Charitable Impact Foundation, a Vancouver based charity known as "CHIMP," recently announced, on April 26, 2022, that it has received more than $1 billion in donations since it began a decade ago. Two weeks later, by May 11, CHIMP's running total was up by another $100 million to $1.1 billion.
The main service that CHIMP provides is an online portal that allows donations to be made to any of the 86,000 charities in Canada. Anyone can set up an “Impact Account” which CHIMP says is like an online bank account for charitable giving. CHIMP reports that 167,000 people have used its service to donate to 12,000 charities.
If CHIMP truly has received $1.1 billion in charitable giving, that's wonderful news! But troubling facts in the history of this charity suggest to me that it should be thoroughly audited by the Canada Revenue Agency. Ahead, I'll explain my concerns, opinions and some of the questions that I believe need to be answered. Over the past four years, I've raised all of my questions with Blake Bromley and John Bromley in a long series of letters. Initially, they did reply but most of my questions have gone unanswered.
GONE BANANAS
CHIMP calls itself the “fastest-growing giving network and donor-advised fund in Canada.”
Tax-receipted gifts reported by CHIMP have gone bananas, soaring to $151 million last year, up by one hundred-fold since CHIMP began. Tax-receipted donations in CHIMP's first year were only $149 916, back in 2011.
CHIMP reports spending virtually nothing on fundraising, only $19,222 over a decade. So how did CHIMP grow so big so fast? This is now a billion-dollar question.
In 2018, The Globe & Mail reported that CHIMP's wealthy donors get tax-receipts for their donations - and their money back. That reporting was based in part on some of my research.
CHIMP first caught my eye because of the peculiar names of some of the charities that it has funded, such as the Maple Syrup Mafia Foundation which got $1.7 million from CHIMP. Another reason that I have followed CHIMP is because it funds an environmental charity that I have followed for many years. In 2021 alone, this charity received $1.7 million from CHIMP.
Year after year, I have followed CHIMP’s financial activity by reviewing its tax returns and financial statements.
One of the things that I noticed is that some of CHIMP's gifts seem to go in circles and boomerang back to CHIMP. Here's an example: In 2020, CHIMP made a gift of $1.025 million to Steward's Charitable Foundation ("SCF"). That same year, SCF gifted $1 million back to CHIMP. Worth noting is that the gift to SCF was non-cash and the gift back to CHIMP was cash, according to tax returns. Non-cash gifts could be securities, cryptocurrency, real estate, a promissory note, and so on.
An important point to note is that both CHIMP and SCF were originally under the direction of Blake Bromley (see here and here), a retired Vancouver lawyer who specializes in charity and tax planning.
The Bromley Charities
According to CHIMP, Blake Bromley has registered more than 650 charities that have handled $2 billion in gifts. So far, I have identified about 200 of these charities. I refer to them as "The Bromley Charities" because they use the address of Bromley's former company (Benefic Group Inc.) and because most of the directors are or were Bromley's employees. As such, most of these charities appear to me to have little outside, independent oversight.
From my detailed research, I have found that by dollar value, most of the gifts that the Bromley Charities give are to each other. By my analysis, 35 of the Bromley Charities, not including CHIMP, made gifts for a combined total of more than $300 million (2015-2021) but less than $2 million went to outside charities that are not part of the Bromley network. This suggests to me that the Bromley charities are part of a common operation, like multiple pockets in the same pair of pants.
CHIMP is run by Blake Bromley’s sons, John and Clif.
When I first wrote to Blake Bromley and John Bromley in 2018, I asked about why some of their charities make gifts back and forth to each other. Their letters of reply indicated that the they took great offence at my questions and insisted that their charities follow the law. "Chimp Foundation has consistently operated in compliance with all statutory and regulatory requirements," John Bromley wrote.
Flagged by Deloitte: $193 Million in Unlisted Securities
An important point to note is that by dollar value, the vast majority of the gifts for which CHIMP has issued tax receipts are non-cash. In fact, last year non-cash accounted for 84 percent of CHIMP’s tax-receipted donations, a total of $128 million in just one year, CHIMP's tax return says.
Non-cash gifts to CHIMP are a concern because CHIMP's Independent Auditor, Deloitte, warned in 2020 that it could not vouch for $193 million of CHIMP's assets in the form of unlisted securities. Deloitte warned that it was "unable to obtain sufficient appropriate audit evidence supporting the carrying amount of investments in certain unlisted securities with a total carrying value of $193,037,460 as of July 31, 2020."
