"Joel Solomon and his friend Carol Newell are multimillionaire philanthropists who have given away or invested their money in sustainable organizations, in an effort to make the world a better place."
- Lori Culbert, The Vancouver SUN, 7 August 2010
The over-arching question raised here is this: what is the justification for $11.4 million in overhead expenditures - including relatively high salaries - while Endswell was simply transferring money to Tides Canada?
Background
The Endswell Foundation is a small part of a large network of Tides-affiliated organizations that have been led for many years by Drumond Pike and Joel Solomon. Endswell says that it has funded hundreds of organizations through Tides Canada and that it has been the largest source of funds for environmental organizations in British Columbia.
According to tables in U.S. tax returns, after 2002 Endswell switched from making grants directly to various organizations, and began making almost all of its grants to Tides Canada alone. Calculations based on U.S. tax returns indicate that since 2003, fully 99 percent of Endswell's grants went to Tides Canada.
One might think that making grants to Tides Canada would be fairly straightforward for Endswell since the treasurer of Tides Canada and the treasurer of Endswell was the same person for ten years: James Morrisey. Mr. Morrisey is also the treasurer of other Tides-affiliated foundations: Salal and Nextwave. He is also the Chair and Treasurer of the Sage Centre (now re-named "Tides Canada Initiatives Society") and is also the Sr. Advisor to Renewal Partners, a so-called "investment firm" that seems to be run in conjunction with the Endswell Foundation. In total, Mr. Morrisey is treasurer or director of at least five Tides-affiliated charities plus Renewal Partners.
Not only the treasurer of Endswell and the treasurer of Tides Canada is the same person, the chairman of the board of the Endswell Foundation, Drummond Pike, is also the "founding chair" of Tides Canada. Furthermore, the vice-chair of Tides Canada, Joel Solomon, is also the president of the Endswell Foundation.
Endswell Now Closed
Endswell's doors are now closed. "Endswell’s grant-making era is now complete," the foundation says at its web-site. Total expenditures in 2010 were only $12,710 and didn't include any salaries. But though the charity no longer continues to operate, questions remain about how it did do while it was in operation.
The $11.4 Million Dollar Question
Since 2003, the total amount that Endswell granted to organizations other than Tides Canada and Tides-affiliated organizations, was $48,034. Of that, $31,000 was granted in 2003.
Since 2003, while virtually no grants at all were made to any organizations except Tides Canada, Endswell reported overhead-like expenditures of $11.4 million. Surprisingly, as shown below, expenditures increased markedly even as Endswell virtually stopped grant-making to all organizations except Tides Canada. While $11.4 million was spent on overhead-like expenses, the amount that was granted to Tides Canada over the same period, was only $8.7 million.
Sources: U.S. and Canadian tax returns. For the spreadsheet on which this figure is based, click here.
Why did Endswell need to pay $11.4 million for expenses while it was simply transferring money to Tides Canada? In my opinion, this is the $11.4 million dollar question.
Since the Chairman of the Board, the president and the treasurer of the Endswell Foundation are also intimately involved with Tides Canada - and hold almost the same positions in both charities - I would have thought that Endswell would have been able to make $8.7 million worth of grants to Tides Canada without having to spend $11.4 million in the process.
Overhead Expenses (2003-2008): $11.4 Million
Between 2003 and 2009, while virtually no grants were made to any organizations except Tides Canada, Endswell has reported overhead-like expenses of approximately $11.4 million. As shown below, total yearly expenditures on overhead almost doubled from nearly $1 million in 2003 to nearly $2 million in 2007.
Sources: Canadian tax returns. For the spreadsheet on which these figures are based, click here.
Of the $11.4 million that Endswell spent on overhead-like expenses, Endswell reported to Revenue Canada that about $2.3 million was for office expenses, $2.6 million was for salaries, wages and honoraria, $5.9 million was for "other expenses" and $427,973 was for professional and consulting fees.
What were the "other expenses" on which Endswell spent $5.9 million - while making no grants at all to any organizations other than Tides Canada?
As shown below, office expenses, salary-related expenses and other expenses tended to increase one year after the next, especially between 2005 and 2008. For example, Endswell's expenditures on salaries - as reported to Revenue Canada - went from $344,409 to $436,532 to $599,017, between 2005 and 2007.
Source: Canadian tax returns. For the spreadsheet on which these figures are based, click here.
