Approving Donor Recognition

Charities like to name things after donors.  Simply, big gifts mean more prominent “naming opportunities”.  Ontario’s Minister of Health recently issued a directive to hospitals stipulating that they can’t rename existing hospitals in recognition of donations.  Is “naming” a risk for major donors?  What are the estate planning implications?

Ontario’s New Rules

First, let’s look at Minister Eric Hoskin’s directive.   It says the new hospital name “must not include the corporate or business name of a corporate donor, or the family name of an individual or family donor, (or) the family name of an individual.”  The purpose is to “ensure the names used by hospitals reflect their role as publicly supported organizations”.  The rules focus on hospitals, not the parts of hospitals.  Wings, buildings, centres, treatment facilities or health services programs are exempt.

The apparent trigger for this pronouncement was a $50 million donation by Myron and Berna Garron in 2015 that named the Toronto East General Hospital as the “Michael Garron Hospital”.  The donors’ son died at age 13 in 1975 of cancer, fearing no one would remember him.  This lifetime donation was carefully planned and negotiated.  The Hospital published a letter outlining the public consultation and approval process that included informing the Provincial Government.  In the end, the Hospital renamed its corporation the Toronto East General Network and its primary site the “Michael Garron Hospital”.  It is almost, but not quite, compliant with the new rules.  The Hospital’s website shows that the brand change is still a work in progress.

Naming Policies

Second, remember that “naming” policies already exist within many institutions such as universities and hospitals.  Most major naming opportunities have formal review that examine the reputation of donors and recognition equity.   At least one province, British Columbia, has a far reaching Naming Privileges Policy that covers schools, crown corporations, universities & colleges and health authorities.  While it rare for naming approval processes to reject donors, it is possible.  The very prospect of a review process – that may be politicized – is unwelcome by donors.

Planning Implications

Finally, when naming is important what are the implications for estate donors?   Major donations may be completed in estate plans, but it is prudent to obtain approval for high profile recognition in advance.  This isn’t always possible, and the charity may (understandably) ask for an enforceable pledge.   The donor could make an estate gift to an intermediary foundation that would be tasked with negotiating gift and recognition.  By delegating the details the donor recovers some leverage, albeit on a post-mortem basis.