By my analysis of the gifts to CHIMP during the years preceding Deloitte’s audit, the total amount of the large, mostly non-cash, round-numbered gifts that CHIMP received from various Bromley Charities was $192 827 970. That’s very close to the value of the unlisted securities that Deloitte was unable to vouch for. Perhaps that’s just a coincidence. Whatever the reason, the fact that $193 million of CHIMP’s assets are in doubt is concerning.
Loans and Notes Receivable
Another thing I notice is that most of the large gifts between the Bromley Charities are mortgage loans, land, promissory notes and notes receivable. Timothy Foundation, for example, reports seven notes receivable (loans) which account for 80 percent of its assets.
Here's a recent example: In 2021, CHIMP made a gift of $4 million to Plentiville Foundation.
Financial statements for Plentiville Foundation clearly show that it used the $4 million from CHIMP to make a loan for $3.875 million at an interest rate of approximately 8 percent. The sole directors of Plentiville Foundation are Blake Bromley, John Bromley and another member of the Bromley family. This means that when CHIMP gifted $4 million to Plentiville, CHIMP gifted the money from one charity directed by John Bromley to another charity that was also directed by CHIMP's CEO and his immediate family. This raises a series of questions. For starters, why is CHIMP's $4 million gift not recorded as a gift to an associated charity?
The $74.7 Million Gift
By my analysis of CHIMP's tax returns, the largest gift that CHIMP has ever made was a gift of $74.7 million to Fortius Foundation, a charity that owned a large sports centre until it was sold to the City of Burnaby for $25.6 million. Fortius Foundation is also one of The Bromley Charities, originally registered by John Bromley and others. This means that the $74.7 million gift went from one of the Bromley Charities to another.
According to information provided by the Canada Revenue Agency, CHIMP's $74.7 million gift is the largest gift to a non-governmental organization in the history of British Columbia.
In financial statements, Fortius Foundation acknowledges that it received CHIMP's massive gift and yet the board of directors expressed "significant doubt" about the charity's ability to continue as a going concern. This raises a troubling question: Why did CHIMP give $74.7 million to a charity that didn't have a sound investment strategy for its huge, historic gift?
CHIMP says in its financial statements that the $74.7 million was to restructure and reduce Fortius Foundation's debt. This prompted me to figure out why Fortius Foundation got into such deep debt in the first place and to whom the money was owed.
My detailed research based on tax returns and financial statements reveals that the $74.7 million from CHIMP was used to pay debts to five of The Bromley Charities. These same charities then made gifts to CHIMP for a total of $76.5 million. Put plainly, the ultimate beneficiary of CHIMP's $74.7 million gift was CHIMP itself.
The five Bromley Charities that made loans to Fortius Foundation and gifts to CHIMP were Almoner Foundation, Imladris Foundation, Foundation for Public Good, Homestead on the Hill Foundation and Association for the Advancement of Scholarship. Financial statements for these charities show that their gifts to CHIMP weren't cash, they were notes receivable.
Quest University Canada
Something similar happened with Quest University Canada (“Quest”), a private university in Squamish, B.C. Quest took several loans from the Bromley Charities which were consolidated into a mortgage loan held by CHIMP. In 2018, CHIMP transferred the mortgage loan to another one of The Bromley Charities, Vanchorverve Foundation, as a gift of $20.7 million.
When Quest’s loan came due and the university was unable to pay, it was forced into foreclosure to pay the debt to Vanchorverve. After the university was sold, Vanchorverve paid $24.5 million to CHIMP. The university lost ownership of all its land and buildings and is now reduced to leasing back its premises from its new owner.
Chimp Technology Inc. Paid $54 Million
Another concern that I have is that financial statements for CHIMP, which I obtained from CRA, show that it has paid more than $54 million (2011-2021) to Chimp Technology Inc., a private company that provides technology services and human resources to CHIMP. More than $50 million was paid over the past five years, including $13.6 million in 2021.
Chimp Technology Inc. is a private company run by the charity's CEO, John Bromley, and his father, Blake Bromley. To be clear, there’s nothing wrong with a charity paying a family-run company as long as the payment to a related party is disclosed and the services are provided at fair market value.
But there is a troubling question that needs to be answered about CHIMP's payments to Chimp Technology Inc.
CHIMP says at its website that its service is "free." "Charitable Impact doesn't charge sign-up or transaction fees for Impact Accounts," CHIMP says. On donor-advised funds, CHIMP charges 0.5 percent on the first $1 million and 0.25 percent after that. Even if CHIMP charged 0.5 percent on the entire $1 billion that it has received, that's only $5 million. So where did CHIMP, the registered charity, get the $54 million that it has paid to Chimp Technology Inc.?
Board Resignations
Here's another question: Why did CHIMP's entire board resign in 2020? And why doesn't CHIMP post its audited financial statements at its website?
These are fair questions.
