MUHC fundraising execs get paid more than peers
Most foundations below average on donor accountability index
The fundraising executives of the foundations of the McGill University Health Centre are the highest-paid of Montreal’s hospitals, with one high-ranking administrator earning an annual salary of at least $350,000, federal tax records reveal.
At the same time, most of the MUHC’s foundations have received below-average grades for donor accountability by Charity Intelligence Canada, a watchdog group that monitors the country’s largest philanthropic organizations.
Seven foundations raise money for the MUHC.
In the year after the MUHC’s problem-plagued superhospital opened in 2015, the foundations’ revenues plummeted by $27.4 million or 29 per cent, according to a Montreal Gazette analysis of their tax filings.
In the MUHC’s case, the public hospital network has struggled to balance its operating budget following tens of millions of dollars in government funding cuts, and it has had to rely more on the foundations to buy medical equipment and fund programs like one for lymphedema patients.
The foundations are overseen by volunteer boards of directors that represent a cross-section of prominent, well-connected Montrealers.
The world of hospital fundraising is a discreet one, but the controversies that have engulfed the MUHC have invited scrutiny of the foundations as never before.
The MUHC’s foundations employ nine executives who each earn $120,000 to $160,000 a year — apart from the top administrator of the Montreal General Hospital Foundation, whose salary is at least $350,000, according to Revenue Canada tax returns.
By comparison, four executives make $120,000 to $160,000 at what is considered the city’s best-performing hospital charity, the foundation of the Jewish General Hospital.
No other executive is paid above that salary range, unlike at the MUHC foundations, where two administrators earn $200,000 to $250,000.
While the MUHC’s foundations’ revenues dropped, those at the JGH foundation jumped by 14.4 per cent in 2016 to $49.9 million — the biggest sum raised of any hospital charity in Montreal.
At the city’s other large hospital network, the Centre hospitalier de l’université de Montréal, two foundation executives make a minimum of $120,000 a year, and a third earns in the range of $200,000 to $250,000.
In total, all of the MUHC foundations employ 89 full-time staff, compared with 33 at the JGH foundation and 84 at the foundations of the CHUM and Ste-Justine Hospital combined.
Greg Thomson, an analyst with Charity Intelligence, said that salary figures are just one way to evaluate a hospital foundation, but he suggested that it’s far from the most important.
Total overhead expenses (as a percentage of revenues) is generally understood as the best measure of a foundation’s efficiency, and on that score, all the MUHC foundations are within Charity’s Intelligence’s range of 5 per cent to 35 per cent.
Still, “it is certainly a question to be asked,” Thomson added of the salary ranges.
Michelle van Vliet, director of marketing for the MUHC Foundation, did not directly address the question of how the foundations justify to donors the relatively higher salaries of their executives.
“All of the foundations of the MUHC have their own respective boards — all of which have dedicated (human resources) committees with strong governance,” she said in an email. “The salaries of the foundation teams and executives are approved by these committees and have been established in accordance with best practice and compared against standards in the charitable sector.”
“What is important to note,” she added, “is that our administrative costs — as a percentage of revenue — are not only within industry standards, but in fact are very good — below 20 per cent.”
While each of the MUHC foundations highlight on their websites the numerous projects they fund, only the Montreal Children’s Hospital Foundation releases audited financial statements each year.
The JGH Foundation makes public its audited financial statements, too.
Neither the CHUM nor Ste-Justine foundations release audited statements, but their annual reports do provide extensive details on their financial results.
In addition to financial transparency and overhead expenses, charity watchdogs track something called donor accountability. On that score, most of the MUHC foundations have received belowaverage marks, as calculated by Charity Intelligence.
“This assesses whether a charity is providing enough information to really understand what’s going on,” Thomson explained.
“Do they let you know what they’re doing, how much of it they’re doing, how much they’re spending on it and then what’s happening with donor dollars? So it’s not assessing their actual impact, it’s assessing how well you can see what’s going on in there.” B.He noted that only 15 to 20 per cent of all Canadian charities earn grades in the A range on donor accountability. The average grade is
For the four MUHC charities that it tracks, Charity Intelligence assigned the MGH foundation a C grade, the Montreal Children’s foundation a B-, the Royal Victoria foundation a C+ and the MUHC foundation a B-.
By comparison, the Ste-Justine foundation earned the average, a B grade, while the JGH foundation scored a C+ and the CHUM foundation a B-.
No Montreal hospital foundation has received Charity Intelligence’s highest four-star rating. Other Montreal charities, though, like Centraide, Dans La Rue and McGill University’s fundraising arm, have been awarded that coveted distinction.
It was 20 years ago that the MUHC was created as a result of the merger of five hospitals. Their respective foundations, however, resisted merging, raising fears that doing so might stymie fundraising efforts.
Today, the foundations are still separate, although the Royal Vic’s fundraising arm is now partnered with the MUHC foundation.
By comparison, when the CHUM was formed in 1997 following the merger of three hospitals, their respective foundations merged shortly afterward.
Although there might be some advantages to keeping some foundations distinct in the same hospital network (for example, maintaining the Montreal Children’s foundation), there are potential disadvantages like costly duplication of administrative tasks.
Myer Bick, president and CEO of the JGH Foundation, cited another possible disadvantage — that some foundations in the same hospital network might unwittingly compete against each other for donations.
“The particular difficulty of the MUHC, in my view, is that when they amalgamated (the hospitals) way back when, 20 years ago, all the independent foundations remained,” Bick said.
“If you have an MUHC foundation that’s trying to approach a
This assesses whether a charity is providing enough information to really understand what’s going on.
donor or a community, and they attend the Montreal General Hospital, or they get their service from the Montreal General Hospital, and they are committed to the Montreal General and their physician is there, then you know, how does it work out that they also give money to the MUHC? So it’s hard when you have an MUHC at the top and all the affiliates underneath.”
Added Thomson of Charity Intelligence: “Generally, I would be all for mergers and consolidation, especially when it comes to foundations in the same general area.”
In 2014, the volunteer auxiliaries of the different MUHC hospitals — with the exception of the one at the Montreal General — merged to become the Friends of the MUHC. In responding to the Montreal Gazette’s queries, no single foundation executive was willing to take the lead in speaking for all the foundations of the MUHC.
Van Vliet, of the MUHC foundation, defended the current multifoundation model as a sound one.
“We now have a coalition of the foundations, and our presidents and board chairs meet regularly to collaborate on fundraising projects and discuss how we can optimize support for the priorities of the MUHC,” she said.
“Through this coalition we continue to work to maximize efficiencies and reduce costs while focusing on projects for the benefit of our patients.”