Kate Bahen

KATE BEHAIN From Chapter 6: Piling On

From Chapter 6: Piling On

Of course, if you want to push a sensationalist narrative to fill column inches and generate clicks, one of the first tasks is to find an expert to say it for you.

The more outrageous and outspoken, the better.

The media’s favourite commentators throughout the CSSG controversy—apart from Charlie Angus and Pierre Poilievre—were charity analyst Kate Bahen and lawyer Mark Blumberg.

Both eagerly accepted their roles as the chief critics of the WE organization, appearing in hundreds of news stories over the summer of 2020. And it appears to me that both adeptly leveraged their increased media presence for professional and financial success. Bahen and Blumberg advanced many narratives that I contend were misleading, and their commentary was seized on by politicians and journalists to become part of the larger story. A number of these misleading narratives are now assumed to be fact.

Bahen is the managing director of Charity Intelligence (Ci), a self-appointed watchdog agency that she founded in 2006. Ci analyzes charities on factors like financial transparency and social impact, then posts the results on its website. Bahen likens her approach to that of a financial analyst who researches stocks to find the best investment opportunities for clients. Ci is a small operation—based on publicly available information, it has just five permanent staff, including Bahen, and does not employ any full-time accountants or auditors. Research director Greg Thomson admitted to the FINA committee that he and Bahen are “analysts, not auditors.” Ci has a three-member board of directors that includes Bahen and Thomson.

Kate Bahen

When Ci launched its online search engine in 2011, it was the subject of a flattering profile in the Toronto Star, but it was met with considerable skepticism from other quarters.  For an article posted to its website, Charity Village, a company that recruits people to work in the charitable sector, spoke to many who criticized Ci’s “naïve analysis of data and lack of understanding of CRA guidelines and how nonprofits in Canada actually work.” Mark Blumberg, for example, said that “to telescope the issue of transparency into disclosure of an audited financial statement on the website of a charity is a simplification of the complexity of the issues.” Malcolm Burrows, the head of philanthropic advisory services for Scotia Wealth Management, concurred. “Ci seems to want to put all [charities] into a single space, and I think that does a real disservice,” he said. “They need to look at that before they make these huge generalizations in public . . . You can’t have a ‘one-size-fits-all’ standard of accountability in the sector.” And Imagine Canada’s then CEO, Marcel Lauzière, offered a similar observation. “They’ve taken a [data-gathering] model from the investment world,” he noted, “where you look at inputs and then tell your investors where to put their dollars . . . It’s not that simple when you’re looking at charities and at their outcomes and impacts.”

All this matters because when Bahen later began commenting publicly on WE Charity’s involvement with the CSSG and presenting herself as an expert on the charitable industry, some of her assertions were based on exactly this kind of superficial and inaccurate analysis of the organization’s financial statements and structure. For instance, she told journalist Jesse Brown, in an interview for his Canadaland website, that the charity was “in breach of its bank covenants,” a situation she characterized as “a massive, massive red flag.” She compared it to a person who is close to maxed out on her credit cards but can’t stop spending. In fact, though, this was a simple technicality arising from WE Charity’s decision to shift its fiscal year from the standard calendar year to one that aligns with the academic year. That made sense because most of the expenditures for and work around the charity’s domestic programs followed the educational calendar. The switch created a minor complication because WE Charity’s real estate mortgage agreements required the organization to earn a minimum level of revenue each year. In the year of the change, 2018, the charity did not demonstrate the required level of revenue because its financial report covered just eight months instead of twelve. The shift also required the organization to defer some revenue to align with the year in which related program spending would occur. So the same issue came up in 2019. WE Charity’s lenders understood this and waived compliance with the covenants, and its auditors noted the waiver in footnotes to the organization’s financial statements without using the word “breach.”

It’s very simple and uncontroversial stuff, but you would never know it if you listened to Bahen. Although she presented herself as an unbiased observer, her public comments were often one-sided and carried charged language. In the more than one hundred tweets she made about the charity between June and October 2020, she often used the hashtag #WEHaveAProblem, and in one, she asked sarcastically, “Does anyone think it is a good idea for WE Charity to implement this $900m government grant?” Months later, as Marc and Craig were preparing to testify before the ETHI committee, she tweeted the words “Burger time!” with an image of a hamburger and a side of cauliflower alongside the brothers on a television screen....

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