From DeGroote to Michael Garron: why more medical institutions are selling their names
When John Kelton became dean of McMaster University’s medical school in 2001 he had “grand ambitions.” It took him roughly six months to discover that the school was bankrupt.
At the time, provincial funding was down and raising tuition was unappealing. “It was apparent to me, having trained in the US, that the opportunity for philanthropy had not really been seized as much in Canada,” says Kelton.
The realization led Kelton to seek major donors. And in 2003, businessman Michael DeGroote donated $105 million to the school of medicine. In recognition, the school was renamed after DeGroote.
In medical schools and hospitals across Canada, donors’ names are featured widely on plaques, wings and lecture halls. However, renaming an entire institution after a single donor, as McMaster did, is far more unusual.
But renaming hospitals and medical schools is a growing trend, especially in the US, though it’s gaining popularity in Canada too. In 2003, the first medical school in was Canada named after a single donor. Since then, three more have had their names changed, most recently the Max Rady College of Medicine at the University of Manitoba. Since 2001, names like Stollery, Pattison and Juravinski have made headlines for donations to hospitals that then adopted their names. Most recently, Toronto East General Hospital became Michael Garron Hospital after Berna and Myron Garron donated $50 million in honour of their son, who died of cancer at age 13.
Name changes tend to be met with “mixed emotions,” says Jay Loeffler, a professor at Harvard Medical School who has researched the naming trend in the US. The major opportunities created by these donations have raised concerns about the influence donors have. Some wonder whether it is fitting to grant naming rights of an entire institution to one individual.
The opportunities of naming rights
Medical institutions are increasingly seeking out naming rights donations, in part due to mounting financial pressure, says Loeffler. In a 2014 study, he noted that 24 of 141 US medical schools were named after high-calibre donors – up from 15 in 2008. “When we hit the recession in North America everything came to a grinding halt, and then all of a sudden [the donations] exploded,” says Loeffler.
In Canada too, philanthropy has become an increasingly essential source of funds for hospitals and medical schools. Hospitals in Ontario are feeling squeezed after a four-year funding freeze, despite a 1% increase in 2016. Similar budget crunches have been felt across the country.
This pressure makes large gifts even more compelling. Even Harvard Medical School recently announced that it would consider a new name in the event of a “transformational donation.” Loeffler guesses it would be upwards of an unprecedented $1 billion. The donations involved with Canadian medical school naming rights have averaged around $100 million per school. The amounts for hospitals’ names depends on their location and reputation.
Donations don’t help hospitals hire more nurses or keep operating rooms open for longer. The Canada Health Act restricts hospitals from spending donations directly on patient care, to ensure equity. But donations can help institutions invest in newer technologies, research, teaching or building upgrades. However, while the financial incentive may be simple, the decision to rename is complicated.
“I’ve never had a donor approach me and say, “I want to name this, what does it cost?” says Nuvyn Peters, vice-president of development and alumni engagement at the University of Calgary. Instead, she says, administrators and donors will discuss the impact a large donation could have. How the donor will be recognized becomes a part of that conversation.
In 2014, a $100 million donation saw the University of Calgary’s medical school named after philanthropist Geoffrey Cumming. Peters says the university felt the rename was a fitting way to recognize the donation, which was matched by the province. But before an agreement was signed, the university included Cumming in discussions about how the money would be used. This is a common step, as the institution wants to ensure the donor is satisfied with where the donation will generally be directed. But, investing the money in areas that are expected to see the greatest returns is the first priority. In Calgary’s case, the money was directed mainly to two research areas: brain and mental health; and infection, inflammation and chronic disease. Both were “poised to take off through donor support,” says Peters.
Franco Rizzuti, a student at the Cumming School of Medicine and former president of the school’s medical students’ association, says he and other students are “starting to see the connection as the benefits trickle-down from the research level,” including access to a cutting-edge anatomy lab.
The $50 million donation behind the Michael Garron Hospital rename was a “game-changer” according to Mitze Mourinho, president of the Toronto East General Hospital Foundation. The donation will buy “close to 100%” of the equipment for the new patient care centre when it’s built. It will also establish an innovation fund, and create the hospital’s first academic and research chairs. “We were trudging along and we were a great community hospital, but this makes us so much better,” says Mourinho.
Hospitals and medical schools don’t accept every donation. According to Peters, declining a donation happens most often when donors want to direct their funds “to an area that isn’t a strength” for the institution. “We would never accept a donation that we couldn’t deliver on,” she says.
David Soberman, a professor at the Rotman School of Management, says that renaming decisions have strategic value aside from capital gain. “It’s absolutely an opportunity to turn over a new leaf through rebranding, and probably one of the best times to do this is when you’re engaging in a major facelift,” he says. He explains that the promise of improved infrastructure is a great distraction from potential negative reactions to the name change. Although the naming process varies by institution, “essentially when you give enough money, recognition is expected,” says Soberman.
