Our Road to Independence

Sustainability is a goal and a process, a marriage of dream and discipline.  Historica Canada began in 1989 as a key program of The Andrea and Charles Bronfman Philanthropies (ACBP) and evolved into an independent nonprofit a decade later in a deliberate, purposeful manner.

As sustainability of incubated programs is a priority for ACBP, Historica Canada’s experience offers lessons to other organizations aiming for independence.

Sustaining a national initiative – in this case one that celebrates and promotes Canadian history, identity and pride – requires broad-based governance and financial support as key elements.  ACBP is not equipped or positioned to play these roles in perpetuity.

Established as an independent nonprofit in 2000, Historica Canada is on solid financial and programmatic footing, but it would be misleading to state that there have not been serious bumps along the way to independence.

The main challenge is to instill confidence in the community that we serve.  Key elements of this – solid governance, effective leadership, quality programming, management of money and resources, and brand recognition and enhancement – are daily challenges of any organization.  For us, they were made more acute when our founder and key funder moved on and sustainability became the goal.

Historica Canada began as a partnership between The CRB Foundation and Lynton “Red” Wilson, a nationally respected business leader and philanthropist in Canada. It was an initiative that mattered to Canadians and from the outset it benefitted from the positive reputation and seriousness of purpose attached to its founders. As a result, it attracted attention, government funders and program partners.

The initial governance structure guaranteed The CRB Foundation – which later came under the ACBP umbrella – a third of the seats on the Historica Canada board to allow influence, but not control.  This was important to the founders and other directors who were respectful of the organization and it proved prescient as the vision of independence evolved.

As the foundation gained confidence in Historica Canada, distinctions between family and other appointments were discontinued so that all directors were on the same footing. We also established board positions for the two founders.

Tom Axworthy, the foundation executive leading the project from its earliest days, ultimately became founding executive director of Historica Canada.  This continuity reflected the belief by founders and board members that his experience and investment in the organization and mission was an asset to its evolution. Through his creativity, knowledge and wide network, he brought a broad and generous vision to the organization and his leadership instilled confidence in supporters.

When he left after nearly 20 years at the helm, the organization struggled through several executive changes.  During some years of uncertainty, Historica Canada witnessed internal rivalries among programs, lack of program development and a decline in fundraising.

Historica Canada was founded with significant financial commitments from both founders.  The largest, in 2000, was a pledge of up to $25 million from the foundation with the condition that Historica Canada match it dollar for dollar.  The full amount was matched within five years, but nearly all the funds were used to support annual operations.  Little was set aside for future financial security.

We were aware of the ACBP spend down, and by mutual agreement, ACBP was to pay its pledge over a minimum of several years with its last payment in 2016.  We set up payments on a sliding scale between operations and endowment to enable Historica Canada to cover its operational expenses, focus on programming, enhance its brand to attract partnerships to match the pledge, and work toward financial sustainability.

After about five years, we reduced the amount earmarked to operations and increased the amount reserved for an endowment.  Later, the full amount of annual payments went to the endowment to support long term development and programming.

But without the annual cushion of ACBP’s operating support, financial issues soon became very clear.  In our enthusiasm for our mission, we were living beyond our means.  

I was asked to take on the job of executive director, having served on the board. With the support of the board and colleagues at ACBP, I ended draws against the endowment, terminated some financially draining programs, shut branch offices and let go some longtime staff.   As ACBP President Jeff Solomon says, “When you are in a hole, the first thing to do is to stop digging!”

This painful period prompted us to clearly state our strengths and weaknesses to pave the way for the next phase.   In 2010 we merged with the Dominion Institute. As the two organizations had similar missions, our founders and board believed that building one stronger and synergetic entity was both financially and programmatically prudent.

This was challenging in its own right, as the organizations had a history of competitive collegiality.  To encourage the melding of cultures, the new board was comprised of directors from both organizations, with a chair who was seen as independent of both.

One of our objectives was to separate the operating charity from the endowment. At the time of the merger, Historica transferred its endowment to a new charitable entity, The Heritage Project (THP).  It provides annual operating support to Historica Canada, as well as funds for specific new initiatives considered priorities.

The split creates a healthy financial discipline and the opportunity to bring an independent – yet supportive – perspective to Historica Canada’s finances.  This was a desirable outcome identified by all parties. Like Historica in its early years, the THP board of five is composed of three directors recommended by Historica Canada and two members recommended by the CRB Foundation.

Institutional change starts with great people with a belief in the organization’s purpose.  It also takes time, energy, and courage.  We had all of this, but also too much money too quickly and too easily.  We put little aside for tomorrow. 

We were late to recognize leadership fatigue – more noticeable at the executive level due to the impact on program development and renewal, but also on the board. 

While we have benefited along the way from knowledgeable and dedicated directors and staff, as an organization, we have not always been clear about our priorities or the financial constraints within which we operated.  High profile but financially draining programs such as our Heritage Fairs initiative continued until we determined that there were other ways to achieve the same objectives in more cost-efficient manner.

However popular the brand and the programs, and no matter how powerful the board, nonprofits face the daily challenge of staying current, presenting their mission in ways that find favor with funders, and refreshing their programs to meet the interests and needs of their audience.

Indeed, sustainability is an objective for every day. Historica Canada’s president is constantly rethinking programs, strengthening financial controls, fortifying the organization’s profile, and reviewing fundraising.

On July 1 – Canada Day, celebrating the establishment of the country in 1867 – the prime minister and other government officials will be present when Historica debuts two new segments of its acclaimed Heritage Minutes series.   This will be a major moment for us, representing our partnership with government and other funders, our high public visibility, and our ongoing commitment to Canadian citizenship and education.

On a broader level, it reflects a belief by our founders, board and stakeholders that Historica has made and continues to make the changes and adjustments needed as an independent organization able to make the impact for which it was originally designed.

This is the ninth post in the “Making Change by Spending Down” series, produced in partnership by The Andrea and Charles Bronfman Philanthropies and GrantCraft. Please contribute your comments on each post and discuss the series on twitter using #spenddown. See related content below for more posts in this series.