Paralympic foundation to shut its doors after fundraising dispute

The troubled Canadian Paralympic Foundation is folding its operations, surrendering its charitable charter and turning over its few remaining assets to the Canadian Paralympic Committee (CPC) by year end, Maclean’s has learned. The decision was forced on the foundation—created in 2003 to help fund the national Paralympic committee—after the charity teetered near bankruptcy in the months leading up to Canada’s subpar performance at the 2012 London Paralympic Games.

Relations between the two groups—both independently managed organizations created to support Paralympic sport—deteriorated as they fought over where and how foundation funds should be spent. Fundraising costs at the foundation soared while revenue plunged. An internal report by Ketchum Canada Inc., a consulting agency for the philanthropic sector, concluded that foundation priorities often conflicted with the CPC’s position that it receive all funds the foundation raised. In fact, the CPC got less than half, with the rest going to other organizations supporting disabled sports or activities. “Over time, this has become a confrontational environment with issues of misalignment and lack of trust,” the Ketchum report said in 2011.

The dispute came to a head in May, when the CPC refused a foundation request for a $300,000 bailout. Vim Kochhar, a retired Conservative senator, resigned as chairman of the foundation after Maclean’s reported in June the details of the report and the foundation’s financial problems. Kochhar also serves as chairman of the Canadian Foundation for Physically Disabled Persons, a charity he helped found in 1987. Blurred lines between Kochhar’s two foundations caused “brand confusion” for donors and sponsors, the Ketchum report said.

The CPC, which receives millions in government funds and corporate sponsorship, is now working on alternate strategies to generate charitable donations, said David Legg, an Alberta university professor and volunteer chairman of the Paralympic committee. It may create an in-house fundraising arm wholly accountable to the CPC, he said in an interview. “Certainly the funds generated from a foundation are becoming increasingly necessary,” he said. “We can’t hide the fact we didn’t perform as well as we would have liked at the London Paralympic Games.” Canada finished 13th overall, and 20th in terms of gold medals, well below past performances. The Paralympic committee faces “an expensive three years” as it meets the multi-million dollar cost of preparing athletes for the 2014 Winter Games in Sochi, Russia, for the 2015 Parapan American Games in Toronto, and the 2016 Summer Games in Rio.

The task of winding down the foundation has fallen to one of its founding members, Barry Winfield of Kingston, Ont., who volunteered as chairman to replace Kochhar. He said the “internecine strife” between the two Paralympic groups began when the CPC took many of the corporate donations that used to flow to the foundation. Last year the foundation had $223,000 in expenses, leaving just $133,000 for donations, most of which went to the CPC. It’s a far cry from the foundation’s much-publicized goal of a $20-million Paralympic Legacy Fund, which inspired Hudson’s Bay Co. to donate $300,000 in 2007. That Legacy fund is empty, said Winfield, noting the CPC used what money it had for more immediate expenses.

“For me this is incredibly sad,” said Winfield. “As one of the three founders of the foundation, the last thing I wanted to see was this.” (Another of the founders, Senator Joyce Fairbairn, is suffering from Alzheimer’s.) He is issuing the last tax receipts and has commissioned an audit. Any remaining assets will go to the Paralympic committee, he said.