Celebrities hire philanthropy consultants to guide their giving
John Legend, the Grammy Award-winning musician, was in search of a charitable cause last year. An African village he supported was thriving, but the Ohio-born singer, fresh from volunteering in the Obama campaign, wanted to do something domestically — something, he recalled, “for people who don’t have a voice.”
Legend hired a consulting firm, and a month and a half later, he had a cause: education reform.
“My time is very hard to come by and you have to delegate sometimes,” Legend said in a phone interview from his European tour. “I felt like hiring them would help me make a bigger impact.”
Legend is among an increasing number of celebrities including Ben Affleck, Rachael Ray, Yao Ming, Ben Stiller, Demi Moore and Ashton Kutcher who have paid experts to strategize their goodwill. Such philanthropic advising has existed in Hollywood for decades — Barbra Streisand has had an advisor for 24 years — but the number of consultants working with celebrities is rising as younger and less established figures, such as television personality Nicole Richie and pop singer Avril Lavigne, call upon their services.
“There are certainly more people in this space,” said Streisand’s advisor, Margery Tabankin, who opened her firm in 1994 and has been credited with launching the profession in Hollywood. “I think there’s a sense that you should look at your philanthropic investment the same way you look at a financial investment.”
Hiring advisors is a national trend among wealthy donors of all stripes, but in Hollywood, it may also reflect a particular desire to be associated with the sort of serious activism that has transformed brethren like Angelina Jolie and Bono from mere entertainers to global power players.
“There’s no question they’ve inspired the next generation of high-profile philanthropists. Frankly, it’s not limited to celebrities. They’re inspirational to philanthropists, period,” said Adam Waldman, president of the Endeavor Group, a Washington, D.C.-based consulting company that advises Jolie and Brad Pitt.
The attempt by celebrities to display a deep commitment to issues beyond their next movie or album was apparent at last month’s meeting of the Clinton Global Initiative, the annual summit of world leaders to address “some of the world’s most pressing challenges.” Celebrities including NASCAR’s Jeff Gordon, actress Geena Davis and Stiller attended alongside prime ministers and corporate CEOs. Lavigne’s new charity for sick and disabled youth Twittered a picture of the singer listening intently to a presentation on the problems facing small farmers in developing countries.
“You have to earn your stripes in philanthropy if you are a celebrity, and it takes homework. People can tell if you are serious or not,” said Trevor Neilson, whose 12-person firm, Global Philanthropy Group, opened a Santa Monica office last year and advises a dozen celebrities including Legend and Lavigne.
For A-list altruists and other high-net-worth individuals, there is no shortage of places to turn for advice these days.
“It’s a growth industry. There are a lot of people who are new to philanthropy and don’t have a lot of experience but have wealth and have an interest in making sure they do it in a sophisticated and tactful way,” said professor James Ferris, director of USC’s Center on Philanthropy and Public Policy.
Banks and law firms are competing with boutique firms and nonprofits to counsel millionaires and billionaires, many of them young, self-made and strapped for time, on how to give their money away effectively. Entertainers also have the option of seeking direction from their talent agency.
For-profit philanthropic consultants can be pricey. Rachael Ray’s Yum-O organization, founded to encourage healthful eating, paid Endeavor Group $130,936 to help open that charity in 2007, according to tax records. A new foundation set up by fashion designer Tory Burch to provide microloans to American women paid Global Philanthropy Group $170,000 last year for consulting services, according to tax records.
Tabankin said the costs vary widely, but “to make it worth hiring somebody, I personally think they should be giving at about the half-a-million-dollar level because then the administrative costs are still a low percentage of what they are spending.”
Those who hire consultants fall into various categories — those like Legend who know they want to do something, but aren’t sure what; others who know what they want to do but don’t know how; and those who are already doing something but doing it poorly.
“We do a lot of redos,” said Marc Pollick, president of the Giving Back Fund, which has advised Justin Timberlake and Britney Spears and now works mainly with professional athletes, including Ming. “People put their mothers, fathers, brothers, French poodles in charge of their organizations simply because it is a job for someone in their entourage … and the foundation is floundering.”
That can be a public-relations hazard for celebrities, as musician Wyclef Jean found out earlier this year when it emerged that his Haitian charity had failed to file tax forms and paid out hundreds of thousands of dollars to companies he and a cousin controlled.
What advisors do for their famous clients runs the gamut from preparing a charity’s tax forms to arranging meetings with members of Congress. They write speeches, update websites, and suggest which benefit galas to attend and which to skip.
“Managers [and] publicists don’t have the time or experience to evaluate the cause or the marketing program,” said Bruce Richman, whose firm, Inspired Philanthropy Group, helped Richie and her fiancé Joel Madden set up their children’s charity.
Among a philanthropic advisor’s most important duties is vetting the recipients of charity money.
“The last thing you need is a story on ’60 Minutes’ that you helped raise $100 million and it didn’t get where it was supposed to go,” Tabankin said.
In Legend’s case, the challenge was to narrow the singer’s wide-ranging policy interests to a single issue that wasn’t already the philanthropic province of another celebrity. The consultants analyzed his past charity work and writings, including hundreds of his Twitter posts.
Education reform “became really clear once we went through all of his tweets,” said Global Philanthropy’s Maggie Neilson.
When The Times published a database of teacher evaluations data this summer, advisors sent him a link to the articles and came up with the idea of sending $150 gift certificates to the 100 top-performing teachers.
Consultants “have been helpful in handling the due diligence and research so that I can stay better informed. I do some of that myself but … they do some things for me that it would be hard to do myself unless I quit my day job,” Legend said.
Leslie Lenkowsky, an Indiana University professor of public affairs and philanthropic studies who has been critical of celebrity involvement with nonprofits, said he was skeptical of the motives of those who hire advisors.
“It’s not simply developing a plan for giving that maximizes taxes. Ultimately, the real value of philanthropy to a celebrity is maintaining an image,” he said.
It’s a criticism that several working in the field acknowledged was sometimes true of celebrities in general, although they insisted not of their clients.
Famous faces will show up to events, Tabankin said, but “having a serious private foundation that is part of giving your funds away hasn’t in any way become part of doing business in Hollywood.”
Global Philanthropy turned away the business of “a person … in the hip-hop community” in legal trouble after sensing that the person was more interested in public relations than helping others, Trevor Neilson said.
“There’s red carpet philanthropy and then there’s real philanthropy. Ninety percent of what happens in philanthropy in the entertainment industry doesn’t have an enormous impact,” he said.
The Giving Back Fund instituted a policy that clients must make “a meaningful personal gift” to their cause after several frustrating experiences.
“We’ve had people who have hundred-million-dollar contracts. It’s in the paper. And they’ll come to us with a $5,000 check and say, ‘I want to start a foundation and can we blow up this check so I can stand behind it for a picture,’” Pollick said.