Thank you for the opportunity to discuss my favourite subject—community foundations in the world of philanthropy.

I am of course delighted to be here in your beautiful city.

The opportunity to come to Singapore—to see and to learn about your wonderful country—to meet so many interesting people—is like a dream come true.

And of course, congratulations to Fortis Bank for taking the time to organize this information sharing session.

Before starting, it is important that you understand the Canadian context from which I speak. It is important that you understand something about Canada.

You know that we are a huge country and our culture is greatly influenced by our weather, our wilderness and our wariness of our American neighbours.

There is a joke about the altruism and goodwill of Canadians that goes all the way back to the 1600's when our european forefathers first arrived at the shores of North America. In looking across this vast and bountiful continent, with all its diverse opportunities, our ancestors said: "we'll take the frozen part".

In retrospect, I know that many Canadians would have preferred a more temperate climate and that may explain why our 30 million people are spread like a ribbon across the most southerly part of our country. It is fair to guess that more than 90% of Canadians could leave their homes and easily drive into the United States within two hours.

But I believe that Canada is best-defined by the diversity of our population and our collective efforts to build a society based on shared values of tolerance, mutual respect and the well being of all peoples wherever they live.

Like Singapore, Canada is very diverse—one of the most multi-cultural countries in the world. Before European settlement, there were many Aboriginal nations—and Aboriginals still comprise about 1.3 million of our population.

The first settlers were the French and the English.Then came other Europeans—the Germans, Ukranians, Polish, Italians and Scandinavians. And most recently, our policies are welcoming newcomers worldwide. Today, new Canadians are most likely to come from: China, India, Pakistan, Phillipines, Korea or Sri Lanka. In our largest city, Toronto, 43% of today's population was not born in Canada.

One of the fundamental jobs of a Canadian community foundation is to promote a cohesive and harmonious society—but let me not get ahead of myself.

Although we have hundreds of small towns, most of our population lives in large cities. Canada is quite regional in nature and Canadians will often describe:

• The maritime traditions and lifestyle of our Eastern provinces,
• The French culture and language of Quebec,
• The economic and business heartland of central Canada, and
• The "west" with its strong resource base and growing political power.

And of course, Canada lives under the shadow of the United States of America—our powerful neighbour to the south.

In almost every aspect of our lives, Canadians benefit because of our close proximity and relationship with the United States. While our political and social structures are very different, we share a common belief in a mixed economy involving 3 strong sectors:

• The private sector led by business, corporations and individual entrepreneurs;
• The public sector consisting of governments at the national, regional and local levels together with their various agencies; and
• The third sector—variously called the voluntary sector, the charitable sector, the Not-For-Profit sector or NGOs.

Today I am here to talk about "community foundations" which are part of this third sector and I want to frame my remarks around the experience of The Winnipeg Foundation and the Canadian community foundation movement—an idea that we learned from the Americans.

Today, Winnipeg is a city of 700,000 people with a diverse and vibrant economy. It is located on the Eastern side of the Canadian prairies, right at the East/West geographic centre of our country. It is sometimes called "the gateway to the West." But to begin this story, I must tell you a little of our history.

In 1867, when Canada first became a nation independent of Great Britain, Winnipeg was a very small and isolated settlement. It was in the Western wilderness—the fur trading lands controlled for decades by the Hudson's Bay Company. Our national railroads would not be built for another 20 years and so, in those days, travel to Winnipeg meant several months in a canoe.

In 1867, the American Civil War had just come to an end and our newly formed national government was all too conscious that the American army could be turned North. Canada was anxious to claim the Western provinces so that our country could extend across the continent from sea to sea. So in 1870, a military expedition was sent to Winnipeg and amongst this contingent was a young, 18-year-old private named William Alloway.

If I was in Canada, I would talk for the next 10 minutes about what happened to William Alloway over the following 50 years. But here let me simply say that by 1920 he was the most prominent private banker in Western Canada and he was very well connected to the banking industry in the United States.

