Fact Check: Rosen Report on WE Charity

Fact Check: Rosen Report on WE Charity

Fact Check: The Rosen Report of October 2020 made no mention of donations, schoolhouse projects, or assertions about double matching.

Following Reed Cowan’s bombshell testimony to Parliament’s Ethics Committee, recent news reports have cited the Rosen Report.

Bloomberg reported WE Charity’s saying:

“its donor matching for projects in Kenya was independently reviewed in 2020 by a forensic accountant who confirmed that projects such as schoolhouses were not ‘double matched’.”

The Globe and Mail reported similar comments:

CBC's Fifth Estate documentary also aired similar claims in response to findings of donations funding the same projects.

Except the only Rosen Report available, released in October 2020, made no mention of donations or matching. This leaves one wondering, what other Rosen Reports released in 2020 exist and where can we find them?

There are lots of moving parts in the WE Charity scandal but it’s important to get the facts straight.


What the available Rosen Report does cover


Andy Stillman, of the Minnesota-based Stillman Family Foundation, hired Miller Thomson LLP. The Stillman Family Foundation has no affiliation with David Stillman, a WE Charity US director, according to friends of WE Charity. (Update: David Stillman stepped down as a WE Charity US director on February 26, 2021 but remains an active supporter.)

Miller Thomson engaged Dr. Al Rosen, a Canadian legend who has taught generations of Canadian accountants. (For those who ask, yes, Al Rosen is still alive, but no details on his golf shirts or collars).

Dr. Rosen evaluated WE Charity and gave his independent opinion that:

  1. WE Charity was financially viable in April 2020, there was no need for a government ‘bail out’.
  2. WE Charity would not have “profited” from the CSSG agreement.
  3. Breach of bank covenants is immaterial.
  4. WE Charity’s Toronto real estate holdings of $44 million are reasonable and appropriate given its charity mission and operations.


Here’s our thoughts on the Rosen Report


1. WE Charity's breach of bank covenants is minor and short-lived.


The Rosen Reports says that WE Charity changed its fiscal year end from December to August, ‘commencing in 2019’. In fact, WE Charity changed its fiscal year end in 2018, not 2019.

The Rosen Report states that this change led to fiscal 2019 covering only a short 8 months rather than a typical 12-month year. Actually, fiscal 2018 was the ‘stub year’. Fiscal 2019 covered 12 months.

The Rosen Report finds the breach of loan covenants is technical in nature, short-lived, and minor in the dollars involved. In fact, WE Charity was in breach of its bank covenants in both 2018 and 2019. A one-off breach in F2018 due to a stub year with the fiscal year end change is a plausible explanation. Yet a repeat in F2019 is hardly short-lived. The auditors do not disclose the amounts involved.

What is disclosed is that WE Charity had demand loans for $13.7 million outstanding in August 2019. The Rosen Report states that by April 2020, loans had risen to ‘about $15 million’. Cash levels at August 2019 were $11.5 million. Even a charity of WE Charity’s size, it’s hard to consider millions of dollars as 'minor' or 'immaterial'.

The Rosen Report provides additional information not publicly reported in the audited financial statements. WE Charity failed to maintain a debt service coverage of 1.25:1. On February 26, 2019, the bank sent letters to WE Charity that it “acknowledged the default and agree to tolerate the default.” With a February 29, 2020 filing deadline, this audit is cutting it close.

The Rosen Report states that minor covenant violations often occur. This is contrary to our analysis. WE Charity’s breach of bank covenants is the only instance that we have ever seen reported in charity audited financial statements.

Given WE Charity’s large real estate holdings, in August 2019 Charity Intelligence reported the loan breach in context with the real estate holdings. Charity Intelligence did not believe nor suggest that WE Charity was in danger of default.

The Rosen Report contends that critics’ (was Charity Intelligence the only voice reading the audited financial statements and raising this red flag?) conclusions were reached without sufficient facts having been gathered and evaluated. One hopes that the publicly available audited financial statements and the professional duty of accountants to report full disclosure is sufficient facts.


2. No 'profit' from the CSSG? Consider this:


The Rosen Report finds WE Charity would not have profited from the CSSG agreement. The government agreement clearly articulated eligible costs. The Auditor General could also review the program.

