J.W. McConnell: Financier, Philanthropist, Patriot
by William Fong
McGill-Queen’s University Press, 2008
733 pp., $39.95
Look at the day-to-day work of most Canadian donors and, at first glance, it will seem virtually identical to that of their counterparts in the United States. Donors north of the 49th parallel spend long hours looking for promising—and underfunded—charities, just as they do south of the border. American foundations exert considerable energy preparing their Form 990s for the Internal Revenue Service; Canadian foundations toil at preparing their Form T3010s for the Canada Revenue Agency. Canadians, like Americans, are engaged in a robust and unresolved debate about the limits for charities to engage in political activity while retaining their tax-exempt status.
On closer examination, however, the differences between the Canadian and American nonprofit sectors appear even sharper than the similarities. For one thing, the nonprofit sector in Canada is much smaller than in the United States. Data compiled by the Johns Hopkins University’s Comparative Nonprofit Sector Project for the period from 1995 to 2002 indicates that volunteering and giving account for 3.94 percent of U.S. gross domestic product—but only 2.4 percent of Canadian GDP. A 2005 report from an Imagine Canada research team led by Michael H. Hall states that support for Canadian charities is both “very broad” and “dangerously shallow.” Nearly 75 percent of Canadians donate to charity each year; nearly 25 percent volunteer their time. What is surprising, however, is how few Canadians make up the bulk of total giving. Less than 10 percent of Canadians donate over 45 percent of the funds given to charities, and contribute 40 percent of the time volunteered.
Differing legal codes make comparisons between the size and scope of Canadian and American philanthropy fairly problematic. The legal definition of “foundation” in particular varies between the two countries, which makes it difficult to compare the relative numbers of grantmakers. What is certain, however, is that the United States has a longer history of grantmaking foundations specifically, and philanthropy generally. Historians debate the causes of the disparity—with plausible explanations including legal, religious, and cultural factors—but the fact of the disparity is undeniable.
Compare the two countries in 1940. At that time, the United States had international powerhouses like Carnegie and Rockefeller. But it also had scores of smaller foundations, including those created by James Buchanan Duke, Julius Rosenwald, the Guggenheims, Olivia Sage, and Alfred P. Sloan. In 1940, Canada had exactly two charitable foundations. The first was the relatively small Massey Foundation, created in 1896. The second, created in 1937, was established by John Wilson McConnell, who is the subject of William Fong’s authoritative new biography.
But J. W. McConnell (whose foundation, several name changes later, is now called the McConnell Family Foundation) established one of North Americas largest foundations, decades before comparable Canadian entities were created. In fact, McConnell’s foundation remained Canadas largest until 2000, when it was displaced from the top position by Quebec’s Fondation Lucie et Andr Chagnon.
McConnell (1877-1963) made his fortune as an investor in a variety of companies, most notably St. Lawrence Sugar and Ogilvie Paper Mills. (All of the companies McConnell created or helped to create have since been merged into larger companies.) The publisher of the Montreal Star (which folded in 1979) for many years, McConnell was a moderate conservative. As Fong writes, McConnell “was no ideologue and no rebel either,” who delighted in being a confidant of many governors-general and lieutenant governors. Although he and his newspaper eventually switched their allegiance from the Conservative to the Liberal Party, he was far more interested in Canada’s role in the British Empire than in national politics.
McConnell’s support for Britain was clearly expressed in his charitable giving. Perhaps most notably, in August 1940 he donated C$1 million to the British government to replace Spitfire fighters destroyed in the Battle of Britain. McConnell’s leadership inspired other Canadian donors to contribute to the British war effort. McConnell also personally assisted many European refugees who were forced to resettle in Canada for the duration of the war. The most famous refugee to receive assistance from McConnell was Dame Barbara Cartland, a well-known romance novelist who declared that McConnell was “exactly what I expected a great Canadian to look like—very tall, handsome, clean-cut, with vivid blue eyes, which were exceedingly alive.”
McConnell’s philanthropy was informed by his strong Methodist faith. (After Canadian Methodists merged their denomination in 1925, McConnell continued his support for the United Church of Canada.) In a 1942 letter to his niece, Mrs. Francis Wasserboehr, McConnell stated, “it seems to me that the way of the Good Samaritan is the very basis of Christianity. He who lives up to this example of good works will do well indeed.” McConnell was a major donor for the construction of church buildings in Montreal and gave lesser amounts for United Church pension funds. He regularly went to church—and kept quiet as ministers’ sermons moved increasingly to the left.
