How a Philanthropic Darling Became Political Scandal
Bloomberg Businessweek|January 11, 2021
A Canadian development charity courted celebrities, enlisted legions of schoolchildren to raise funds, and built a new, commerce-fueled model of philanthropy. Then a Covid relief deal got people asking who was benefiting most
Natalie Obiko Pearson, Danielle Bochove, and David Herbling

One morning in early March, 12,000 schoolchildren and their teachers gathered in London for the world’s loudest field trip. Screams filled cavernous SSE Arena, the party a reward for good deeds done. Through a four-hour extravaganza of strobe lights and celebrity cameos, tween-age “change makers” bopped their way through dance and musical performances interspersed with motivational speeches. Singer Leona Lewis and Sophie Grégoire Trudeau, wife of Canadian Prime Minister Justin Trudeau, talked self- empowerment. Formula One legend Lewis Hamilton spoke out, despite his day job, against climate change. There was a shoutout to Virgin Group Ltd., the main corporate sponsor. Obligingly, the kids waved their light sticks and roared.

The spectacle, known as a WE Day, was the brainchild of two Canadian brothers, Craig and Marc Kielburger. In the 25 years since a 12-year-old Craig started a charity devoted to ending child slavery, they’d added a for-profit wing and won over the young, the rich, and the powerful to an uplifting if sometimes controversial brand of do-goodism. Their philanthropic behemoth, WE Charity, had development projects in nine countries and was bringing in some C$66 million ($52 million) a year; its U.S. fundraising alone placed it in the top 5.5% of American public charities by revenue. Mentored by the likes of Oprah Winfrey and Richard Branson, the Kielburgers had galvanized Fortune 500 boardrooms, regulars at the World Economic Forum in Davos, Switzerland, and thousands of schools. And their charity/business empire was unlike anything the philanthropic world had ever seen, featuring a for-profit voluntourism operation that hosted billionaires and politicians, as well as events that drew luminaries on the order of Prince Harry and Archbishop Desmond Tutu.

Within months of the London festival, though, WE Charity would be on its knees, and the Kielburgers would be facing an unfamiliar level of scrutiny. First, the novel coronavirus halted big gatherings and international volunteer trips, two pillars of the brothers’ business model. Then their talent for courting elites backfired, following a June announcement by Trudeau’s government that WE would be the sole administrator of a C$544 million Covid relief program offering grants to support student volunteers. It soon came to light that WE had been awarded the deal uncontested and had previously paid hundreds of thousands of dollars in speaking fees and expenses to Grégoire Trudeau and other Trudeau family members, setting offa controversy that would help unseat Canada’s finance minister and trigger an ethics investigation into the prime minister himself.

Journalists, opposition politicians, and others started taking a closer look at WE. They found that beneath its virtuous messaging lay a complex corporate structure that mixed philanthropy with for-profit activities and featured a dense web of political connections that held the potential for conflict of interest. Former employees also stepped forward with allegations of racism and exploitative behavior. The organization quickly backtracked from the government contract, but the damage was done. By fall the brothers were on TV, tearfully announcing the shutdown of their main philanthropic endeavor in Canada.

Still, the question remains: Whom did the charity benefit most—the developed or the developing world, the organization or those it intended to help? In interviews with Bloomberg Businessweek or in public testimony, ex-employees, former students and a teacher at WE’s charitable schools abroad, and others who’ve had close dealings with the Kielburgers allege a pattern of obfuscation and lackluster oversight, with unusually intricate corporate structures, funds spent on a real estate portfolio that was large for a charity, and pupils in impoverished areas used as props and sometimes subjected to corporal punishment by teachers.

In a 71-page reply to queries sent by Bloomberg Businessweek—accompanied by more than 400 pages of supporting materials, including third-party assessments, testimonials, employee statements, and a separate 22-page set of responses from its lawyers labeled “Exhibit 1”—WE disputed the criticisms and allegations that have been levied against it, including assertions that corporal punishment took place at one of its schools. The response stated that the organization’s complexity was dictated by Canada’s and other nations’ laws and regulations, that its real estate holdings and for-profit businesses were the best way to support WE Charity; that, far from being exploitative, its activities benefited many people around the world; and that some of its critics are disgruntled former employees and students.

How two brothers redefined philanthrocapitalism only to see their work collapse around them is still being untangled. But the fallout has shaken the development world, prompted accusations of white privilege, and exposed the insularity of Canada’s establishment that had for years ignored questions surrounding an organization that traded on liberal, progressive values.

It all started with two 12-year-old boys.

In April of 1995, Craig Kielburger was scanning the newspaper for cartoons as he ate breakfast in his suburban Toronto home when a story from Islamabad caught his eye. It was about Iqbal Masih, a boy who’d been sold to work at a Pakistani carpet factory, then escaped to become a prominent child activist. Masih had recently been murdered. He, like Craig, was 12.

