Post Updated: Tom Williams responds to David Baines’ Vancouver Sun article
February 21, 2008 by Tris Hussey
Filed under Business News
David Baines wrote an article in the Vancouver Sun on Saturday about GiveMeaning. From the quick skim I did and Tom’s response, it sounds like David is raising questions about financial disclosure at GiveMeaning. This is an excerpt from Tom’s response:
Nevertheless, his main contention is that GiveMeaning Foundation has spent more money building the GiveMeaning brand and service than it has raised money for its projects. This is not only not in dispute but not surprising to anyone that knows anything about a start-up business. GiveMeaning launched its re-vamped website in late September of 05. Prior to that, our web presence was in Beta and very little transactions flowed through. The numbers that Baines is reporting on is our first full year of collecting tax-receipted donations in Canada for the GiveMeaning website. Given that our
average donation through the website is about $40, our first-year tally of money raised for projects is not surprising. It’s also not surprising to anyone that understands the nature of a start-up that in the first few years of operation that start-up costs will exceed revenues. It took eBay eight years to make a profit. Source: The $5 philanthropist: My response to David Baines’ article this past Saturday
I’ve talked with Tom on several occasions and even met him in person. I find talking with him energizing and inspiring. I think any organization like GiveMeaning is going to attract scrutiny. Personally I like Tom’s response, it’s clear and straightforward. I hope that now this will put any and all questions to rest.
Update Feb 21, 2008: It’s been almost a month since I wrote this post and as of this moment there are 63 comments on it. I have a lot of mixed feelings about this post. At first I thought, wow Tom is getting a bad wrap. But I’ve been reading the comments with an open mind and well now I don’t know.
A couple weeks ago Tom emailed me privately to express his concern about some of the comments. He asked that I take down defamatory comments, or he will be forced to take legal action. I read through all the comments, as did the content and executive team of b5media, and found one that I thought was over the line so I deleted it. Since then I haven’t been approving all comments. There have been two in the last couple days that I will not post.
After deleting the one comment, I told Tom and offered that he could be on my BlogTalkRadio show to give his side of the story. Tom hasn’t replied to that offer. This week I received a letter from GiveMeaning’s lawyers, which is now in the hands of our lawyers.
I stand by freedom of speech. I stand for open conversations. I can’t abide ad hominem attacks though.
I decided to update this post to let you know that I still read all the comments and my offer to Tom is still open. If Tom accepts I would have callers on the line unless he agrees.
I also still believe the idea of GiveMeaning is great, however I think there are legitimate questions about the site/company/foundation that need to be answered and addressed.
I would like to know if all the questions and criticisms can be answered. Right now, however, I have my doubts about that as well.
I would like to read some response from the
organization (GiveMeaning) on the charges
made by David Baines’ article.
Bill, Tom Williams is the founder and head of GiveMeaning, so his post should be considered an official response.
Tom William’s response is not satisfactory. GiveMeaning stinks of a scam.
I agree, I read Tom’s blog and Baine’s article, things are not adding up for Mr. Williams… Am I missing something? Only 17% of $ goes to charity? His overhead is too high for a website.
Alot of people simply don’t understand what Givemeaning is doing. First of all the technology being developed by GM is comparable to what is now called a Web 2.0 company and if anyone has done there research they would quickly find out the costs that are incurred by producing such software. It’s a simple fact. Do you honestly think that a site like Facebook cost $100 000 to develop? Please, don’t be ignorant.
The second area that both Blaine and many ignorant readers forget to realise is that the donations given to online projects goes directly and yes a 100% of it goes to these projects. The donations that go to GM go to the costs of GM and the development of GM. Do you not think those donors who support GM directly see the costs that are incurred by development? It’s standard and simply donating 101 to request to see the books and business expenses when making substantial contributions. To further be simple about this there’re two costs being discussed here ONE for projects on site, which as the site states goes directly to projects and SECONDLY the donations that go directly to GM’s development costs. Do we now understand the difference? It’s spelled out on the site. Furthermore I’ve been involved with projects that are on the site and know for a FACT that yes 100% of that money has gone to the projects I’ve donated to.
What makes Blaine’s article so bias is that he bases his observations on Tom by purely speculating and making subjective observations about his past and his appearance. Blaine sounds like a bitter and washed out writer who can’t allow for objectivity to rule(look at Blaine’s record or past articles and you see a pattern of discontent and failure) as that wouldn’t allow for him to write such vacant and highly bias articles. It’s the worst kind of writing we can imagine because the majority of readers don’t realise the biases he’s making and unfortunately accept them as facts. Unbelievable! He’s not given us any conclusive evidence about Tom. Comments on Tom’s past by people who may or may not like him is not objective and highly suspicious of the motivations of those who may dislike Tom. Ever thought of that everyone?
Also for Blaine and those simple minded and ignorant readers “your entitled to your opinions but your not entitled to your own facts”
100% of what we raise for projects on the GiveMeaning.com website is forwarded to charities without charging or deducting any fees to donors or charities.
We raise other charitable donations from donors specifically to run the GiveMeaning service. These donors are specifically funding our operating costs NOT the projects on our website.
The article combines both our project funds and our operating costs together and then divides what we have distributed to charities from projects and then says 17% of what we raise goes to other charities, which is entirely inaccurate.
The donors who give to support GiveMeaning’s operating costs do so recognizing the need to fund the operation of a free service specifically so that 100% of what we raise through the website for the projects on our website can be distributed without fees or charges.a
Tom thank you for swinging by and clarifying this. Jason … you as well.
I for one stand by Tom and GM 100%. It’s the little things that we do that count.
It’s still not adding up for me. I just watched the clip on The Hour, with GS CBC site. Tom Williams seems like someone I don’t trust , he has a very inflated view of himself and there is something not right about the amount of money he pays himself and his wife. they make more money than most and their expenses are very high! For charity, this doesn’t seem right at all.
Definitely, this smells like a scam. Tom Williams’ “response” is self-serving, and avoids the central concerns raised.
There’s no justification for Williams and his wife to drain a start-up of $10,000 and untold expenses monthly. If every penny counts, then don’t take excessively out of the organization.
It seems grossly inefficient for other charities to, in effect, launder monies through another charity. Do the people who donate to these folks know where that money goes? It’ll be interesting to hear how it serves the interest of these anonymous donors. Sounds like a tax scam.
It’s obvious, too, that Tom Williams history is fabricated. What credibility has he?
Sadly, it appears the charity field is inviting territory for carpet-baggers.
I’m glad there is a discussion going on about this, however, anonymous comments don’t help. As for Tom, again, I’ve met him in person, interviewed him, and chatted with him several times. He is for real.
Tom is following these discussions as well. There are a lot of expenses with building a site like that. Believe me, I’ve been there building sites…it’s expensive. I can’t comment or judge about how Tom and his wife are paid … I just don’t have that info.
anyone read the latest david baines article published today in the Vancouver Sun jan.26? would like to hear your thoughts.
I have read todays article (second of three)
and am more convinced than before that this
is a problem for Revenue Canada to look
into. If the charity is getting 100% of the
donation and kicking back a percentage… that
seems to me to be money laundering.
Is there any oversight to the honesty of the
people involved in the charitable enterprise?
There appears to be no checks on possible
fraud being played out here.
Well put. Tris, listen to William.
This is all very interesting. I’m going to keep an eye on this and see how it develops.
I believe this to an incredibly important discussion- Thank- you Tris for hosting it. It forced me into reading the two Vancouver Sun articles and doing some research on Mr. Williams. It seems as though many have been sucked into his charisma. The financial revenue stream is highly suspicious. I think we are all aware of the start up costs associated with a business- particularly one that is web based. But shouldn’t the salaries reflect the fact that this is a start up Non- profit and not a fortune 500?
However, aside from the overhead- ONLY half of the personal donations are accounted for. That totals apx $130,000 of missing money. For an organization that prides itself on 100% of its donations going to charities I find this very strange.
I hope that we all be rational and logical when analyzing Mr. Williams and Givemeaning. And that we be careful not to get draw in by his manipulate character.
Tom will, no doubt, say that the other half of the monies will be distributed later - when those projects reach their goal. Only time will tell on that point. Regardless, it’s apparent the projects serve as the window-dressing to a twist on Ponzi and pyramid schemes of old. The big money for Williams, his payday, is in all the grey money flowing into givemeaning’s coffers. And, Jane, you nail it 100% when you ask “shouldn’t the salaries reflect the fact that this is a start up Non- profit and not a fortune 500?” If the objective here is to help the causes, there’s much better ways to do that than by Tom Williams and his wife sucking up $10,000 a month in base salary - and him blowing lots more bucks on travelling for photo ops in Dunrobin and elsewhere. It really comes down to who we’re dealing with here - and, as Steve explains, family and friends know well what the public is now just learning.
http://www.givemeaninginside.blogspot.com by Tom Newman has some insight into this situation worth looking at. Thank you Tris for hosting these discussions.
There was a 3rd article today. Sounds like there is still more to come. Now that people are talking (we can only assume that Reinhart shared his emails directly with Baines), it is becoming clear that Tom Williams was and is a scam artist. Someone who has habitually lied about his finances and scammed people, should most certainly not be involved in running a charity.
Has anyone read today’s article? Tris, I would like to hear what your opinion is. It is in the Vancouver Sun today, Wed. Jan.30, by David Baines, the same author as the last articles on Tom Williams the founder of Givemeaning.
I’m in the securities industry and I knew him at Whalen Beliveau and although a bright kid, he never amounted to much at all and his reputation among his peers was that of an arrogant computer geek who was hired purely as a tech boom hedge by an overzealous brokerage firm caught up in the dotcom frenzy. Where’s he worked since? Nowhere. Is he a Jeff Imelt? no. Is he wealthy? No. He is a failure….I see no successes in his past..why make a bet on his future?
Wow. Thanks to all of you for keeping this conversation going.
This is becoming a very interesting story on its own. I haven’t read the later articles yet, could someone paste the link(s) in a comment here?
I love the idea of GiveMeaning, but if it isn’t being run on the up and up … that doesn’t help future businesses focused on charity, etc.
I consider many of the statements made by entirely anonymous “people” (for all I know all these comments have been entered by the same person) on this blog and others to be defamatory and will in no way dignify them with responses.
I am however replying to each of Mr. Baines’ articles on my blog at givemeaning.blogspot.com
Article 2:
Last Saturday, I noted that former Silicon Valley “whiz kid” Tom Williams has been busy promoting his charity business, GiveMeaning.
GiveMeaning hosts a website where organizations can list their charitable projects. People who want to support any of these projects can donate their money to GiveMeaning, which issues a charitable tax receipt for the full amount, then forwards 100 per cent of the proceeds to the designated charity.
I noted two concerns. The first was financial.
Of the nearly $1 million in donations it received in 2006, one-quarter came from individuals. The rest came from other registered charities, which specifically designated the money for GiveMeaning’s overhead.
Overhead has been substantial. In 2006, it amounted to 68 per cent of total donations. That included $120,000 in salary for Williams and his wife, country singer Jessie Farrell.
Williams argued that 2006 was the first year of operation for GiveMeaning’s website, which is why overhead was so high. In any event, he said, 100 per cent of the money designated for specific charities is forwarded to those charities, so nobody gets short-changed.
Maybe so, but the bottom line is that in 2006 only $172,000, or 17.5 per cent, of total donations went to designated charities. That’s a very small amount.
My second concern relates to Tom Williams and the whole “whiz kid” story. It has been repeated ad nauseam in every major media outlet. He professes to be bored with this storyline, but he does nothing to discourage it from being retold. I think it is clear that he uses it as a tool to promote himself and whatever business venture he happens to be promoting at the time, which at present is GiveMeaning.
The whiz kid story has three parts: The first is that in 1995, at the age of 15, he dropped out of his Victoria high school and moved to the Silicon Valley where he worked with Apple “helping to pioneer the interactive music industry” and making $80,000 per year in the process.
The second part, revealed in an award-winning CBC documentary that aired in 2000, is a confession that he was living a double life, not only as a user of alcohol and drugs, but as a user of people. Williams admitted to CBC reporter Boni Fox he had told “amazing, wonderful, and, in most cases, untrue stories about me.”
He admitted that an earlier CBC report showing him jumping on his couch while lip-syncing to some rock music — a clip intended to show he was still a little boy at heart — was pure fiction.
“Do you think I ever woke up in the morning, surveyed my apartment and said, ‘Maybe I’ll crank the tunes and jump on my couch for a while?’ I don’t think so.”
He bragged that reporters are easy dupes: “I can say anything to you. Whether I practise it or not, you won’t know. That’s the thing with the media. All those things I was doing [drugs and alcohol] … I was saying something completely different. Who knows? I might still be.”
His father, Trevor Williams, told Fox that his son “is a prototypical child of the electronic age. He knows how to use the sound-bite. … He will give you a sentence that will be tailored for you to put into your news broadcast. He is a child of the age in that sense.”
This may explain why the media, like moths to a candle, have continued to embrace the whiz-kid story, even though it had badly broken down by the time of the CBC interview.
In the two preceding years, Williams had worked as a technology analyst for Vancouver brokerage firm Whelan Beliveau. The idea was that he would help the brokerage firm develop and sell high-tech securities offerings. He would earn one-quarter of any gross commissions the firm earned from these deals, but he would have to pay his own expenses, such as travel and the cost of an assistant. In 1997 and 1998, the firm paid him $141,500 and $165,960, respectively, in advance commissions.
Meanwhile, he racked up $76,864 and $75,029 in expenses, which the firm paid and accrued as a loan that he would pay from future commissions.
Unfortunately, he did not develop any business. “None of the transactions with which [Williams] was involved were ever completed,” Tax Court of Canada judge Campbell Miller noted in a tax decision rendered in October 2004.
In other words, he did not earn any of the more than $300,000 in advance commissions that the brokerage firm paid him.
The brokerage firm demanded that Williams reimburse the firm for the expenses it paid on his behalf. “Notwithstanding such demand, Williams has not repaid any amount in respect of these monies,” the judge noted.
If that wasn’t audacious enough, when Williams filed his income tax returns declaring the advances he had received (but did not earn), he claimed the expenses that he had not paid.
Canada Revenue Agency originally disallowed the expense claims on the grounds that Williams didn’t pay them. Williams appealed, arguing that even though he didn’t pay them himself, he was liable to his firm for the full amount.
The judge agreed, and allowed him to deduct the expenses. But Williams never reimbursed the brokerage firm. He was thus able to have his cake and eat it, too.
By this time, Williams was developing GiveMeaning, and the story took on its third dimension: The whiz kid had dropped his pursuit of materialism and embraced philanthropy.
The media loved it. “Meaning had been sucked from his life,” Canadian Press reported in a December feature published in the Globe and Mail. “So he dumped his job, his salary and lifestyle and started selling philanthropy online to make his world real again.”
In October, George Stroumboulopoulos, host of CBC television’s The Hour, noted that Williams “took his brilliance and applied it to philanthropy.”
Just days ago, Business in Vancouver nominated Williams as one of the city’s “40 under 40″ most innovative leaders, specifically for his development of GiveMeaning.
dbaines@png.canwest.com
Next week: We look at some of the “whiz kid’s” other business dealings, including those with former NHL star Paul Reinhart.
Article 3 (sorry but I can’t figure out how to post a short link to his; feel free to edit Tris).
