Reporting on how charitable foundations spend the money they’ve raised can be valuable, but it also can be extremely challenging. It isn’t always easy to gain a full picture of what’s going on from the outside, even with tax documentation, and getting any details wrong can lead to major pushback. The latest case of that comes from a pair of reports this week from freelance columnist Rick Gibbons in The Ottawa Sun on the Ottawa Senators Foundation and Senators’ owner Eugene Melynk’s The Organ Project. Those have now led to a giant “Correction and Apology” that ran in the paper Friday. Here’s the print version of that correction (via Sportsnet’s Wayne Scanlan):
Ottawa Sun apologizes to Melnyk. pic.twitter.com/vN0XTrCBzv
— Wayne Scanlan (@HockeyScanner) June 12, 2020
After the publication of two columns by Rick Gibbons, one on June 5 entitled “Split between Senators and Sens foundation boils down to money,” and one on June 8 with the headline “Melnyk’s tussle with Sens foundation could be a messy one,” the Ottawa Sun became aware of errors that caused us to review both columns. Based on that review, we wanted to address the following issues:
The June 5 column incorrectly inflated the amount the Ottawa Senators charged the Senators Foundation for rent. In fact, the Senators charged the foundation $78,750 in rent for 2019. The Senators said that they are required by law to charge rent because of the arm’s length structure of the foundation, and the rent charged was below market. The team also said they are required to charge for other expenses, including human resources, information technology and other administrative costs.
The June 8 column referred to information in a Canada Revenue Agency filing that indicated The Organ Project, a private foundation started by Eugene Melnyk, donated $5,000 to the Kidney Foundation in 2018. However, The Organ Project has told the Sun that its core mandate was not to distribute money to other charities but to spend money it raised on activities aimed at promoting organ awareness and registration. The charity also said that it engaged in other charitable work, including raising money to be spent on promoting public awareness of organ donation, hosting several galas, creating commercials and other activities that were not reflected in the Ottawa Sun’s original story.
The Sun spoke with several sources that spoke on condition of anonymity, who claimed Eugene Melnyk has advocated for the Sens Foundation to support organ donation awareness and that they believed he perceived the foundation to be an extension of his franchise. This information should have been attributed to those sources. Eugene Melnyk and the Senators both say they respected the independence of the foundation at all times and strenuously deny that they directed the organization to divert funds to other initiatives.
Finally, the Sun would like to clarify that it did not intend to suggest that Eugene Melnyk or the Ottawa Senators had exercised improper influence over the Ottawa Senators Foundation or that they had attempted to misdirect, misappropriate or misapply charitable funds of the foundation or The Organ Project. In addition, the Sun did not contact Eugene Melnyk or the Senators for comment prior to the publication of both columns.
We sincerely apologize and regret any misunderstanding caused by the errors contained in the two columns.
And here’s a statement Melynk put out through Senators.com:
Eugene Melnyk, chairman of Capital Sports and Entertainment and owner of the Ottawa Senators National Hockey League club, acknowledges the apology issued by the Ottawa Sun regarding errors and mistakes in its publication and its regret for the misunderstandings they caused.
The Ottawa Sun and its columnist Rick Gibbons published two columns on June 5, and June 8, containing numerous factual errors and inaccuracies that have caused immeasurable damage to Melnyk, the Ottawa Senators hockey club and The Organ Project.
Prior to the publication of both articles, the Ottawa Sun and its freelance columnist did not contact Melnyk, the Senators or representatives at The Organ Project to seek comment or verify information from “anonymous” sources upon which Gibbons based his commentary. Nor did he avail himself of information on the public record to ensure accuracy. These failures of the most basic journalistic principles of fairness and accuracy contributed to faulty reporting, which led to a barrage of negative commentary against Melnyk in the media, on social media and digital platforms.
Despite considerable pressure to publicly respond to the erroneous statements and inflammatory allegations levelled against him, Melnyk sought to correct the record through proper editorial channels at the Sun. Although he notified the tabloid newspaper of his intention to pursue a libel and defamation lawsuit, Melnyk provided the Sun an opportunity to respond to his concerns.
Today, the Sun published a lengthy correction and apology to Eugene Melnyk and the Senators.
“The unequivocal public apology by the Sun for the inaccuracies and mistakes it published will not undo the damage to my personal and professional reputation, my charitable work, the hockey club, and the stress on my family,” Melnyk said. “However, the apology is a necessary step to correct the falsehoods and to set the record straight.”
That statement goes on to address several of Gibbons’ assertions in more detail, and is worth reading in full.
There are several things to consider here. First, the rent comment appears to be the one thing here that’s indisputably factually wrong. Gibbons’ initial line there in his June 5 piece was “Another sore point has been the high rent Melnyk charges the foundation. It’s in the hundreds of thousands of dollars annually, I’m told. Charging rent is not believed to be a common practice by other sports franchises with charitable foundations.”
