Fund-Raising Dinners Are ‘Way Out of Hand’ : Officers From Different Corporations Meet to Discuss How to Slow Growth of Charity Events

Aren’t you hungry for charity now?

For a whopper of a price--up to $300--the charitably minded can take their pick of about 2,000 fund-raising dinners and luncheons in Los Angeles this year.

But now the proliferation of fund-raising dinners, albeit from worthwhile charities, is being seriously questioned by giving officers at some of the corporations which are heavily targeted to buy tickets. And one major dinner sponsor, the Boy Scouts, plans soon to halt most of its dinners in return for a larger allocation from United Way Inc.

The use of fund-raising dinners is “growing and growing and everyone I talk to says we have got to stop this,” said Beverly Hoskinson, head of McDonnell Douglas-West Personnel Commumunity Service, which distributes donations from the aerospace firm’s workers. The service does not buy dinner tickets as a matter of policy and Hoskinson has become a lightning rod for corporate contributions officers interested in taking a similar stance.

‘Special Events’

“It has gotten way out of hand,” she said.

Those familiar with these dinners, known in the charity business as “special events,” say that the proceeds accrue mostly to those charities that are the best students of the local power structure and are most adept at subtly tugging the commercial ties that bind.

Demand for these sociological skills is so strong that Liz McMillion of McMillion Group in Hollywood has an unlisted business telephone. “I’ve never had to go looking for a client,” she said, echoing comments by others in the field.

“We are amateur sociologists who study the networks among the powerful,” said Gerald M. Plessner, president of Fund Raisers Inc., an Arcadia firm that stages such dinners for fees of up to $25,000. “I try to figure out what is a community and there are many communities of interest.

“One element in this town that is different from a lot of others is it has two centers of power,” Plessner said.

“There are the downtown financial-legal-petroleum interests, which tend to be more conservative and WASP, and there is the Westside entertainment industry-financial interests and they tend to be liberal and Jewish,” he said. “You work in each with a different style and approach and recognize that there are different networks in each.

‘Built on Clout’

“But in every case this business is built on clout,” added Plessner, who teaches fund raising at USC and who has written a how-to guide for holding such events.

“The key is finding an individual to be honored and a second individual to be dinner chairman, each of whom has chits out . . . whom businesses are obligated to buy tickets to honor.”

This explains why retailers are honored far more often than manufacturers and wholesalers, as the adaptation of one of Plessner’s charts, which accompanies this article, indicates. While clout counts, the connection between the individual honored and the sponsoring charity is often ethereal.

When the Los Angeles Boy Scout Council began getting into the dinner business in the mid-’70s, its first honorees were top executives who had been Scouts.

But as the dinners became part of the routine for many Scout supporters, the nature of the honorees began to change. Recently the Scouts held a dinner to honor Frank Sinatra, who was never a Boy Scout.

Mailing List Important

Access to friends and business associates of the honoree is so crucial that the Boy Scouts said they canceled a dinner last year to honor Western novelist Louis L’Amour when his wife declined to turn over her Christmas card mailing list so those on it could be asked to buy tickets.

While experts in the field estimate that there are about 2,000 fund-raising meals annually in metropolitan Los Angeles, there is no hard data available on all of them.

But just 500 of these benefits grossed $33 million and netted $24 million in Los Angeles for secular nonprofit organizations in 1983, according to Robert Burns, general manager of the city Department of Social Services, which collects such data. Just three years earlier, in 1980, only 267 dinners were reported to the city.

These figures significantly understate the actual revenues, however, because religious organizations are not required to file information with the city Social Services Department before soliciting within the city limits.

In addition, some dinners are not reported individually, but as part of overall revenues. The Jewish Federation Council, for example, reported to the city that it raised about $41 million last year, more than half of which came from special event luncheons and dinners.

Plessner and others believe the rise of political fund-raising dinners that net $1 million for statewide and national candidates has sparked growing interest among charities in such events.

“Those $1,000-a-plate political testimonial dinners are a driving force in terms of the sights and aspirations of nonprofits,” Plessner said. “A nonprofit of substantial size cannot read in the press about a dinner for Reagan that raises $1 million for the GOP in California and not say to itself, ‘Why can’t we do that?’ ”

Efficiency Questioned

The number of charity dinners has become an issue of great concern to giving officers at many of the city’s most civic-minded companies, who regard such affairs as an inefficient way to raise money and who believe that buying tables at dinners does little to benefit their companies.

A dozen of these giving officers met for lunch in Security Pacific National Bank’s Bunker Hill skyscraper last October to discuss how to slow the growth of the fund-raising luncheons and dinners, especially by the Boy Scouts, City of Hope, National Conference of Christians and Jews and the American Jewish Committee, all of which have many fund-raising arms.

Companies Involved

The companies whose giving officers attended included Security Pacific Corp., California Federal Savings & Loan, McDonnell Douglas-West, Southern California Gas Co., Atlantic-Richfield, Unocal, Pacific Bell, General Telephone and Carter Hawley Hale, each of which gets solicited for up to 50 dinners per month.

“It’s gotten out of hand and we need to heighten everybody’s awareness,” said Carol Taufer, Security Pacific Corp. vice president for philanthropy, who organized the luncheon. In September alone, Taufer said, her bank declined 37 ticket purchase requests.

Banks a Popular Target

“Banks get hit particularly hard,” she said. “The Boy Scouts put on luncheons for the petroleum industry, the building industry and on and on and the problem is that we have customers from all of them so we get hit for tickets to every one of them.