There’s a spin-off benefit too. Often, large gifts trigger further donations, an effect economists call “crowding in.” At Michael Garron, interest in the hospital has grown and further donations have been pledged, says Mourinho. The initial success of the Michael Garron rebranding hasn’t gone unnoticed. Mourinho says she has been approached by three other institutions, “one on the west coast, and two closer to home,” that are considering their own renaming opportunities.
The potential pitfalls of granting naming rights
When it comes to attaching naming rights to large donations, the biggest worry is influence, says Loeffler: “If somebody gives this much money, how much control do they have?” While influence is a concern in any donation, the stakes are higher when the institution carries a donor’s name.
The worry has precedent. A significant Canadian example occurred in the background of a dispute between the pharmaceutical firm Apotex and a researcher affiliated with the University of Toronto and The Hospital for Sick Children in the late ’90s. Some worried that because the Apotex Foundation was negotiating a $30 million donation to the university and its affiliated hospitals, the latter were unable to be objective in the dispute. Ultimately, that donation was not made.
In other instances, the donor’s name has been sullied, leaving institutions to judge whether it is appropriate to keep the moniker – and the money attached to it. In 2005, Queen’s University returned David Radler’s $1 million gift and removed his name from a business school hallway after he pled guilty to fraud. In contrast, SickKids kept both Conrad Black’s donation and the wing named after him, despite his fraud convictions. This week, concerns emerged about Victor Dahdaleh’s recognition at York University, where the Global Health Institute is named after him, in light of his involvement in the Panama Papers.
Granting naming rights may also face a backlash when people have a collective or personal connection to an existing name. The renaming of the Henderson General Hospital in Hamilton sparked controversy in 2010. The community and historical society felt the decision to rename the hospital to recognize the Juravinski family’s donation disregarded Nora Henderson’s contributions as a trailblazing municipal politician. “The community took offence to wiping that history,” says Terry Whitehead, a Hamilton city councillor. “There was a sense that if you’re wealthy you get your name [on a building]. Nora Henderson wasn’t wealthy.”
Similarly, when the University of Calgary’s Faculty of Medicine was renamed the Cumming School of Medicine, some felt the new name lacked significance. “There was definitely a subsect of the population that thought Geoffrey Cumming’s connection to medicine was relatively modest,” says Rizzuti.
Best practices for renaming
Given health care funding realities, it seems likely the naming trend will grow. How can institutions get the benefits of a rename from a major donation-inspired rename while avoiding the pitfalls?
Significant protection comes from naming rights policies, which guide naming rights agreements. Most institutions’ policies are publicly available and some are as long as 15 pages. Mourinho says that while the foundation can work to make sure donors are satisfied about where their money is going, it’s important that their influence be limited once the agreement is signed. “There’s wording in the agreement that ensures donors cannot make requests [post-agreement],” she says. The same is true for medical schools. “Once the gift has been made, the donor really doesn’t play a role beyond receiving regular reports,” says Peters. Institutions additionally reserve the right to remove a name in the event of a conflict of interest on the donor’s part or if a donor’s reputation is tarnished.
Spending breakdowns are also often publicly available. Though the spending of the Garron donation is still being decided, Mourinho says the information will be in their annual report and is shared through internal staff communications. She adds, “anyone who is interested can ask.” The largest equipment investment so far is $1.6 million for a new CT scanner.
However, while naming rights policies and general spending breakdowns are commonly made public, the agreement documents between donors and institutions are generally private. A 2013 report from the Canadian Association of University Teachers (CAUT) recommends universities make these agreements public to improve transparency, particularly when accepting corporate donations or entering into long-term funding agreements with donors.
Consultation may also better inform decisions and mitigate negative reactions. Though hospitals control their naming rights, Mourinho says Michael Garron Hospital consulted with the Ministry of Health and Long-Term Care about the change. “They are our primary funders; we felt the need to engage them and to let them know where we’re at. They were very supportive,” she says. The hospital also conducted “anonymous community telephone polling” through an external party that reached roughly 300 households. The polling helped inform the hospital about the community’s receptiveness to changing the name, though Mourinho adds they couldn’t reveal what the new name would be before the deal was in writing.
Rizzuti suggests that consultation would have made a difference to him and other students at the Cumming School of Medicine. “Everybody needs to be engaged in setting the agenda,” he says. He adds that it would have helped alleviate students’ concerns if they had been informed about how the research-directed money would benefit them.
At McMaster, DeGroote’s initial donation, and an additional $50 million he gave in 2014, has created a faculty development fund, an endowed chair in stroke prevention, and funded three research and education centres – to name a few of the impacts. And for Kelton, the impact of the gift outweighs any repercussions from the name change. “It completely changed our school forever.”