'We are not surviving on bake sales any more'

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We're sitting in a food court at the Toronto Hospital for Sick Children. It's just past noon on a Tuesday and the atrium is bustling with activity as doctors, nurses, patients and visitors scurry back and forth. No one gives Ted Garrard a second look, unaware that he's responsible for raising more than $100-million annually for the hospital.

Mr. Garrard stops eating, looks around at the commotion and fondly recalls the first time he came to Sick Kids.

"I was a patient here in the late 1960s," he says. "I think I was 10 years old. I had an overactive pituitary gland that they were studying. I remember it was fantastic because I was able to watch the Santa Claus Parade from my room."

The next time Mr. Garrard passed through the hospital's doors, it would be in 2009, as chief executive officer of the SickKids Foundation, one of the largest children's hospital foundations in North America. Mr. Garrard's return as a caretaker for the hospital came at pivotal moment for the foundation, whose reputation had taken a beating from a series of embarrassments. A botched fundraising effort, a scandal over severance payments to the departing CEO and questions about a host of senior departures added to the pain of sagging donations and soaring fundraising costs.

For a hospital that has grown from an 11-room house in 1875 to a global research powerhouse that cares for thousands of children every year, reviving SickKids' fundraising efforts in the midst of the recession and a scandal was an especially important and daunting task. While the hospital's founders vowed "No child shall knock in vain," many of its donation solicitors were doing just that.

So when the foundation's board asked if he would take on the job of CEO, Mr. Garrard could have easily declined. After all, he had a secure position at the University of Western Ontario, where he had spent 13 years as vice-president of development and raised more than $600-million. But Mr. Garrard jumped at the chance. "I love challenges," he says. "Fundraising is all about a challenge."

One of his first moves at SickKids was to organize a press conference with board chair Patsy Anderson to address the scandals head-on. "We had to get it out there, get the story over with and then start moving on to the other great things that we are supposed to be doing," he says.

The strategy worked. Within weeks, the scandal stories faded, donors returned and the SickKids Foundation started regaining its footing. Last year, the foundation had its best fundraising year ever, pulling in $107-million. Total assets have climbed well above $600-million thanks in part to a 41-per-cent return on investments. Costs are down and the organization has sharpened its focus on a specific set of priorities.

The financial success means the foundation will be able to turn over roughly $80-million to the hospital this year. While that's a fraction of its $700-million annual operating budget, it's a crucial source of funding for dozens of programs and research projects that would not exist otherwise.

Mr. Garrard isn't sitting tight. He says the foundation needs to raise about $150-million annually to fund its priorities, which include a $400-million research facility.

Finding the extra money won't be easy, and he knows it. Donation trends in Canada don't look good for charities. Over all, charitable giving dropped to $7.75-billion in 2009 from $8.19-billion in 2008 and $8.65-billion in 2007, according to Statistics Canada. The number of people giving has also been falling steadily and is at a 30-year low. And the average age of donors has crept up to 53, an indication that young people are not as engaged.

The tougher giving climate means donors are far more picky about their gifts and charities have to work much harder to get them. "We used to keep our donor records on recipe cards in a little recipe box at United Way," Mr. Garrard recalls from his days working at the United Way in Toronto in the early 1980s. "Now we need complicated systems to be able to do this."

To keep donations coming in, Mr. Garrard commands a staff of 140 people, including four full-time "prospect researchers," who scour databases looking for leads. They comb through public salary records, real estate holdings, past gifts and social connections. Leads are vetted by volunteers who cobble together more information. Once a prospect is identified, a pitch is made either by Mr. Garrard or a foundation director. The charity also relies on direct mail campaigns, door-to-door solicitations and telemarketing. All of which has helped generate a database of 300,000 donors and a network of 10,000 volunteers.

"We are not surviving on bake sales any more." Mr. Garrard says. "I get a lot of people I've hired from the private sector who come in and are quite amazed at the complexity of the work we do."

Most of that effort is aimed at securing major gifts, typically those over $100,000. Those donations are the lifeblood of large foundations and the only way for SickKids to meet its objectives. Right now those gifts make up about 40 per cent of the foundation's total annual donations. Mr. Garrard wants to boost it to 60 per cent. But that means competing fiercely with other charities and sometimes waiting years for a donor to make up his or her mind. "Sometimes it can take me four or five years [to secure a donation]" he says.

Not every gift is accepted either. Mr. Garrard once turned down a donation from a financial institution because the institution demanded the money be invested through the firm. One potential SickKids donor wanted to cover the cost of an addition to the hospital's atrium. "We had to say no because it just wasn't going to fit [with the design]" Mr. Garrard says.

Mr. Garrard says major donors have become much more involved in their giving. Some have advisers helping them make selections while others put charities through something akin to a beauty pageant before selecting which one to give to. "I would say that donors are becoming increasingly sophisticated in the kind of due diligence they do around some of their major gift giving," he said. They are also asking, "Will my gift make a difference and what kind of role will I have?"

To meet those demands, Mr. Garrard believes charities must be more accountable to donors. He is part of a pilot project with Imagine Canada, an umbrella group for Canada's charitable sector, to introduce accreditation standards for charities. The standards include financial management, governance, fundraising and many other areas. Participating charities would be subject to audits to ensure they comply. "It is the world's first self-regulation of charities and not-for-profit [organizations]" he says.

One area Imagine Canada has yet to tackle is salary disclosure. Unlike in the United States, federal regulations in Canada do not require charities to publicize individual salaries. A few charities have to disclose compensation because of provincial reporting rules, such as Ontario's annual "sunshine list." Others, like SickKids, have U.S. affiliates and report under U.S. rules which require publication of detailed salary information (Mr. Garrard earns $400,000 annually plus a bonus of up to $100,000). The result is a mixed bag of partial disclosure that frustrates charities and donors.

"I am all for disclosure," he says. "Our donors deserve it. We are using their money to support our salaries. That said, I do think that our donors need to be better educated on what it actually costs to run a charity."

Mr. Garrard would also like to see changes to tax rules to boost incentives for first-time donors. And he believes the government needs to become more concerned about the shrinking donor base. "I think it's about building a civil society," he says. "Canadians have a reputation as the most generous givers in world. If we are starting to see people become disaffected from giving, I think that sort of gives cause for concern about the kind of society we want."

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CURRICULUM VITAE

Personal

Born: May 27, 1958, Toronto.

Moved to Edmonton as a teenager.

Divorced, with two children, a 23-year-old son and a 20-year-old daughter.

Education

BA and MA degrees in political science and economics from Ontario's York University.

Career

1981: Policy analyst with the Ontario Liberal Policy Research Office.

1983: Joined the United Way of Greater Toronto as research director before becoming Campaign Director in 1992

1996: Vice-president of development at the University of Western Ontario responsible for fundraising, communications and public affairs.

2009: President and chief executive officer of SickKids Foundation

Hobbies

Reading

Travel

Gardening

Cooking