“We tried to get one of the senior officers of our companies to get other senior executives together to say, ‘Look at this, you guys.’ ”

In addition, top officers at major banks are often heavily involved in charitable activities as volunteers, honorees and dinner chairmen.

The changing corporate attitudes toward supporting dinners sponsored by charities they already support with direct grants was illustrated Thursday night at a dinner to honor William French Smith, the former U.S. attorney general. Neither Pacific Lighting Corp., on whose board Smith serves, nor Crocker Bank, on whose board Smith served for 10 years until 1981, bought tickets to the Boy Scout affair, Scout officials said.

Understands Resistance

McMillion, who staged the dinner, said she understands the growing resistance to corporate support of dinners, especially at those companies where giving officers, often women, have taken an active interest in enhancing the quality of their firm’s giving.

“Their job is to give money away and to do it in a wise manner and to do the best they can for their companies without too much of their budget being chewed up by dinners,” McMillion said.

“But trying to stop dinners will never fly,” McMillion added, “because they are too integral to the social fabric of this town.

“I just talked to Carol Taufer the other day and she said ‘this dinner business is getting ridiculous.’ But the purpose of her call was to order a table of tickets for an event I’m putting on for one of my clients,” McMillion added.

But United Way Inc., which serves Los Angeles and Western San Bernardino counties, has taken a step toward reducing the dinner business and, in the process, to increasing the amount of Boy Scout money that flows through United Way’s books.

Canceling Some Events

Within days, United Way Inc. and the six Boy Scout Councils in Los Angeles County are expected to sign an agreement that will increase United Way’s allocation to the Boy Scouts. In return, the Scouts will cancel about $1 million worth of fund-raising luncheons and dinners but not all such events, according to Scout Executive John Claerhout and Francis X. McNamara Jr., the United Way Inc. president.

As part of the agreement, corporations that regularly buy tickets to these Scout events will continue to give money, but will channel it through United Way as a direct contribution.

“My position on fund-raising dinners is that if you have supporters you want to honor and you want to build volunteer support, they are great--and in the process you will make a lot of money,” McNamara said. But he added that when the primary purpose is to make money, dinners are not an efficient way to do so.

The data the city’s Burns collected suggest that overall about 28% of dinner proceeds go to costs of the event, including the meal, fees to consultants or salaries to staff to stage the event, pre-dinner activities such as cocktail parties to solicit ticket buyers and postage.

$100-a-Plate Dinner

But for a dinner priced at $100, costs often exceed half of the total revenues and so such dinners are becoming less common unless they are held in a home or involve only a light buffet.

“It’s hard to make anything on a $100 dinner,” said Lucille Polachek, whose Events Unlimited runs many dinners for Democratic politicians and Westside health charities, including the AIDS Project Los Angeles dinner Thursday for which more than $1 million worth of tickets were sold.

The $125 and $150 dinner is becoming as rare as prime rib at such functions. The trend is to $250 and even $300-per-plate affairs, Polachek and Plessner said.

The reason, Polachek and others said, is because the cost of staging a dinner remains the same or rises only a few dollars regardless of ticket price.

Dinner and ancillary costs for a $150 dinner run nearly $50 per plate, Polachek, Plessner and McMillion said, or one-third of the ticket price. They said the Century Plaza is the most sought-after location for charity dinners and that it typically charges $4 to $5 more per meal than its nearby competition at the Beverly Wilshire and Beverly Hilton hotels.

Beef or Chicken

For a $250-ticket dinner, costs may not rise at all unless beef is served instead of chicken and better quality wine is offered, which together may add $5 to the cost of each dinner. That means costs are only about one-fifth of each $250 ticket.

Polachek said there is also a trend toward cash bars rather than hosted ones, which holds down costs and discourages excessive drinking.

Many charities also hold dinners without entertainment, an element that can raise costs significantly. Although a star performer may work for free, providing the entertainer with a hotel suite, limousine, flowers and paying his lighting crew and musicians can easily cost $25,000.

Entertainment also makes it difficult to end events early. “You want it over by 9:30, 10 at the latest,” Plessner said.

Lump-Sum Grant

To cut down on its charity dinner costs, Security Pacific has an agreement with the Scouts to pay just $25 for seats at luncheons and $50 at dinners, most of which will soon be halted. The bank makes a lump-sum grant to the Scouts in lieu of buying charity meal tickets.

Other corporations are discussing such arrangements with several major charities that stage dinners, several giving officers said.

Additional Support

To really hold down the share of charity-dinner revenues needed to cover costs, though, some charities ask dinner ticket buyers to make pledges of additional support, as happened at the AIDS Project Los Angeles event Thursday night.

Ben Horowitz, the City of Hope executive director, said pledges, not ticket sales, explain why the 1984 Sportsmen’s Dinner to raise money for part of a City of Hope building netted nearly all of the $2.6 million in gross revenues. The event cost just $63,000 or 2.4 cents out of each dollar raised.

Claerhout, the Scout executive, said he also sees a profitable future in dinners that include an auction, but only when experiences rather than tangible items are up for bid.

“Most people who are affluent enough to attend these dinners already have everything they need and so another painting or a car isn’t of as much interest to them as something along the lines of travel to London or a deer-hunting trip, getting to wave a baton at the Hollywood Bowl or letting your child be a bat boy or bat girl for one day with the Dodgers,” Claerhout said.