‘I firmly believe that when it comes to profiling people in the media, there are two binary states: Either the media propels them, or they drag them through the dirt.”
So declared Tom Williams in a 1999 interview with CBC Television. By that time, media coverage had propelled him to near-mythical status: The Victoria “whiz kid” who, at the tender age of 14, had quit school, moved to the Silicon Valley and become Apple’s youngest employee.
But the whiz-kid persona wasn’t entirely a product of the media. In fact, it had been carefully cultivated by Williams.
“I tried to be the director, the actor, the writer and the audience,” he admitted to the CBC. “That’s a lot for one person.”
But he said reporters are easily duped: “I can say anything to you [the media]. Whether I practise it or not, you won’t know. That’s the thing with the media.”
In 2004, at the age of 25, he resurrected the whiz kid story, this time to promote his new charity business, GiveMeaning. The twist on the old story was that, after making millions of dollars and consorting with big-name entrepreneurs such as Apple’s then-CEO John Scully, venture capitalist Mike Milken and broadcast magnate Ted Turner, he had embraced philanthropy.
Perhaps unaware of his earlier-admitted duplicity, the media gobbled it up.
“Whiz kid shuns wealth for charity work,” read the headline in The Vancouver Sun in November 2004. “Fed up with the dotcom business, B.C. boy genius turns his hand to helping the needy.”
“The Technical Son,” the Victoria Times Colonist labelled him in a November 2004 headline, playing on the prodigal son parable. “At 14, Tom Williams left his family for the Silicon Valley. At 25, he’s back and bright as ever.”
“Computer whiz kid turned charity king,” said the headline for a Globe and Mail story in December 2007. “At 25, Tom Williams walked away from a lucrative career in Silicon Valley to find a way to put a deeper meaning into his life.”
There have been dozens more newspaper, television and radio stories, all telling the same story. Williams professes to be bored with the story, but he continues to tell it to anybody who will listen, including school children.
Problem is, there is a serious structural flaw to this tale. Williams spent only a few months in Silicon Valley. By 1996, he was back in Vancouver. From then on, he moved from one job to the next, in some cases leaving bad debts and bad feelings among both friends and business associates.
In April 1997, after brief stints at Terry Hui’s MultiActive Technologies and Steven Funk’s Canadian Maple Leaf Financial Corp., he joined Whelan Beliveau, a Vancouver brokerage firm. His job was to develop high-tech securities business.
As noted in my last column, the firm paid him $307,460 in advance commissions in 1997 and 1998, plus $151,893 for expenses on the understanding he would reimburse them from future commissions. However, he didn’t complete any business transactions and didn’t reimburse the firm for any of the expenses.
Since he hadn’t paid for any of the expenses, Canada Revenue Agency refused to permit him to deduct them for tax purposes. Williams appealed and won on grounds that, even though he hadn’t paid them, he was still liable to the brokerage firm for the full amount.
The rub is that he never repaid a cent to the brokerage firm. As a result, he was able to deduct $151,893 in expenses that he never paid.
In May 1998, Williams left Whelan Beliveau and embarked on an unremarkable career analysing and promoting Vancouver penny stocks.
In November 1999, for example, he became a director of Tribeworks Inc., a Vancouver company listed on the OTC Bulletin Board in the United States. Two years later, he resigned. During that period, the stock never rose above penny-stock status and the company never made a dime.
In 2003, Williams established Thomas Research, which prepared research reports for companies listed on the TSX Venture Exchange. An example is VRX Worldwide, an Internet travel information service that, like Tribeworks, never graduated beyond penny-stock status.
In June 2004, Williams, under the auspices of Thomas Research, began writing editorials for Stockhouse, a Vancouver-based stock market information service.
“Writing for Stockhouse, I have the opportunity to make this media interactive,” he said in his first editorial. “I’m hoping that my ideas for future articles will come from the collective of readers.”
His articles focused on fledgling high-tech firms listed on the venture exchange. However, reader response was muted: “I must say I’m entirely disappointed with you lot,” he said in a September 2004 editorial. “I really don’t know how much longer I’ll continue to pour the energy and effort I put into these columns.”
His last advice was Google, which he recommended readers sell at $85. It was a bad call: The stock is now trading at $550.
Although times were lean, Williams always projected affluence. He bought tens of thousands of dollars worth of clothes from Holt Renfrew, and on one occasion his cheque bounced and an employee was fired as a result.
He also borrowed thousands of dollars from friends, including money to pay bar bills so that he could pretend to be a big shot. Substantial amounts remain unpaid.
In 2004, he formed a company called Mercer Street Capital which provided investor relations services for several TSXV companies, including BCS Global Networks Inc. and Reality Commerce Corp.
Concurrently, he formed a partnership with former NHL star Paul Reinhart, who is active in the Vancouver venture capital market. Williams was to provide the technical knowledge and Reinhart the money.
On Williams’s recommendation, Reinhart invested several hundred thousand dollars in BCS Global and Reality Commerce, but their share prices went south and the losses were heavy.
“No doubt about it, our partnership was a total bust,” Williams admitted in an e-mail to Reinhart in February 2005.
That was not the only problem. Williams had borrowed stock from Reinhart, ostensibly to pay taxes, but Williams had instead used it to pay a margin call. Now Reinhart wanted his money back.
“I lost my tax case,” Williams replied in an e-mail to Reinhart (even though he had won it). “And I am facing a $68,000 debt to the government with absolutely no way to cover it. I am seriously contemplating bankruptcy. Bottom line, I have a negative cashflow and zero assets that aren’t already claimed or leaned on.”
Reinhart insisted that he account for the shares, but Williams refused: “If you had asked rather than demanded, you might have found me willing to oblige, but it’s clear you are trying to bully me at a time in my life when I am already down. The fact that you would question my honesty now or ever is infuriating.”
Reinhart replied: “Your advice that you lost your tax case, and that you are facing personal bankruptcy as a result, would appear to be inconsistent with the claims you are making to the contrary and the money you are spending on consumer goods.”
Williams dismissed reports of his profligate spending as “gossip.”
Reinhart said in a recent interview that he didn’t pursue the matter “because I knew I would never be able to get the money from him, or if I ever did get money, it would be coming out of somebody else’s pocket.”
It was about this time that Williams, claiming to have found a deeper purpose in life, started GiveMeaning, which acts as a conduit for people who want to donate money to specific charitable projects.
As noted, this spawned a new wave of articles, all resurrecting the whiz kid theme. Problem is, if the story ever was true, it had been seriously outdated by the intervening events I have described.
Then there is GiveMeaning’s financial record to date. As of Sept. 30, 2006 (the charity’s last reporting date), GiveMeaning had collected nearly $1 million in donations, but only 17.5 per cent had flowed through to specific charities. Most of the rest had been used for overhead, including $90,000 per year for the whiz kid and $30,000 for the whiz kid’s wife, country singer Jessie Farrell, plus expenses.
- Next: We take a closer look at GiveMeaning, which was structured by controversial tax lawyer Blake Bromley.
If you’d like to learn more about how GiveMeaning
may be operating, Google the February 4, 2004
article by David Baines in the Canadian Business
Magazine.
See if these links will appear - it may be not possible:
http://www.canada.com/vancouversun/news/business/story.html?id=70700a18-9a1f-4949-ac63-83d208c75b7e&k=63970
http://www.canada.com/vancouversun/news/business/story.html?id=70700a18-9a1f-4949-ac63-83d208c75b7e&k=63970&p=2
http://www.canada.com/vancouversun/news/business/story.html?id=70700a18-9a1f-4949-ac63-83d208c75b7e&k=63970&p=3
Today’s reportage is devastating in revealing the truth behind the lies told by Tom Williams. The myth is busted. No wonder Williams can’t respond on his blog in any meaningful way.
The Sun writer looks headed toward another Webster Award or National Newspaper Award while Williams’ online cronies such as blogger Darren Barefoot duck for cover.
Here’s hoping that as the blogosphere matures, we’ll see more like Tris - those who retain their intellects and open minds.
In the world of charities, one can only hope that there’s some agency - be it the tax department, or another - that can put the boots to people exploiting the good name of giving.
William, can you provide a link to this? can’t find the article. Steve, thank you for the posting the articles. Tris, i agree, this is interesting…one of your best discussions yet.
Wow! This is sure heating up. I wonder if Telus- Givemeaning’s title sponsor on the web page- is aware of this ‘watergate’ of a scandal?
With all we now know, and all we are beginning to discover, it appears that there is serious fraudulent activity taking place. Who could possibly donate their hard- earned money to an organization such as this?
Wow! This is sure heating up. I wonder if Telus- Givemeaning’s title sponsor on the web page- is aware of this ‘watergate’ of a scandal?
With all we now know, and all we are beginning to discover, it appears that there is serious fraudulent activity taking place. It is truly unfortunate that we can never be too sure of what happens to the money we donate in good faith…
Wow, I’m really glad there’s discussion going on about this in the blogosphere. I read David Baines’ article in the Sun (I believe it was the one that Gordon posted above), and found the whole story very interesting and sad at the same time.
If organizations like GiveMeaning, that so many donors and fundraisers had put hope in (how could you not like a site called Give Meaning?!), turns out to be some fraudulent scam… what can we trust and believe in this world? When what seems like something credible and trustworthy, turns out to be a complete lie to serve the founder financially. Very scary.
Julie, the article in question is entitled:
“The Tax Man On Trial,” It chronicles the
trial of Blake Bromley and the Canada Revenue
Agency. February 4, 2004 Canada Business
Magazine Proceedings reported by David Baines.
Julie and others ….
Here is the site of the 2004 Baines article:
“The tax man on Trial”
http://www.canadianbusiness.com/article.jsp?content=
20040202_58278_58278&page=1
Thanks, William. (btw, that link breaks in the middle)
The Bromley case referred to in this article demonstrates the failure of laws to keep up with white collar malfeasance. It’s possible to engage in practices that are clearly unethical and deceptive - yet, may not be criminal due to the nature of prosecution of such offences.
Pairing Blake Bromley with Tom Williams is a marriage made in hell for investors and genuine donors.
The tax man on trial
David Baines
From the February 2004 issue of Canadian Business magazine
Blake Bromley is a well-known Vancouver tax lawyer who specializes in setting up charitable foundations and structuring very large donations for maximum tax advantages. Among his clients have been David Lam, a retired real estate developer and former B.C. lieutenant-governor, who has given millions to the University of British Columbia and other charities, and diamond prospector Stewart Blusson, who made a blockbuster donation of $50 million to UBC in 2000. At the time, it was billed as the largest bequest ever made to a Canadian university. So it was an especially incongruous scene on Jan. 12 when Bromley entered the grimy precinct of the B.C. provincial court at 222 Main St. in Vancouver’s drug-ridden Downtown Eastside to answer 23 charges of tax evasion relating to his dealings with two unrelated charitable foundations. In his opening remarks, Crown prosecutor Leslie Mackoff accused Bromley of making several hundred thousand dollars’ worth of “sham” donations to the Voice of Peace Foundation and the Howe Sound Samaritans’ Foundation, charities that Bromley had established on behalf of two Vancouver-area men to promote Christian missionary work. Bromley’s lawyer, Steven Cook, a tax specialist with Thorsteinssons, made it clear in his opening address that he was going to rely on the letter of the law. He said “the concept of sham must be balanced against the right of the taxpayer to take all legal steps to minimize his tax liability.” Cook stressed there is a fine line between tax avoidance and tax evasion–and the court will have to determine whether this was “a fraudulent understatement of income” or simply “an aggressive tax avoidance scheme.”
For Bromley, the timing of the trial, which is expected to take four weeks, is particularly awkward. Days before he appeared in court, The Vancouver Sun revealed that he had structured another huge donation for Blusson, who along with prospecting legend Chuck Fipke discovered the Ekati diamond mine in the Northwest Territories in the mid-1990s. This one, a $30-million gift to the proposed Sea to Sky University, a private liberal-arts and science institution to be located in Squamish, B.C., had been made two years earlier, but neither the amount nor the donor had been publicly disclosed. Bromley acts as the proposed university’s strategic counsel and secretary and serves as one of its directors, along with former UBC president David Strangway and Peter Ufford, a director of 2010 Olympic Bid Corp. in Vancouver. There is no suggestion that there is anything untoward about Blusson’s donation, but the fact that Bromley is currently answering charges that could potentially land him in jail represents a possible embarrassment for what would be B.C.’s first private university. Mackoff told Judge Catherine Bruce he will present evidence that will show that Bromley incorporated the Voice of Peace Foundation in 1995 on behalf of retired mathematics teacher Abram Enns. To fund the foundation’s activities, Enns loaned it nearly $1 million. Mackoff said Enns wanted to convert $500,000 of his loan to an outright donation, but did not have sufficient taxable income to take advantage of the charitable tax credit. So Bromley and his family members donated $500,000 of their own money, which was then used to repay half of Enns’s original loan. Mackoff said Bromley stated in a letter dated Sept. 11, 1998, that the $500,000 donation would be “absolute and unconditional,” but the letter went on to contemplate that, upon being repaid by the foundation, Enns would, “of his own volition, immediately bestow a gift to the Bromley family, perfect strangers to Enns, in the identical amount of $500,000.” In other words, the money would simply go in a circle, but the Bromley family would receive charitable tax receipts which, assuming a 50% tax saving, would reduce their tax bill by about $250,000. Mackoff noted that under Canadian tax law, “gifts” such as the $500,000 the Bromley family donated to the foundation do not have to be reported as income, so the scheme would never have come to the tax department’s attention unless it had conducted an audit. He also claimed evidence will establish that none of the bank accounts used in the transaction had enough money to cover the amounts involved, that the transactions were “completely dependent on each other, and that without the funds being returned to Bromley the sham donations could never have been made and vice versa.” Mackoff said evidence will also show that, based on the Bromley plan, Enns conducted two similar transactions, one involving a $100,000 “donation” from his daughter Lois in November 1998. The prosecutor noted that Enns’s daughter “felt extremely uncomfortable about the transaction and wrote an enclosure in her 1998 T1 return explaining it” to the Canada Customs and Revenue Agency. The following month, Enns entered into a similar arrangement with Stan Unger, a wealthy developer from Calgary, for $400,000. “Unger will testify that while he sought advice from his accountant, he later learned that his accountant had relied on the fact that Blake Bromley had structured the transaction rather than considering its legitimacy independently,” Mackoff told the court. Turning to the Howe Sound Samaritans’ Foundation, Mackoff alleged that Bromley “entered into a stripped-down version of the same circular cheque transactions” used in the Voice of Peace Foundation scheme. The prosecutor said evidence will show that, in 1996, founder Douglas Stelling–on Bromley’s advice–loaned $250,000 to the foundation, which used the funds to buy shares of a junior mining company owned by Stelling. It was anticipated that, as the stock price increased, the shares could be sold to repay his loan or to increase the foundation’s value by simply forgiving the loan. However, the mining company fell on hard times, the stock was rendered worthless, and the Stellings found themselves in desperate financial shape, worried they might not be able even to pay their house mortgage. Mackoff alleged that, at this juncture, Bromley told Stelling he could make use of the foundation’s losses. He offered to buy the foundation for $26,000, even though it had only a few hundred dollars in its bank account, and, under tax rules, a charitable foundation cannot be sold. Bromley agreed to pay $1,000 per month to each of Stelling and his wife, Marcia, for the next 13 months, but to get the money, they had to invoice him monthly for “consulting services.” The Stellings obliged, even though the only service they provided Bromley was typing the monthly invoices, Mackoff alleged. Then Bromley’s two private companies, Blake Bromley Consulting Inc. and QDDQ Services Inc., “donated” $133,500 and $100,000, respectively, to the foundation, which used the money to repay Stelling’s original loan. Mackoff said Stelling, who wrote the cheque to himself on behalf of the foundation, did not even bother cashing it. He simply signed it over to Bromley, completing the circle with no net capital infusion. Bromley’s two companies, meanwhile, expensed their donations on their tax returns, enabling them to substantially reduce their taxes payable. Bromley’s lawyer, Cook, insisted there is nothing criminal about any of this. He distinguished between deliberate tax evasion and “a taxpayer’s honest mistake as to the exact nature of his civil obligations,” which, he said, should be a matter of civil law. To prove the charges, he added, the Crown must show that the accused’s actions were “done with the specific intent or ulterior purpose of evading the payment of tax he knows or believes are payable.” The UBC and Sea to Sky donations that Bromley structured for Blusson also have circular elements to them, although there is no suggestion that they breached any laws. In the case of UBC, Blusson donated $50 million worth of shares of a junior exploration company called Archon Minerals Ltd., which holds potentially valuable claims adjacent to the Ekati mine. This donation not only provided Blusson with an instant tax receipt for $50 million; it allowed him to take advantage of a rule that enables taxpayers who donate shares to a charitable foundation to pay half of the capital gains tax they would otherwise be obliged to pay. In this case, the shares were donated at a deemed value of $1.75 each, but due to Archon’s poor trading liquidity, it was extremely unlikely they could be liquidated at that price. So as part of the deal, Blusson agreed to buy back the shares in tranches over a four-year period for a net present value of $50 million. In essence, the shares will make a round trip–from Blusson to UBC and back again to Blusson–but in the process, Blusson has been able to extinguish his capital gains liability for half the amount he would normally pay. The same structure–again using Archon shares–is being used for Blusson’s $30-million donation to the Sea to Sky University. Details of this donation were never publicly announced, and came to light only because the share donation had made the university an Archon insider, which obligated it to report its share acquisitions and disposals. Although the circling of shares has enabled Blusson to take advantage of a tax benefit that wouldn’t otherwise be available to him, there’s no suggestion there is anything illegal about it.
