjoyed the finance work, but was less excited about the prospect of a career working with wires. Like many engineers, Mr. Johnson decided to get an MBA. But first there was the problem of those student loans.
"I found this company servicing the DEW line in the Arctic that was paying three times what GE did, for the same work. So I signed up," says Mr. Johnson, who spent two years at a radar station on Cambridge Bay, in what is now Nunavut, earning the money to go to business school.
He joined Bay Street brokerage Burns Bros. & Denton as a mining analyst in 1963 (in his first report, he picked a stock that went sideways for the next decade), became president of Burns Fry in 1984 and vice-chairman of BMO Nesbitt Burns in 1989.
Mr. Johnson has always set aside a third of his working day for charitable concerns, a habit his employer indulged. Friends joke that he can be generous to a fault.
His former boss, John MacNaughton, who was president of BMO Nesbitt Burns, tells the story of Mr. Johnson mustering all kinds of support for a man who was going to jog across Africa, wearing a T-shirt with the bank's logo on it. "This runner was going to get more media coverage than Terry Fox," Mr. MacNaughton says. The athlete got $50,000 from the bank and a glorious send-off party. He was never heard from again.
But when Mr. Johnson decided to lobby the finance minister and PM with a letter-writ-
ing campaign from every non-profit board member he knew in Canada - initially 600 community leaders from hospitals, universities and the arts - the Bank of Montreal didn't just give its rainmaker time off. It assigned him two assistants.
As the campaign got rolling, every MP began getting one-page letters from Mr. Johnson and community leaders in their ridings, all pushing for a new source of capital for their hospital, their local university, their hockey rink or art gallery.
"None of us thought the full elimination of capital gain would ever occur. Don was just so damn persistent. He collected data from charities. He lectured public servants and harangued politicians," says Malcolm Burrows, who calls himself "one of Don's army" as the volunteer head of government relations for the Canadian Association of Gift Planners in Ottawa.
Mr. Burrows, who also runs the Bank of Nova Scotia's philanthropic advisory unit, says: "In government and charity circles, Don was considered to be a slightly unhinged obsessive, but he was right."
In the 18-month period leading up to one federal budget, Mr. Johnson and his two secretaries fired off 10,000 letters. The banker began to dog Mr. Martin, along with successors John Manley, Ralph Goodale and Jim Flaherty, the same way he successfully stalked CEOs of companies such as Imasco and Suncor to win billion-dollar assignments.
"Don didn't just show up at every speech I made. He seemed to pop up behind every tree, on every street corner, with a big smile and yet another letter explaining his cause," Mr. Martin says.
"He made the very powerful counterargument that while certain charities were bound to be favoured, the country stood to benefit over all from accessing this enormous amount of money that would not otherwise be going to charity."
Mr. Martin bought in to the logic. He cut 50 per cent of the capital-gains tax on stock donations in 1997. Mr. Flaherty "finished the job," as Mr. Johnson says, by making stock gifts totally exempt from capital-gains tax in 2006.
"Officials decided to change the law when their own analysis convinced them that forgoing $800-million in tax revenue was less of a cost than dealing with Don for another 20 years," Mr. MacNaughton jokes.
It changed the face of Canadian philanthropy. In the 40 years before the 1997 tax break, the United Way in Toronto had received just $44,000 in stock donations. Since then, the charity has been given $60-million. Nationally, gifts of stock to Canadian charities, negligible before 1997, total $3-billion in the past decade. (Charities generally convert all stocks into cash right away.)
"My hope is these gifts help Canadian institutions go from good to great," Mr. Johnson says. "We're competing against the United States and the rest of the world, and these gifts will build the endowments and the institutions that will attract the very best people, in medicine, in education, in the arts."
There now seems to be a competition to see who can give the most. In 2003, retired Laidlaw International CEO Michael DeGroote gave $105-million worth of stock to McMaster University's medical school, the largest single donation in the country's history. The gift instantly made the school among the best endowed in North America.
Research in Motion founder Mike Lazaridis gave part of his stake in the BlackBerry maker to Waterloo University in 2004 to establish cutting-edge computer and physics programs.
Within days of Ottawa's 2006 tax cut, construction and sports tycoon Larry Tanenbaum gave $50-million to the United Jewish Appeal. In doing so, the head of Maple Leaf Sport and Entertainment also threw down the gloves with fellow millionaires. His son, Ken Tanenbaum, said: "He's looking to inspire others, given the policy that [Finance Minister Jim]Flaherty has put in place with respect to the capital gains."
"I don't think Canadians understand what Don's work has done for all Canadian charitable organizations. It's nothing short of amazing," says lawyer Gail Asper, president of the Winnipeg-based CanWest Global Foundation.
Mr. Johnson and his wife, who have five children between them as well as five grandkids, have done more than just lobby. After what Mr. Flaherty calls "Don's law" came into effect, the banker donated $1.3-million to the University of Western Ontario's business school and $5-million to a Toronto hospital's vision centre - he has terrible eyesight. (He's also chairing the centre's $15-million fundraising campaign.)
And that $12-million National Ballet campaign, back in 1994? It raised $13-million.
However, the gifts given to date, from Mr. Johnson and other wealthy citizens, may be just a prelude to the next act in Canada's philanthropic evolution, as the baby boomers turn their energy and their money to legacy projects.
"Entrepreneurs can create jobs in ways no government ever can. Doesn't it make sense that social entrepreneurs can solve public problems in way no government can?" Mr. Martin asks.
"Don Johnson gave social entrepreneurs that opportunity. There was an ice jam and he blew it apart."
Andrew Willis is a columnist for The Globe and Mail's Report on Business.