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WE Charity’s donors and corporate partners are rightly shaken by all of the recent disclosures about what is going on at WE. As Craig and Marc Kielburger acknowledged in https://www.newswire.ca/news-releases/media-statement-we-charity-853384204.html their apology, WE Charity’s integrity and purpose are being questioned. This has harmed the trust that Canadians have in WE and the charity knows that it needs to address it.
WE Charity’s co-founders, Craig and Marc Kielburger, have promised to more closely examine WE Charity’s internal structures and governance and https://www.newswire.ca/news-releases/planning-for-the-future-of-we-832131931.html yesterday they announced a few first steps.
To build on these first steps We Charity may want to consider three additional items to shore up donor confidence. These are simple and can be done within the next few weeks.
https://www.charityintelligence.ca/research-and-news/ci-views/43-charity-news/662-ci-s-top-10-questions-for-marc-and-craig-kielburger Charity Intelligence’s Top 10 Questions for Marc and Craig Kielburger
 
1. Hire top-tier auditors
WE Charity is one of Canada’s largest charities, receiving more than $60 million each year in support. It has global operations, with both its international development work and also its WE Charity affiliates in the US and UK. It has a highly complex structure with multiple entities and related parties, such as Craig and Marc’s private business ME to WE. It has grown far beyond the teenage start-up from Thornhill, Ontario.
Yet, despite this expansion, it has retained the same auditors. With the greatest respect for Kestenberg Rabinowicz Partners LLP and to Swiantek, Kling & Pasieka LLP in Niagara Falls, New York, WE Charity should consider a switch to a top-tier auditor.
Yes, a top-tier auditing firm will cost more money. However, this would give WE Charity’s donors and corporate sponsors more confidence. WE Charity aspires to be transparent and accountable. A top-tier auditor would signal far greater credibility than other endorsements. This is money well spent.
WE Charity’s fiscal year end is August 31. Charity Intelligence suggests that WE Charity announce a new auditor as soon as possible.
 
2. For governance, WE Charity could add more independent directors
Charity Intelligence has concerns about WE Charity’s directors’ independence. Currently WE Charity Canada has four directors. One director served as Deputy of Operations at ME to WE, the private business of Marc and Craig Kielburger. The chair, a York University faculty member and former staff member with the Toronto Catholic District School Board, was Marc Kielburger’s high school teacher.
Given the complexity of WE Charity and its financial issues, the new Canadian directors should be fit for purpose. WE Charity is a distinct entity from ME to WE. This could be reinforced with additional independent directors who are arm’s length from ME to WE.
WE Charity has close connections with corporations and leaders. These people with experience should serve as directors. It would be appropriate for WE Charity’s board to have eight to twelve directors to bear the workload as it works through this crisis.
As well, WE Charity’s staff must be distinct. WE Charity, WE Charity US, and ME to WE should consider separate chief financial officers.
 
3. Close the co-founder loophole
To Craig and Marc, you have built a great Canadian success. You should be immensely proud of being co-founders of WE Charity and ME to WE. By all means keep ‘co-founder’ in your title. But you need to take on a position that has fiduciary responsibility and accountability.
There’s a co-founder loophole. Co-founder is not recognized as a position in governance. There are no requirements under Canadian accounting rules to note transactions to co-founders. Co-founders are not listed on government filings.
Co-founder is a warm and fuzzy title that carries no fiduciary responsibility and no disclosure requirements. As a co-founder, there is no accountability.
You believe in WE Charity. Please show this commitment by stepping up as directors of WE Charity and WE Charity US.
 
Additional reading: Charity Intelligence’s report on https://www.charityintelligence.ca/charity-details/82-we-charity WE Charity
 
Legal disclaimer: The views and opinions expressed are to inform donors on matters of public interest. Views and opinions are not intended to malign any religion, ethnic group, organization, individual, or anyone or anything. Any dispute arising from your use of this website or viewing the material hereon shall be governed by the laws of the Province of Ontario, without regard to any conflict of law provisions.

WE co-founders Marc and Craig Kielburger will appear before the Finance Committee on July 28, 2020. New information about the complex network of WE entities is coming to light for the first time in the aftermath of the Canadian government’s announcement of a sole-source contract with WE Charity to administer the $912 million Canada Student Service Grant (CSSG).
Since WE Charity is one of Canada’s largest charities with a global profile, Charity Intelligence (Ci) is closely following these hearings to learn and share new information. On behalf of Canadian donors looking for answers, these are the Top 10 questions we would ask Marc and Craig Kielburger at the Finance Committee hearings. 
 