And unlike Bromley’s schemes, there is no question that when the dust settles, Blusson will have made net cash donations amounting to many millions of dollars. This key difference may explain why Bromley’s donations are being challenged in court and Blusson’s are not.
Cyn, your comment leads to good news and bad news.
On the plus side, very few heads of charities have left a 10 year trail of familial and financial wreckage like that of Tom Williams. His continuous history of failures, unpaid debts, bounced a cheque at Holt Renfrew, burned partners etc. make him, thankfully, a special case.
The bad news is, as you point out, this sort of scheming can give legitimate philanthropists and charities a bad name. The public lacks the ability to conduct due diligence to tell the straight shooters from the liars, and, instead, relies on trust. There’s no body doing the job of regulating the huge number of charities operating today. So, you’re right, it is scary. Very scary.
There are a lot of ‘gut feelings’ here - mostly by nameless posters. I’m always reluctant to put those in print when the evidence for them is flimsy and people’s lives and livelihoods are at stake. I still see no real, hard evidence that anything shady is going on here.
And to those who think 700k is a lot to build a commercial-grade website, having done it many times before I can assure you it is not.
We have a thread on this at NowPublic too if you want to read more:
http://www.nowpublic.com/money/media-mud-fight-local-reporter-vs-charity-operator
Thanks Michael. This is, clearly, a complicated thing. Personal histories, large amounts of money, and seemingly good deeds … yeah always make for good stories.
Michael, I don’t think these cooments are simply gut feelings, I think they are valid concerns. I have been following this story and I agree with Tris, it is complicated.
the Tippett comment is laughable, as the basis for arguement is centralized around how does a person with a detailed history of lying deciept and theft become a do-gooder? I havent seen Mike milken or john scully or larry elison come to the table once in give meaning’s career to speak of their incredible experiences with the wiz-kid. I think that fate intervened on this professional con-man’s endeavor of bilking a free ride on the backs of people that actually care about their community.
I urge everyone who is reading this thread to look at the actual facts being used to call William’s reputation into question. The poster above is shocked to report that he once alledgedly ‘bounced a cheque’. C’mon Robert — please.
I would urge all to read the latest article by David Baines before commenting further.
Mr Tippett, in light of this latest article, might I suggest that you reread all four of the articles, s-l-o-w-l-y, before again blindly leading the charge, lemminglike and cliffward, to defend Tom Williams and GiveMeaning?
Mr. Tippett, you are involved in raising capital in the markets, are you not? If so, then you will be familiar with the word Ponzi, will you not?
http://www.canada.com/vancouversun/news/business/story.html?id=40c97404-2157-47fc-8edb-63e499354804
“… asked Williams to name those charities, but he refused. “I can’t name any. None have asked for public recognition,” he said.
(Williams later claimed on his blog that he had offered to name them. However, when I repeated my request in an e-mail, he did not respond.)…
“…These schemes so offended the tax department that, instead of simply disallowing the claimed tax credits, they charged Bromley with 23 counts of tax evasion and making false or deceptive statements on his income tax returns.
After a trial, however, Vancouver Provincial Court Judge Catherine Bruce ruled the Crown had not proven beyond a reasonable doubt (the standard required for a criminal conviction) that the donations did not qualify as charitable donations, or that he intended to deceive the tax department.
On this basis, she acquitted Bromley, but conceded there was still “a live issue in the civil tax jurisdiction.” Bromley did not pursue the matter in tax court. How it was resolved is not precisely known, but it’s a fair bet that CRA stuck to its guns.
Bromley figures prominently not only in GiveMeaning — he helped structure it, and his son John serves as a director — but also in other charitable organizations that have given money to GiveMeaning and received money from it…”
“…In 2006, the television foundation donated $150,000 to GiveMeaning to help pay overhead. This struck me as unusual, as GiveMeaning has nothing to do with the television business…
“… later learned that the television foundation had been funded by a $2-million loan from an unidentified party. Foundation president Paul Jay said that, for confidentiality reasons, he could not disclose the name of the lender, but he said the lender had been introduced by Bromley.
Whomever the lender was, he or she clearly had a soft spot for GiveMeaning. Jay said a condition of the loan was that the television foundation donate $150,000 to GiveMeaning to help finance overhead…
“…GiveMeaning, meanwhile, made several donations to other registered charities, most notably $87,383 to the Amazing Grace Foundation, which had both Bromley and Williams as directors. It’s not clear what this foundation does, why the donation was made or why the money was funnelled through GiveMeaning, rather than given directly to the foundation.
Bromley refused to discuss the tax implications of any of these transactions and Williams refuses to return my calls, so we don’t know the extent to which taxpayers are subsidizing this process.
That’s a shame. If charities want to maintain public trust, they have to be open and accountable.
ºIn this case, there’s a lot of money-shuffling going on, but we really don’t know why.
dbaines@png.canwest.com
© The Vancouver Sun 2008
Good Point Michael,
Just reading this morning’s Vancouver Sun article on Tom Williams and the structure of Givemeaning. These facts speak for themselves. C’mon Michael, be logical- don’t just be another victim.
I figure Michael must be a partner or something otherwise he wouldn’t sound so defensive for Givemeaning. Michael? The article today goes beyond this a bounced cheque. I agree with Jason and Dayo.
I’m pretty sure that Michael isn’t involved in GiveMeaning. As I’ve said before, this is becoming quite a twisted mess.
Well, one of the other directors in GiveMeaning’s latest Canada Revenue filing is shown to be Hugh Notman, who is likely another well-known stock-market figure in Vancouver, William Hugh Notman.
He will likely be very protective of his name and reputation.
Notman William Hugh
Stirling Capital Corp
Stirling Mercantile Corp
Andean American Mining Corp
Consolidated Peritronics Medical Inc
Peritronics Medical Ltd
SMC Ventures Inc
Triant Technologies Inc
AccelRate Power Systems Inc
BioSyent Inc
Hedley Technologies Inc
Key Capital Group Inc
Garrison Enterprises Inc
GNI Petroleum Inc
http://www.stockwatch.com
For the record, I have no relationship to GiveMeaning although I have met Tom a number of times. (I have also met David Baines. I have also met Tris Hussey.) I have no dog in this fight but it does strike me as unfair that people are assumed guilty and need to prove their innocence.
Who are you ‘chance ho’?
Michael Tippett asks, “Who are you ‘chance ho’?”
Why attack him? Is it because you’ve Googled the rest of us, and have now found that those who play in the public markets can’t afford to be publicly displayed, with their guts and other unviewables hung out to dry?
As to innocence, and proving it, your mentor, Tom Williams, has already said it, ““… asked Williams to name those charities, but he refused. “I can’t name any. None have asked for public recognition,” he said.
(Williams later claimed on his blog that he had offered to name them. However, when I repeated my request in an e-mail, he did not respond.)…”
What more is required? He’s already been quoted about his misleading Whelan-Beliveau and Canada-Revenue testimony, made under oath in a BC court.
Paul Reinhart was seemingly lied to, also.
Tibbett, you doth protest to much. Let’s hope that you birds of a feather don’t nest together, as the public’s money is also tucked away in that contribution which the Working Opportunity Fund made to Nowpublic.com.
Far too many stock-market players in this for me to feel comfortable with…or to comfortably feel that anyone outside of GiveMeaning is going to get much of the giving.
Not that it matters. “Render unto Caesar the things which are Caesar’s, and unto God the things that are God’s” still works in Canada…and even carries over into the US of A, Michael.
All concerned….. I have a feeling this issue is
going nowhere. (Unless the CRA responds, and
I doubt they will after their effort to nail Bromley
failed in 2004)
In the newspaper business, as David Baines would likely
agree… a story needs “legs,” to continue to bite, sadly, this one does not and will fade away.
It would have helped if the charity name was “Scams’R'Us” It is…. but it wasn’t.
On the bright side, some things to consider:
a) the CRA may find it simpler to prove “intent” with a second tax case based on a similar scheme
b) Tom Williams, being who he is, is destined to be revealed again and again for such conduct; this recent series of articles places the first historical markers in place - making it easier for the public to be informed and protected, and, it makes future investigations build to a cumulative weight
Fool me once, shame on me. Fool me twice, shame on you. From here on, Tom Williams, Blake Bromley and givemeaning can’t rely on being given a mulligan.
They’ve used up their “Get Out of Jail Free” cards in the public court.
WEll put. I’m finished with this discussion.How sad and textbook this case is, all we can do is learn and not be fooled again. Thanks y’all.
Quote from Williams, “Baines has said that as a young man, I had some screw-ups and wasn’t as much of a “whiz kid” as I and some media outlets have portrayed myself as. Ok.”
Another one from Williams, “That up until starting GiveMeaning, I was more “famous for being famous” than for actually accomplishing anything.”
The problem I have is that Tom Williams has been spewing the story of his accomplished past to anyone that would listen since he started Give Meaning and for many years prior to that. Now he has finally admitted that most of that key elements of that story as we would like them to pertain to Give Meaning(actual accomplishments and business acumen) are false. For that I commend Tom as it is hopefully the first step to redemption.
However, the question is a simple one: Is Tom Williams, with what we now know of him, really someone that should be permitted to operate a charity? I bet you Tom Williams, the liar he has now admitted to being as indicated in the first quote above, isn’t even the worst charity scammer out there. There needs to be some sort of qualification process for charity operators. Stock market participants have to answer to the relevant Securities Commission. If charity operators can take money from the general public and hold it and distribute it in trust, any person who is a principal should be subject to the same rules and due diligence as a stock market pariticpant.
I believe only political action can change the
environment that allows lawyers like Bromley
to skirt the spirit of the law governing charities.
These loopholes open the way for the type of
quasi legal methods used to avoid having the CCRA intervene in their nefarious pursuits.
Send a letter to your Member of Parliament demanding that they bring in enabling legislation to close these ambiguities in our charitable
tax system that these people are using to
their advantage. Letters of encouragement to columnists
like David Baines to keep digging up the dirt
on those engaged in unscrupulous charity frauds
wouldn’t hurt either. Wringing your hands in
total frustration is not a good option.
Agreed, Bill. Political action is important. Writing to MPs, the CRA and others who can take steps to fix the problem is good advice. As is showing support for journalists who expose the rot.
Meanwhile, back at the givemeaning ranch, a project of Blake’s daughter, Serena Bromley, is a beneficiary:
http://www.givemeaning.com/project/tambala/member/13766
And Pop makes the news for one of his clients not understanding the law that makes it illegal for charities to donate to political parties in B.C.:
B.C. Liberals must give refund to charity
September 15, 2005
B.C. Liberals must give refund to charity
By Charlie Smith, The Georgia Straight
Elections BC has ordered the British Columbia Liberal party to refund a $12,500 contribution from a registered charity called the Loyalty Foundation. “Under the Election Act, they don’t have any penalties for the party as long as they return it within 30 days,” Elections BC
spokesperson Jennifer Porayko told the Straight.
Vancouver Whitecaps owner Greg Kerfoot is one of three directors of the Loyalty Foundation.
In 2002, the B.C. Liberal government passed the Election Statutes Amendment Act, which banned charities from making political donations.
Last month, the charity’s lawyer, Blake Bromley, told the Straight that his clients sometimes mistakenly make political donations because they don’t understand the law.
Kerfoot’s name was listed beside two Loyalty Foundation donations to the B.C. Liberals this year: $10,000 on January 24 and $2,500 on April 20. Kerfoot had a private meeting in Premier Gordon Campbell’s Vancouver
office on January 25-one day after the $10,000 donation to the B.C. Liberals-according to the premier’s day timer, which the Straight obtained through a freedom-of- information request.
Kerfoot, a former chairman and CEO of software manufacturer Crystal Decisions, also contributed $32,500 out of his own pocket to the B.C. Liberals, according to the party’s disclosure statement on the Elections
BC Web site (www.elections.bc.ca/).
Other contacts for your comments and complaints: (in addition to your M.P.)
Hon. Stephen Harper, Office of the Prime Minister
80 Wellington St., Ottawa, Ont. K1A 0AZ
email pm@pm.gc.ca
Finance Minister Jim Flaherty, Dept. of Finance
140 O’Connor Street, Ottawa, Ont K1A 0G5
email jflaherty@fin.gc.ca
Taxpayers Ombudsman, Suite 724, 50 O’Connor
Ottawa, Ontario K1P 6L2
Enforcement Division Canada Revenue Agency
1166 West Pender St., Vancouver, B. C. V6E 3H8
Phone (604) 691-4588
I’ve spent the last few hours reading through this blog, the GM blog and website, and took in the interview from The Hour, and i fully agree, a 17% commitment of funds in 06 to actual charities is sadly unimpressive. Much of the background of Mr. Williams is also a bit odd and doesn’t provide much structure for an individual trying to establish a reputable cause, assuming his stories are true, and the opposition is also true - it’s certainly hard to validate either.
