Good morning, everyone. Thank you very much for the invitation to testify today, and also thank you, everyone, for the hard work you're doing on this file.
I've been following the WE Charity from afar for several years now, and over the last couple of weeks I have taken a closer look at its annual reports, website, videos, social media, press releases, financial statements and tax returns—both Canadian and U.S. tax returns. I also looked at the job ads for about 20 positions to see what type of work WE has been hiring staff to do. I have spoken with former staff who have been employed by WE. I'll just say that unless I specify otherwise, I'm referring to WE, the registered charity, when I say “WE”.
Overall, what I see is an organization that has grown fast, unusually fast, and has shifted its focus. In terms of revenue, WE Charity has soared from annual revenue of about $1million to $66 million in the span of about 15 years. In total, I find that since 2003, WE Charity, a Canadian-registered charity alone, has reported total revenue of nearly half a billion dollars, about $490 million in revenue, and about $470 million in expenditures. That's just what WE Charity, the Canadian-registered charity, has reported.
What has surprised me is that only about one-quarter of the total revenue of WE Charity is from tax-receipted donations. What this means is that three-quarters of WE Charity's revenue is from sources that for some reason are not interested in a tax receipt.
In 2019 alone, WE Charity, according to its U.S. tax returns, was granted a total of $118 million from U.S. sources, including some very large amounts: Allstate Finance, $32 million; Microsoft, $10 million; Unilever, $10 million; Walgreens, $8.3 million; and KPMG U.S.: $4.6 million. The thing that strikes me about this list of donors who account for $118 million is that so many of them are big brands. In addition to those names that are on the list on U.S. tax returns, WE Charity also partners with the Royal Bank, Telus, Nordstrom, Holt Renfrew, Staples, DavidsTea, The Keg restaurants, Virgin Atlantic, DHL and other for-profit companies.
As I watched some of the WE Charity's videos, I was surprised to see the corporate logos of some of these companies pop up: KPMG t-shirts, Royal Bank t-shirts, the DHL delivery trucks, and so on.
Looking through the job ads, I found that WE Charity has advertised only for positions in sales and marketing. I could not find one job ad for staff in any other country. Now, that just may be the function of the ads that were available at the time. However, a couple of the ads in particular did catch my eye, and I'll give you one example. WE Charity advertised.... The description of the job states that this program between Allstate and WE Charity—and I quote—plays a vital role in Allstate's success. Then the job ad goes on to explain how “by advancing the business priorities of the corporation with reputation-building strategies." That job ad also goes on to say that this program drives business results through improved external reputation with investors, policy-makers, media, customers, consumers and opinion leaders.
I'm almost done here.
I notice that WE has a program called “Track Your Impact”, which allows a consumer to go online and input a code when that consumer purchases a WE product. That code links the consumer to information about the village that the consumer is helping with that purchase.
That data, consumer data, is collected by WE—consumer data mostly for children, for young people. WE says, as part of their literature for this specific program, that they have almost four million people in their movement. If that’s the case, that’s a gold mine of consumer data about a highly desirable, hard-to-reach market segment—children and millennials.
This brings me to the conclusion of my opening remarks. I could say much more, but I will leave it at that for now. In summary, I think questions need to be asked about whether WE Charity is operating for purposes that are exclusively charitable, as is required by law under the Income Tax Act, or whether WE Charity is tapping into the advertising and marketing budgets of these big companies, like Allstate, that granted WE Charity at least $40 million. This of course raises a series of troubling questions about not only whether the federal government did proper due diligence, but furthermore, whether in fact the government, in awarding this contract to WE, was on the cusp of awarding a $1-billion contract to a charity that is offside of the law.
Thank you for the opportunity to testify. I'll be glad to answer any questions.