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Trudeau's Speaking Fees Did Charities a Service

06/21/2013 01:01 EDT | Updated 08/21/2013 05:12 EDT

I have been watching, with increasing irritation, the flurry of criticism over Justin Trudeau's decision to accept a $20,000 speaking engagement for a charitable organization while he was a sitting MP.

Some have written on the question of whether a member of Her Majesty's Government should or should not be disqualified from earning extra income, but I will leave that question to others.

What I would like to address is the controversy over how that extra income was earned -- specifically the suggestion that it was somehow wrong for Mr. Trudeau to accept a reasonable fee to attempt to help a charity raise awareness and support for its cause. This notion is misguided. Indeed, it is precisely the kind of limited thinking that is hurting our philanthropic sector.

I am regularly asked to speak at charity events. As Mr. Trudeau has done, I almost always charge a healthy speaking fee. I, too, have been criticized for doing so. "You can afford to do it for free, you don't need the money," some will say. (And yet I observe that at almost all such events, venues charge charities for space, food and beverage. Imagine! But that's not the point here.)

I give away multiples of what I earn every year to charities of my choice. But I also believe that creating a relationship of mutual benefit is far more advantageous to the charity in the long run, because it forces them to think and act with an entrepreneurial mindset. Effective charities will lever the popularity of a given speaker to multiply interest and generate greater revenue. At least that's how it's supposed to work.

For example, several years ago I was asked to speak at a "Philanthropy Day" event for a somewhat discounted fee. The organizers were projecting upwards of 500 ticket sales at $45 per person, or around $22,500 in revenue. But I saw upside. I only agreed to participate if they bumped up the ticket price to $75 and doubled sales projections to 1,000. Inspired by the challenge, they sold more than 900 higher-priced tickets and increased revenues by some $45,000.

This is what is known in every other sector as a win-win. Why would the same rules not apply in the philanthropic sector?

And here's where we come to the bump in the road. One of Mr. Trudeau's past clients, the Grace Foundation in New Brunswick, hired him to speak at an event to raise money for a seniors' home, which apparently did not go well. In fact, the event lost $21,000. Disappointed with the results, a Foundation board member asked Mr. Trudeau to reimburse the speaking fee.

His initial refusal to do so generated plenty of controversy. But consider this: Since a speaker's bureau was involved, asking Mr. Trudeau to reimburse the full amount means that he is on the hook for not only his fee, but also the bureau's commission - on a transaction that is more than a year old. Moreover, if the Foundation had in fact found a sponsor to cover the fee - as I am told they were -- any refund might not go directly to the charity, but to that third party.

This bigger issue for me is the failure by the Foundation to acknowledge its own obvious incompetence. This Foundation failed to do what it needed to do to make the event a success, and now they turn around and ask Mr. Trudeau to bear the economic cost. My impression is that this Foundation deserves to go under (or endure a wholesale change of management), rather than be propped up by Mr. Trudeau's repayment.

Nevertheless, I understand that Mr. Trudeau has now promised to do another event for the Foundation -- at no cost, of course -- in order to right his alleged wrong. While I applaud his gracious response, I would suggest he is killing the Foundation with kindness. It clearly has bigger problems to deal with, and Mr. Trudeau's efforts at life support are not likely to save it. Nor should they.

This politically motivated circus and related backlash may now have the effect of eliminating some great speakers from the rubber-chicken charity circuit -- including Senators Roméo Dallaire and Jacques Demers -- speakers who deliver great value to forward-thinking charities.

I would suggest we use this lesson as a rather important opportunity to rethink the way we coddle inefficiencies and ineptitude in the philanthropic sector. Then, we might be debating something useful.

This originally ran in the National Post.

W. Brett Wilson, is a Canadian business leader, philanthropist, and panellist on CBC's "Dragons' Den."

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