While the salaries disclosed are significant for a ‘non-profit’, and 30k for Ms. Farrell’s ‘part time’ help is excessive, it appears this organization is being built not unlike a typical high-tech startup. Anyone that can remember the dot-com days will recall the stories of exhaustive effort required by most startups building technology-based organizations - and unfortunately, the effort and skill set required doesn’t come cheap. That said, most startups are either funded by investors, or supported by reduced salaries. 90k out the gate is a fairly decent take home!
Given this i would say however, having worked in the media sector for over a decade, specifically online, and on occasion with non-profits, it is certainly good to see someone with Mr. Williams (apparent) background, breath new air into fund-raising and the non-profit model. In my experience, ive seen charities run by academics with little to no knowledge and/or access to technology. To that point, can we not agree that a new approach the the charity/non-profit ‘business model’ is far overdue?
If the GiveMeaning business model does in fact provide a simple, free, and legitimate technical outlet to charities to acquire donors, and helps to increase funds raised, then i support GM and its mandate. I cant however imagine GM proving legitimate until disclosures show the percentage of funds shifting away from operations, and its leadership taking a more humbling approach to public relations.
“William
Feb 2, 2008 at 10:57 pm
All concerned….. I have a feeling this issue is
going nowhere. (Unless the CRA responds, and
I doubt they will after their effort to nail Bromley
failed in 2004)
In the newspaper business, as David Baines would likely agree… a story needs “legs,” to continue to bite, sadly, this one does not and will fade away.”
I haven’t been able to find any record of a civil action to recover the funds, so presumably an out-of-court settlement between the taxpayer and the Canada Revenue Agency recovered the funds in question.
The CRA, by law, can’t comment on out-of-court settlements, and the taxpayer, for public relations purposes, is highly unlikely to admit that the CRA was right, and that he had to reconsider and render unto Caesar the things which are Caesar’s (God will have to reserve His opinion of the matter for the afterlife–should Heaven be providing a common meeting place).
As Burns said, in a time prior to income taxes:
The best-laid schemes o’ mice an ‘men
Gang aft agley,
An’lea’e us nought but grief an’ pain,
For promis’d joy!
I had never heard of Tom Williams until last week when I saw him speak at a benefit. I pride myself on being a very perceptive individual. I have read the posts here and find many people talking about how ‘gut’ feelings are unsubstantiated and so on and how they have met Williams and believe he is ‘for real’ and ‘committed’ and a bunch of other really ‘nice’ things.
Williams in his response to Blaines article admits that he has made mistakes in the past and has ‘grown up’. That’s great for someone to do when they are 21, but not when they are 28 and managing other peoples money.
To tell you the truth, what amuses me the most about Williams’ story is that all of these people gave him all of this money over and over again simply because the media said he was ’smart’ and ‘worked at apple’. As far as proven business acumen, this young man is an unmitigated failure. Williams himself does not even deny this. My question is: Being a complete failure and utterly incompetent in the world of business, why is Williams qualified to run a charity? Simply because money is only ’spent’?
As for Williams’ personal expenses, they are truly jarring. His claim that ’startup costs are high’ does not justify a personal salary of $10,000 a month for him and his country singer wife. Williams has obviously become accustomed to the high life and is having a hard time reconciling his public persona with that of his private. As the old saying goes: As above, so below. How can a man who lives an extravagant lifestyle and has no sense of true accountability or remorse for his actions which have negatively impacted businesses and individuals in the past be trusted to run a charity dedicated to alleviating the suffering of the less fortunate in the world? Simply because what he is doing now is ‘good’?
As for my own impressions of Mr. Williams, being someone who has been in business for seven years, they are as follows:
Mr. Williams immediately gave me the same crawling sensation I would get from a snake-oil salesman. His high-handed commands and appeal to only ‘those who were truly affected by what they have seen’ smacked of an insincere calculation that I have seen time and time again in my experience.
Over the years, I have worked with several social justice initiatives and groups who are fervently working towards affecting real change and meaning in this world. It has been a true honor and illuminating experience to work with these people. Williams, in his presentation, exhibited none of the characteristics of any individual I have worked with in the non-profit social justice sphere. This is a particularly damn accusation I know, but it is from my heart and from my experience.
Williams would be better served working in the film, television, or music industry. The products of those fields are more in tune with his character, and as Mr. Blaines article points out, his apparent ethics.
“Williams, in his presentation, exhibited none of the characteristics of any individual I have worked with in the non-profit social justice sphere. This is a particularly damn accusation I know, but it is from my heart and from my experience.”
Hmmmm. And the last Registered Charity Information Return filed by GiveMeaning (period ending September 30, 2006) showed the directors of GiveMeaning to be:
Directors / Trustees and Like Officials - GIVEMEANING FOUNDATION
6 Directors / Trustees and Like Officials.
# Directors/Trustees and Like Officials
1 Last Name: WILLIAMS
First Name: THOMAS
Initial: JL
Position in Charity: DIRECTOR
Director/Trustee at year end? Yes
Arm’s Length Indicator: Yes
2 Last Name: BROMLEY
First Name: JOHN
Initial: D
Position in Charity: DIRECTOR
Director/Trustee at year end? Yes
Arm’s Length Indicator: Yes
3 Last Name: NOTMAN
First Name: HUGH
Initial:
Position in Charity: DIRECTOR
Director/Trustee at year end? No
Arm’s Length Indicator: Yes
4 Last Name: RICHARDSON
First Name: CHRISTOPHER
Initial:
Position in Charity: DIRECTOR
Director/Trustee at year end? Yes
Arm’s Length Indicator: Yes
5 Last Name: LAVERY
First Name: WILL
Initial:
Position in Charity: DIRECTOR
Director/Trustee at year end? Yes
Arm’s Length Indicator: Yes
6 Last Name: DOWDS
First Name: MARK
Initial:
Position in Charity: DIRECTOR
Director/Trustee at year end? Yes
Arm’s Length Indicator: Yes
Of course, this story will in all eventuality likely end up having “legs”, but the “legs” are likely being massaged and trained at the moment, and, if they do come back, they will likely reappear kitted out in some pretty serious ass-kicking boots.
I have worked in non-profits for 3 decades, the last 10 for a web-based giving fund. These numbers do not add up. Comparing software costs of GM to Facebook is beyond ridiculous. I have read all the articles, blogs and viewed the cbc interview. David Baines has serious credibility. Tom Williams is stealing from every taxpayer. Blake Bromley is a long-time joke in Vancouver and appears to have spawned a pair of thieves in his children. I am so sick of pretty-boy sociopaths lining their pockets while I write cheques to the government. Kudos to David Bains - I hope he never stops fighting the good fight.
Another little jewel when it comes to Tom Williams is his second video blog entry where he talks about how he and a couple other ‘young leaders’ got together and ‘went out for drinks’.
This man two days later went on to essentially excoriate an audience of people for his assumption that they all drank lattes by asking that they ‘buy a one dollar cup of coffee instead of a $4 latte and give the rest to Give Meaning’ .
My question to Mr. Williams is this: Did you buy a $1 thimble of prison hooch made in the back, or perhaps a $5.50 highball plus tip?
Good point Rob. I would also like to know:
-EXACTLY what Tom’s wife did to earn $30,000
-Exactly how much his software costs were and who provided this software
-why his ultra-private “donors” have failed to come forward and defend him
-why he does not use some of his salary to pay back people he owes money to
Excellent comment Alex. I think that your view of Mr. Williams as a ‘pretty boy sociopath’ is dead on. Too often do individuals who fit the archetype of forward-thinking hipster find themselves in positions in which they have no qualification or ability. It is unfortunate that looks and image dictate success more so than merit. Would Mr. Williams be as successful a con-man if he dressed differently and had an extra 40 pounds on him?
His absolute lack of remorse or forthrightness is amazing. Though it will take time for his reputation to be completely destroyed (which I hope it will, given the appalling nature of this dishonesty), the piece in the Sun has already caused one partner of Mr. Williams to begin seriously distancing themselves from him. I call on everyone here to ensure that Mr. Williams can no longer hide under his flimsy blanket of denials and is forced one day to get a real job that requires full accountability.
Rob & Alex, I’m amazed that there is still a pent-up demand for disclosure of the source of GiveMeaning’s donations.
Aweel, I’ll have to suggest that, for ye of little faith, the sources won’t turn out to be as miraculous as Jesus turning water into wine.
If anyone would dare to suggest that the miracle of the loaves and fishes was an allegory for a Biblical Ponzi scheme (and also “cast your bread upon the waters”,lol), then that might enhearten the mean-spirited who are always amongst us.
Mr. Gould, I think you may perhaps be missing the point here. Neither myself, and to my knowledge Alex, has made the assertion that Mr. Williams is running a ponzi scheme.
The point is this: Mr. Williams is an avowed liar who has consistently demonstrated over his career beginning at the age of 14 that he can not, and should not, run a business. Mr. Williams has demonstrated an appalling lack of personal accountability for his actions, past and present. Mr. Williams confirms all this by way of his own statements. It also appears that Mr. Williams and his cohorts have mismanaged taxpayer funds.
I do not see how anyone here or elsewhere could be ‘waiting for miracles’ beyond Mr. Williams taking responsibility for his statements and actions.
And keeping in tune with what you perceive as my ‘mean-spiritedness’ : As far as your amazement is concerned, perhaps you could restrain your awe to open mouthed staring at your computer screen and brushing up on your poorly quoted Scripture which has no bearing whatsoever to the matter at hand.
What is important here is that Mr. Williams has not adequately responded to the questions levied against him by reasons of not believing that the people asking him these questions here are ‘people’ and that he will ‘not dignify them with a response’. I assure Mr. Williams that I am one person, and if he would simply answer my query about the price of his highball as opposed to a club soda, I myself will be sated. However, the Canada Revenue Agency, those who would like to sue Mr. Williams for lost or misappropriated monies, and those who donated the $120,000 to Give Meaning that went up in smoke, may not be satisfied with only knowing the price of his drinks.
So what do you say Tom? How much were the drinks that night? Was it a club soda in keeping with your ethos which you high-handedly demanded of a theatre filled with 250 people, or was it a gin and tonic with a lime? It’s a simple question.
This wouldn’t be the first tech founder in the world who’s been outed as a charismatic fabrication. It’s really hard for honest & talented people to break into entrepreneurism in this country when it’s being monopolized by a fair amount of narcissistic blowhards. That’s a sweeping generalization, I realize, because some are actually humble and talented. But you can make it a fair ways with uninitiated investors and media by being able to tell a good story and stretching the truth to its absolute limits.
Also, I highly disagree with the point that you need $700k to make an ‘enterprise-level’ website. Hell, give me a hacker with half an ounce of motivation, and he could recreate GM in 4-8 weeks. Open-source has made the fixed cost of starting up almost negligible. If you have the right skills and know the right people, $50K in living expenses would be plenty to get something off the ground. Just look at Y-Combinator companies, they only get like 15K per founder, and 95% of those companies’ technology blows GM out of the water. The perpetuation of the myth in this country that you need millions of dollars to get a website off the ground is not only lunacy, but unhealthy over the long-term. Perhaps to market it properly, but not to build it in the first place…
In its 2006-09-30 annual filing with the CRA’s charities directorate (http://www.cra-arc.gc.ca/tax/charities/contact-e.html …click charities listings), the GiveMeaning Foundation, BN868487307RR0001 (three of its directors are Tom Williams, John Bromley and Christopher Richardson), reported that it donated $87,383 to the Amazing Grace Foundation, BN839866548RR0001 (its three directors are Tom Williams, Blake Bromley and Christopher Richardson). GiveMeaning reported that it spent a meaningful amount of $199,043 that year on professional and consulting fees.
In its 2006-03-31 annual filing with the CRA’s charities directorate, the Amazing Grace Foundation,BN839866548RR0001, reported to the charities directorate that it spent $ 14,526 on professional and consulting fees.
In its 2006-10-31 annual filing with the CRA’s charities directorate, the Independent World Television Foundation, BN 815799671RR0001 (one of its directors is Blake Bromley) reported to the charities directorate that it donated $150,000 to the GiveMeaning Foundation. That was pretty much all that the Independent World Television did that year…except from paying professional and consulting fees of $113,026.
In its 2007-02-28 annual filing with the CRA’s charities directorate, PHILANTHROPY WITHOUT FRONTIERS/PHILANTHROPIE SANS FRONTIERES, BN137201315RR0001 (two of its three directors are Blake Bromley and Christopher Richardson), reported that it donated $150,000 to Give Meaning, BN 868487307 RR 0001.
In its 2006-02-28 annual filing, PHILANTHROPY WITHOUT FRONTIERS/PHILANTHROPIE SANS FRONTIERES reported a donation of $175,000 to Give Meaning, but did omit to give any BN designator. Professional and consulting fees were reported as $110,276 in 2007, and $202,271 in 2006.
And its charitable work (besides supporting the travel and consultancy industries)? “RESEARCH (WITH FOCUS ON PRESUMPTION OF PUBLIC BENEFIT) ON THE DRAFT UK CHARITIES BILL DIRECTOR ATTENDED SWEET CHARITY CONFERENCE IN LONDON AND MEETINGS RELATED TO DRAFT UK CHARITIES BILL AND ATTENDED RELATED SESSIONS OF THE HOUSE OF LORDS DIRECTOR SPOLE AT CHARITY CONFERENCE IN PUERTO RICO ATTENDED CHINA CHARITY CONFERENCE IN BEIJING NOVEMBER 17 TO 23, 2005 MET WITH OFFICIALS OF CHINESE MINISTRY OF CIVIL AFFAIRS ON JANUARY 22 TO 25 2006 RESEARCH AND CONCEPTUAL WORK ON THE DRAFT CHARITIES ENHANCEMENT LAW IN CHINA MEETINGS IN SINGAPORE ON JANUARY 20 AND 21, 2006 WITH THE OFFICIALS OF INTERNAL REVENUE AUTHORITY MEET WITH SENIOR GOVT OFFICIALS IN VIETNAM RE: THEIR CHARITY LAWS COURT CASE IN BRITISH COLUMBIA TO CLARIFY ISSUES RELATING TO LAW OF GIFT RESEARCH INTO GST ISSUES PERTAINING TO CHARITIES ATTENDED INTERNATIONAL CONFERENCE ON PLANNED GIVING IN NY”
Tris, I am sorry to hear by your update that
you’ve had to cut some blogs… guess the
pressure is building for you to terminate this
entire subject. I’m happy you haven’t caved
to the threats of legal action and continue to
run those blogs you feel to be acceptable.
It takes guts to keep these opportunities for
concerned individuals to have a voice in this
controversy. I congratulate you for keeping
the conduit open. Bravo!
The charities directorate is looking at “research” undertaken by charities organizations.
http://www.canadianfundraiser.com/newsletter/article.asp?ArticleID=2551
CANADA REVENUE AGENCY -
Issues guidelines on undertaking research, seeks input
Canada Revenue Agency has developed a set of draft guidelines on what types and forms of research it will consider to fit the purposes of registered charities, and which it will not accept. It is asking charities to review the guidelines and provide it with comments and input before the end of this month.
The basic principles upon which research will be considered a charitable activity, says CRA, are that
it represents a reasonable way to achieve or further the organization’s charitable purpose;
the subject matter is not frivolous; the research is undertaken in such a way that it is likely knowledge will be discovered or improved;
it is carried out for the public benefit that could arise from it and not primarily for self interest or for mainly private commercial consumption; and
the results are disseminated and made freely available to others who might want access to them.