The story shocked and inspired Craig,who rallied his classmates and Marc, five years his elder, to form a group called Free the Children. Child labor was one of the biggest trade policy issues of the 1990s, and Craig quickly developed a near- evangelical pull on his audiences. In a video of an impassioned speech to a convention of labor unions in Toronto in November 1995, he pauses at times with his eyes closed, effortlessly commanding the attention of 2,000 adults. When he concludes, labor leaders step forward to pledge money. He left the event with C$150,000, 15 times his stated goal.

Before long, Craig’s campaign to free child laborers from bondage came to international attention. He addressed U.S. congressional committees, appeared on 60 Minutes, and met with Al Gore, Mikhail Gorbachev, and Pope John Paul II. He wrote a book and starred in a documentary. (He also brought a libel suit at age 14, over a magazine profile, and later received a reported C$319,000 in a settlement.) Within three years, the brothers were running a global philanthropy, now with a focus on establishing schools in Ecuador, India, Kenya, and Nicaragua (though they kept the name Free the Children until 2016). In 1999 they founded a business that became a pioneer of voluntourism, selling service trips abroad.

That same year, at 16, Craig landed a spot on Winfrey’s famous set. “You have no idea what’s about to happen when this goes to air,” Tim Bennett, then one of Winfrey’s top executives, told the Kielburger brothers, according to a 2018 book they co-authored, WEconomy: You Can Find Meaning, Make a Living, and Change the World. In a spur-of-the-moment pledge, the talk show queen committed to funding 100 schools. She became a key mentor, introducing Craig and Marc to a more high- powered tier of philanthropy.

As Craig built the charity’s profile, Marc amassed diplomas—from an elite Swiss high school, then Harvard (international relations), then the University of Oxford (law). Spurning lucrative offers from Wall Street, he brought his world of elite connections back to the small charity that as of 2003 was still being run out of the Kielburgers’ living room. Craig had by then begun his undergraduate studies at the University of Toronto’s Trinity College. “He was sharp, motivated, impassioned,” recalls one of his former professors, David Welch. “He was also the only student I ever taught who asked for an extension so that he could travel to Sri Lanka to open a school and receive a prize.” An executive MBA followed.

By 2004, the brothers were looking for ways to generate stable revenue to counterbalance the vagaries of donations. They opened Bogani, a safari-style camp for volunteer travelers who paid to stay on the doorstep of Kenya’s Maasai Mara National Reserve. An ecofriendly T-shirt business soon followed. Those efforts would eventually crystallize, backed by a key investment from JeffSkoll, the former president of EBay Inc., into ME to WE Social Enterprises, a for-profit business selling volunteer trips and fair-trade goods, such as beaded Maasai bracelets and chocolate made from Ecuadorian cacao, sourced from the charity’s overseas projects. ME to WE pledged to donate at least half its profits to the charity and touted the “highest of governance standards,” according to one press release.

Also in 2004, the charity launched an initiative, later named WE Villages, that expanded its purview from education to clean water, health care, and sustainable farms and other income-generating projects. The villages became destinations for volunteer tourists from ME to WE. Depending on one’s inclinations and means, a trip could entail two backbreaking weeks digging foundations someplace remote or a glamping excursion where the chore list was short and the wine list long. ME to WE started operating a string of luxury properties in Ecuador, India, and Kenya, which became base camps for wooing donors and celebrity ambassadors, as well as a source of local tourism jobs.

To underpin it all, the Kielburgers began refining a simple and seductive philosophy, one David Jefferess, a professor of cultural studies at the University of British Columbia’s Okanagan campus, describes as consumption for the betterment of others. “We want to see ourselves as good people without having to give up, or risk, or sacrifice anything,” he says. “The language they use is fortune and misfortune. They don’t talk about privilege.”

In 2006 the Kielburgers and Winfrey teamed up to start providing North American teachers with curriculum aids—a program eventually sponsored by Dow Inc., Walgreen Co., and others— and encouraging students to set up fundraising clubs. The strategy got WE into thousands of Canadian, U.K., and U.S. schools. Staff would go out to give talks on various social issues, giving out mail-in slips the students could send back to the charity with their contact information, which it would use to offer kids guidance on pursuing their chosen causes. According to a post on the Medium platform by a former speaker named Matthew Cimone, the more that were returned, the better a candidate the school became for a major WE fundraising program. (WE says that it’s “cause inclusive” and that it encourages young people to fundraise for whichever ones they choose. A report the charity provided says that, in the current academic year, about half of WE-affiliated school groups raised funds, and four in 10 of them did so for WE.)

The charity also struck more than 50 media partnerships, covering ABC and Fox television, MTV, the Seattle Times, the Chicago Tribune, Facebook, Twitter, and most of Canada’s largest outlets. It all came together at its WE Day jamborees, which served to reward student activists, sell merchandise, and elevate the profile of the charity and its founders. The first WE Day was held in Toronto in October 2007, with a lineup that included Trudeau, then campaigning for his first parliamentary seat. The events grew in scale and glamour, expanding to more than a dozen North American and British cities annually. Corporate partners footed the bill, which could top seven figures. Celebrities donated time to speak for such unimpeachable causes as anti-bullying, self-empowerment, and equality. Sales booths and advertisements plugged ME to WE trips and trinkets, while a “Teacher Zone” offered educators ideas on how to fundraise.

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