McConnell commits $30M in capital transfer to Indigenous-led foundations. What's a capital transfer? And will others follow?

Early in the morning, one day in mid June, Bruce W.J. Miller took a video call from his home in Winnipeg, on Treaty 1 territory, that he could have scarcely imagined two decades prior. 

From the Northwest Territories, two leaders of the McConnell Foundation, one of Canada’s oldest and largest private foundations, told Miller that their board, at a recent meeting, had committed to a “capital transfer” of $30 million to Indigenous-led foundations — and that his organization, the Indigenous Peoples Resilience Fund would receive a third of that sum.

“When I started in this sector…it was just such a hard, uphill battle,” says Miller, partnerships lead with IPRF. “And [now] to be in a position of opportunity to see this come to fruition — it’s really a monumental moment in philanthropic history.” 

In Canada, multi-million dollar gifts are not uncommon, but few go to Indigenous organizations. 

Indigenous people represent 4.9 per cent of the Canadian population, according to Statistics Canada, but a report found that in 2019, foundations and charities gave just eight gifts of over $1 million to Indigenous organizations. (In that year, Indigenous charities and non-qualified donees received just $1 for every $138 received by non-Indigenous organizations.) 

Beyond the dearth of big donations flowing to Indigenous organizations, fewer gifts still come in the form of a capital transfer — a type of coveted gift that seeds the recipient’s own endowment. 

For decades, many foundations and charities have used endowments as a tool to reduce annual fundraising pressure and ensure long-term sustainability. But few equity-seeking communities have had the assets necessary to create endowments of their own. 

Capital transfers seek to interrupt this inequity — by shifting assets from a well-endowed organization to an equity-seeking organization.

“It’s not just about the transfer of capital. It’s about the transfer of power,” Miller says.

“This type of unrestricted funding helps us help ourselves.” 

Launched in the early pandemic, the Indigenous Peoples Resilience Fund is an Indigenous-led charity that supports Indigenous communities across the country. 

McConnell’s gift is the largest the organization has received in their campaign to raise a $250 million endowment — and the largest known capital transfer by a foundation in Canada within the past five years to an equity-seeking organization. 

In 2021, the Foundation for Black Communities issued an appeal for Canadian foundations to transfer 3.5 per cent of their assets to the nascent Black-focused foundation as part of their quest to raise a $300 million endowment. 

But while about seven foundations have given some cash to support the organization, more than two years later, just the Laidlaw Foundation and the Inspirit Foundation have done capital transfers to FFBC, according to the foundation’s CEO Gladys Ahovi. 

In February, the federal government announced FFBC was chosen to administer the government’s $200 million Black-led Philanthropic Endowment Fund, but Ahovi says they’re still looking for foundations to transfer a total of $100 million. “This is a shared responsibility,” she says. “There is tremendous wealth in this [sector] that Black communities have contributed to and absolutely have the right to benefit from.” 

Earlier this year, the Enchanté Network, Canada’s largest network of 2SLGBTQI+ organizations, also announced its intention to raise a $200 million endowment to support queer and trans communities. But despite a handful of foundations being willing to take calls with Enchanté, the charity’s executive director Tyler Boyce says the discussions have been disappointing. 

“The answer has been: ‘That’s a great idea and we wish you the best of luck with it,’” says Boyce.

What then led the McConnell Foundation’s board to make this sizable commitment? Why have capital transfers been so rare? And will other foundations follow in McConnell’s footsteps? 

$30M commitment part of a “natural evolution” in foundation’s work

Jane Rabinowicz, McConnell’s acting CEO, says a key factor driving the foundation’s decision to transfer $30 million to Indigenous-led foundations is that her board is “genuinely committed” to the issue of reconciliation — a commitment that has grown over two decades. 

Beginning in 2003, the board approved the foundation’s first-ever Indigenous-focused grant — $150,000 to First Nations Child and Family Caring Society, the organization founded by Cindy Blackstock in 1998. 

In the 2010s, they built on that early work, becoming one of the first foundations to sign the Circle on Philanthropy’s declaration of action where they promised to learn and take action toward reconciliation with Indigenous peoples. 

Two years later, the foundation went further still, making reconciliation one of their three priority areas, alongside climate and communities. 

Between these milestones and issuing millions in grants to support Indigenous-led organizations, the foundation’s board engaged in education on reconciliation, Rabinowicz says, including site-visits and presentations from Indigenous partners. 

She says each of these learning opportunities was a seed that ultimately led board members, all of whom are part of the McConnell family, to feel as though a capital transfer was a “natural evolution” of their work in this area.  

Rabinowicz says the board pledged $30 million, believing it was a “significant” symbolic and financial commitment, representing about 4.5 per cent of the foundation’s assets. While McConnell has not yet announced the other Indigenous foundations that will receive capital transfers, Rabinowicz says the first tranche of each transfer will flow by 2025. 

For the Laidlaw Foundation, another foundation that has engaged in capital transfers, board buy-in was also crucial, says foundation executive director Jehad Aliweiwi. 

In 2021, as the pandemic continued, Laidlaw’s board met to consider what extra they should do to help Black and Indigenous communities. Capital transfers made sense because the foundation’s board is from the communities it serves, Aliweiwi says. 

Unlike the boards of many private foundations, which are composed solely of the benefactor’s family and close allies, Laidlaw’s board also includes a variety of diverse community sector professionals. (It is also one of the few foundations chaired by an Indigenous woman, fundraiser Janine Manning.)   