The policy is intended to apply both to organizations whose prime purpose is undertaking research and to those with some other purpose which might be served or furthered by research projects.
Although CRA hopes to establish these guidelines to make it easier for organizations to judge whether their research project qualifies as charitable, it notes any final decision will depend on the facts of a specific situation, and says its people will be happy to provide an advance opinion to those who are unsure whether or not they fit the criteria.
Example of acceptable
Research that would qualify, although undertaken by an organization that does not have research as its prime mandate, would be exemplified by a food bank’s researching whether the number of working people using the bank declines when the level of the minimum wage increases.
Research that would not qualify would include that which involves the internal deployment of an organization’s administrative, management or fundraising resources, or that which researches the donation patterns of its donors to increase the amount of funds it raises annually, because in both cases the benefit would be only to the charity itself, not to the public.
In essence, says the document, “to be considered charitable any research an organization funds or conducts must be capable of furthering or achieving its formal charitable purpose, as set out in its governing documents.”
For the complete report: http://www.cra-arc.gc.ca/tax/charities/ consultations/research_guidelines-e.html; to respond with feedback: Charities Directorate, CRA, Tower A, 320 Queen St., Ottawa ON K1A 0L5, fax 613/948-1320, consultation-policy-politique@cra-arc.gc.ca.
Thanks for all your support folks. I am going to keep this dialog open as long as I can. As long as comments aren’t personal attacks on Tom, I’ll post them.
Keep up the good work, Tris. i’m sorry you have had to deal with all of this. All I’m going to say about Givemeaning is that I agree with you, the idea is a good one but as someone who has been very confused, betrayed and threatened (like you) for questioning the intentions of Givemeaning, I understand you must be stressed about all of this. Please don’t give up and take good care. Your blog is very important because it allows concerned people to understand they are not alone with regards to this matter. This isn’t only about Givemeaning, it is about defining “what is charity?” and how do we make sure as tax payers we are not subsidizing business men and women who are lining their pockets in the way the folks at Givemeaning are.
Jay thank you. I fully intend to keep this thread going until I’m forced to stop.
The whole tax implications of this are really, really interesting. Our own taxgirl.com is interested in the discussion now too!
Tris,
I appreciate you keeping this forum open. This blog is being carefully monitored by a wide variety of people that are directly and indirectly linked with Tom Williams and Givemeaning. Its importance is vital in revealing key information that has been kept behind closed doors for far too long. There are many who have been involved with this organization, both individuals and corporations (ie. Telus) that were completely unaware of how Givemeaning operated. Now that this information is public we are all better equipped to make informed decisions on whether or not we want to be involved with Givemeaning.
As far as being held liable by Mr. Williams you have nothing to be concerned about. This is a scare tactic that has been used repeatedly by Mr. Williams in the past. This is why so many of those victimized by his actions have never come forward. Thank’s again,
Jason
Thank you Jason. I appreciate all of the support. This lets me know that I’m doing something important here.
One good thing about this is that it’s pretty hard to suggest defamation when the sources are the registered charity’s information returns which have been filed with the Canada Revenue Agency’s Charities Directorate.
Being hoist by one’s own petard has a nice medieval ring to it, and has stood the test of time.
The CRA’s database shows that the GiveMeaning Foundation, BN868487307RR0001, in its 2005 information return (for the period end 2005-09-30) lists donations made to 10 qualified donees during the year. The listed donees are certainly not included in what I would consider to be the Who’s Who of major charities in Canada, British Columbia or even the Lower Mainland, and the total of $1,335 for the 10 displayed donees is hardly mind-boggling (the highest donation is $200, and the lowest is $100).
GiveMeaning reported in 2005 that it had three individuals in permanent, full-time positions (paying between $1-$39,999), and it also filed, at D3, that it paid $41,622 to employ 2 part-time or part-year employees during the fiscal period.
GiveMeaning reported during that same 2005 fiscal period that it had revenues of $77,000 in tax-receipted gifts, and also received $70,000 from other registered charities. Total revenues of $147,000 in gifts and donations, and $141,218 in expenditures ($32,818 in advertising & promo, and $86,422 in salaries & wages)…and then it handed back $2,900 in “total gifts to qualified donees, excluding enduring property”.
The GiveMeaning Foundation was registered on 2003-12-09, and it filed its first annual return for the period end 2004-09-30. This initial annual return showed two individuals who share the same well-respected family name as two of the three original directors / trustees and like officials(they do not reappear on the 2005 filing).
Revenue in fiscal 2004 consisted of $20,965 in total gifts received from other registered charities, and expenses consisted mainly of $24,404 in professional and consulting fees.
The Charities Directorate’s database also records a GiveMeaning Foundation Canada, BN843644162RR0001, 1500 WEST GEORGIA STREET SUITE 1555 P O BOX 62, VANCOUVER, BC, as being registered on 2006-09-18.
This charity’s annual information return is not available online. What will this similarly named foundation be doing (it, too, is a Category Code 03: (Welfare) Charitable Corporation, designated as a public foundation), and why couldn’t the GiveMeaning Foundation, BN868487307RR0001, have carried out its tasks, whatever they may turn out to be?
Tris,
Don’t let Tom bully you. It’s smoke and mirrors so that he can avoid the real issue of accountability to his community, his donors and tax payers in general. He has commonly used bullying in the past to silence naysayers and it is a favorite tactic of his.
I appreciate that you seem to have changed your view from the beginning of this story to the end and have remained open minded. For someone that initially professed to support Tom, I hope that you can now appreciate that so long as you are doing what Tom wants, he will treat you like his best friend. However, once you start to think independently and get in his way, he will go on the offensive. Stay strong as you’re doing the right thing.
On a side note, we should all be reveling in the irony that someone who has admittedly manipulated the media for over a decade to further his own personal causes is now crying foul over some postings on a blog. Ahhh hypocrisy, so amusing.
does anyone find it strange that the givemeaning blog no longer works and that tom isn’t posting anymore comments these days?
Also notable is the big advertisement for “Beaches” Girlfriend getaways on the main page. I think that this recent activity has caused quite a stir in the business of charity so to speak.
“because you and your girls deserve nothing but the best!”
– from the link. Very classy.
Tris, thanks again for not backing down in the face of the threats.
The Givemeaning Foundation’s September 30, 2007, Registered Charity Information Return is not on the Charity Directorate’s website as of yet (a charity must file within six months of the end of its fiscal period), and I’m sure that many will be most eager to see what will be revealed in those filings.
Personally, I’d be most interested to find out what motivated the Independent World Television (ITV) Foundation, BN 815799671RR0001, to donate $150,000 to Givemeaning in the year ended October 31, 2006, and also to see if ITV was sufficiently moved enough to do the same in 2007 (its 2007 Registered Charity Information Return is not on the Charity Directorate’s website, either).
And why did PHILANTHROPY WITHOUT FRONTIERS/PHILANTHROPIE SANS FRONTIERES contribute $325,000 to the Givemeaning Foundation in the last two fiscal periods ending on Feb. 28, 2006 & 2007?
That’s lot of cash ($475,000) going from registered charity to registered charity in such a short period of time…and not much seems to have leaked out yet to aid God in doing His charitable work.
While the old adage says that charity begins at home, surely it doesn’t suggest that charity should remain mainly within that home?
Tom Williams and GiveMeaning used to make much mention of Plenteus Technologies, whose website at http://www.plenteus.com/about/news/131104vansun.html states:
“These days Williams is using his business skills, evangelical charisma and whiz-kid persona to develop a new online marketplace for charitable giving. Williams has put tens of thousands of dollars of his own money into creating Plenteus Technologies, an Internet company designed to link non-profit charities with potential donors.”
Has Global Institute USA stepped into the void left by Plenteus?
Child Aid international, a Surrey-based charity which uses the services of GiveMeaning, advises us that, “Canadian and US donors who donate through GiveMeaning will receive a taxable receipt from GiveMeaning Foundation (or their US partner - Global Institute USA).”
The Global College China Center of Long Island University advises us, “ID #8684 7303 RR0001) that has partnered with the Global Institute USA, which is a 501(c)(3) registered charity and will issue tax receipts in the US (GiveMeaning’s BN is 8684 87307RR0001)”.
http://www.jolleansheart.com/links.taf tells us of a Kelowna-based Global Institute, quotes Global’s Dr. Goheen, and even provides a link to a website, http://www.globalcharity.org. (the website, alas, declines to open when accessed, even though Who.is advises Website Status: active).
No matter, perhaps. The Charities Directorate’s listing of charities shows a Kelowna-based Global Institute, BN889133575RR0001, and its registered Charity Information Return for the fiscal period ended 2006-12-31 reports its directors / trustees and like officials to be Richardson, Christopher; Bromley, John; and Brandlmayr, Leslie.
Global Institute, BN889133575RR0001, in its registered Charity Information Return for the fiscal period ended 2005-12-31 reports that one of its directors / trustees and like officials during the period had been a Goheen, Duncan S.
That (2005-12-310) was a busy period for the Global Institute. It stated that it was inactive during the fiscal period, yet $4,733,326 in other expenditures was reported as being expensed. Total expenditures for the period before gifts to qualified donees were $4,730,386, total management and administration expenditures were $4,730,386, and total charitable programs expenditures were zero.
And, curiously, the Global Institute reported only $156 in interest and investment income in fiscal 2005, even though it showed $453,118 in interest and investment income in the preceding year.
The fiscal period ended 2004-12-31 was seemingly a banner year for the Global Institute (well, as long as you weren’t looking for charity).
Global reported that it “MONITORED ONGOING PROGRAMS MANAGED INVESTMENTS”; had amounts receivable from all others in the amount of $904,979; held long-term investments in the amount of $3,851,822; received tax-receipted gifts of $21,265; earned interest and investment income of $453,118; expensed $372,922 in other expenditures; reported total management and administration expenditures of $392,520 (professional and consulting fees were $20,522); and made total charitable program expenditures of $2,639.
I’ve visited the GiveMeaning website on March 11, and clicked on “view our current projects”, which took me to Victoria projects.
http://www.givemeaning.com/community/CA/BC/Victoria/type/all/page/1/cause/ lists a couple of pages of project; however, out of the 10 projects trying to raise funds, eight of them have only raised $810 out of their stated goals of $89,000.
The two others have raised $14,271.46 of the stated goals of $22,000, but one is Ollie the Otter (and the $1,336.99 raised seems to be tied into BC Hydro somehow), and the other, Help firefighters fight cancer, seems well organized and is receiving some healthy amounts from involved and aware individuals, which helped to run up the total to $12,934.47
I viewed the Vancouver projects, and did find the following ( http://www.givemeaning.com/community/CA/BC/Vancouver/type/all/page/3/cause/ ) to be a bit misleading, inasmuch as we know of the $475,000 donated by Independent World Television and PHILANTHROPY WITHOUT FRONTIERS/PHILANTHROPIE SANS FRONTIERES.
“Project - GiveMeaning Foundation
Founded by Tom Williams
GiveMeaning needs your support. If you like what we’re doing, I ask that you make a donation in support of our operations. While we hope that advertising will eventually cover our costs, we are not yet there. GiveMeaning’s mission is to… read more
Current: $96,984.69 | Total Needed: $500,000″
And this one (is it a joke?):
“Fundraising by Tom Williams
I’m running for the 1st Annual Vancouver Relay To Rescue Pugs
Current: $80 | Total Needed: $1,500
In support of: Saving 100 Abandoned Pugs in the Lower Mainland.
I work for GiveMeaning which is a very pug-friendly work environment”
FYI, from what I have read, the CEO and his wife have two pugs. Somehow, this fundraising project does not add up and seems strange…I agree Dayo. If a pug ended up at the SPCA, dozens would want to adopt it. They are very trendy and popular dogs! Not to mention expensive. I’d like to see where Givemeaning got this info from re:100 Abandoned Pugs. There is no doubt that interesting elements of the business re: Givemeaning have been revealed. I’ve been following this story and it worries me that there is going to be more and more stuff coming out about this company. So good to have a site like this one to follow the updates. Thank you Maple Leaf 2.
Jance & Dayo: Pugs are abandoned very often, so I’m not surprised about the 100 being abadoned. This is besides the point…So, that being said, Givemeaning has flaws that David Baines revealed. I do think the pug thing is for real, but I would never donate money through Givemeaning. Donate straight to the cause so you know the money will get there.
News release CRA revokes charitable status of the Francis Jude Wilson Foundation
Ottawa, Ontario, March 5, 2008…
The Canada Revenue Agency (CRA) has revoked the registered charity status of the Francis Jude Wilson Foundation, a Montreal-area charity. This revocation was effective February 23, 2008, and follows a letter dated August 27, 2007, that was sent to the Foundation.
As stated in the letter:
“The result of these arrangements is that, in essence, the Charity received in actual cash returns from the tax shelters a mere $23,716 in fiscal 2005 and $81,951 in fiscal 2006 yet issued receipts totaling $10,560,650. From the actual cash returns, the Charity incurred professional fees of $105,129 and $129,726 in 2005 and 2006 respectively.
Based on this, it appears that the preponderance of the Charity’s funds are directed primarily to the benefit of the tax shelter promoters and to the promotion of the tax shelter arrangement while a scant percentage reverts back to the Charity. In our view, the arrangement described above, particularly the insignificant returns realized by the Charity and its lack of control over its own “investments”, demonstrates a willingness of the Charity to lend its receipting privileges for the inappropriate private benefit of the tax planning donation arrangement and its promoters, which is not charitable at law.”
….
“Given the manner in which the Charity has structured its financial affairs for the private benefit of the tax shelter and its promoters, its proportionally minimal levels of involvement in these financial arrangements, its failure to act in the best interests of the Charity by choosing prudent investments in favour of those pre‑selected and pre-arranged by the tax shelter, it is our view that a collateral purpose, if not primary purpose of the organization is, in fact, to support and promote the tax shelter arrangement.”
The notice of intent to revoke and other letters relating to the grounds for revocation are available to the public on request by calling 1-800-267-2384.
A charity that has had its charitable status revoked can no longer issue donation receipts for income tax purposes. The charity is no longer exempt from income tax, unless it qualifies as a non-profit organization, and it may be subject to a tax equal to the full value of its remaining assets.
Registered charities in Canada perform valuable work in our communities, and Canadians support this work in many ways. The CRA regulates registered charities through the Income Tax Act and is committed to ensuring that charities operate in compliance with the law. Where a registered charity is found not to comply with its legal requirements, the CRA may apply monetary penalties or may suspend or revoke the charity’s status under the Act.
The CRA is reviewing all tax shelter-related donation arrangements (for example, schemes that typically promise donors tax receipts worth more than the actual amount of the donation), and it plans to audit every participating charity, promoter, and investor. For more information about tax shelters, visit the CRA’s Tax Alert Web page at cra.gc.ca/alert.
http://www.cra-arc.gc.ca/newsroom/releases/2008/mar/nr080305-e.html
Interesting how CRA is clamping down on this … well I can imagine it’s going to be an interesting year.
Tris, I think that you should take a bit of a bow for allowing this public discussion to have developed, as I doubt that it’s a coincidence that this thread was ongoing at the same time that the CRA released, “The CRA is reviewing all tax shelter-related donation arrangements (for example, schemes that typically promise donors tax receipts worth more than the actual amount of the donation), and it plans to audit every participating charity, promoter, and investor.”