This was a time when American bankers were founding the first community foundations—beginning in Cleveland in 1914. Their motivation was straight-forward. Bankers were working with clients to establish charitable trusts. They wanted to manage the money and they wanted to help their communities, but they were not so interested in dispersing the annual interest earnings to charity. So, they invented community foundations to fulfill this responsibility.

In 1921, William Alloway made a gift of $100,000 to create Canada's first community foundation in Winnipeg. This money was to be invested as capital with only the annual interest earned available for charitable work. So in 1922, The Winnipeg Foundation made its first $6,000 in grants to charities.

A couple of years later, a second gift arrived—this time only 3 gold coins, valued at $15, in a plain envelope marked only with the words "The Widow's Mite."

And so, our first endowment fund is capitalized with $100,000 and our second fund is capitalized with $15, establishing a fundamental value—it is not the size of the gift but the act of giving that matters.

Today, The Winnipeg Foundation has more than 1,700 funds with a market value of about $400 million. We proudly trace our history back to 1870 when our city was nothing more than a few wooden houses clustered at the forks of the Red and Assiniboine Rivers on the edge of the Canadian prairies – and to an entrepreneur who built a successful banking business and who wanted to give something back to his city.

From this story, I hope that the traditional business model of a community foundation is becoming clear. Private donors make gifts of capital which are pooled for investment to create an income stream that is used to make grants to charitable organizations. While the foundation itself is a charity, it is structured as a funder of other charities.

This year, The Winnipeg Foundation is celebrating its 85th anniversary. I want to briefly describe just a few recent endowments in order to demonstrate the flexibility of our institution:

A memorial fund:

One day last year an elderly and distinguished-looking gentleman visited our office. His wife had recently died and he wanted to create a named fund in her memory. He was not a wealthy man but it was obvious that his love ran deep. Every year, The Winnipeg Foundation publishes in the newspaper a list of every endowment created since 1921, along with our financial statements. This year's insert was 12 pages long. The elderly gentleman wanted his wife remembered by including her name on that list. And so, with a gift to the community of $1,000, a memorial fund was established as a lasting legacy in her memory.

The Winnipeg Foundation holds many memorial funds created by ordinary people as a legacy to honour their parents, or other family members, and to support their community.

A scholarship fund:

Throughout our city there are about 60 secondary schools. Some of them are quite old and have graduated many students who went on to successful careers. From time to time, one of these high schools will hold a reunion when graduates return for a weekend of celebrations and renewal of old friendships. At one of these reunions last year, more than 300 former graduates donated to a new scholarship fund, resulting in an endowment capitalized with $90,000. Every year, forever, the income from this investment will help future graduates.

We all know that life's journey is defined by what we learn along the way and for many people, helping students is a wonderful legacy.

An agency fund:

One of the greatest challenges facing charities in Winnipeg is the need for a dependable revenue stream that can be used at the discretion of the agency. A few years ago, our largest theatre decided that if it was to offer quality productions, it needed a healthy influx of money every year beyond what could be expected from ticket sales and other public or private sources. The theatre started what we call an agency fund. Then, we began to receive donations, hundreds of donations—some large and some small—and in less than 4 years, this endowment is capitalized with over $5 million.

What better way is there to help the arts flourish than to create a dependable revenue stream that provides financial support year after year?

The point to be emphasized in these stories is that gifts come from many different people—people of all walks of life, all interested in building a legacy for our community that will go on giving year after year. The capital is invested and only the annual income is used for charitable grantmaking.

From these stories you might think that most endowments are designated to specific purposes—scholarships or agencies. The reality is that most of our funds are completely unrestricted. The income can be used for any purpose – to support any charity that enhances the quality of life in Winnipeg. We also have many "field of interest funds" where the donor has generally specified that the annual income should support:

• Education,
• Or the arts,
• Or medical research
• Or the environment.

In Canada, we often say that when you die, you can leave your wealth in three places:

• With your children,
• With charity, or
• With the government.

Family is always most important and the government is always the least preferred! But over the years, many generous gifts have given The Winnipeg Foundation the capacity to support charitable needs as they emerge.