Fong writes that McConnells’ stern Methodism gradually relaxed over time. He decided that dancing was no longer sinful, particularly if performed at charity balls. And although he remained a teetotaler, he became friends with the members of Canadas leading brewing families (most notably the Molsons)—and encouraged them to give.
McConnell gave small but steady amounts before 1920. In the 1920s, he began his major giving. “Although McConnell did have a few established causes,” Fong writes, “he gave without strings and widely, simply to the three traditional objects of charity: religion, education, and medicine.”
The chief beneficiary of McConnell’s support was McGill University. From its creation in 1937 until McConnell’s death in 1963, the McConnell Foundation gave away C$43.7 million, of which the largest amount—C$14.9 million—went to McGill for buildings and scholarships. An additional C$4.6 million went to McGill’s teaching hospitals.
McConnell’s interest in McGill was actually inspired by American philanthropy. In 1920, the Rockefeller Foundation offered to give C$1 million to the McGill University College of Medicine if McGill could match the Rockefeller gift. McConnell led the fundraising drive, which included substantial donations from the Canadian Pacific Railway, the Bank of Montreal, and other leading corporations. The drive ended with McConnell raising C$5.2 million, and starting a commitment to McGill that lasted for the rest of McConnell’s life. McConnell served on McGill’s board of governors from 1928 to 1958, and McGill students to this day can attend the university on a McConnell Scholarship, hear lectures at McConnell Hall and McConnell Engineering Hall, and watch hockey matches at the McConnell Arena. The McConnell Family Foundation continues to be a major patron of McGill; its most recent donation, for C$20 million, was granted in November 2008.
McConnell’s support for hospitals has ultimately proven more complicated. In 1927, Anglophone hospitals in Montreal received limited state funding, while Francophone hospitals were run by Catholic social orders. McConnell and other leading Montreal businessmen believed that hospitals in their city needed a great deal more money, and combined a citywide fundraising campaign with a successful effort to persuade the Montreal city council to impose a tax on restaurant meals, with the proceeds dedicated to hospitals. McConnell remained a major supporter of Montreal’s hospitals for the rest of his life, even as the state ultimately took control of all Canadian health care. Because of his critical role in the passage of the hospital tax, Fong writes that McConnell was a founder of “what became the welfare state in Quebec.”
In 1935, McConnell decided to make his giving more systematic and turn his wealth into a foundation. Canada had community foundations, most notably the Winnipeg Foundation, and the United Way of Canada had branches in many cities. But it was McConnell who created Canada’s second private grantmaking foundation.
Over the years, McConnell received help from many people, including his acquaintance John D. Rockefeller Jr. But his closest philanthropic advisor was Jeremiah Milbank, founder of the JM Foundation. McConnell admired Milbank for his support of Boys and Girls Clubs, as well as for his substantial support of programs that serve the disabled. McConnell and Milbank became close friends, and McConnell often spent his vacations at Milbank’s South Carolina plantation.
In an effort to ensure that Canadian law accommodate private philanthropy, McConnell in 1943 successfully lobbied to make Canadian corporate contributions to charities tax-deductible. As a result, Canadian corporate generosity remains strong to this day. Fong recounts a separate episode, in which “new [Canadian] federal legislation in 1950 [was] designed to force foundations to spend 90 percent of their revenue in a given financial year.” McConnell persistently lobbied the Department of National Revenue; in 1951, he received an advantageous ruling. The McConnell Foundation was exempted from the new requirement, on the grounds that it had been incorporated before 1940. (Today, the annual payout rate in Canada is set at 3.5 percent.)
In this definitive biography, William Fong presents an unfortunately neglected figure in the history of North American philanthropy, a figure who deserves to be better known. “Possibly no single person anywhere in his era ever merged money-making with money-giving so consistently and wholeheartedly, and over such a length of time, as McConnell,” Fong writes. “The wealthier he became, the more he gave away, from the very start of his career, when he was making a few cents a day, until he became probably the richest man in Canada. Although he kept much for himself and his family to live on very well, there was almost a cause-and-effect relationship between his making money and his giving it away.”
Contributing editor Martin Morse Wooster is the author of The Great Philanthropists and the Problem of “Donor Intent.”