I am fairly sure that the charities directorate will have been contacted by many of your readers, thanks to the links provided.
I don’t know if your site tracks the volume and where traffic originates by thread but, if it does, some Ontario and Quebec views will likely be from interested parties within the CRA.
As an aside, I was informed that the charities directorate’s publicly accessible website has been upgraded as of today, and the public should be able to access the new-and-improved features by next week at the latest.
Best regards.
You’re too kind. I just look back at how I started this post and where it has gone now. If I’ve done some good for Canadian taxpayers (myself included), then I’m more than happy.
When I started blogging four years ago, yep my four-year blogiversary is next month, I never would have thought I would be doing this now.
On March 9, 2008, mention was made here of the Kelowna-based Global Institute, BN889133575RR0001, and its registered Charity Information Return for the fiscal period ended 2006-12-31, which reported its directors / trustees and like officials to be Richardson, Christopher; Bromley, John; and Brandlmayr, Leslie.
The Charities Directorate’s listing of registered charities now shows that the Global Institute, 889133575RR0001, revoked its registration as of 2008-04-19.
No annual information return has yet been filed for the year ended 2007-12-31 and, in compliance with CRA policy, all previously viewable annual filings are gone from the publicly accessible Charities Directorate website.
The Charities Directorate will provide copies of the deleted items upon request; however, the December 31, 2007, annual return is not due until six months after the year end, so that information will not be available in response to a request until mid-July or so, unless it is filed early…or at an even later date, should the charity be late with its required submission.
Will you explain this in layman’s words Dayo and explain the relevence to Tom Williams? Thanks so much. You’ve lost me but i would like to understand. J
Recopy the March 9, post.
*******************
Dayo Gould
Mar 9, 2008 at 12:01 pm
Tom Williams and GiveMeaning used to make much mention of Plenteus Technologies, whose website at http://www.plenteus.com/about/news/131104vansun.html states:
“These days Williams is using his business skills, evangelical charisma and whiz-kid persona to develop a new online marketplace for charitable giving. Williams has put tens of thousands of dollars of his own money into creating Plenteus Technologies, an Internet company designed to link non-profit charities with potential donors.”
Has Global Institute USA stepped into the void left by Plenteus?
Child Aid international, a Surrey-based charity which uses the services of GiveMeaning, advises us that, “Canadian and US donors who donate through GiveMeaning will receive a taxable receipt from GiveMeaning Foundation (or their US partner - Global Institute USA).”
The Global College China Center of Long Island University advises us, “ID #8684 7303 RR0001) that has partnered with the Global Institute USA, which is a 501(c)(3) registered charity and will issue tax receipts in the US (GiveMeaning’s BN is 8684 87307RR0001)”.
http://www.jolleansheart.com/links.taf tells us of a Kelowna-based Global Institute, quotes Global’s Dr. Goheen, and even provides a link to a website, http://www.globalcharity.org. (the website, alas, declines to open when accessed, even though Who.is advises Website Status: active).
No matter, perhaps. The Charities Directorate’s listing of charities shows a Kelowna-based Global Institute, BN889133575RR0001, and its registered Charity Information Return for the fiscal period ended 2006-12-31 reports its directors / trustees and like officials to be Richardson, Christopher; Bromley, John; and Brandlmayr, Leslie.
Global Institute, BN889133575RR0001, in its registered Charity Information Return for the fiscal period ended 2005-12-31 reports that one of its directors / trustees and like officials during the period had been a Goheen, Duncan S.
That (2005-12-310) was a busy period for the Global Institute. It stated that it was inactive during the fiscal period, yet $4,733,326 in other expenditures was reported as being expensed. Total expenditures for the period before gifts to qualified donees were $4,730,386, total management and administration expenditures were $4,730,386, and total charitable programs expenditures were zero.
And, curiously, the Global Institute reported only $156 in interest and investment income in fiscal 2005, even though it showed $453,118 in interest and investment income in the preceding year.
The fiscal period ended 2004-12-31 was seemingly a banner year for the Global Institute (well, as long as you weren’t looking for charity).
Global reported that it “MONITORED ONGOING PROGRAMS MANAGED INVESTMENTS”; had amounts receivable from all others in the amount of $904,979; held long-term investments in the amount of $3,851,822; received tax-receipted gifts of $21,265; earned interest and investment income of $453,118; expensed $372,922 in other expenditures; reported total management and administration expenditures of $392,520 (professional and consulting fees were $20,522); and made total charitable program expenditures of $2,639.
As we wait for the 2007 financials for GiveMeaning to appear on the Charities Directorate website (year end, September 30, 2007; filing deadline March 31, 2008; received by CRA, but not input into website almost two months after filing deadline), we can ponder upon the fact that GiveMeaning’s pleas to the public for funding for itself seem to be falling upon deaf ears.
At March 16, 2008, the total raised was $96,984.69. The total as of today’s date, and taken from the giveMeaning website, is only $98,518.19.
Only $1,533.50 in donation in 71 days, or $21.60 per day. I wonder if there is a Benefic-associated charity (or charities) subsidising the huge shortfall in wages and expenses?
Mar 16, 2008 at 9:48 am
Current: $96,984.69 | Total Needed: $500,000″
http://www.givemeaning.com/community/CA/BC/Vancouver/type/all/page/2/cause/
• Project - GiveMeaning Foundation
• Founded by Tom Williams
• GiveMeaning needs your support. If you like what we’re doing, I ask that you make a donation in support of our operations. While we hope that advertising will eventually cover our costs, we are not yet there. GiveMeaning’s mission is to… read more
• Current: $98,518.19 | Total Needed: $500,000
What do you think will come of this Dayo? You seem to understand what is going on… I can’t believe people don’t do their research before giving their hard earned $ to GM.
I am expecting the Charities Directorate to go through many of the entities listed on this thread (and they’re not charities, IMO) with a fine-toothed comb.
On or about May 21, 2008, the Charities Directorate posted on its website an update, titled “Introduction and examples of acceptable purposes (objects)”, which seems to be defining what the Canada Revenue Agency expects a charity to accomplish.
IMO, few of the entities mentioned here meet the expectations which the CRA specifies should be met in order to be recogniszd, and registered, as a charitable organization.
Should that be so, then certain entities may face reassessments and penalties.
“————————————————————————–
Adath Israel Congregation
Registration Number: 118872217RR0001
Effective date of Penalty: March 12, 2008
Reason for Penalty: Donation receipts containing false information
ITA Reference: 188.1(9)
Amount of Penalty: $499,055
The charity’s tax receipting privileges and qualified donee status are suspended.”————————————————————————–”
Unfortunately, under present CRA policy, suspended charities’ reportings are removed from the publicly accessible database, and Freedom of Information requests come into play.
The CRA is aware of this matters discussed here, and are aware of this website.
It will be interesting indeed to see the 2007 GiveMeaning annual report; however, I’m at a loss to explain why the Charities Directorate website has not been updated with the filed information, as it’s been in their possession for almost two months now.
http://www.cra-arc.gc.ca/tax/charities/whatsnew/menu-e.html
http://www.cra-arc.gc.ca/tax/charities/becoming/mod-intro-e.html
The Income Tax Act (the Act) provides for the registration of organizations that are charities. As the Act does not define what is charitable, the Canada Revenue Agency (CRA) determines whether or not an organization qualifies as a charity at law by applying the common law: that is court decisions.
To be charitable at common law, an organization must have exclusively charitable purposes and carry on exclusively charitable activities that further these purposes. In this document, the words purposes and objects are used interchangeably. Both refer to the way that an organization describes and identifies the reason(s) for which it was created i.e., what it intends to achieve. Activites are the organization’s programs - or how it will accomplish its purposes.
A charity’s objects are set out in its governing document. If the objects allow the organization to do something that the law does not recognize as charitable, the organization is not considered to be a charity and is not eligible for registration.
When selecting a purpose or purposes, an organization must keep in mind a number of important factors:
Categories of Charitable Purposes and Public Benefit - Not every purpose that may provide a public benefit is charitable at common law.
Only those purposes that fall within four specific headings or categories are charitable at common law. These categories are the relief of poverty; the advancement of education; the advancement of religion; and other purposes beneficial to the community as a whole in a way which the law regards as charitable. The latter category identifies an additional group of particular purposes that have been held by the courts to be charitable at law. This does not mean that all purposes that provide a public benefit qualify as charitable.
In addition, to qualify for registration as a charity, an organization must meet a public benefit test. An organization must show that its purposes and activities provide a tangible benefit to the public as a whole or a significant section of it. An organization that wishes to limit its beneficiaries unreasonably or offer a private advantage may not qualify for registration under the Act. For more information about public benefit, please refer to the CRA Policy CPS-024, Guidelines for Registering a Charity: Meeting the Public Benefit Test.
Prior to making an application to become a registered charity, careful consideration should be given to whether what your organization wishes to achieve falls within the scope of at least one of the four categories of charitable purposes, and will deliver the necessary public benefit.
Exclusivity - A registered charity must have exclusively charitable purposes and activities.
This means that a registered charity may not have any purposes that are not charitable. It also means that all the activities of the charity must further its charitable purposes.
Precision - To be eligible for registration, a charity must describe its purposes precisely so that each one is clear and restricts the organization to only charitable activities.
Language that is broad and vague could include non-charitable purposes and allow for the pursuit of non-charitable activities, which would not meet the requirement of exclusivity.
Activities - The activities of the organization must directly further its charitable purpose(s).
Activities gain their charitable character from the purposes that they are intended to further. As such, selecting purposes from this list is only one part in the application process. The activities of the organization must bear a relationship to its charitable purposes and must be a reasonable means of achieving them.
It is important for organizations to choose their purposes carefully and provide accurate and detailed descriptions of all the activities they will conduct to further each purpose chosen. Note: Intentionally making a false statement when applying for registration as a charity may result in the subsequent revocation of charitable status.
Model Objects
The link to model objects below provides a non-exhaustive list of purposes that would be acceptable to the CRA. These purposes may be suitable for use by organizations that wish to apply to become registered charities or by organizations that are already registered, but wish to amend one or more of their purposes.
Why use the model objects?
If an organziation uses a model object, the CRA will usually not need to discuss the wording of the object with you. This may speed up the decision making processes because, in most cases, the CRA will only need to consider whether:
a) the organization will deliver a public benefit;
b) the proposed activities are charitable, will be carried out in a manner allowed by the Act, and will further one of the organization’s objects; and
c) the organization is appropriately set up.
Other Considerations
Drafting the objects is only one part of creating the governing document for a charity. Careful consideration should also be given to drafting other parts of the governing document, such as power clauses, and to the requirements of all applicable federal and provincial legislation. In addition to the requirements under the Income Tax Act of Canada, there may be other applicable federal and provincial legislation that you should consider.
Model Objects
CRA unravels this one.
http://www.cbc.ca/canada/story/2008/05/30/f-banyancharity.html#socialcomments
Donors owe millions after revenue agency investigates foundation
Banyan Tree Foundation head says of accusations: ‘They’re wrong’
Last Updated: Monday, June 2, 2008 | 5:08 AM ET Comments14Recommend39John Nicol CBC News
A Toronto-based charitable foundation that gave out $208 million in tax receipts over the past six years was called a “sham” by the Canada Revenue Agency, tossing recipient charities into disarray and forcing donors to pay back close to $100 million to the government.
What’s more, the Banyan Tree Foundation offered many of its clients loans to increase their donations, so donors are also on the hook for tens of millions in loans to a company now owned by Banyan Tree president Robert Thiessen.
A bit more activity by the Charities Directorate at the canada Revenue Agency
May 29, 2008
Applicants for Charitable Status in Canada with foreign activities need to provide detailed info
The Canada Revenue Agency has recently been sending out a new form letter to some applicants for charitable registration which appear to have foreign activities requesting they provide greater detail in terms of the foreign activities. Here is a copy of a sample letter from CRA. The letter is worth reading and I would emphasize the importance of providing sufficient detail of the proposed foreign activity as well as a draft agreement for any structured arrangements…”
http://www.globalphilanthropy.ca/index.php/blog/
Dayo, you do fine work and research. Thank you. I saw the Banyan Tree report on CBC news last night and thought of Givemeaning. Please keep it up.
The latest results for Givemeaning are now on the CRA website.
Thanks, Bill.
IMO, the financials will need a bit of unpeeling. A quickie peek reveals that:
This year, GiveMeaning reports that it made a donation of $126,098 to the Amazing Grace Foundation (Tom Williams, Richard Christopher and Blake Bromley); last year it reported that it made a donation of $87,383 to the Amazing Grace Foundation ((Tom Williams, Richard Christopher and Blake Bromley).
This year, professional and consulting fees are $237,918, advertising and promotion are $55,612, travel and vehicle are $79,486, and salaries, etc. are $339,586; last year, the figures for professional and consulting fees were $199,043, advertising and promotion were $28,433, travel and vehicle were $24,109, and salaries, etc. were $153,646.
This year, the four expenses above totalled $712,602, last year they totalled $405,591: a year-on-year increase of over 75 per cent ($307,011).
That’s a lot of promo, vehicle and travel expense for an entity which is domiciled in Vancouver and which states that it only operates in Canada.
As to the salaries and wages figures, this year’s filing shows part-time or part-year renumeration to be $12,709, and there are four permanent, full time positions paying between $40,000 to $79,999, and one individual who draws a salary of between $80,000 and $119,999.
Last year, there was no part-time compensation reported, and the filing showed three permanent, full time positions paying between $40,000 to $79,999, and one paying between $80,000 and $119,999.
On an average (leaving the part-timers out), those five salaried employees get $65,363. Not bad money for passing out other peoples’ and other entities’ ‘donations’.
Those are good wages for a company that deals with helping charities. More than most make. What do you think will happen with givemeaning? Bromley has taken his name off Givemeaning team. any insight? Is this simliar to Banyan Tree initiative? Dayo, please explain when you can. Thank you Tris.
“Bromley has taken his name off Givemeaning team. any insight?”
Steve, I’m sort of unsure as to where Bromley has taken his name off of the Givemeaning team. I use the Charities Directorate’s website to determine who the directors, trustees and officials of GiveMeaning Foundation are, and I cannot recall if a Bromley was previously listed as a team member on Give Meaning’s website.
John Bromley and Leslie Brandlmayr show up as trustees with Tom Williams on the other GiveMeaning Foundation, Canada’s (843644162RR0001) 2007-08-31 information return. John Bromley and Christopher Richardson show up as trustees with Tom Williams on the GiveMeaning Foundation’s (868487307RR0001) 2007-09-30 information return.
John Bromley is reported on Benefic’s website, http://beneficgroup.com/benefic-staff/ , as being the Vice President of the Benefic Group (Blake Bromley is listed as the President and Principal), and Leslie Brandlmayr is also listed there as a consultant.
Those are indeed good wages, even on an averaged basis, and the professional fees and other expenses also seem to be on the generous side (and they would be definately quite onerous if they were to be deducted from funds donated strictly for charitable purposes).
If the Charities Directorate’s website had a few more publicly accessible search features, the interlocking connections might be easier to determine.
Steve, I think that I see what you mean.
The 2007 filing for the Givemeaning Foundation, 868487307RR0001, does not indicate that any of the four directors (Thomas Williams, John Bromley, Christopher Richardson and Mark Dowds) were directors/trustee at the 2007-09-30 year end.
