How Big Money Drives Social ChangeBy Pamela Chaloult on August 18, 2010 - 5:42pm
How big money drives social change
Green philanthropists are striving to turn Metro Vancouver into a sustainable nirvana
August 8, 2010Joel Solomon and his friend Carol Newell are multimillionaire philanthropists who have given away or invested their money in sustainable organizations, in an effort to make the world a better place.
Nothing new there, you say? Wealthy people with a generous bent have been donating to charities forever. To build schools in Afghanistan. To feed children or fight AIDS in Africa. To construct new houses in Haiti. To help less fortunate people closer to home, through agencies like the Salvation Army.
The difference with Solomon and Newell, both born and raised in the United States, was that they focused their investments in one region to make the most sweeping change possible on a social, business, environmental, and political scale.
The area they chose was Metro Vancouver, where the pair has been responsible for millions and millions of dollars in various types of business investments, charitable contributions and, more recently, enthusiastic backing for the city's new left-leaning mayor, Gregor Robertson.
Critics -- many of them online bloggers, some with connections to the city's centre-right Non-Partisan Association party -- chafe at the influence, but supporters argue that over the last 15 years this duo has played a role in making Vancouver a leader in green companies, sustainable initiatives, and socialist politics.
In a speech in San Francisco in July 2008, Solomon told his audience that his and Newell's strategy "was to take a long-term look at how to deploy financial resources toward systemic social change focused in one region.
"So we make business investments, charitable grants, support collaborations, leadership development and capacity-building with the hopes of influencing public policy and creating models of sustainability solutions long-term," he explained in the speech, which is posted on YouTube.
And that is what the duo appear to be achieving in Metro Vancouver.
Both Solomon and Newell are now longtime residents of British Columbia, and he said in a recent interview that Vancouver was the obvious choice to concentrate their activities and build momentum for their causes.
"There could be no better place to model sustainability, green business, advanced social awareness and social consciousness. This place is prosperous, it's new, it's a meeting of cultures, it is geographically positioned on the innovative coast, it is multicultural, it is educated, it has every potential. There are no freeways in our city," he said.
"There is a natural wave that is going on. Vancouver was already on the forefront of sustainability on its own. And that is part of what drew us to ... the commitments and the work here. I believe we have had the impact, but I believe it is part of a societal trend. We were able to come into it at the right time with resources."
Although Newell brought more money to the table (she inherited more than $60 million US from her family's Rubbermaid empire), Solomon (who inherited approximately $5 million Cdn from his father's shopping-mall company) brought the business experience to the enterprise. Together, they have pumped millions into the local economy through successful, green-focused venture capital firms and charity foundations.
And many of the connections to this pair -- those who have joined them and those who have benefited from their influence -- can be linked to a difficult-to-reach Northern Gulf Island, Cortes. That is where Solomon, Newell and Robertson all own property, and where they all have a connection to Hollyhock, an educational retreat that aims "to inspire, nourish and support people who are making the world better."
Solomon's international reach also attracted significant cash to Robertson's nomination battle and the then-fledgling Vision Vancouver party, some of it from outside B.C. Well-heeled, environment-focused donors raised hundreds of thousands of dollars to help Robertson win the nomination, then win the election, and their influence continues with Solomon's good friend, Robertson's chief of staff Mike Magee.
A handful of new city hall staffers, including Magee, have past links to Hollyhock. One of the highest-profile examples is Sadhu Johnston, city hall's new deputy city manager, who was hired with much fanfare from Chicago, who held his wedding at Hollyhock.
Almost two years into his term, Robertson has introduced more sustainability initiatives in a city that many had already considered environmentally friendly, such as more bike lanes, farmers' markets, backyard chickens, and a Climate Smart program to reduce greenhouse gas use.
All of it could be seen as evidence that the "systemic social change" Solomon referred to in his speech two years ago is well underway.
It was 15 years ago when Russell Precious, the founder of Capers Community Market, introduced Solomon to Robertson, who was then an organic farmer making smoothies at a tiny operation in the Fraser Valley.
Newell had been an early investor in Capers, the Vancouver-based organic grocery store chain, and Solomon -- who had just started working with Newell and was new in town from Tennessee -- had asked Precious if he knew of any organic farmers in need of investments to grow their businesses.
Solomon recalled with a chuckle the day Precious drove him to Langley to meet Robertson, his wife Amy, and his business partner Randal Ius. Most organic farmers at the time, Solomon smiles, were "cynical" about money.
"They probably, more than any other investment has done, put us through due diligence," said Solomon during a recent interview in his renovated offices in the Downtown Eastside.
"I had to go weed carrots at the farm ... and meet the family, and stay for dinner."