As a result, most people in Winnipeg see our foundation as a very flexible grantmaker. We support a very wide range of community projects:

• Special initiatives to support the poor and less advantaged;
• Daycare centres for children;
• Public library and literacy projects;
• Hospitals and universities; and
• Environmental projects

To name a few.

Our board has directed that we should be a 360-degree grantmaker—that is to say, we are to provide grants to charities of every type that serve the needs of our citizens. Our vision is: "a Winnipeg where community life flourishes." And that gives us a very wide mandate indeed.

In 2005, our foundation made grants to about 600 different charities amounting to more than $16 million. Most of that money was directed to community projects at the discretion of our board.

I want to pause for a moment because this is an important point. In recent years we have seen the growth of new kinds of gifts to community foundations. These gifts are "donor advised"—that is to say, the donor is actively engaged in making recommendations about what kinds of activities our foundation grants should support.

In principle, this is not a problem—we have been dealing with donor designations for decades. However, it can be an issue if a foundation Board has no independent discretion. There can be a dramatic difference between what a donor and Board see as community priorities. It is, therefore, important in building a new foundation that policies provide some discretion to the board.

Through out my remarks, I will be making various references to "the Board."

The Board of a community foundation plays a fundamental role in its policy and governance direction. I wish that I could generalize and give you a defined formula by which all Boards are established. However, the reality is that the process and composition differs everywhere.

You always want respected people on the Board. In our case, we have a separate Appointing Board, established by government legislation, whose only purpose is to appoint board members for a 4 year term. Since 1921, our Appointing Board has consisted of certain fixed positions—the Lieutenant Governor, the Mayor, the Chief Justice, the Land Registrar. As different individuals assume these positions, they automatically become members of the Appointing Board.

This is our system—but there are many others.

Today, The Winnipeg Foundation is extremely well-known in our community, but I have to tell you that it took time. After 60 years, we were capitalized with less than $20 million—hardly enough to do $1 million in annual granting assuming spending at 5%. After 75 years, we were capitalized with about $100 million and as I said earlier, today we hold about $400 million. There is no question that we are building momentum.

Some of our growth is the result of investment returns but most comes from the countless gifts we receive from donors.

I want to mention one remarkable gift that we received 4 years ago.

A prominent business family in our city sold certain of their business interests and, like Mr. Alloway in 1921, wanted to give something back to their community. They were considering a private foundation that would make grants to charitable agencies that support children, families and the less advantaged.

I talked to them for several months about the advantages of a community foundation:

• The fact that we had a staff of grant making professionals who know our community very well and who undertake the necessary due diligence before any grant is paid;
• The fact that we have proven investment performance;
• The fact that we have a sound and efficient financial administration; and
• The fact that our board is comprised of prominent citizens with an established reputation for public trust and accountability.

As a result of our discussions, they decided not to establish a private foundation. Instead, they donated $100 million to The Winnipeg Foundation—the largest gift of its kind in Canadian history.

I hope that these stories have demonstrated to you that a community foundation is a vehicle that allows people from all walks of life to be philanthropists. It does take leaders with vision and commitment to their community. It also takes business people who understand how to invest accumulated capital and make it grow. And finally, it takes credible judgment to build public trust and assure that annual grants are invested in community projects that make a difference.

As you can see, community foundations are independent charities pursuing the public good. They are what you would call institutions of public character.

But I am afraid that by now you will believe that community foundations are limited in their role to simply supporting the work of other charities by:

• Attracting gifts;
• Building capitalized endowments; and
• Making grants to worthwhile community projects.

Grantmaking to charities is important, but the role of community foundations is much more complex.

I said earlier that there are 3 sectors and the reality is that in a society, authority and responsibility are ultimately distributed between the private sector, the public sector and the voluntary sector.

This distribution has a profound impact on our collective quality of life. Government, which is elected by the people, regulates the activity of business and not-for-profit organizations. Government decides how wealth is accumulated by individuals and corporations—and government establishes the framework in which non-profits operate. All of this is a giant "system" which varies from country to country and from time to time.

