SWEET CHARITY
They made their fortunes on Bay Street, and now their generosity
is changing the face and fabric of the city

By D’Arcy Jenish

Illustrations by Remie Geoffroi

PETER MUNK—SMARTLY DRESSED in a pale pink shirt and charcoal suit—is in a buoyant mood even though the heat at the entrance of the cardiac centre at Toronto General Hospital is wilting and the afternoon’s event is running 45 minutes behind schedule. The chairman of Barrick Gold Corporation is here with his wife, Melanie, for the rededication of the hospital’s Peter Munk Cardiac Centre and they are awaiting the arrival of Prince Edward and his wife, Sophie, the Earl and Countess of Wessex. The Munks mingle with several dozen guests and hospital staff, and between sips on a take-out coffee, Peter Munk reflects on why he donated $7.5 million over the past decade to establish the cardiac centre and another $6.4 million for the Munk Centre for International Studies at the University of Toronto.

“When you get much from society, you want to give something back,” he says. “I thought about it for many years and wanted to focus on things that were meaningful. One was education. I sat down with [former U of T president] Rob Prichard and members of the [university’s] senate and they gave me a list of priorities. The one that appealed to me most was international studies. I believe globalization is inevitable. The world is becoming a small village. If Canadians want to prosper, they have to become more international.”

“Health was my second concern,” he continued. “My father, Louis, my grandfather, Abraham, and my uncle Nicholas all died here, at this very hospital, and all from cardiac problems. When the hospital came and pitched me for money, cardiac care was a natural.”

Over the past decade, wealthy Torontonians like Munk, most of whom have made their fortunes on Bay Street, have reinvigorated and, in some cases, brought about wholesale transformations of major educational, medical and cultural institutions through gifts of cash or assets, such as corporate shares. That is evident to anyone who walks from Bloor and St. George streets, through the University of Toronto and down University Avenue as far as Dundas Street. Many new or refurbished buildings in the area bear the names of wealthy benefactors—the Rotman School of Management, the Leslie L. Dan Pharmacy Building, the Joey and Toby Tanenbaum Laboratory for Alzheimer’s, the McEwen Centre for Regenerative Medicine at Toronto General Hospital and the Schwartz-Reisman Emergency Centre at Mount Sinai Hospital.

“I believe we’re the second-largest real estate developer in the Greater Toronto Area after Pearson Airport,” says Jon Dellandrea, who served as U of T’s chief advancement officer until he left in late June to take a similar position at Oxford University in England. “If you visit our three campuses—Scarborough, Mississauga and St. George— it’s obvious that gifts have made a huge impact.”

Named buildings, however, are just the visible tip of an enormous wave of philanthropy. Most of the gifts have gone to support less noticeable initiatives: endowed chairs that allow universities and hospitals to attract star teachers and researchers from around the world; bursaries and scholarships that support students at every level of study; research institutes where leading scientists search for new cures; and clinics that offer patients state-of-the-art and, sometimes, life-saving medical treatment.

Dr. Tirone David, who practises at Toronto General and who is one of the world’s leading heart surgeons, says private gifts have made it possible for his team to purchase mechanical hearts, which cost $150,000 apiece and can be used only once. The hospital implants about 15 per year—the device is placed under a patient’s ribs and functions in place of the recipient’s heart while awaiting a suitable organ for transplanting. “We can do this only because we have benefactors,” says David. “OHIP doesn’t cover the cost of these devices even when someone is dying of heart failure.”

Philanthropy has allowed the Toronto Western Hospital to become the first acute-care facility in Ontario to treat patients with a medical device called a gamma knife. The hospital had to use an enormous crane in late May to lift the 20-tonne machine three storeys and then lower it through an opening in the roof to its new home. The machine, which goes into operation in September, produces beams of radiation that allow physicians to destroy damaged, and inoperable, brain cells to treat neurological disorders such as Parkinson’s disease and epilepsy. The hospital was able to purchase the machine, thanks to a $3.5-million gift from an anonymous donor and $3 million from the Tanenbaums. The Ontario government will cover operating costs but would not provide funds necessary to purchase the machine—and it has been sending 30 patients a year to the United States for treatment, at a cost of approximately $1.1 million annually. Toronto Western will be able to treat 300 patients every year. Tanenbaum, a land developer and former owner of York Steel Inc., the largest steel fabricator and distributor in Canada, said he first heard about the gamma knife last October while attending a fund-raising event at the hospital.

“I went home that night and told Toby that they needed another $3 million to purchase one and she said, ‘Joey, we’ve got to do it,’ ” recalls the 72-year-old Tanenbaum. “This machine can save dozens of lives every year.”

Charitable donations in general, not just those from the wealthy and super-wealthy, have risen dramatically across Canada due to changes to the tax system that Paul Martin introduced as finance minister in the mid-1990s. Statistics Canada figures show that Canadians made receipted donations of $3.6 billion in 1995 and the latest available numbers reveal that in 2003, they gave $6.5 billion. “There’s been a spectacular change in this country,” says Ottawa lawyer Arthur Drache, one of the country’s leading experts in charity law and tax planning. “Until 1996, a large part of my practice was working with very rich people who wanted to make donations without having to pay huge penalties.”