This could be an indication that all four have left; that the information return was not filed correctly; or that the data was entered incorrectly by the CRA.
The 2006 return does indicate whether or not the directors/trustees were directors/trustees at year end.
Thanks for your response. how do i look into CRA results for givemeaning, scuze my ignorance…
Steve, go to
http://www.cra-arc.gc.ca/ebci/haip/srch/sec/SrchLogin-e?login=true&searchType=Registered
and enter ‘GiveMeaning’ in the charity name box. That takes you to the two GiveMeaning Foundation listings, and you click on GIVEMEANING FOUNDATION.
That takes you to the header page, and clicking Registered Charity Information Return takes you to the yearly filings.
David Baines has written another article, commenting upon the latest CRA filing;
http://www.canada.com/vancouversun/news/business/story.html?id=7dab553a-abce-452c-abd8-d7a73b093a58
Mystery surrounds charitable dealings
David Baines, Vancouver Sun
Published: Saturday, June 14, 2008
dbaines@png.canwest.com
© The Vancouver Sun 2008
GiveMeaning, a Vancouver-based organization that acts as a middleman for charitable donors and donees, has filed an updated financial statement with Canada Revenue Agency.
I had hoped this statement would resolve some of the questions and concerns I had raised in earlier columns, but no such luck. In fact, it raises even more questions and concerns.
GiveMeaning is a sort of Craigslist for charities. People trying to raise money for specific projects can register on GiveMeaning’s website, and people wanting to donate to those projects can contribute through the website.
GiveMeaning is the brainchild of Tom Williams, 29, a self-described former Silicon Valley whiz kid who claims to have turned his back on the material world and committed himself to philanthropy.
As outlined in earlier columns, his story doesn’t stand up to scrutiny. I discovered that he has stumbled from one business and personal failure to another, and generated a lot of ill-will in the process. Also, a lot of the money raised by GiveMeaning ends up in his pocket.
During the year ending Sept. 30, 2006, GiveMeaning received $982,705 in donations and spent $493,204, or 50 per cent, on administrative expenses.
Of the remaining $489,501, only $171,979 — or 17.5 per cent of total donations — flowed through to charities (the balance remained on GiveMeaning’s books).
One of the biggest expense items was Williams himself. He drew a salary of $90,000 per year, and his wife, country singer Jessie Farrell, drew another $30,000 for her part-time work. This is very generous compensation for such a small charity.
Williams acknowledged that administrative costs were high, but attributed it to normal start-up costs. He said GiveMeaning’s financial return for the year ending Sept. 30, 2007, would show a greater percentage of overall donations going to charity.
That return has just been posted on the Canada Revenue Agency website. At first glance, it looks like Williams’s prediction was correct…
David Baines has written another article, commenting upon the latest CRA filing;
http://www.canada.com/vancouversun/news/business/story.html?id=7dab553a-abce-452c-abd8-d7a73b093a58
Mystery surrounds charitable dealings
David Baines, Vancouver Sun
Published: Saturday, June 14, 2008
dbaines@png.canwest.com
© The Vancouver Sun 2008
…That return has just been posted on the Canada Revenue Agency website. At first glance, it looks like Williams’s prediction was correct.
Donations and sundry revenue nearly doubled to $1,908,038. Of this amount, $1,391,118 or 73 per cent, flowed through to charities. This is a big improvement over the 17.5 per cent the previous year.
Administrative expenses, meanwhile, increased by 72 per cent to $851,198. But relative to total donations, administrative expenses dropped from 50 per cent to 44 per cent. Still very high, but better.
However, when I dug a little further, the picture took a turn for the worse.
The financial return shows that $500,000 of the roughly $1.4 million in donations that flowed through GiveMeaning was donated to Star of the Sea Parish, a Roman Catholic charity in Surrey.
The odd thing is that Star of the Sea is not listed on GiveMeaning’s website and did not solicit any funds through GiveMeaning. It is not the sort of mom-and-pop charity that typically uses GiveMeaning’s services.
Paul Schratz, spokesman for the Archdiocese of Vancouver, said the donation was a private donation of securities made by a parishioner. He said the donor received legal advice that he should funnel the securities through GiveMeaning.
He said the people who run the Star of the Sea charity had “no knowledge whatsoever” of GiveMeaning. It was simply a conduit…
David Baines has written another article, commenting upon the latest CRA filing;
http://www.canada.com/vancouversun/news/business/story.html?id=7dab553a-abce-452c-abd8-d7a73b093a58
Mystery surrounds charitable dealings
David Baines, Vancouver Sun
Published: Saturday, June 14, 2008
dbaines@png.canwest.com
© The Vancouver Sun 2008
…Another $40,000 cash donation flowed through GiveMeaning to Canadian Food for Children Co-Workers, a Langley-based charity which distributes food to needy people throughout the world.
Once again, this charity is not listed in GiveMeaning’s website, and president Joseph Krentz said he did not solicit any funds through the site. He said the donation came from a longtime supporter, and he has no idea why the donation was funnelled through GiveMeaning.
Another $35,000 cash donation was flowed through GiveMeaning to the Agape Street Ministry, which helps drug addicts and prostitutes in the Downtown Eastside. Once again, this charity is not listed on the GiveMeaning website. President Dan Dobin said the cheque just arrived in the mail. “I just about fell over,” he said.
He said the donor, a couple, was identified to them, but he has “no idea” why they ran the money through GiveMeaning. “It’s a mystery,” he said.
Otto Forgacs, chairman of the Mind Foundation of B.C., which helps schizophrenics, had an almost identical story about the $35,000 it received from a private donor who is known to them. So did Yvonne Douma, executive director of the Pro-Life Society of B.C., who similarly received $35,000 from a donor who is also known to them.
So who is the mystery person (or persons) who is counselling these people to funnel their donations — a total of $645,000 — through GiveMeaning, and why are they doing it? Williams refused to be interviewed….
David Baines has written another article, commenting upon the latest CRA filing;
http://www.canada.com/vancouversun/news/business/story.html?id=7dab553a-abce-452c-abd8-d7a73b093a58
Mystery surrounds charitable dealings
David Baines, Vancouver Sun
Published: Saturday, June 14, 2008
dbaines@png.canwest.com
© The Vancouver Sun 2008
…So who is the mystery person (or persons) who is counselling these people to funnel their donations — a total of $645,000 — through GiveMeaning, and why are they doing it? Williams refused to be interviewed.
I don’t know what, if any, value-added GiveMeaning provides in this exercise. They appear to be simply accounting entries. On the other hand, there may be substantive financial or administrative reasons. We just don’t know.
One thing we do know: the $645,000 in donations that ran through GiveMeaning on an unsolicited basis had the effect of increasing the percentage of donations that GiveMeaning flows through to charities, and reducing administrative expenses as a percentage of total donations.
If we subtract the $645,000, the total amount that GiveMeaning flowed through to charities drops to $746,118. Meanwhile, GiveMeaning racked up $851,198 in administrative expenses. The bottom line is that it spent more on overhead than it flowed through to charities that actively solicited and utilized GiveMeaning’s services.
This is a pretty ugly picture. Maybe Williams could paint a better picture, but he’s not talking.
Unpeeling those financials a bit further:
1…a donation of $40,032 was sent to Hope for Nations. A trustee of this registered charity is Ralph Bromley.
2…the filing shows that GiveMeaning issued tax receipts for publicly-traded securities/mutual funds which it received as non-cash gifts. A charity is required to report, at line 5600, the total eligible amount of tax-receipted non-cash gifts (gifts in kind) which it received and issued tax receipts for. This amount is not filled in on the filing.
3…the liabilities show amounts owing to non-arm’s length parties of $39,182 and an amount of $300,000 as other liabilities. IMO, if these were to be repaid, the charity would be in straitened circumstances.
4…2007 management and administrative expenditures/overheads totalled $851,198, which is $70,933 per month. It is now almost the end of June, and GiveMeaning has been operating for nine months in the current fiscal period, which means that another $638,000 should have been expended on overheads.
5…total tax-receipted gifts and amounts received from other registered charities total $1,768,732. Only $1,391,118 was remitted to qualified donees, leaving a shortfall of $377,614. The filing does not show assets in an amount sufficient to cover this amount.
This is very telling. I read the article. Thanks DG.
I see GiveMeaning’s money schemes in the news again. Revisiting, I find it even more encouraging to see that Dayo is doing such fine research, and that Tris is still carrying on with this thread - despite earlier reports of bullying by Tom Williams.
If the authorities show a fraction of the perseverance and integrity of what you’re displaying, the games by Williams, Blake Bromley et al will be curtailed before too long.
Robert, this is a real cash-burner of an operation, not for the faint of heart or shallow-pocketted.
This is a post I made on another thread which recaps some of the posts above (M Tippitt, who has posted here http://www.nowpublic.com/money/media-mud-fight-local-reporter-vs-charity-operator#comment-107150)
In 2006, GiveMeaning had three full-time employees making between $40K and $79.9K, and one head honcho making $80K to $119.9K. GM took in $234,643 in tax receipted donations, and $730,350 from other registered charities (we never did find out the identity of these charities which were moved enough to give almost $750,000 to cover GM’s start-up costs), with $250,000 of the $730,350 being designated as specified gifts. Management and admin burned up $493K out of $494K (auto & travel, $24K; professional & consulting, $199K; and full-time wages and burden, $153K), and gifts to donees totalled $171,979, with $87,383 of that going to Amazing Grace (Give Meaning’s implementing organization).
In 2007, Give Meaning had progressed to a reported six full-time employees, with four of them making between $40K and $79.9K, and one making $80K to $119.9K. GM took in $878,732 in tax receipted donations (we’re ignoring the $740,000 in flow-throughs which didn’t make a donate-to-me pitch on the GiveMeaning website), and $150,000 from other registered charities. Management and admin burned up $851K out of $860K (auto & travel, $79K; professional & consulting, $237K; and full-time wages and burden, $339K), and gifts to donees totalled $651,118 (we’re again ignoring the $740,000 in flow-throughs), with $126,098 of that going to Amazing Grace (Give Meaning’s implementing organization).
Over two years, $1,344,000 expended on management and administrative costs to raise $1,113,375. In two years, $880,350 was given to GiveMeaning by other (and mainly unknown) registered charities so that GM could cover a portion of the $1,344,000 in management and admin costs (there is a $300,000 other liability on the 2007 balance sheet, along with a $39K amount owing to non-arm’s length parties, which seems to make up the deficiency).
Ignoring the $740,000 in flow-throughs, tax receipted gifts taken in over the last two years total $1,113,375, yet gifts to qualified donees going out total only $823,097, leaving a shortfall of $290,278.
Year 2007 assets total $337,773, and liabilities total $365,445 (and $339,000 of the liabilities is mentioned above).
On another happy note, 2007 management and administrative expenditures/overheads totalled $851,198, which is $70,933 per month. It is now almost the end of June, and GiveMeaning has been operating for nine months in the current fiscal period, which means that another $638,000 should have been expended on overheads.
Looks like some unknown angels will have been casting their bread upon the GM waters by ponying up another $750,000 (from other registered charities???) to keep the ark afloat.
Sheesh. Give Meaning spent $436,918 on professional and consulting fees over the last two years. Whatever happened to talking things over with your pastor or parish priest?
In 2006, Give Meaning reported to the Charities Directorate on its September 30 filing that other registered charities had given it $730,350 ($250,000 of this was designated as specified gifts). Next year, on its 2007 filing, GiveMeaning reported that it received another $150,000 as a gift from registered charities.
That’s $880,350 in two short years, and GiveMeaning’s 2007 liabilities show another $339,000 in advances/loans from other unspecified and unknown entities.
However, GiveMeaning is pleading on its website (http://www.givemeaning.com/project/givemeaning ) for cash to cover its operating costs, saying that it needs $500,000, and that only $99,353.19 has been received to date. But, but, but…what has happened to the accounting records?? How did $780,997 seemingly fall through the cracks ($880,350, less $99,353), unrecorded?
The GiveMeaning list of donors to the $500K target presently shows that the Seraphim Foundation made a donation. Why did the Seraphim Foundation, 859365371RR0001, report on its December 31, 2006, filing that it gave $25,000 to GiveMeaning (used to help GM with overheads)? Seraphim got $101,000 in tax-receipted gifts, and why was it moved enough to give 25 per cent of its take to Tom Williams and GiveMeaning as an unspecified gift?
3. Seraphim Foundation
http://www.givemeaning.com/project/givemeaning
http://www.cra-arc.gc.ca/ebci/haip/srch/sec/SrchLogin-e?login=true&searchType=Registered
2006
Registered Charity Information Return
for
SERAPHIM FOUNDATION
Fiscal Period End 2006-11-30
BN/registration number 859365371RR0001
Qualified Donees - SERAPHIM FOUNDATION
Name of Qualified Donee: GIVEMEANING FOUNDATION
Location: VANCOUVER, B.C.
BN/Registration Number: 868487307 RR 0001
Total Amount of Gifts: $25,000
Amount of Specified Gifts: 0
Associated Charity: No
Thanks Dayo. What do you think this means?
“What do you think this means?”
I hope that it means that those entities (and I personally doubt that if all of their names were to be fully revealed that their activities would fill my expectations of what a charity should do) which fronted GiveMeaning the $880,350 to cover overheads, and also those other entitiies which advanced the other $339,000 to GM in 2007, will be called to task by the CRA.
It also likely means that the Seraphim Foundation’s $25,000 donation to GM has brought Seraphim’s activities to the public’s attention.
The CRA is not toothless.
http://www.cbc.ca/canada/story/2008/06/25/banyan-charity.html
CRA probing Banyan Tree issuing $208M in tax receipts with little paid in charitable donations
Dayo Gould or anyone else, have you read TW’s response to the last DB article on his blog? Surprise, surprise…He still denies everything and avoides the issues. His “team” has lost players as well.
This still has legs, and it is interesting that Amy O’Brian refers to GiveMeaning as “Williamss’ charity business”.
Still has legs.
http://www.canada.com/vancouversun/story.html?id=19ba31a7-5552-4d16-97b0-6fea7103d472
Amy O’Brian, Vancouver Sun
Published: Wednesday, July 09, 2008
“…Farrell and her husband, Tom Williams, have had their share of worries in the past year with the publication in The Sun of several pieces by business columnist David Baines. The columns, which began in January, raised serious questions about the integrity of Williamss’ charity business, GiveMeaning….”
Steve, I’m sorry that I missed your response until now.
I just read Tom William’s undated update to his blog, which seems to have been posted prior to June 26, 2008.
The response is extremely long on rhetoric but short on explanations, as it gives out nothing in the way of a clarification about the flow-throughs from the original donors to GiveMeaning and then from GiveMeaning to the Star of the Sea, etc., and makes no apology for the increased and bloated management, travel and consultancy expenses in 2007.
There are a few more anomalies which are apparent in the CRA filing, and I’ll throw them out for discussion next week.
However, Mr. Williams’ statement, “GiveMeaning, a service which has helped hundreds of charities across Canada achieve their goals without charging any costs to them or their donors”, disingenuously glosses over the fact that some persons, by way of advances from some other registered charities, have chosen to hand over to GiveMeaning $880,350 to cover GM’s overheads, and other entities have advanced another $339,000 to GM in 2007.
That $880,350 must have been expensed as a “cost” to those other, unnamed charities’ donors, because it’s not showing as a liability on GM’s CRA filings.
