Do Private Family Foundations Engage in Political Activities Through Their Granting?

This year, Christopher Dougherty completed a PhD dissertation about the extent to which the Canadian charitable sector is a politically expressive sector, based on data from Ontario and Alberta from 2003 to 2017. The data doesn’t include cross-provincial data, such as a political contribution from an individual foundation trustee in Alberta to a provincial political party in Saskatchewan. The dissertation focuses on private family foundations and their granting decisions within Ontario and Alberta. There were 5,606 private foundations in Canada in 2017, and collectively, they held about $92 billion in assets. Dougherty spoke to PANL Perspectives about his findings, including some of the eye-opening discoveries along the way.

Question: How do private family foundations engage in subtle political activities through their granting or through the personal actions of individual trustees?

Christopher Dougherty: Individual private family foundation trustees aren’t particularly subtle, and they’re directly contributing to political candidates and parties at high rates. Approximately 25% of them made at least one political contribution in 2003 to 2017, about 40% were repeat donors with a consistent political preference, about 20% were repeat donors who gave to more than one type of party, and the rest made a single gift.

That 25% political-contribution figure is about 10 times higher than the 2.6% of Canadians in general who are estimated to make political contributions, according to a 2022 study by Tolley, Besco and Sevi.

But not all private family foundations have trustees who make political contributions. In Ontario, somewhere between 20% and 50% of foundations have a trustee who makes a political gift in any given year. In Alberta, it’s as low as a single trustee at one foundation in one year and goes as high as 30%.

And it’s mostly one or two trustees out of the whole private family foundation board who are making political contributions.

What this all means is that the differences in granting between private family foundations with trustees who make political contributions and those foundations without any trustees making political contributions might be caused by just those one or two trustees. Also, what we don’t know is how granting decisions are being made or what influence individual trustees have on granting decisions; we only know that there are differences in granting when boards have politically active trustees.

Q: You write, “Politically aligned family foundations are much more likely to give to religious missionary charities, while non-political foundations are much more likely to give to mainstream Christian congregations.” Can you explain the difference?

Dougherty: This difference comes down to how the recipient charities classified themselves when they registered for charitable status with the Canada Revenue Agency.

In my study, there are five religious subsectors that are combined from denominational or sectarian choices: Christian, Jewish, Muslim, Other (which includes Baha’i, Buddhist Hindu, Jain, Sikh, and others), and Missionary. As each charity chooses how to classify themselves when they register, these subsectors include congregations, religiously affiliated service-delivery charities (such as food banks, homeless shelters, pastoral counselling organizations) and congregations with an integrated service delivery.

So, what I see in the results is that charities who choose to register under a specific Christian denomination (like Catholic, Anglican, United or Lutheran) are more likely to receive grants from foundations whose trustees don’t make political gifts. In contrast, charities that register as Missionary are more likely to receive grants from foundations where trustees do make political gifts.

Q: Do specific political connections influence which charities a foundation gives to?

Dougherty: Because I looked at political alignment (left, centre and right) rather than specific politicians or parties, I can’t say anything about specific political connections. What I can say is that political ties between foundation trustees and federal parties tends to be a bit more fluid and the differences are more about whether a trustee is making political gifts or not. At the provincial level, in Alberta and Ontario, political ties tend to be with right-of-centre parties, and foundation granting when trustees are making gifts to provincial parties reflects right-of-centre politics (less for arts and culture charities, Muslim charities, and environmental charities, for example).

I’m aware of a few charities that have current or former politicians on their boards or that were founded by politicians or their relatives. In future research, I hope to look at how recipient charity’s political connections affect granting from foundations with similar political connections.

Q: Do Canadian foundations direct grants to supporting public policies for the benefit of themselves and their wealthy peers?

Dougherty: No, there’s no evidence that private family foundations are granting more often or more dollars to charities that are involved in developing or building support for policies within Ontario and Alberta. My future research will look at grants across provincial boundaries to analyze granting to national think-tanks or advocacy organizations that were missed because of the geographic limits in this study.

Q: What did you find eye-opening about your research related to private foundations?

Dougherty: When I started this study, I expected trustees to be more consistent in their support of parties or political goals. However, the number of trustees giving to both centre and right-of-centre parties in the same year meant that I had to change my thinking about political giving to include non-political goals, like helping a friend get elected or accessing a decision-maker at a political fundraiser.

On the granting side, I was surprised by the importance of giving to religious charities in the results and how political ties correlate with types of religious charities; I mean, foundations without politically aligned trustees are more likely to give to mainstream Christian charities, while foundations with politically aligned trustees are more likely to give to missionary religious charities

A lot of the conversation around foundations seems focused on service delivery and achieving impact, and religious organizations aren’t always part of that conversation. There needs to be a broader conversation about the different things that private family foundations do with their granting, and not just service- and impact-focused granting.

Christopher Dougherty is based at the Centre for the Study of Philanthropy & Public Good, University of St. Andrews, in the UK, and is researching “The political expressiveness of charitable sectors in comparative perspective: Canada and its provinces and the UK and its countries.” He’s on LinkedIn.

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Monday, December 9, 2024 in For homepage, News & Events, Private Foundations
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