Drache explains that between 1972 and 1996, individuals could deduct a maximum of 20 per cent of their income for charitable donations, regardless of how much they gave. In 1995, the ceiling was raised to 75 per cent of income. The following year, the government amended its tax legislation again to encourage gifts from individuals with substantial assets. Those with stocks or other assets that had appreciated would be taxed on only 25 per cent of the capital gain rather than 50 per cent if they transferred such assets to a registered charity. “The tax hit has been minimized to such an extent that it is very easy philanthropy,” Drache says.

The introduction of the tax amendments coincided with a shift in Bay Street thinking about Toronto’s place in the world, according to some observers. “It was Bay Street having an international vision,” says Malcolm Burrows, director of foundations and philanthropic planning with Scotia Private Client Group. “People were concerned with the city’s academic and medical leadership on the international stage.”

At the same time, the leaders of some of the city’s major institutions were determined to raise their status on the world stage. Dellandrea says that former U of T president Prichard initiated the campaign for the university in the mid-1990s to ensure that it would rank among the best anywhere in the world. The campaign was formally launched in 1997 with a goal of raising $400 million. Eventually, it was boosted to $1 billion and the end of the campaign set for 2004. The university reached its objective a year ahead of schedule when Michael Lee-Chin, chairman of the Burlington, Ont.-based mutual fund company AIC Investments, donated $10 million to create the AIC Institute for Leadership at the Rotman School of Management.

In the early days, Dellandrea says, his office made many pitches to Bay Street executives on the need for gifts that would be directed to what he calls human capital—money for endowed chairs and student aid—but initially it was a hard sell. “I remember a conversation with Peter Godsoe, who was chairman of Scotiabank, and he asked whether the money would go into the black hole of university funding,” Dellandrea recalls.

His team managed to sway the thinking of Godsoe and many others. As a result of the campaign, U of T now boasts 175 endowed chairs, each based on donations ranging from $1 million to $3 million, whereas prior to the campaign, only 15 chairs had been created in the history of the university. Endowments for student aid grew almost eightfold, to more than $463 million from $69 million, which has allowed the university to make a simple guarantee: no student of ability will be refused admission due to financial constraints.

But bricks and mortar gifts have also transformed a number of departments and fields of study, international studies being one of these. Janice Stein, director of the Munk Centre, says the businessman’s donation allowed for the refurbishment of three run-down student residences, the construction of a new façade to link the buildings and the creation of the exquisite gardens in front of the complex. More important, it brought under one roof five separate institutes that previously were scattered throughout the campus. They come from many disciplines, including medicine, law, political science, history, economics and sociology, but all are devoted to various aspects of international studies.

Bringing them together, Stein says, has created a community of scholars and graduate students working in a rich, intellectual environment. The centre supports 60 graduate students and post-doctoral fellows and has become one of the leading North American venues for international studies. In fact, it has been so successful that the various centres and institutes have already filled the spaces. “Munk’s gift was genuinely transformative,” says Stein. “It allowed us to reach a new level of excellence. We now have an international reach that would have been impossible without this gift.”

Private money has also had a major impact on the research capabilities of the teaching hospitals on University Avenue. The University Health Network, which is composed of Toronto General, Toronto Western and the Princess Margaret, has raised $425 million since April 2000 and aims to push that number to $500 million by March 31, 2006, the end of the current fiscal year. Last October, the UHN announced the largest single gift to date—$25 million from Audrey Campbell, daughter of the late newspaper magnate Roy Thomson, and her three daughters. That money has been used to establish the Campbell Family Institute for Breast Cancer Research at Princess Margaret.

Dr. Tak Mak, director of the institute, says the Campbell gift and the Weekend to End Breast Cancer Walk, several others, will allow him to increase his existing team of researchers to 150 from the current 100. As well, the institute will expand from two floors to four. The focus of the research is breast cancer, but any breakthroughs could lead to cures for other forms of the disease. “Progress against one disease always leads to progress against others,” he says. “Much of what we do is like taking an engine apart. What we learn could be used on the engines of cars, trains, airplanes or boats.”

Like other researchers, Mak is grateful for the private support but says philanthropy is no substitute for public funding. Governments in Canada, he says, have demonstrated an appalling lack of leadership and vision when it comes to medical and scientific research. Ottawa puts in about $600 million annually, only about two per cent of the $30 billion that the American federal government pumps into such endeavours each year. Furthermore, the Canadian government does not provide any money earmarked specifically for cancer research whereas Washington spends about $29 billion US yearly.

Canada pays a price for such a shortsighted approach, Mak says. The country is not producing enough innovative technology and the jobs that go with it. Many of the most talented medical students have little choice but to pursue opportunities south of the border and he points to U of T’s combined MD-PhD program. It is now in its 20th year, but over half the graduates have left the country. Finally, he argues that Canada simply isn’t a factor on the international stage and notes that Canadians have not won the Nobel Prize for medicine in more than 80 years, not since it was awarded to Frederick Banting and John Macleod, codiscoverers of insulin, in 1923.

“Where is our national pride?” he wonders. “We have the talent, but we just don’t invest in science. That’s a true lack of vision.” Fortunately, some of Canada’s wealthiest and most successful business people have stepped into the breach.