Monday, December 12, 2005


A new breed of donors bypasses charities to address specific needs

GORDON PITTS, Globe and Mail, Monday, December 5, 2005

David Cheriton is a Stanford University professor, global expert in computer networks and serial entrepreneur who, in the late 1990s, gave some start-up help to a couple of Stanford students.

Those students were Larry Page and Sergey Brin, and the $200,000 (U.S.) he sank into their company, Google Inc., has grown thousands of times, building a fortune that amounts to hundreds of millions of dollars.

But for all his willingness to trust kid researchers with his hard-earned cash, Mr. Cheriton, 54, is not ready to put equivalent faith in charities. Giving is a big priority for him, but not just to anybody.

"So much money going to charity is wasted," says Prof. Cheriton, 54, who distrusts mainstream charities with their high-paid executive directors and elaborate bureaucratic machinery.

That was the thinking behind his move this fall to donate $25-million (Canadian) in Google stock to Ontario's University of Waterloo and the computer science program where he earned his Masters and PhD degrees.

His rationale is the money would go directly to the people who could use it, the students, researchers and academics who, like Mr. Page and Mr. Brin, might change the world.

The B.C.-born, Alberta-raised Prof. Cheriton, who has been a founder, chief executive officer and technologist for a swath of Silicon Valley companies, is typical of the new giving coming out of the corner office.

The sums of money are growing fast, but the donors are more targeted and personally engaged in the deployment of their funds.

Prof. Cheriton's thinking is that he made a big bet at Google and it turned out exceedingly well. He's making another venture capital bet at University of Waterloo but the risk is smaller. The university already houses a demanding computer school that's a go-to source of talent for Silicon Valley and other technology incubators.

Prof. Cheriton doesn't plan to micromanage the application of the money he's giving Waterloo. He's busy enough teaching at Palo Alto, Calif.-based Stanford and serving as a technical adviser to a number of companies, including Sun Microsystems Inc.

But he has stipulated that the university will tackle what he sees as an enormous challenge in software development: to make it trustworthy in the functioning of large-scale computer systems.

The same problem-solving orientation inspired Marcel Desautels, who has donated $45-million over the past five years to two Canadian business schools, including, this fall, $22-million to what is now the Desautels Faculty of Management at McGill University.

When he was president of a credit information company, Creditel of Canada Ltd., from 1970 to 1996, he was frustrated because he could never find good managers with strong general skills.
So when he sold the company in 1996, and ended up as CEO of a $100-million foundation formed from the proceeds, management training was at the top of his philanthropy priorities.

Mr. Desautels, 71, has also championed integrative learning that cuts across functional disciplines, such as finance and marketing. His $21-million in donations over five years to the University of Toronto's Rotman School of Management has funded a centre of integrative thinking, along with providing funds for new curriculum and teaching in that area.

At McGill, the money is going to a number of uses, including endowed chairs and fellowships. But there is also a nod to Mr. Desautels' consuming interest: an annual symposium in integrative learning.

The good thing, he says, is that McGill's leaders were already committed to an integrative approach. "I was very anxious to learn whether that idea already existed here."
Both men get their names on the schools they are funding, although they say that was not essential in the granting of the funds. But pride certainly plays a part in Mr. Desautels' motivation.

His foundation's funds do not come from his own pocket but from the disposition of Creditel, originally an association of client companies. But he says he built Creditel from almost nothing. "I feel that I earned every cent of it."

By contrast, Mr. Cheriton says he is somewhat embarrassed by the naming of the David R. Cheriton School of Computer Science, and is still trying to get used to his added profile.
Although today's donors work hard at structuring the scale, timing and form of donations, emotion still plays a part. Mr. Cheriton is giving to his alma mater, and the Manitoba-born Mr. Desautels is putting money back into Montreal, which his family helped settle in the 17th century.

Ian Ihnatowycz, president, founder and chief information officer of Toronto's Acuity Funds Ltd., recently gave $5-million to the Royal Conservatory of Music -- and part of the motivation stemmed from the long hours he spent as a boy in the conservatory's old building in Toronto, training to be a pianist. That teenage dream died, but he is giving $4-million of his total donation to the renovation of the hall, to be renamed after him.

Another key factor, he says, are the studies that show a link between musical skills and training and intellectual development in children.

These people are not done giving. Mr. Desautels figures he will deepen his relationship with U of T, McGill and his own alma mater, the University of Manitoba, to which he has also committed money. Mr. Cheriton also has more to give, although he insists "I'm not a billionaire."

The sums can grow in other ways. In 2002, Dick Haskayne, a retired chief executive officer and director of a number of companies, gave $16-million in cash and Calgary land to the University of Calgary's business school, which now carries his name. With the growth of Calgary and real estate values, Mr. Haskayne estimates his endowment would be worth about $30-million now if the property were sold.

He thinks donations like his should serve as examples. "There has been a lot of money made out West and across this country in the last number of years. The accumulation of wealth in Calgary these days is staggering," he says.

"There are a lot of good people who want to give back. They just have to figure out how to do it."

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