Charity Intelligence’s Top 10 Questions for Marc and Craig Kielburger:
1. The CSSG was contracted through WE Charity Foundation, a new separate charity, rather than WE Charity. The explanation was that this was done for legal liability purposes. Did you consider that this course of action might increase the risk for the Government of Canada and also Canadian taxpayers? 
Why ask this? Canada Revenue Agency filings show that WE Charity Foundation was registered in January 2018 to hold real estate for the benefit of WE Charity. The stated intention was to transfer millions of dollars in property to the Foundation, but as of June 2020, https://globalnews.ca/news/7203337/trudeau-we-charity-foundation-real-estate-holding-company/ Global News reports that the transfers had not yet been made, which means it had few assets.
 
2. Why do you not hire leading international auditors to prepare your financial statements?
Why ask this? WE Charity Canada, WE Charity US, and WE Charity UK raised $60 million in annual support in 2019. When giving to charities of WE’s size, complexity, and global scope, donors and corporate sponsors often have greater confidence in top-tier international auditing firms, which is why larger international entities typically use them (C https://www.charityintelligence.ca/research-and-news/ci-views/43-charity-news/661-we-charity-next-steps i’s article WE Charity’s Next Steps).
 
3. On May 19, 2015, ME to WE Foundation US and WE Charity US each paid US$500,000 to purchase website domain(s). What domains were bought and who owned them at the time they were purchased?   
Why ask this? According to 2019 documents, in 2015 ME to WE Foundation paid US$500,000 for the website domain we.org. On the same day, WE Charity (a separate US 501.c.3. charity), also paid US$500,000 for website domains. The recipient(s) of these funds/seller(s) of these domains were not disclosed.

 
 
4. Why do you need so many different entities and such a complex organizational structure in order to do your work?
Why ask this?  WE Charity Canada is only one piece of a highly complex network that includes charities and private businesses. The partial list includes WE Charity (US), WE Charity (UK), ME to WE Foundation (US), ME to WE Foundation of Canada, WE Charity Foundation, Wellbeing Foundation (Canada), Wellbeing Foundation America Inc. (US), We365 LP, We365 Holdings Inc., We365 GP Inc., and Imagine 1 Day International Organization. The Kielburgers also have a https://www.charityintelligence.ca/media/audit_pdfs/WE%202019%20audited%20financials.pdf controlling interest, through a holding company, in a private business ME to WE Social Enterprises Inc. More related and affiliated organizations may not yet be identified. 
 
5. How do you explain that ME to WE Foundation has not disclosed in its US regulatory filings the non-arms-length relationships of its three directors? 
Why ask this? The application for 501.c.3 charities asks: ‘Are any of your officers, directors, or trustees related to each other through family or business relationships?’ Over the past ten years, ME to WE Foundation filings have indicated ‘no’ to that question. According to https://www.wecharity.org/about-we-charity/our-team/ publicly available records, directors Dalal Al-Waheidi and Victor Li have long and extensive working relationships with each other. Director Wendy Yunli Qi is married to director Victor Li. 
 
 
https://www.charityintelligence.ca/charity-details/82-we-charity Ci’s report on WE Charity
https://www.charityintelligence.ca/research-and-news/ci-views/45-r-d/663-charity-intelligence-finance-committee-statement Ci’s statement for Finance Committee
https://www.charityintelligence.ca/research-and-news/ci-views/43-charity-news/661-we-charity-next-steps Next steps for WE Charity
 
6. Why are you not directors, officers, or trustees of any of these charities, but rather take the title “co-founders”?
Why ask this? Directors have fiduciary responsibilities for governing and overseeing a charity. Furthermore, there is no regulation in either the US or Canada requiring auditors to report transactions involving co-founders. Any moneys received from the Kielburgers – and any moneys paid to the Kielburgers – can legally go unreported in an audit. This co-founder loophole makes it impossible to trace dollar flow between entities and individuals.
 
 
7. At WE Charity (US) there are two classes of members. Will you provide to the Committee a list of founding and voting members since inception, and does WE Charity (Canada) have a similar selection mechanism for Canadian directors?
Why ask this? At WE Charity (US), there are two classes of membership: founding and voting. Voting members are authorized to elect the board of directors, and also to elect additional members. Founding members’ approval is required to admit new members, but founders have no other voting rights.
 
8. Would you be willing to provide the Committee a complete list and organizational chart of all entities in all jurisdictions which have as directors, members, and/or officers any of the following people in the last five years: Marc Kielburger, Craig Kielburger, Kielburger family members, Dalal Al-Waheidi , Scott Baker, and Victor Li.
Why ask this? In the last few weeks, several new entities have come to light that are part of the WE network. To facilitate research and to understand the full picture, it would be helpful for donors to know all of the various entities.
 
