By Malcolm Burrows

The WE Charity’s story should be a business school case study. Young, idealistic founders. Growth and acclaim. Complexity, political scandal, and collapse.

But is WE Charity a case that can teach charities and donors, or is it an outlier?

The connection with business school naturally comes to mind with WE Charity and its for-profit social enterprise sibling ME to WE. Craig and Marc Kielburger are self-described “social entrepreneurs”, and Craig has an MBA. As Marc told an interviewer in 2007 about their for-profit arm “We run the place with a non-profit philosophy with business principles.”

But what are these business principles? And how do they relate to the mission of WE Charity? For starters, at a simple level, businesses have strategy and charities mission. Both involve discipline and focus, yet from the beginning the WE Charity mission evolved, or perhaps more accurately drifted.

Craig became the story
WE Charity started out in 1995 as a moral crusade of a 12-year-old boy against child labour in the developing world. The charity Craig and his family created in 1997 was called Kids Can Free the Children, which became Free the Children. Its mission was “the eventual elimination of child labour and the exploitation of children”. From the start Craig was a media star — a super articulate kid — but the charity had few substantive programs on the ground. Craig became the story. The child white saviour arriving with media, celebrities and politicians in tow.

The mission of Free the Children quickly refocused on more general international development with an education focus. In 1999, Craig announced on Oprah (of course) that they would build 100 schools internationally. By 2003, 300 schools were reportedly completed. Their student clubs reportedly grew to 300,000 members. (Note the round numbers.) Inspiring stuff for a nascent organization, and more concrete than the elimination of child labour.

About the same time, elder brother Marc founded the company that was the precursor to the for-profit ME to WE. Its strategy was to earn revenue for the charity through the sale of goods and services. The primary focus was selling international volunteer trips, such as school builds. It was a virtuous travel agency. Later ME to WE added virtuous clothing and bracelets.

Many charities run mission trips and sell stuff that is related to the cause without needing a separate legal entity, but the Kielburgers had ambition to scale up their business. As former staffers reported, ME to WE became competitive with the charity for staff and resources within the WE empire. Sell trips v. running international programs.

Packaged for corporate sponsors
The charity and businesses (there were a number) were tied together by strategy, and Free the Children inevitably changed its name to WE Charity in 2016. One brand under one roof. But was ME to WE a supporting business or a rival enterprise that distracted the charity?

Some think the major example of mission drift was the creation of WE Days, which started in 2007. These rallies inspired youth to “change the world”, a compelling and vacuous phrase that should always prompt caution. These events featured celebrity speakers, politicians (and their families) and the founders, who had become celebrities themselves. WE Days were an outgrowth of the charity’s student clubs and school programs. They were rewards for students who were active in their community.

Strategically, these events tied together the student programs, fundraising, profile building and travel sales. WE Days rapidly became a primary focus on the charity. Kids, get inspired! Convince your parents to buy our trips and become major donors! It wasn’t just Bill Morneau’s family who bought the whole deal.

The integrated WE brand and WE Days were packaged for corporate sponsors. WE had a compelling brand, and the hearts and minds of young leaders. These could be delivered for a cost to sponsors. Corporate sponsorship became a huge part of their revenue mix, reportedly growing to $126 million a year in the Canada, U.S. and U.K. charities.

WE Charity’s expenditures, on a percentage basis, shifted from the 86 WE villages in nine countries to domestic programs anchored by WE Days. The international programs were used to inspire northern hemisphere kids and donors to dream — and to purchase authentic life experiences. The focus became northern consumers, not southern beneficiaries.

At the centre of the WE empire was the remarkable charisma and energy of the Kielburger brothers. As founders, they were the embodiment of the cause. Founder charities are common in the charitable sector. If the founder become the story, however, these charities often warrant greater scrutiny. Founder dominance can be a form of mission drift. The organization should be bigger than the founders, not the other way around.

The WE empire is unique in Canadian charity history due to its celebrity buzz, corporate complexity and spectacular collapse. It was an outlier. For donors, one of the traps of charity is falling for emotions and charisma. Inspiration is compelling, but it is not a good indicator about what was going on underneath. It’s often hard to assess impact and organizational health, but a clue is when words don’t align with deeds.

Malcolm Burrows is Head, Philanthropic Advisory Services for Scotia Wealth Management of Scotiatrust. He writes this column exclusively for each issue of Foundation Magazine.

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