Office Expenses (2003-2009): $CAN 2.3 Million
Over the same years that Endswell made 99 percent of its grants to Tides Canada, Endswell's office expenditures increased from $CAN 172,250 in 2003 to $CAN 765,395 in 2008. Why did the Endswell Foundation even need an office - especially in the years when it made no grants at all to any organizations other than Tides Canada? Why did office expenses increase so sharply? And what happened in 2009 (see above) .... were office expenses reported as "other expenses?" Why did Endswell spend $CAN 765,395 on office space and expenses in 2008, the same year that it seems to have begun to shut down its operations?
Sources: U.S. and Canadian tax returns. For the spreadsheet on which this figure is based, click here.
Staff Expenses
Since 1997, secretarial and staff costs have increased sharply from $44,996 in 2000 to a high of $606,231 in 2007.
Professional & Consulting Services: $CAN427,973 or $US 2.2 Million?
As mentioned above, between 2003 and 2008, Endswell reported to Revenue Canada that it spent $427,973 on professional and consulting services. Over roughly the same period, the amount that Endswell reported to the U.S. Internal Revenue Service was about $2.2 Million. Why did Endswell even need consulting services while it was simply transferring money from Endswell to Tides Canada? And why the apparent discrepancy in the amounts reported to Revenue Canada and to the I.R.S.?
For what type of ”consulting services” did Endswell pay Interdependent Investments Ltd., “Candid” and “Real Assets" a total of about $1.4 million since 1997? Why is it that no information could be found for Candid - which was paid $452,536 by Endswell?
Sources: U.S. and Canadian tax returns. For the spreadsheet on which this figure is based, click here.
Grantee Support & Education: $US 3.3 Million
Since 1999, Endswell spent approximately $3.3 million on "grantee support and education" and "program support," according to U.S. tax returns. Of that $3.3, $2.6 million was spent since 2003 - during the period when 99 percent of Endswell's grants went to Tides Canada. This raises a fair question: who got the $2.6 million for "grantee support and education" and "programme support?" Did this $2.6 million go to Tides Canada - the organization that seems to have been the only major grantee of the Endswell Foundation since 2003?
What happened between 2008 and 2009 that caused Endswell's costs for programme support to increase from $32,973 to $903,804?
Sources: U.S. tax returns.
Staff Salaries
The senior staff at the Endswell Foundation are Joel Solomon (President), Martha Burton (Sr. Vice President), Paul Richardson and Pam Chalout. All of these individuals are also staff at an investment firm named Renewal Partners which works in conjunction with the Endswell Foundation and Tides Canada. At Renewal Partners, Joel Solomon is the CEO, Martha Burton is a Sr. Vice President and Paul Richardson is a Vice-President. As shown below, their salaries have increased markedly in recent years.
Sources: U.S. and Canadian tax returns.
What were the staff doing?
According to my observations, in 2004, 2006, 2008 and 2009, the amount granted to organizations other than Tides Canada was zero. And yet, over the same years that Endswell made no grants at all except to Tides Canada, Endswell still had substantial expenditures for staff salaries. In fact, Endswell reported to Revenue Canada that for salaries, wages and honoraria, it spent a total of $209,022 in 2004, $436,532 in 2006, $387,679 in 2008, and $481,703 in 2009 - and in none of those years did Endswell make a single grant other than to Tides Canada. This raises a fair question: during the years when Endswell staff made absolutely no grants at all except to Tides Canada, what were they doing?
Several of the paid staff at the Endswell Foundation also hold other positions:
- Joel Solomon is president of several companies, including Renewal Land Company, Hollyhock Farm Ltd. and Hollyhock Centre Ltd.. Hollyhock Farm Ltd. offers "Bodywork" (spa services?) for $85 to $170 per hour. According to U.S. tax returns, Joel Solomon also has 10 percent ownership in Village Real Estate, a real estate agency in Nashville Tennessee. Joel Solomon is also president of Interdependent Investments Ltd., a company to which Endswell paid $1.4 million for "consulting services."
- Paul Richardson, whose salary seems to have tripled over a few years (from $55,656 to $150,094), is or has been until very recently, the Acting Chair of the Coast Conservation Endowment Fund Foundation.
- Martha Burton, whose salary nearly doubled in one year (from $72,036 to $132,325), is the Treasurer of Vision Vancouver.