Should GM be unable to repay the $339,000 advanced to it (and those financials are bleak), then the entities which advanced the $339,000 will also have to bear the “cost” of the bad debt.
I speculate that those entities are other registered charities, and the bad debt would then be expensed and become a “cost” to them and their donors.
Thank you DG.
The Independent World Television Foundation, 815799671, has filed its October 31, 2007, Registered Charity Information Return.
Its financials are interesting, showing amounts receivable from non-arm’s length parties of $2,179,783 and $1,509,665 in cash and short-term investments, and other liabilities of $4,117,260.
The only charitable thing which it seems to have done in 2007 is to hand over another $150,000 to GiveMeaning, and the charity’s assets at line 4110 (amounts receivable from non-arm’s length parties) have increased by $2,097,209, and other liabilities at line 4330 have increased by $2,117,260.
INDEPENDENT WORLD TELEVISION FOUNDATION
2007-10-31
815799671RR0001
(604) 683-7006 (this is Benefic’s telephone number)
Total gifts to qualified donees, excluding enduring property 5050 $ 150,000
Qualified donees
1 Name of Qualified Donee: GiveMeaning Foundation
Location: Vancouver, BC
BN/Registration Number: 868487307 RR 0001
Total Amount of Gifts: $ 150,000
Amount of Specified Gifts: $ 0
Associated Charity: No
http://www.canada.com/vancouversun/news/business/story.html?id=40c97404-2157-47fc-8edb-63e499354804
David Baines
• “…In 2006, the television foundation donated $150,000 to GiveMeaning to help pay overhead. This struck me as unusual, as GiveMeaning has nothing to do with the television business…
“… later learned that the television foundation had been funded by a $2-million loan from an unidentified party. Foundation president Paul Jay said that, for confidentiality reasons, he could not disclose the name of the lender, but he said the lender had been introduced by Bromley.
Whomever the lender was, he or she clearly had a soft spot for GiveMeaning. Jay said a condition of the loan was that the television foundation donate $150,000 to GiveMeaning to help finance overhead…
The CRA grinds slowly, but it does grind away.
http://www.cbc.ca/canada/story/2008/09/20/banyan-tax.html
The federal government has revoked the charitable status of the Toronto-based Banyan Tree Foundation.
In a notice published in the Canada Gazette Saturday, the Canada Revenue Agency (CRA) said Banyan failed to meet requirements in the Tax Act.
In June, CBC News reported that CRA had called the charitable foundation a “sham,” and was forcing donors to pay back close to $100 million to the government.
The foundation has said it distributed more than $200 million to charities, such as the Calgary Red Cross and Parkinson’s Society of the Maritimes. But the figure was nowhere near $200 million.
Banyan gave clients a tax receipt for donations, and also offered many of its clients loans to increase their donations.
But the government has refused to honour the charitable receipts the foundation gave to those donors, requiring them to repay the tax avoided.
Banyan Tree president Robert Thiessen has denied the government’s allegations, saying in June “they’re wrong.”
“I am turning human greed into philanthropic work, and I make no apologies about that,” he said.
Still grinding away.
http://www.canada.com/vancouversun/news/business/story.html?id=0403e438-92fd-418c-858d-24b375a24eff
Organization loses charity status
Pinnacle Foundation’s tax-shelter scheme fails to satisfy agency
David Baines, Vancouver Sun
Published: Tuesday, November 18, 2008
The Canada Revenue Agency has revoked the charitable status of Pinnacle Foundation, a Vancouver-based organization that has been running a charitable donation tax-shelter scheme.
In a release Monday, the revenue agency said the foundation issued tax receipts for $6.7 million in cash and property donations, but received only $20,253 in property rental income in 2004 and gifted only $18,000 to qualified recipients in 2005.
“The charity’s sole activity during the audit period was its participation in the donation arrangement; no charitable activities have been conducted by the charity prior to or after its participation aside from the gifting of approximately $18,000 to qualified donees,” CRA stated in a notice.
According to annual financial returns filed with the agency, the foundation’s directors during the period in question were: Gerry Worden, an Abbotsford certified management accountant; Richard Widden, a Winnipeg lawyer and Queen’s counsel; and James Vancoughnett, whose residence and occupation are not known.
The foundation’s website lists the directors as Worden, Widden and Fred Schneider, a Vancouver insurance broker. Schneider is also listed as the contact person on the foundation’s financial returns, although he said in an interview he has not been involved with the foundation for about five years.
The foundation’s address on its financial returns is Suite 1555, 1500 West Georgia St. in Vancouver, which is the address of The Benefic Group, a consulting firm that provides legal and tax advice to charities. It is run by Vancouver tax lawyer Blake Bromley.
According to the foundation’s website, “Pinnacle will accept donations of property, receive net proceeds from the rental and/or sale of the property and make distributions from these receipts to other Canadian charitable organizations.”
Here’s how the scheme works, as described on its website:
An unidentified Bahamian resident donates the right to use condominium units at the Regattas of Abaco, a resort in the Bahamas, to a Canadian trust called the Regattas Trust.
The trust then identifies “suitable beneficiaries” to whom it donates the property. The beneficiary, however, must promise to repay a loan for $8,000.
The beneficiary then donates the property to Pinnacle at its fair market value, which is said to be $26,560. This generates a tax refund of about $12,000 which, after repaying the $8,000 loan, leaves the donor with a $4,000 profit.
These charitable tax schemes, which almost invariably contain an offshore component and an “independent” appraisal generating a tax refund that exceeds the donor’s out-of-pocket costs, have come under attack by CRA.
During the past year, the agency has announced it is reassessing thousands of taxpayers because of donations that have resulted in the issuance of hundreds of millions of dollars worth of tax receipts.
Although not mentioned in the CRA notice, it is likely that taxpayers who participated in the Pinnacle scheme will also be reassessed.
dbaines@vancouversun.com
© The Vancouver Sun 2008
Interesting, missed this article. Thanks for the update, Dayo. SC
The CRA works slowly, but it also works surely.
http://www.vancouversun.com/business/Taxman+goes+after+questionable+charitable+donation+schemes/1070600/story.html
Taxman goes after questionable charitable donation schemes
By David BainesDecember 13, 2008
Over the years, I have written more than a dozen stories warning people about charitable donation tax-shelter schemes that promise to turn philanthropy into profit. I don’t think they have done much good.
A few days ago, Canada Revenue Agency issued a press release saying it has reassessed more than 65,000 taxpayers and disallowed more than $2.5 billion in donations claimed under these schemes.
There’s more to come. CRA says it plans to audit every one of these something-for-nothing schemes, which means more taxpayer grief to come.
The amazing thing is, in the midst of this government-sponsored eradication program, these little time bombs are still being actively marketed in B.C. and elsewhere in Canada. Apparently, the fish are still biting.
One of these schemes is called the Universal Healthcare Trust Donation Program, which is still being promoted by the Destiny Group of Companies in Markham, Ont.
The Destiny Group is run by David Singh, who has had many run-ins with securities regulators in both B.C. and Ontario. In 2000, he was banned from the Ontario securities market for five years.
Incredibly, given his regulatory record, the Surrey Teachers Association invited him in May 2007 to make a presentation on retirement planning, which he used as an opportunity to market his donation scheme.
According to his promotional material, a taxpayer could donate $1,000 to a charity and get a tax receipt for that amount. A philanthropic trust, based in St. Lucia, would then give the taxpayer $5,000 worth of medical supplies, which he could donate to a charity and receive a tax receipt for that amount, too.
The bottom line is that, for a $1,000 cash donation, the taxpayer would get a $6,000 tax receipt, which would generate a $2,600 tax refund.
What happens in all these schemes is that the deemed market value of the donated product is far in excess of its actual cost. This creates an inflated tax receipt which, in turn, provides a big refund, courtesy of us taxpayers.
When Singh made his pitch, the scheme was being marketed in the Vancouver area by Gail Zuccolini, managing director of Afton Management Ltd.
She insisted the scheme posed no greater risk of reassessment than any other tax shelter, a rather specious remark considering these donation schemes were already under intense government scrutiny.
Sure enough. In April this year, the government sent reassessment notices to taxpayers who claimed deductions for the 2006 tax year on account of the Universal program.
“CRA has concluded that the trust purchased the property — purportedly having a fair market value of $115,205,056 Cdn — with $3,481,234 US in cash,” the notice stated, driving home the fishes-and-loaves aspect of this scheme.
CRA argued the primary motivation of donors was not to assist in humanitarian aid, “but rather through a series of transactions to make a profit from the tax credits so obtained.”
The agency said the donation was not a true gift, rather it depended on the philanthropic trust giving the taxpayer a supply of medical supplies valued at far more than the taxpayer’s cash contribution.
“Although it appears from the promotional material that beneficiaries had the option to keep the property rather than donate it, in reality the option was limited to such a degree as to be effectively non-existent,” CRA stated in its letter to taxpayers.
“Furthermore, we remain unconvinced that the title to the property was legally transferred to you to allow you to gift it to the charity. You cannot give what you do not own.”
The same month, I wrote another column about a similar scheme, the Canadian Humanitarian Trust Donation Program, based in Mississauga, Ont.
Taxpayers make a cash donation to a registered charity and receive a receipt for that amount. Then the donor applies to become a beneficiary of the Canadian Humanitarian Trust, domiciled in the British Virgin Islands.
The trust buys drugs at a bulk discount (it is not clear where the trust gets the money) and transfers them to the taxpayer at a value far exceeding the amount of his donation. The taxpayer then donates the drugs to a charity and receives a tax receipt for the full amount.
According to a marketing materials, a donation of $26,100 would generate a tax receipt worth $99,900 and a tax refund of $43,656, for a net return of $17,556, or 67 per cent.
“This has been set up strictly in compliance with the Income Tax Act,” Terence David, who markets the program in B.C., told me at the time.
“People are initially very skeptical, as you are. Fair enough. I expect people to think it’s too good to be true. But when they receive the tax refund, they are satisfied with the results and they tell their friends.”
Alas, a few months after my column, CRA started sending out notices of assessment to people who claimed deductions on account of this program from 2003 to 2006.
David is still marketing the program in B.C., but he says it has been altered to meet CRA objections. That doesn’t mean participants won’t be subject to further reassessments, though. The program was tweaked twice before, but that did not spare participants from CRA’s pogrom.
The puzzling aspect of these deals is that the gathering storm has been apparent to all, but it doesn’t seem to worry the promoters or the participants.
“I wouldn’t expect CRA to just roll over and say keep the money,” David said. “They would be derelict in their duty if they didn’t challenge it. We appreciate that is the nature of the beast.”
He insists that the reassessments are not the program’s fault. They are CRA’s fault: “CRA takes a diametrically opposed view of what the Income Tax Act allows,” he says.
The Canadian Humanitarian Trust, like many others, has established a legal defence fund to challenge any reassessments. Promoters use these funds as marketing tools, to instil confidence in consumers. For me, they highlight just how risky these deals are.
dbaines@vancouversun.com
© Copyright (c) The Vancouver Sun
I’ve followed this chap’s career with a great deal of interest. I first ran across him here in Victoria as a gr 6 student. He was articulate, imaginative and a terrific story teller. To some degree, he was a (and perhaps still is) a charming fantasist, a bit of a Peter Pan. Tom’s strengths at that time were a prodigious memory,verbal precocity, and chutzpah. I recall him telling me with great certainty that he had read and thoroughly understood Joyce’s Ulysses when he was 10. His early brush with computers was to produce some nifty little stories in Hypercard on the old Mac Plus. Unfortunately at that time, the school system was easily impressed with the dog and pony show that was pre-dominated in the computers in schools movement. The industry was scavenging for any evidence that the massive investment in computers was creating tangible gains in student learning; Tom was promoted to child-star in this tragicomedy. Overwhelmed by the acclaim, he must have been amazed at how the adults around him were so easily swayed. His schooling was interrupted and he was absorbed into the world of hype that was the tech industry of the 80’s. I’ve often wondered how much he might have accomplished if he’d been shaped by a rigorous academic program during the critical adolescent years rather than being left to his own devices. Like any lost child star, the acclaim and easy access that have stamped his teen years will pursue him like Morley’s ghost. I wish him well, but I won’t send be sending any money his way.
To the developers of this web site (a suggestion): I think these “survey pop-up” windoes really dont help when I want to read the original article and the opinions in responce to the article. If I were one of the editors I would consider removing a “more non invasive” approach to survey taking. an “optional form” if or should the viewer wishes to participate in such a survey. Having popup windows in ones face each time I read the article is rather distracting when I read sites like this one or many others. Thank you, otherwise both the article its self and the discussion in hand are very interesting never the less. Keep up the good work, thank you.
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The implosion continues.
http://www.vancouversun.com/business/Whiz+charity+scheme+loses+momentum+donations+plunge/1738698/story.html
‘Whiz Kid’s’ charity scheme loses momentum as donations plunge
By David Baines, Vancouver SunJune 27, 2009
The financial situation at GiveMeaning, a Vancouver organization that acts as a middleman for charities, is going from bad to worse. Donations are way down, expenses as a percentage of donations are way up, and the organization is growing deeper in debt.
GiveMeaning is a sort of craigslist for charities. People who are trying to raise money for specific projects can register on GiveMeaning’s website, and people wanting to donate to those projects can contribute through the website.
The business is the brainchild of Tom Williams, 30, a self-described former Silicon Valley whiz kid who claims to have turned his back on the material world and committed himself to philanthropy. As outlined in earlier columns, his story doesn’t stand up to scrutiny. In fact, he has stumbled from one business and personal failure to another, and generated a lot of ill will in the process.
It is also debatable as to whether Williams is motivated entirely by philanthropic ideals. In previous years, he has drawn $90,000 per year, plus expenses. His wife, Jesse Farrell, a part-time employee, has collected $30,000 per year. This has proved to be unsustainable.
Financial returns show the flow of charitable dollars through GiveMeaning is shrinking at a rapid rate. During the year ending Sept. 30, donations totalled $728,165, down 62 per cent from the prior year. Expenses totalled $442,346, down 49 per cent from the prior year.
Because donations fell more dramatically than expenses, the ratio of expenses to donations jumped from 45 per cent to 61 per cent — an extremely high percentage.
GiveMeaning promises that every cent of every dollar that is donated goes to the designated charity. How does it do this if an amount equal to 61 per cent of its total donations is consumed by expenses?
Williams originally hoped people would be so supportive of his business model that they would donate money to cover overhead costs, at least until the website attracted enough advertising revenue to sustain itself. But that didn’t happen, so he is borrowing the money.
As of Sept. 30, GiveMeaning’s liabilities totalled $554,259, consisting of $9,327 in trade credit, $244,932 owing to “non-arm’s length parties” and $300,000 categorized as “other liabilities.”
Who these lenders are is not known. They are not identified in the financial return and Williams did not return my calls.
As of Sept, 30, GiveMeaning had $166,280 in assets against $554,259 in liabilities, for an overall deficit of $387,979. That means that, if and when its loans come due, the whole ship will sink unless there is an infusion of new capital.
The overall impression I get is one of waning business. The website lists dozens of philanthropic projects that are coming nowhere close to their stated donation targets. Williams, once a prolific blogger, has gone quiet. He still tells the whiz kid story, but it’s getting very tired, and tiring.
dbaines@vancouversun.com
© Copyright (c) The Vancouver Sun