Following their deliberations, the foundation announced a $2.5 million capital transfer to the Foundation for Black Communities in March 2021 and a transfer of the same size to the Indigenous Peoples Resilience Fund three months later. 

In addition to board buy-in, Rabinowicz says fortuitous timing also contributed to the McConnell Foundation’s capital transfer decision.

During the pandemic, foundation staff began to learn about capital transfers, prompted by discussions among colleagues in the sector about the new approach. In 2022, the Indigenous Peoples Resilience Fund submitted an unsolicited proposal to the foundation for just such a commitment. 

Rabinowicz says the timing of the proposal was good: McConnell’s internal readiness at a staff and board level was aligned with the needs and readiness of IPRF and the broader Indigenous sector for capital transfers.

Aliweiwi says the same was true at the Laidlaw Foundation, where “compelling” proposals from FFBC and IPRF were presented to the board when they were looking for ways to help. 

Aliweiwi says the timing was also good from an investment standpoint. Like many foundations, Laidlaw’s endowment performed well during the early stage of the pandemic. “One of our investment people said this is the right thing to do, especially now,” Aliweiwi says. 

The Laidlaw CEO adds he was hopeful that other foundations would see their capital transfer announcement and make similar commitments of their own, but few have. Why? 

Perpetuity orientation, novelty, and fear of a “flood” of requests may be holding foundations back

Marcel Lauzière, CEO of the Lawson Foundation says his foundation hasn’t yet made a capital transfer, despite their commitment to other trust-based philanthropy approaches, because their dollars are limited given their foundation’s current orientation toward operating in perpetuity.  

In 2021, Lawson considered an appeal from the Foundation for Black Communities, but ultimately did not move forward. 

“It was not because we’re not interested in the foundation,” Lauzière says. In fact, Lawson co-sponsored a 2020 research report outlining the under-funding of Black communities which laid the groundwork for FFBC’s capital transfer call, he adds.   

But with limited dollars, his foundation has to make tough choices, he says. 

In 2021, when they considered FFBC’s appeal, Lawson had recently prioritized support for diabetes prevention in Indigenous communities, having signed onto the Circle’s declaration of action some years earlier. 

For the Houssian Foundation, another foundation committed to trust-based philanthropy that has not engaged in any capital transfers, the rationale is not so much a lack of dollars, but a  lack of knowledge about capital transfers and the relative youth of the foundation. 

Mira Oreck, the foundation’s executive director, says her organization has only just initiated their first grantmaking strategy within the last two years. While her team was aware of FFBC’s capital transfer appeal when they were developing that strategy, the use of the approach was still nascent, she says. 

“I think the reason things like this don’t happen is much more about education and knowledge than it is necessarily barriers to wanting to make [it] happen,” she says.

“Many things are on the table for the Houssian Foundation in terms of how we use 100 per cent of our dollars towards impact.” 

Sadia Zaman, CEO of the Inspirit Foundation, believes there may be a third reason that some foundations haven’t yet done capital transfers: Fear of a deluge of subsequent similar requests. 

In 2021, Inspirit announced capital transfers of $1 million apiece for both the FFBC and IPRF. When her board was discussing the first transfer, someone did raise the concern that the announcement could lead to similar requests from other organizations, she says. 

But it hasn’t happened. 

It takes years of work for a group of people to get to the stage where they are in the position to ask a foundation for a capital transfer — years of pulling the right team together, community building and developing a fundraising plan, Zaman says. 

“I think often people can get mired in fear that 30 other people will come and there will be a lineup,” she says. 

Despite these barriers, all three foundation executives say they believe McConnell’s commitment is likely to spur other capital transfers across the sector. 

Capital transfers: A middle road between perpetuity and spend down?

Lawson’s Lauzière says he believes the McConnell’s commitment offers a useful example of a foundation rejecting the “binary” between spending down and existing in perpetuity. 

“[Many] foundations are not necessarily spending down in the very near future,” he says. “But they could be thinking about reducing their assets and transferring their assets earlier rather than later…I think that would be a really interesting conversation.” 

He adds he believes McConnell’s decision is likely to encourage others. In the nine years he’s worked in the foundation sector, philanthropic change has come from a few foundations leading the way and others following, he says. 

Laidlaw’s Jehad Aliweiwi, too, is hopeful the Montreal-based foundation’s bold announcement will lead to more just like it, believing that foundations have a moral imperative to consider the capital transfer approach. 

“Every foundation in Canada has its roots in accumulating wealth in ways that may have been disadvantageous to certain communities,” including benefitting from Indigenous lands and Black labour, he says. “There are very strong historical reasons as to why every foundation within that asset should be thinking about this as a way to address the past.” 

Enchanté Network’s Tyler Boyce says he is particularly hopeful that foundations will consider making transfers to support multiple equity-seeking populations. 

“I really want to make sure we’re not having a crabs in the bucket mentality where it’s one [community] or another,” he says. “Really what we’re asking for is a shift in the overall mindset when it comes to philanthropic support in this country.”

McConnell gift will have ‘ripple effect’: Miller

From Treaty 1 territory, Bruce Miller is bullish about the future. 

The Indigenous Peoples Resilience Fund has a goal of raising $50 million within the next two years and $250 million within the next five. With McConnell’s support, they’re on track, he says. 

“Like a pebble in a pond, it will have a ripple effect and that’s what we need,” Miller says. “We like to say we move at the speed of trust. But that trust is big and it’s moving fast.” 

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