Whether or not that’s a common practice and/or “required by law” as the team claims is certainly worth more investigation. It would have been useful to see specific cases of other team-affiliated foundations that are or are not charged rent by their affiliated teams. Even that wouldn’t necessarily be 100 percent applicable to the Senators’ case, as many foundations are structured quite differently from each other, and the Senators’ arms-length situation appears particularly unusual. That itself could have used more reporting, though, and discussion of if the arms-length approach actually benefits the foundation.. But getting the number of the rent wrong (from $78,750 to “in the hundreds of thousands of dollars”) is a significant factual error, and one that likely gave Melnyk and his legal team ground to push for a correction.
The other big problem here appears to be with the framing of the information about The Organ Project and its $5,000 donation. Gibbons’ June 8 piece uses that as its central thread, starting with “What would you think if a charity raised nearly a million dollars but spent less than half a cent of every dollar raised on the causes it was supposed to support? Hold that thought” and then going to the following:
So what happened to all that money? Again, according to CRA filings, The Organ Project invested barely $5,000 of the nearly $1 million it raised on organ donor awareness. For those without a calculator, that’s 0.49 per cent, or less than half a cent for every dollar raised. And yet the Sens Foundation is being attacked for investing about 50 cents on every dollar it raises on programs. The hypocrisy is stunning.
So, where did all The Organ Project money go if not to worthy causes? According to CRA, a whopping $779,464 went to cover fundraising costs. Another $238,118 went to management and administration. I’m told these are the kind of results almost certain to draw the attention of the taxman.
And, from the correction:
The Organ Project has told the Sun that its core mandate was not to distribute money to other charities but to spend money it raised on activities aimed at promoting organ awareness and registration. The charity also said that it engaged in other charitable work, including raising money to be spent on promoting public awareness of organ donation, hosting several galas, creating commercials and other activities that were not reflected in the Ottawa Sun’s original story.
And from Melynk’s statement:
In his June 8 column, Gibbons mistakenly reported that a Canada Revenue Agency filing showed that The Organ Project, a private foundation started by Melnyk, invested only $5,000 of the nearly $1-million it raised on organ donor awareness. That was not true. Mr. Gibbons’ error appears to arise from his mistaken assumption that The Organ Project operated like the Foundation. While the Foundation raises money that it then distributes to various causes, The Organ Project raised funds for it to spend on promoting public awareness of organ donation and encouraging organ donation registration. The Organ Project’s operations and awareness efforts included, for example, hosting galas in 2017 and 2018 that had the twin purposes of raising money while also promoting organ donation awareness, creating and producing commercials to raise awareness, substantial in-game presence at Canadian Tire Centre, The Organ Project’s presence at multiple WE Days, and collaborating with other organizations to develop a program to promote organ donor awareness with employers and encourage them to introduce organ donor registration.
The $5,000 payment identified by Gibbons was a direct donation by The Organ Project to the Kidney Foundation. While this direct contribution was not something The Organ Project normally did, and was not part of its normal operations or mandate, for Gibbons to erroneously report that this was the only charitable work done by the organization is both patently false, immensely unfair, and ignores all the work done by The Organ Project to raise awareness of its cause.
This is interesting, as unlike with the rent, it’s not the numbers Gibbons used that are in dispute, but rather the way they’re used. Gibbons presents the $5,000 (a 2018 donation to The Kidney Foundation) as the only actual charitable work The Organ Project did before it shut down in 2019 (it planned to relaunch this year, but that doesn’t appear to have happened yet), as that was all that was listed under its donations. The Organ Project claims that what it itemized as “fundraising costs” was actually “promoting public awareness of organ donation.” Whether the specific “operations and awareness efforts” the foundation itemizes above are worth the money it spent on them can be debated, but the big issue here is presenting that $5,000 donation as the only thing the foundation did.
And there are questions to be asked about why “the Sun did not contact Eugene Melnyk or the Senators for comment prior to the publication of both columns.” Yes, not every story needs organizational comment, and the organization may not have provided much comment even if asked. And Gibbons did reach out to Senators Foundation executives. But given the arms-length arrangement, the current dispute about future affiliation, and the unfavorable comments about Melnyk in these pieces, these could have used at least a request for comment from Melnyk or the Senators. Not providing even a short window for comment before the publication of pieces like this that would be certain to create a stir feels like a curious choice, especially given the Senators’ various forms of pushback against local media in the past. And it’s one that doesn’t inspire a lot of confidence in how the Sun approached this.
A notable element of this saga even the lengthy correction and apology providing the Senators/Melnyk/The Organ Project side of things, and even the team statement and its further detail, doesn’t really answer all the questions raised by Gibbons’ pieces in the first place. Yes, his Senators Foundation rent number was wrong, and his framing of the finances of The Organ Project is at least disputed (but wasn’t portrayed as such in the initial piece). And those missteps, combined with the decision to not seek pre-publication comment, appear to have given Melnyk enough ammunition to push for this lengthy correction and apology.
But there are still unanswered questions about what’s going on with the Senators Foundation and its potential split from the team, and about if The Organ Project’s various spending initiatives actually accomplished much. And more reporting on those topics would likely be valuable. (It’s notable that the team statement alone provides more information on what The Organ Project actually spent than anything in the various Sun pieces.) As this saga shows, though, it’s critical to get the reporting right, especially on sensitive topics like this. And any further reporting on this topic is going to have to be airtight to avoid further corrections.