The meeting would lead to Renewal Partners making a modest six-figure investment in an early stage Happy Planet, which would eventually grow into a sizable company. It also led to a close friendship between Solomon and Robertson.
Happy Planet was one of the first investments made by the newly formed Renewal Partners, whose moniker was inspired by Newell's name.
With financing from Newell and business savvy from Solomon, they created a $10-million venture capital firm that has invested capital in 75 companies, many of them in B.C., such as Salt Spring Coffee, SPUD (Small Potatoes Urban Delivery) organic food delivery, New Society Publishers, which focuses on books about solutions and social change, and Lunapads, which makes ecofriendly products for women.
Newell remained anonymous for years and Solomon's work was largely behind the scenes, unknown to most except those in the social change world. That all changed a couple of years ago.
After Renewal Partners achieved some success, Solomon says, he started speaking about how businesses should and could be socially responsible. And it was around then that the pair publicly threw their support behind Robertson in a fractious election campaign.
Solomon also became involved in raising $35 million for the pair's spinoff venture capital firm, Renewal2, which continues to support green companies with funding from outside investors. Solomon is chairman of the board of Renewal2, which has so far made a half dozen investments, one in B.C. to Horizon Distributors, a Burnaby-based shipper of natural products.
Newell now has exhausted a self-financed $20-million charitable foundation called Endswell, which made more than 700 grants to environmental initiatives. The recipients, again many of them in B.C., were wide-ranging, including housing (Portland Hotel Society), labour initiatives (Columbia Society), environment (David Suzuki Foundation), animals (Marmot Recovery Foundation), activism (Pivot Legal Society), first nations (Vancouver Native Health Society), education (Linnaea Farm Society, which runs a private school on Cortes Island), and even online journalism (Tyee Fellowship Fund).
The key use of the Endswell money, Solomon believes, was the creation a decade ago of a public foundation, Tides Canada, which collects millions in charitable donations and then uses them to support initiatives involving climate change, wilderness protection, marine conservation, aboriginal issues and poverty.
According to a 2008 charitable return filed with the federal government, Tides had $29 million in assets and $35 million in revenue, and bequeathed $36 million during that year alone. Solomon, who is its vice-chairman, says the foundation asks for advice from its base of 200 donors about where the charitable grants should be issued.
Tides, with offices in Vancouver and Toronto, has issued hundreds of grants to organizations similar to the Endswell recipients, and others such as the B.C. Civil Liberties Association, Mount Pleasant elementary school and the Tlingit Family Learning Centre in northern B.C.
Another major recipient of Endswell grant money is the Hollyhock educational centre on Cortes Island, which purports to encourage personal, professional and social development through more than 100 programs, most of them pro-environment, which focus on subjects such as wellness and wisdom practices, arts and culture, business and leadership development.
In addition to networking and workshops, it offers activities such as karma yoga, meditation, kayaking, learning to cook organic vegetarian fare, and listening to motivational speakers, such as healthy-living advocate Dr. Andrew Weil.
This September, for example, Hollyhockers can attend a four-night, $625 course by New York author Robert Moss about "master[ing] a fun way to bring the power and insight of your dreams to waking life, and draw on their wisdom."
Funding raised eyebrows
Solomon's wife, Dana Bass Solomon, is the CEO of Hollyhock, which is now a non-profit operating under a charity called Nextwave. B.C. environmental activist Tzeporah Berman is a Nextwave director.
Donors receive tax receipts from Hollyhock, according to the retreat's website, for money contributed to a variety of initiatives ranging from scholarship funds to installing eco-friendly toilets. The 2008 charitable information return filed with the federal government says Nextwave received donations valuing more than $1.6 million that year.
If it all sounds a little too granola, consider the perspective of Tamara Vrooman, a former B.C. deputy finance minister, who was a keynote speaker at the Social Venture Institute last year and hopes to attend Hollyhock again because, she said, it was so unique compared to other conferences.
"This is really the first time where I saw people committed to creating change in our community that had the wherewithal to do that," said Vrooman, now the CEO of the Vancity credit union.
Solomon is co-leading Hollyhock's 15th annual Social Venture Institute (SVI), a four-day conference in September for entrepreneurs running socially conscious enterprises. Robertson and his Happy Planet team attended the first SVI in 1996.
It was Cortes Island where Robertson moved his family, after he started Happy Planet. That decision required Robertson to commute regularly to his growing business in Vancouver, so he spent his nights in the city in Solomon's Downtown Eastside apartment.
"I was his crash pad," Solomon recalled. "When you actually live together that way, you have lots of time to talk about everything."