9. What are the names of the external advisors who recommended Greg Rogers as Chair of WE Charity (Canada)?
Why ask this? Based on a statement from Greg Rogers (board Chair), external advisors and existing board members were engaged to facilitate the process and identify potential Chair candidates.
  
10. ME to WE Foundation US reports US$15.8 million in program spending since 2015, but reports no staff or wages paid. What specifically was this money spent on?
Why ask this? Since fiscal 2015, https://www.charitiesnys.com/RegistrySearch/show_details.jsp?id={0E2556CA-8D80-4530-95AA-C8115E55BE2F} ME to WE Foundation has spent US$15.8 million in ‘program services’. US$8.6 million was spent in fiscal year 2019 alone. ME to WE Foundation reports no staff or wages paid. In 2019, it gave $600,815 to other charities. 
 
 
It’s important for Canadian donors to have a full understanding of the entire network of charities they are funding. What goes on in these various international entities may influence giving decisions. The more donors understand about the entirety of the network, the better informed they will be, and the better able to give intelligently.
Ci researches Canadian charities to help donors be informed and give intelligently. Its website posts free reports on more than 750 Canadian charities, as well as in-depth primers on philanthropic sectors like Canada’s environment, cancer, and homelessness. Today over 360,000 Canadians use our website as a go-to source for information on Canadian charities reading over 1.3 million charity reports. Through rigorous and independent research, Ci aims to assist Canada’s dynamic charitable sector in being more transparent, accountable and focused on results.
 
Media enquiries: 
Kate Bahen, Ci Managing Director: kbahen@charityintelligence.ca
Greg Thomson, Ci Director of Research: gthomson@charityintelligence.ca
 
If you find Charity Intelligence’s research useful in your giving, please consider https://www.charityintelligence.ca/donate donating to support our work. Being funded by donors like you maintains our independence to help Canadians be informed in their giving. Canadians donate over $17 billion each year. This giving could achieve tremendous results. We hope Charity Intelligence’s research helps Canadians give better.
 Legal disclaimer: The information in this report was prepared by Charity Intelligence Canada and its independent analysts from publicly available information. Charity Intelligence and its analysts have made endeavours to ensure that the data in this report is accurate and complete but accepts no liability.
The views and opinions expressed are to inform donors on matters of public interest. Views and opinions are not intended to malign any religion, ethnic group, organization, individual, or anyone or anything. Any dispute arising from your use of this website or viewing the material hereon shall be governed by the laws of the Province of Ontario, without regard to any conflict of law provisions.

To watch the https://parlvu.parl.gc.ca/Harmony/en/PowerBrowser/PowerBrowserV2/20200806/-1/33657?Language=English&Stream=Video Finance Committee questioning of Charity Intelligence. (There is a break due to a server issue at 12:06 and the meeting resumes with final questions at 12:56.)
To watch Ci at https://parlvu.parl.gc.ca/Harmony/en/PowerBrowser/PowerBrowserV2/20200813/-1/33713?Language=English&Stream=Video Committee of Government Operations and Estimates on August 13, 2020 with Gail Picco of The Charity Report
 

” My name is Greg Thomson, Director of Research for Charity Intelligence. 
Charity Intelligence is itself a charity – one that analyzes Canadian charities to help donors be informed and give intelligently. Our https://www.charityintelligence.ca/ website hosts free reports on more than 780 Canadian charities, and provides insight into specified-giving areas such as the environment, cancer, and homelessness.
This last year, some 314,000 Canadian donors used our website for information on Canadian charities, reading over 1.3 million charity reports. We estimate that our research helped inform and influence $95 million in Canadian charitable giving last year alone.
Just as democracy depends upon informed citizens, the fundamental health of philanthropy rests on well-informed donors.
Our own research supports this case. In surveys of donors who have used our resources, 77% say that Charity Intelligence reports have improved their confidence in giving to charities and have inspired these donors to give 32% more money to charities.
It’s within this context that Ci presents to the Finance Committee today.
 
Since 2011, Ci has analyzed and reported on WE Charity. WE Charity Canada is a big piece – but only one piece – of what we now know is a highly complex international network of WE-related entities.
Starting in 2014, Ci rated WE Charity with our highest 4-star rating based on transparency, reporting, and overhead spending. WE Charity ticked all the boxes and performed well relative to other Canadian charities.
In September 2019, Ci analyzed WE Charity’s demonstrated impact – the measurable returns on its work – and found WE Charity’s impact to be Fair. Fair is below average. This reduced Ci’s rating on WE Charity to three stars.
Our major limitation as analysts is that we are only as effective as the data is reliable. We are analysts, not auditors.
 