Community foundations take an active interest in how this system is operating. People who find themselves on community foundation Boards are seldom satisfied with limiting their role to the prudent investment of endowments and the judicious distribution of grants. Board members see themselves as community leaders and as a result, community foundations are leadership organizations.

One certain lesson from history is that the relationship between the private, public and voluntary sectors is very dynamic. No such system can remain in equilibrium without constant adjustments. Successfully re-balancing these relationships is one important element of community leadership.

Therefore, like leadership organizations in the business sector, community foundations have a responsibility to use their knowledge and influence for the betterment of society. When some group is less advantaged, falling behind or not being treated fairly by the "system," community foundations look for ways to correct the balance. This may involve grants for:

• Research;
• Supporting risky pilot projects;
• Convening symposiums on troubling issues; or
• Undertaking educational campaigns.

In Canada, we call this work social justice grantmaking.

The job of a community foundation is community building—creating greater cohesion and a sense of belonging. Many times governments and businesses can not invest in certain potentially worthwhile activities because they are not proven to be viable. A community foundation can help with projects where there is a risk of failure—especially if that project (even if it fails) contributes to a stronger community overall.

For example, in Winnipeg, our foundation is leading what we call the "Centennial Neighbourhood Project." It is focused on one area of our city where most of the residents are primarily Aboriginal. These people have suffered great inequities under our system and as a result are often:

• Less educated;
• Less likely to be employed;
• More impoverished; and
• More likely to face various social problems.

The people who live in Centennial Neighbourhood have not been well served by our "system" and The Winnipeg Foundation is focusing significant resources and energy to address this issue. We have engaged other NGOs, business partners and government agencies to help us in this effort.

If you look up The Winnipeg Foundation website, you will see our tagline: "your centre for community philanthropy".

In our view, philanthropy is not limited to helping the good work of charitable organizations—as important is this may be. Philanthropy is about strategic investments that use our limited resources in a focused effort to address inequities in our society and to influence public policy.

But community leadership can take many other forms and each community foundation must determine which is most suitable.

• For example, community foundations are collaborative organizations that depend on their relationship with other charities for their success. Sometimes, avoiding competition and handling collaboration well is a form of leadership.
• Another illustration—Canadian community foundations place enormous emphasis on our "Youth in Philanthropy" programs—influencing the values of our young people is surely community leadership.

At this point, I want to again stress that community foundations are not government agencies even though we share a common interest in the public good:

• Community foundations act independently in determining which charitable services should be supported or augmented in order to create more vibrant and healthy communities;
• Compared to government, community foundations have small budgets and therefore must be strategic and visibly make a difference in order to build confidence in our institutions;
• Like successful businesses in the private sector, community foundations are agile. They can make decisions very quickly with a minimum of bureaucratic process;
• And finally, community foundations use their local knowledge and grantmaking capacity to provide leadership within their communities.

What I have described thus far is very much based on the Winnipeg experience and reflects the traditional model of a North American community foundation. However, there is a saying: "if you have seen one foundation, you have seen one foundation."

In Canada, there are over 150 community foundations and in the United States, there are about 700. Each one has its own unique history and each one would have a different experience to share. The beauty of a community foundation is that it can be molded to suit the needs of any community.

In my province, we have many small towns each with their own foundation. The needs and interests of a rural community are very different than those of a city. But even in a very small community, there is a general acceptance that every charity can not have the expertise and resources to manage its own endowment. By pooling expertise and resources, the community is better served overall.

I have had the opportunity to visit many Canadian and American community foundations and can assure you that there is always much to be learned from the experience of others. The Winnipeg Foundation is a charter member of the American Council of Foundations since it was established in the 1950s and we have been active leaders in Community Foundations of Canada since that organization was formed in 1992. What we know is that community foundations are essentially local institutions that evolve in different ways. By sharing diverse experiences, the movement has tremendous strength.