Robertson's three main mentors in his decision to run for mayor were Solomon; Bob Penner, the owner of Strategic Communications (Stratcom), which received investment money from Renewal Partners; and Robertson's now-chief of staff, Magee, whose company, Convergence Communications, does a host of work with Renewal Partners, Endswell and Tides Canada.
The extensive involvement of these three men in the election race was documented when, in 2006-07, Vision raised $350,000 to pay off its 2005 campaign debt and to prepare the party for the 2008 election. Stratcom donated $48,000, Convergence gave $28,000, and $10,000 came from Renewal Partners.
The idea, said Magee, was to grow Vision under Robertson's leadership to a winning party in 2008.
A longtime mover in political circles, Solomon was quick to offer financial backing to Robertson to run for mayor because, he argued, if Robertson wanted to join the blood sport of politics, then he should be supported.
"All of us worked in the campaign, my daughter came home from school and worked on the election," Solomon said.
It raised eyebrows in 2008 when the public learned that a significant chunk of the $180,000 Robertson raised to secure the Vision mayoralty bid came from people in the U.S., who knew Robertson through the organic food business but whose strongest ties were to Solomon.
The list of U.S. donors included Weil, the healthy-living doctor, who Solomon had contacted as a young man after being diagnosed with kidney disease; Gary Hirshberg, whose multimillion-dollar organic yogurt company was invested in by Solomon; and Mark Deutschmann, owner of Village Real Estate in Tennessee, a business partner of Solomon.
An analysis by The Vancouver Sun identified more than $330,000 in donations to Robertson, other Vision candidates or the party from 2006 through the 2008 campaign, from Canadians and Americans associated with Solomon or his businesses.
Solomon said he is proud of the help he provided, but argued that the amount of money he brought in was relatively small. Vision Vancouver, for example, raised $1.5 million in the campaign and Solomon estimated he brought in about $200,000 of it. That represents 13 per cent of the money raised for the campaign, and is consistent with the analysis done by The Sun.
Both Robertson and Solomon, who became a Canadian citizen two years ago, insist they would support a ban on foreign campaign donations. However, in 2008, Solomon said, Vision worked within the existing rules to build a war chest to take on the ruling Non-Partisan Association.
'No mafia structure'
Magee, Robertson's good friend and right-hand-man at city hall, argued that the green initiatives that the Vision council is now bringing into Vancouver merely reflect public attitudes: Polls show residents like bike lanes and parks, he said.
But city hall watchers on websites such as citycaucus. com, founded by Daniel Fontaine, chief of staff to former NPA Mayor Sam Sullivan, have raised concerns about a half dozen or so new hires at city hall having ties to Hollyhock. Bloggers have dubbed Cambie and 12th Avenue as "Vancouver City Hollyhock" or the "Hollyhock mafia."
Solomon counters that the whole point of Hollyhock is to provide a space for like-minded people to network around environmental and social issues, and possibly make business connections.
"There's no mafia structure. No meetings. No secret codes," he said.
"Greening is made out by some to be some kind of a fringe thing. They are behind the times because everybody has realized that the planet is reaching its limits on resources and that the side effects of how we've done manufacturing, and transportation and other things, are now catching up with us and need to be addressed."
So, are green companies still a fringe thing?
Bernie Magnan, chief economist with the B.C. Chamber of Commerce, said a growing number of companies are trying to be more sustainable, but cautioned that the transformation takes time and it is buyer beware.
"There are shades of green. We want to get more green, there's no question we have to move in that direction. ... The companies that don't do that will be the dinosaurs of today," Magnan said. "But anything we will do in this realm will take time. It will not happen overnight."
Jon Garson, vice-president of policy development for the B.C. Chamber of Commerce, said credit has to be given to the provincial government for introducing a carbon tax on fossil fuels that is encouraging the development of green technology companies, such as Ballard and Westport Innovations.
While the products of sustainable companies are often more expensive than their non-green counterparts, Garson said there is proof consumers are willing to absorb extra cost for the greater good.
But, for now, it remains a small market. B.C., Garson noted, is still a province that relies heavily on mining, forestry and natural gas, though other cleaner industries are starting to emerge, such as biotechnology and film.
At a recent meeting of the Board of Change, a new Vancouver organization with 300 members who are business people committed to social and environmental issues as much as profit, more than 80 people squeezed into the trendy Sciue restaurant in Vancouver to hear Solomon speak.
Solomon's prediction for the future, he told the packed crowd, was that businesses were moving toward having a lighter footprint.
"There is a massive sea change in the global economy underway," he said, teetering on a funky footstool. "We are still at the beginning, this is still the early stages, and all of us have an incredible role to play."
Read more: http://www.vancouversun.com/life/money+drives+social+change/3371272/story.html#ixzz0xU1P0mOI