Where the money is

Welcome to The Money Edition of Your Working Girl.  This week it’s all about money — who has it, who doesn’t, how to get some and how to show it.  

Your Working Girl never thought, with all due respect to the profession, that accountants would be a necessary part of the revolution.  Today she can unequivocally tell you they are.  And now she will tell you why.

If you walk down University Avenue in Toronto, the piece between College and Dundas Streets, take a look around.  You are strolling by some of the most expensively equipped buildings known to humankind.  On the east side there is Sicks Kids Hospital and Toronto General & Western Hospital.  On the west, there’s Princess Margaret, Mount Sinai and the Toronto Re-hab.  Hospital Row they call it.

You could also call it Billionaire’s Row.  You’d be right about the number of zeros.

At the end of fiscal year 2012, the Hospital for Sick Children Foundation sat on assets of $781.8 million against liabilities of just over $21 million.  Princess Margaret Foundation showed assets of $396.4 million against liabilities of $62.3 million.  Toronto General & Western Foundation totted up $322.4 million in assets against $11 million in liabilities.  These are the foundations, mind you, not the hospitals themselves.  The hospitals also have hundreds of millions in assets on their own separate books.  (Accountant, please!)

Hospital foundations were created in the 60s and 70s so that hospital boards could focus on the medical needs of patients and have other people do the business of fundraising.  They were also vehicles for hospitals to park their assets so government wouldn’t reduce their budgets.

They have a charitable number so a portion of every donation is sheltered from tax.  And, of course, every dollar that is sheltered from tax is a dollar of revenue the government does not receive.

But does a hospital foundation behave like a charity in the sense people think of charity?  Or does is a hospital foundation behave more like an investment fund which publicizes comparatively small scale events such as a kid’s lemonade stand or a community tribute in the name of an ill-fated child to attract new investors?

In the big picture of a hospital foundation, how is a donation of 50 bucks from Joe Schmo, Jane Schmo or any of the assorted Schmo’s fit into the scheme of things?  Practically speaking, they’d make more money from investment income than the time it takes to write a thank-you note.

These are very wealthy organizations by anyone’s measure.  But apparently not wealthy enough by their own.

The Sick Children’s Hospital Foundation is currently in a campaign to raise $200 million for the SicksKids Centre for Research & Learning.  The Centre will “house state-of-the-art equipment and [be] able to attract the greatest medical research minds in Canada and the world.

The total bill for what the Foundation describes as an “architectural jewel” is actually $400 million.  The government is kicking the other $200 million.  (Your welcome, says Your Working Girl, Taxpayer Edition.)

Across the street, Princess Margaret has upped the hospital fundraising ante with its  $1 billion “Believe it” campaign to “revolutionize cancer care by creating a new gold standard.”  (Please see previous blog “IAMGOLD, we are pink” if you in the school of ironic detachment.)

The Foundation says it will reach out to “our donor community with a goal of $500 million, which our researchers hope to match with $500 million in grants.”  Researchers hope to match? If the researchers are going to have to peddle their wares by their own selves, Your Working Girl is driven to ask, where in the hey-ho is the other $500 million going?

Who, in heavens name, are these people?  Why are they sitting on so much money?  And why do they want more?

They certainly are not giving it away.  In 2012 Sick Kids Foundation, dispersed $60.5 million.  Princess Margaret gave away $63.5 million and Toronto General granted $50.9 million.  The money went to “qualifed donees” as the CRA says.  That would primarily be researchers or other professionals delivering service in the hospitals.  And it amounted to between 30 – 50% of revenue the foundations raised in that year.

It’s seems to Your Working Girl that, because we care so much about the tough time some of our children, youth and elderly friends and family are having these days, we must help hospital foundations be accountable to the community within which they operate.

The best accounting firms in the business perform the audits for these charities.  Every dime is spoken for and they are working this side of the law like nobody’s business. And who are we to question that?  What do we know from deferred capital contributions, restricted reserves, unrestricted reserves?

Your Working Girl would love to have an accountant on staff right now to help her to that.  To ask the right questions, in the hope of, someday, getting the right answers.

Because we do need answers.

Not all hospitals seem to require enormous nest eggs, she’s noticed.  Mount Sinai lives in the same neighbourhood with a mere $69.6 million in assets against $7.1 million in liabilities.  Down the street at Church and Queen, St. Michael’s Hospital Foundation, another poor cousin, showed assets of $61.4 million against liabilities of $674 thousand.

It worries Your Working Girl to no end when she hears health care providers and other public officials tell us there’s no money for prevention, no money to ‘deal with’ diabetes, no money for mental health services, no money for Children’s Aid, no money for school lunches, zip for gym classes at school; same for substance abuse programs.

Hospitals, their foundations and their billions of dollars are of no help in these matters – unless you are sick enough to be one of the very few people who enter their doors.  Until then, your health is of no interest.   They are in the business of people being sick.  Healthy people, well…that’s not so good for business.

Could it be that the biggest fundraising scam of all time is right under our nose?