I believe that Canada has benefited from watching our American neighbours deal with unexpected competition as large financial institutions launched new products aimed at the philanthropic market. The Americans have also invested heavily in technology, national marketing strategies and the development of standards. Most recently, we have seen some significant research from the United States on the future challenges that American community foundations will face and how they might react.

In Canada, the emphasis has been quite different. Our work has focused on the principles and values that underpin our movement. We are trying to avoid being overly prescriptive and instead, we are attempting to assure that our members understand why we do what we do. Essentially, we exist to foster more vibrant and creative communities and to ensure that all citizens have an equal or fair chance to share in the benefits of our society. By building endowments successfully with donors and by collaborating successfully with other charitable agencies, Canadian community foundations are making a significant difference.

But today, the contrast between Canada and the United States must be put into the context of a world-wide movement because new actors have come onto the stage.

In 1989, the community foundation concept spread across the Atlantic Ocean first emerging in Newcastle in the United Kingdom. Soon after, the first community foundation appeared on the European mainland in Banska Bystrica, Slovakia. In the last decade, several hundred community foundations have been created in cities and towns all across Europe.

We now see them emerging in Australia, Thailand and the Philippines. Even in China, several cities are known to be exploring the concept.

These new community foundations are influenced by the North American model but they are clearly evolving in their own directions. From my perspective, it seems that they are placing greater emphasis on building a civil society where different groups have opportunity for influence. They are also more likely to work closely with government, the private sector and foreign foundations in delivering special services and programs.

If American and Canadian community foundations are best known as grantmakers, these new emerging foundations are placing their emphasis on community leadership.

The Transatlantic Community Foundation Network, created by the Bertlesmann Foundation in Germany, has been working to bridge an understanding between the new and the traditional models. As an outcome of this process, The Winnipeg Foundation has built a relationship with the Nitra Community Foundation in Slovakia.

I well remember when my colleague from Nitra was visiting Winnipeg and we were talking about "endowments." I explained that these were gifts of capital which were invested—partly in government bonds and partly in the stock market. Our board has a policy that we will spend 5% of the average market value every year on community grants. The capital remains invested.

My colleague explained to me that there is no word in Slovakian that would capture this concept. In the end, the closest she could come was a phrase that means "funds for the future." It follows then that endowment building in Slovakia will be much more difficult than in Canada.

Different languages and different cultural traditions are going to profoundly affect the community foundation movement in ways that are exciting and insightful. Let me give you another example.

In Canada, we believe that our community foundations are publicly accountable. There are many evidences of this:

• We conduct an annual audit;
• We publish our financial statements in the newspaper; and
• Our grantmaking criteria are open and accessible.
• Our laws and our boards declare our intent to be publicly accountable.

But in parts of Europe, our process would not meet their test. For them, there must be tangible oversight structures. And so, we are seeing some European community foundations with what appears to be 3 Boards of Directors:

1. The Managing Board consisting of perhaps 4 directors who supervise the staff, approve budgets and policy and make the day-to-day governance decisions.
2. The Supervisory Board which appoints the managing board, appoints the auditors and receives the audit report.
3. A General Community Board that formally receives the annual report of the community foundation and appoints the supervisory board.

This structure, which from a North American perspective appears very cumbersome, is aimed at assuring public accountability.

As I have already said, there are interesting developments afoot as new community foundations emerge and this can only strength our movement. Every country is unique and what we are seeing worldwide is a basic idea being shaped in many ways to suit different situations.

I want to close my remarks with a brief reference to globalization and centralization.

In today's modern society, everyone is connected and our world is surely getting smaller. Efficiency and competitiveness increasingly demand that we sacrifice local decisions and local control. Technology facilitates that sacrifice.

But community foundations as a global movement are bucking the trend—community foundations are a force:

• Building local capacity,
• Responding to local needs, and
• Empowering local leadership.

Community foundations are a vehicle for philanthropy and philanthropy is about making strategic investments in charitable activities so that our communities are more vibrant and our societies are more equitable and harmonious.

The community foundation movement already has a proud history but I believe that the best is yet to come.

Thank you.