USA FOR AFRICA: NEW HEIGHTS OF AFFLUENCE

In six months time, the USA for Africa Foundation has come up in the world. Twelve stories, to be exact.

The instant foundation, which currently has between $25 million and $30 million collecting interest in a Security Pacific National Bank account, moved into new high-rise office suites in high-rise Century City last week.

The Hollywood sign is dimly visible through the summer haze outside Executive Director Marty Rogol’s office window. Compared to the cubicle on Sunset Boulevard where USA for Africa has operated since last February, this is a hippodrome.

Because he’s been away on foundation business in Chicago and Atlanta, last week was Rogol’s first real opportunity to look at the suite: “Here we’re going to put a conference table and I’m getting a new computer and--look! A real phone system! One that really works!” he said.

In keeping with the foundation’s chronic anxiety about misspending charity money, a red-and-white plastic sign (see photo) has been taped to the wall at the entrance. It advises visitors not to panic over the relatively lavish 1,200 square feet of office space--because it’s being donated by R&B; Management Co.

One official estimated that a lease on an office that size in Century City would normally go for as much as $45,000 a year. But virtually everything is donated, from the rent to the phone system.

“The only thing in my office that isn’t donated is that,” Rogol said, pointing to his own personal Panasonic ghetto blaster behind a sprawling donated executive desk.

The Ameritech Ricoh 6200 SR photocopier and the IBM, Compaq and Digital Rainbow computers have all been donated by their manufacturers. A VAX 730 mainframe computer system was installed gratis by U.S. Leasing. American General Communications installed the Toshiba phone system, with all labor and equipment contributed.

Columbia Pictures, Security Pacific Bank and USA for Africa president Ken Kragen contributed several thousand dollars worth of furniture, including the refrigerator in the office kitchenette and the couch next to Rogol’s desk.

Music Express supplies free messenger service. The Postal Instant Press shop at 8485 Sunset Blvd. supplies free printing. Even the long-distance phone service is being donated by MCI, according to Rogol.

Pitney Bowes, supplier of the foundation’s postage machine, is the only company that didn’t play Santa Claus. The foundation pays for that out of a growing overhead budget.

Despite rent-free headquarters, the foundation continues to spend more overhead money than it originally envisioned.

When music manager Ken Kragen co-founded the organization last winter with singer Harry Belafonte and music producer Quincy Jones, he said USA for Africa’s first-year overhead would be about $200,000. A month ago, doubled that estimate. Last week Rogol confirmed that the first-year overhead would actually run about $650,000.

“Travel is our largest single expense,” he said.

USA for Africa singers are subsidizing some expenses, including salaries. Kenny Rogers, Lionel Richie, Ken Kragen and Pat Benatar underwrite some portion of the foundation’s day-to-day operating costs.

Another way the foundation is paying its bills is by using the interest from its bank account. Rogol told Calendar that he didn’t know the interest rate or how much has been collected thus far in interest, but he said that the interest money will decline as foundation grants are made to Africa in coming months.

Said Rogol, “We don’t have an endowment like the Ford Foundation, so we can’t live off the interest the same way. We hope to have all our money spent or in the pipeline by the end of September.”

Some relief agency officials and the media have been critical of USA for Africa for not “spending down” its money fast enough. Even though Rogol contends that he is spending it as fast as he can without spending it unwisely, USA for Africa can no longer be seen as a temporary institution that will simply route its charitable booty into good causes and disappear.

In May, USA for Africa had already announced it would be run by a nine-member board of directors, based on recommendations from a 12-member board of advisers and a 12-member medical task force.

In July the board added four new directors to its board, including singer Marlon Jackson.

Rogol’s paid staff, originally consisting of six people, will expand to 10 within the next few weeks. One person will be assigned to do nothing but sift through hundreds of grant applications and project proposals submitted by individuals and relief organizations who want money.

Plans have been announced for the expenditure of $34 million by October though, as of last week, only about $2 million of the “We Are the World” largesse had actually been spent.

Rogol’s standard reply to the delay in funding projects is, “We can either spend it fast or we can spend it smart.”

Thus far, USA for Africa spending might be considered “smart”: maximum dramatic impact and attendant publicity with a minimum of visible waste.

(Last week, Band Aid’s Bob Geldof also was fending off a London newspaper’s criticism for failing to spend some $50 million raised in July’s Live Aid concerts. Echoing Rogol, Geldof said the money would not be spent “foolish” or fast. “The object is to maximize the generosity of the people,” he said.)

USA for Africa is demanding accountability and concrete results of grant recipients. Contractors for a $600,000 Sudanese road re-building project, for example, will get their money in increments. The size and frequency of the increments will depend upon exactly how many miles of road they actually repair.

The idea, Rogol says, is to show donors that their money is actually doing good. At the same time, it encourages them to contribute more time, energy and money to Africa.

That’s why USA for Africa pull-out advertisements currently appearing in 140 national magazines make very specific promises as to how contributions will be spent.

Says an ad line beneath a picture of a $13 “We Are the World” sleeveless T-shirt, “Your purchase of this item will help supply two blankets to a needy family.”

Similarly, ads for the following items make these claims:

Buy a $21 USA for Africa sweatshirt “will help feed an African child for almost a month.”

Buy a $12.50 “We Are the World” LP or cassette will “help immunize 100 African children against polio.”

However, the pull-out ad bears this disclaimer in small print: “The above examples are offered only to illustrate how much good can be done with even a small amount of money. The net proceeds from your purchase will in fact be used wherever the need is greatest. . . .”

Rogol said the ad language first met the Connecticut attorney general’s truth-in-advertising guidelines six months ago and attorneys general in the other 49 states followed suit.

Even though sales of “We Are the World” records have trailed off to a trickle, the current national magazine ad campaign (all ads, magazine space, etc., have been contributed) should keep funds flowing.

Still, high-profile concern remains the organization’s best fund-raising tool.

The foundation’s most recent press release proclaims that its board of directors finally decided after two marathon planning sessions in July how to spend up to $17 million in the coming months.

About $10 million was earmarked for immediate spending in Sudan, Ethiopia, Burkina Faso, Mozambique, Mauritania and three other countries: a $1.35 million airlift to Chad, Mali and Niger is planned for October. Trucks, shelter, well-digging equipment, medicine and warehousing facilities, as well as food, will be delivered.

Another $7 million will be doled out during September. Later in the month, the board will meet again. Their task? Decide how to spend another $17 million.