Salaries of Drummond Pike and Joel Solomon:
Drummond Pike is on salary at the U.S. Tides Foundation (reportedly for 20 hours per week) and Joel Solomon is paid by Endswell. As shown below, their salaries have increased sharply over the years. Drummond Pike's salary appears to have doubled in 2003, the same year that Tides Canada seems to have achieved equivalency status as a charity in the U.S., and therefore eligible for tax-receipted contributions from U.S. sources.
Sources: U.S. and Canadian tax returns. For the spreadsheet on which this figure is based, click here and here.
Joel Solomon: Benefactor or Paid Employee?
Joel Solomon has been described as "a member of the inherited wealth club" and "a modest version of the later generation of the Kennedy/Rothschild/Rockefeller class." A Vancouver Sun journalist reported in August of 2010, "Joel Solomon and his friend Carol Newell are multimillionaire philanthropists who have given away or invested their money (italics added) in sustainable organizations, in an effort to make the world a better place."
Another Vancouver writer reported, "Joel Solomon has put his millions (italics added) into new, business-first socialism." After reading that more than one professional Vancouver journalist has depicted Joel Solomon as independently wealthy, it was astonishing to learn from U.S. tax returns that, in fact, Joel Solomon has been a paid employee of the Endswell Foundation since 1997. My impression had been that Joel Solomon was one of the benefactors behind Endswell; I hadn't had the impression that, in fact, he has been a paid employee for 14 years, paid a salary to run the charity that supposedly he co-founded with Carol Newell.
U.S. tax returns indicate that since 1997, the Endswell Foundation has paid a total of $872,519 to Joel Solomon, Joel Solomon Co. and "JSCO." As president of the Endswell Foundation, Joel Solomon's salary increased from $144,142 in 2006 to $186,189 in 2008, according to U.S. tax returns. As shown, payments to Joel Solomon and his company increased even as grant-making ground to a halt to all organizations except Tides Canada. My question is, why?
Sources: U.S. and Canadian tax returns. For the spreadsheet on which this figure is based, click here.
Spending for Administration vs. Charitable Programs
According to information in Canadian tax returns, since 2003 Endswell spent about $20.9 million. Of that, $8.7 million was granted to Tides Canada, including a small amount granted to Tides-affiliated organizations. Tax returns say that nearly $6.7 million was for charitable program expenditures and $5.4 million was for management and administration.
What were the charitable programs that Endswell was conducting while it made NO grants at all to any organizations except Tides Canada? And why did Endswell need to spend $5.4 million on management and administration in order to spend $6.7 million for charitable programs?
For a larger version of the figures shown below, please click on this image itself:
Source: Canadian tax returns. For the spreadsheet on which this figure is based, click here.
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NOTES:
- The concerns and questions presented in this post were raised in letters sent to Drummond Pike and Joel Solomon, on 13 September 2010 and 27 September 2010. The response received was a letter from the lawyer of Tides Canada, dated 2 December 2010.
- Renewal Partners, the "seed capital investment firm" of which Joel Solomon is CEO, reports that it "invested" in Village Real Estate - the very same company in which U.S. tax returns say that Joel Solomon has 10 percent ownership.
- After questions were asked about why Joel Solomon was reported to the I.R.S. as a member of the board of Endswell, but not to Revenue Canada, it was noticed that his name was added in the tax return for 2009. For previous years (2000 - 2008), Joel Solomon's name does not appear in the publicly available information reported to Revenue Canada regarding the directors of the Endswell Foundation.
- Three of the Tides-affiliated organizations to which Endswell has granted money are the Linnaea Farm Society, Hollyhock and Pivot Legal Society. Both the Linnaea Farm Society and Hollyhock are on Cortes Island where Drummond Pike and Joel Solomon own properties that are adjacent to Hollyhock. From 2000 to 2005, the president of the Linnaea Farm Society was Amy Robertson, the wife of Vancouver's Mayor Gregor Robertson. The CEO of Hollyhock is Dana Bass Solomon, the wife of Joel Solomon. Thus, Joel Solomon is the Chairman of the board of Hollyhock where his wife is the CEO. Mrs. Solomon is also on the board of the Pivot Foundation. The Executive Director of the Pivot Foundation and the Executive Director of Pivot Legal Society are the same person: John Richardson. In 2003 and 2004, the treasurer Hollyhock Centre Ltd., was Gregor Robertson, Vancouver's current Mayor. In 2004, Gregor Robertson was the Treasurer of Hollyhock Farm Ltd. which offers "Bodyworks" (spa services?), from $85 to $170 per hour. That's not charity. That's business.
Updated March 19, 2011