Ci’s August 2019 report on WE Charity flagged this material information:

• a breach of financial covenants on its $13.7 M in bank debt that its bank has waived for the second year in a row. 

• the related party transactions with 8% of donations to WE Charity going to ME to WE, the private business controlled by Marc and Craig Kielburger, to purchase goods and services.

In August 2019 an outside party shared with us public records about WE Charity’s real estate transactions. These transactions were not disclosed as related party transactions in WE Charity’s audited financial statements.
Given this lack of disclosure, we reviewed research-and-news/ci-views/43-charity-news/661-we-charity-next-steps WE Charity’s auditor, which has a solid reputation for tax and business. However, the auditor’s website only advertised one charity client, WE Charity. In our database, no other charity used this auditor.
This contrasts with WE Charity hiring the most prestigious law firms and its stated commitment to the highest financial transparency. We questioned why WE Charity has not hired leading international auditors to prepare their financial statements, despite being one of Canada’s largest charities with global operations.
On learning of the resignation and replacement of WE Charity’s directors in March of this year, we arranged a 30-minute video call with WE Charity’s Chief Operating Officer. Subsequently, we learnt through the media that one of the newly-appointed directors had resigned. We were not assured by WE Charity’s comments or statement.
On July 17, 2020, Charity Intelligence issued its strongest alert, a donor advisory.
 
With more news coming to our notice, and after looking at other WE entities, we released our research-and-news/ci-views/43-charity-news/662-ci-s-top-10-questions-for-marc-and-craig-kielburger 10 questions. Primarily:

• Was the Cabinet aware that the CSSG was contracted through WE Charity Foundation, a new separate foundation with no employees or assets, rather than WE Charity? 

• Why are the Kielburgers not directors of any of the WE charities, but take the title “co-founders” which removes fiduciary responsibility and shields them from various disclosure requirements?

• Why has neither WE Charity Foundation in Canada or ME to WE Foundation (US) disclosed in their regulatory filings the non-arms-length relationships of their three directors? 

• Why does WE need such a complex organizational structure with multiple single-purpose entities to do its work? This is highly unusual for charities, even Canada’s largest international aid charities.

 
WE Charity is an outlier – normal metrics for assessing charities do not adequately reflect its suitability for donors. It is not similar to any of the vast majority of other Canadian charities.
We have flagged these issues because the more donors understand about the entirety of the WE network, the better informed they will be, and the better able to give intelligently.
With that, I will hand the floor to Kate Bahen, Managing Director.
 
 
Good morning. My name is Kate Bahen. As Managing Director of Charity Intelligence, I prepared the two most recent updates on WE Charity – on August 28, 2019 and July 10, 2020.
Before answering your questions, I would like to speak to some of the issues that have been raised during your proceedings and on social media about Charity Intelligence and the motives behind our reporting.
Let me address these in order.
Yes, Charity Intelligence is a small charity. Our annual revenues of $435,000 support a team of 3 full-time staff, supported by exceptional university students each summer. This April, we hired another charity impact analyst, so our full-time roster increased by 33% to 4 people.
Charity Intelligence’s (Ci) team answers Canadians’ questions about giving and we update our popular website. Despite our small size, we have demonstrated a significant impact on Canada’s charitable giving.
Yes, Ci lost its charitable registration status for one day in September 2012 because I was late in filing the annual return. I am solely to blame for falling behind in the essential paperwork. It was a hard lesson, learnt well. Ci has filed before the deadline in the last 8 years.
As to the motivation for our work, it is simply to give Canadian donors the best independent and objective advice we are capable of.
Charity Intelligence is non-partisan. I do not know the political affiliation of our staff. These matters simply don’t come up in our research and analysis of charities.
To keep comments within the 10-minute limit this section was cut from the opening statement: In the past, I personally contributed $950 to Chris Alexander’s campaign – a conservative, and a high school friend. I also contributed to Bryon Wilfert’s campaign, a Liberal and my history teacher. I believe in supporting people but I am not politically motivated in my work.
I find partisanship toxic. As you may notice from my accent, like many new Canadians, I came from away to Canada. I am deeply indebted to this amazing country.
To some, partisanship may be a sport or a game. Yet as a child, I saw the Troubles, I learned of the Orangemen’s march, I heard the bombs. I want no part of that. Ever again.
 

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