The Ottawa Senators Foundation responds to recent controversy

On Wednesday, Charity Intelligence Canada released a report about the Ottawa Senators Foundation, saying that they only used 46% of the money raised for charitable causes, which Beata reported on here. The Sens Foundation reached out to us to share their perspective, so we did a phone interview with Danielle Robinson, the President and CEO. Here is her take.

Before the interview really even got started, Sens Foundation President and CEO Danielle Robinson wanted to make one thing clear: “We are very proud of our work in the community.” Throughout the interview, she stressed the fact that everyone who works there (eight full-time employees according to the CIC report, nine total employees on the Foundation website) believes in what they do and wouldn’t be there if they didn’t believe in it.

Sens Foundation Mission

First of all, with any charity, it’s important to know what their goal is before evaluating. Robinson emphasized two main goals of the Sens Foundation: social recreation and youth mental health. The former is about providing access to sport (“Not just hockey!”) for families who otherwise wouldn’t have financial means. As Robinson put it, “What happens after school, on weekends, during summers is critical to child success. And so many good things come from participating in sport.” The latter is focused on two main areas: addiction treatment and suicide prevention. Mental health has been a big part of the Sens Foundation since Daniel Alfredsson got involved with the You Know Who I Am campaign.

She gave some examples of community organizations that they contributed to in 2017-18, such as the Boys and Girls Clubs ($500k), the United Way’s Project Step ($1M), and the Youth Services Bureau’s Bridges program for youth who have attempted suicide. Since the Sens Foundation doesn’t run its own programs, all of their funding goes to local initiatives. Since its foundation in 1998, the Foundation has donated more than $33M to local charities. For the 2017-18 season, this was $2.4M put directly into local organizations.

Revenue Streams

Possibly the biggest issue Robinson had with the CIC report was their lumping of donations.  She pointed out that around 10% of the Sens Foundation’s revenue is from philanthropic donations that can obtain a tax receipt. The rest comes from corporate sponsorship, lotteries (such as the 50/50 draw), and signature events (such as the Sens Soirée). So by the CIC’s accounting methods, 46% of revenue goes to charitable causes, but the Foundation accounts for money differently. They would argue that the proportion of donations that goes to charity is much higher.

For the signature events, the Sens Foundation looks for corporate sponsorship to cover the costs of events. Venue, food, drinks, decor, lighting were examples given of things that are covered by sponsorship. For example, the most recent Sens Soirée had Ferguslea Properties Ltd. and Bell in the title. In this way, people’s contributions in purchasing tables, buying auction items, etc. can go directly to charity. And none of these contributions are charitable for tax purposes, because people are receiving services or items (e.g. dinner, live music, signed jerseys) for their contributions. In the CIC’s report, these corporate sponsorships are considered as donations and the things they are sponsoring are considered as fundraising costs. The Foundation would disagree because they would argue that this is money companies are giving, knowing full well that it’s not going to charity, and it’s money they’re giving for sponsorship purposes, essentially coming from an advertising budget. It’s money that would otherwise not go to charity, and no company believes they’re contributing it directly for charitable causes. These corporate donations allow for the $200-300k fans spend during the Soirée annually to go to directly charity.

The biggest source of income for the Sens Foundation is the 50/50 draw. Robinson disputed the CIC’s numbers, saying that in 2017-18 they received $2.7M from the 50/50 draws, and that about 60% went to costs (paying the winner, OLG fees, machine and paper costs). This is a little bit less than the CIC’s estimate of 67% of the gross income going to incidentals. (Also for those wondering why the CIC’s estimate of 50/50 expenses went from $109k in 2015 and $95k in 2016 to $1.8M in 2017, it’s because in 2015 and 2016 the Sens tried a pilot program where the OLG gave money to winners directly, eliminating this as income.) The revenue from 50/50s fluctuates with things like attendance, playoff games, or other events such as last year’s Roar of the Rings. Robinson estimated that 50% of the Foundation’s income came from the 50/50 draws. She also wasn’t sure why the CIC’s numbers were different from their own, but encouraged others to look at the documents on the CIC’s website and determine it for themselves. (From my calculations, expenses made up 62% of the gross revenue from 50/50, per Note 11).

I also pointed out that the biggest campaigns I’ve seen to donate to the Foundation were spearheaded by bRian5or6 or Bonk’s Mullet (Sens Money on the Board). The only advertising I’ve seen the Foundation do for these campaigns is retweeting them, which costs no money. She emphasized that they are grateful for donations from fans and via these campaigns, but since direct philanthropic donations are only 10% of their revenue, they don’t put money into advertising this avenue. This means that these contributions aren’t paying for what the CIC referred to as Fundraising Costs.

Reserve Funds

Another thing the CIC pointed out was the large reserves being “hoarded” (Robinson’s word) by the hockey charities. She gave a clear reason for this: the threat of another lockout. As you know, the NHL had lockouts at the expiration of its CBAs in 2005 and 2012 (and in 1991!). The Foundation is concerned about losing its main revenue streams in terms of 50/50 draws at games that aren’t happening, and signature events that require players who are locked out.

As any charity should, the Sens Foundation has a volunteer Board of Directors to whom the staff report. The BoD decided two years ago to start building up a reserve fund to be prepared in case of a lockout as early as September 2020. Because some of these charities depend on annual funding from the Sens Foundation, the Foundation decided a reserve fund was the best way to ensure continued funding in the event of a lockout. Robinson said they felt “extremely lucky” to have access to resources such as NHL players that encourage so many fans to contribute, but they also realize there are disadvantages such as the loss of those players due to no fault of their own.

Transparency

The third thing the CIC commented on was lack of transparency. Robinson said this was never something they had never questioned as an organization in the past. First of all, the organization is overseen by the aforementioned independent Board of Directors. There is a list of bylaws to which the organization must adhere. Then the Foundation is audited annually by PwC. All documents are submitted to the CRA, and are publicly available on the CRA’s website like they are for all charities. When CIC asked for financial statements, a Sens Foundation spokesperson directed them to the CRA website since this was what they had always done in the past. Since this is the requirement for charities in Canada, they had considered themselves acceptably transparent.

That being said, she did say that with the recent comments by the CIC and reaction online, the concept of more transparency will definitely come up at their next monthly BoD meeting. The CIC suggested including audited financial statements on their website, and this will definitely be at least up for consideration at the next meeting.

What she did appreciate was that the CIC gave them a B+ for donor accountability. In terms of revealing where their money goes, the organization does a good job. Robinson was proud of the work her organization did and their involvement in the local community, and was glad at least this was reflected in the CIC report.

Final Perspectives

In the end, I’m very grateful to Danielle Robinson for reaching out. I won’t tell you whether you should agree more with her than the CIC. What she did ask was to consider that you can’t lump all charities together. A charity such as the Sens Foundation that is mostly driven by gambling fundraisers, and offsets the costs of its fundraising events with corporate sponsorship, is hardly comparable to charities that are driven exclusively by philanthropic donations from individuals. She pointed out that what some groups might call a program cost (e.g. meals for volunteers) and be considered charitable spending, the Foundation has to call an administrative cost because it does not run programs of its own. She also pointed out that it’s great to have questions asked of charities, because they need to be held accountable, but that she was frustrated the CIC didn’t ask any follow-up questions that had easy answers such as why they were building up reserves.

Charity is complicated. We’d obviously all like 100% of our contributions to go to charity, but it’s pretty much impossible to run a significant charitable endeavour without any paid employees or incidental costs. What I hope is that this interview at least gives some more clarity about the situation, and gives you a better idea of how your money is used when you support the Sens Foundation.