WE Charity is expecting to net $25-million from the sale of its real estate holdings and other assets as it winds down its Canadian operations and sets up a new endowment, documents released by the charity indicate.
WE announced last month that it was ending its programs in Canada and that co-founders Craig and Marc Kielburger would leave the organization. The charity said it had been forced to act because of disruptions caused by the COVID-19 pandemic and the controversy surrounding a cancelled contract with the federal government to run a student volunteer program.
At the time, Craig Kielburger said proceeds from the asset sale would be used to create “an endowment, we hope to sustain global projects for the long term, like our hospital, college and agricultural learning centre that meet critical needs of children and families.”
WE Charity lists $42-million worth of Toronto land and property on its balance sheet, which includes about 10 buildings. The market value is likely higher than that, which only reflects the prices WE paid for them. The buildings up for sale include WE’s 43,000-square-foot Toronto headquarters, which opened in 2017.
On Thursday, WE released a pair of reports funded by the Minnesota-based Stillman Family Foundation, which has extensive ties to the WE organization.
One report, which was prepared by Toronto accounting firm Rosen and Associates, said WE had “well over $50-million” worth of net assets in cash, marketable investments and real estate. The report added that WE estimated it would net “around $20-million to $25-million” from the asset sales after paying off bank loans and other costs. The accounting firm did not specify how the calculations were made.
WE has yet to provide details about how the endowment will be structured. The charity has been involved with several projects in Kenya, Ecuador, India and elsewhere. In its latest financial statement, WE said it spent $26.7-million on its international programs.
The Rosen report said that under the new endowment plan, WE “estimated that the core ongoing support for these activities could be continued for annual costs of under $1,500,000, and perhaps closer to $1,000,000.”
In a statement, WE said that because it was winding down Canadian operations “it will be not proceeding with any new development projects overseas. … Rather, it will be sustaining its current select infrastructure projects." It added that the Rosen report “has evaluated the running costs of these specific projects, which amounts to $1.5-million a year, which is in line with WE Charity estimates.”
WE said it released the Rosen report and another one by Matt Torigian, Ontario’s former deputy solicitor-general, to “correct inaccurate information” about the charity.
Mr. Torigian concluded in his eight-page report that the federal government reached out to WE to administer the volunteer program and that neither bureaucrats or the Prime Minister’s Office predetermined that the charity would be selected.
In its 11-page report, Rosen said that the “overall public commentary” about WE “is not based on readily available facts, but rather, a ‘group think’ type of behaviour where the same misleading statements are made over and over such that they are improperly assumed to be fact.”
Among the firm’s conclusions were that WE was financially viable last spring when it won the federal contract and that its real estate acquisitions “were well aligned with – and necessary for the delivery of – the organization’s social mission.”
Both reports were commissioned by the Stillman Family Foundation which has made several donations to Free The Children, WE Charity’s former name. According to IRS forms, the foundation gave Free The Children US$150,000 in 2016, US$258,775 in 2015 and US$91,775 in 2014.
David Stillman, whose relatives have served on the board of the family foundation, worked for WE Charity in the United States from 2010 to 2015 as director of U.S. operations. Mr. Stillman is now a business consultant based in a Minneapolis suburb and he has also served on the board of WE Charity U.S.
“While it can sometimes be awkward to have bosses younger than you, I can say without a doubt that they were the best leaders I have ever worked for and with,” Mr. Stillman said in an endorsement on WE’s website. Marc Kielburger also referred to Mr. Stillman as “our friend” in a 2016 blog post.
The Howie Stillman Young Leadership Fund, set up in honour of David Stillman’s brother, has also funded WE’s work in Kenya.
In a statement on Friday, WE said the Stillman Foundation commissioned the reports “as long-time supporters of the organization.” WE added that the foundation "funded this work because of their involvement with the organization not in spite [of] their involvement. Once the reports were complete, they wanted to publicly share the findings.” WE also said that David Stillman was not involved in commissioning the reports.
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