‘Profit’ is a loaded word in the non-profit sector. Charities prefer to call it ‘surplus’. Under the CSSG, with all performance goals met, WE Charity would have received $43.5 million. Indeed, WE Charity received $30 million upfront in July 2020. This money was fully returned in September 2020.

Consider this:

At the end of F2019, (August 31 2019 before covid), WE Charity reported in its annual T3010 return 352 full-time staff and it paid a total of $19.9 million in compensation. WE Charity paid $2.9 million in professional fees (lawyers, accountants, etc.), $1.1 million in rent and $0.1 million in interest and bank charges. Rosen assesses that the ongoing support of WE Charity’s international program cost $1 million to $1.5 million annually. Add this up and, with the cancelation of WE Days, travel, and other expenses, WE Charity’s base operating costs look to be around $25.4 million.  

The CSSG’s $43.5 million is a huge amount of money for any Canadian charity to run a program.


3. Rosen Report finds no financial difficulties existed at WE Charity in April 2020


The Rosen Report finds there was no financial ‘bail out’ as alleged. WE Charity was financially viable. In the early days of the covid pandemic, the report states that WE Charity’s management took difficult but correct actions. It laid off hundreds of staff. The Rosen Report finds financial difficulties did not exist at WE Charity in the Spring of 2020.

Dr. Rosen arrives at this assessment from reviewing WE Charity’s financial books for April 2020, books and records the former Chair of WE Charity’s directors states she requested but didn’t have access to.

WE Charity’s financial position at the end of April 2020 is not public information. Charities only report annually. This time period will be covered in WE Charity’s audited financial statements for F2020. These were required to be submitted on February 28, 2021. Charity Intelligence has asked WE Charity for its F2020 financials and hopes to update shortly.


4. $44 million in real estate holdings were not inappropriate


Dr. Rosen writes that WE Charity’s “real estate holdings should not be an issue being debated.” This is an independent and fair opinion.

Alternatively, maybe it is appropriate for donors and governments to assess charities, their holdings, their financial statements and other issues? That would be due diligence.

The Rosen Report is worth reading. It doesn’t mention donations or double-matching funding to meet appropriate needs or vouch for any such practice. It does state other interesting opinions.



Ethics Committee, Questions of Conflict of Interest and Lobbying in Relation to Pandemic Spending, February 26, 2021. WE Charity donor, Reed Cowan's testimony begins at 13:58.

Natalie Obiko Pearson, Danielle Bochove, Donor Says WE Charity Removed Plaque Honoring His Dead Child, Bloomberg Business, February 26, 2021

Rosen & Associates Limited, Report for WE Charity, October 27, 2020

Geoffrey York, WE Charity was ‘duplicitous’ in its Kenya dealings, claims prominent donor Reed Cowan, Globe and Mail, February 26, 2021

CBC Fifth Estate, The Price WE Paid: An investigation into WE Charity's rise and fall from grace, February 5, 2021

Andy Stillman, The Real #WE Scandal is the loss of #WE Charity, Friends of WE

WE Charity, WE Charity announces Board of Directors appointments and transitions, March 2, 2021

Alex Boutilier, I was told to quit for asking about financial records, says former WE Charity board chair, Toronto Star, July 28, 2020

KRP LLP Chartered Professional Accountants, WE Charity’s 2019 audited financial statements, Markham, February 29, 2020

WE Charity’s audited financial statement for previous years found here.

Charity Intelligence, Review and Rating of WE Charity, updated July 10, 2020


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Legal disclaimer: The information in this report was prepared by Charity Intelligence Canada and its independent analysts from publicly available information. Charity Intelligence and its analysts have made endeavours to ensure that the data in this report is accurate and complete, but accepts no liability.

The views and opinions expressed are to inform donors on matters of public interest. Views and opinions are not intended to malign any religion, ethnic group, organization, individual, or anyone or anything. Any dispute arising from your use of this website or viewing this material hereon shall be governed by the laws of the Province of Ontario, without regard to any conflict of law provisions.







 Notes to people new to looking at charity balance sheets: A balance sheet is a moment in time – a snap shot. This is the financial position of WE Charity’s assets on August 31, 2019 and August 31, 2018. The balance sheet is not affected by the year end for 2019 as you are comparing the asset position August to August.

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