Experts give showbizzers recipes for turning dough and energy into good deeds
Celebrity charity has always been in vogue, but now revving in the highest gear it’s ever been in, it seems you can’t turn on the TV without hearing about Bill Gates’ decision to focus his full attention on the billions he’s donating to heal and educate the world, Warren Buffet’s astoundingly generous donation to Gates’ foundation, Angelina Jolie’s efforts in Africa and Bono’s crusade to help the downtrodden in developing countries.
Many industry folks are eager to not only flex their financial muscle for a cause but also learn the ins and outs of philanthropy so their efforts are long-lasting.
Some celebrities are happy to simply write a check for a pet cause. Others prefer to get personally involved day to day in addition to donating their money. Whatever method celebs choose, there’s an entire apparatus operating in the background — from business planners to back-office service providers to legal teams — to ensure these creative types get their causes off the ground and keep them flying.
So how does it all begin? How does a celebrity get involved in building a foundation or joining a cause?
Finding a celebrity’s niche is key, experts say. Gregory Wendt, a wealth adviser based in Santa Monica, says celebrities can be overwhelmed with sudden wealth and need to be coached to think about how much money they really need to live and how much is appropriate to give away.
“I ask an extensive series of questions to help them figure out what is right for their life and how can we use their money to support that,” Wendt says. “It takes an hour or two for people to get what I’m talking about.”
Smaller contributions are perhaps best suited as donations to existing foundations, Wendt says. Some industry folks simply want to lend their time, and Wendt can also help them find the right outlet.
Lisa Philp, head of philanthropic services at JP Morgan Private Banking, says the company’s celebrity clients, which includes models and musicians, usually start out with a passion about certain issues. She says the firm’s goal is not only to help celebrities understand nuts-and-bolts details such as tax implications and business structure, but also to find the ideal outlet for their interests.
“We take that starting point and do research for them,” Philp says. “If someone is passionate about child welfare, we find out who the key donors are, who is affecting policy changes, who are the groups involved and where are the gaps in services.”
A few celebrities go the whole nine yards. Director Tom Shadyac is among a select few who created a business to help charities. Inspired by Paul Newman’s model for Newman’s Own products that raise money for charity, Shadyac started a bottled water company called Hope to Others, or H to O.
H to O donates 100% of after-tax profits to charity. CEO Tom Schleuning says Shadyac chose water because it’s a universal commodity. The company has been successful in getting cases of its water into talent agencies, on set and in entertainment law firms, among other places. It’s also available at Whole Foods locations in the Southwest U.S.
“We all need it on a daily basis,” Schleuning says. “And (water) doesn’t have a huge brand loyalty, which makes it easier to market.”
Still, Schleuning and Shadyac had to learn the ropes of the business from scratch, from finding the water sources in Northern California and in Palomar, near San Diego, to contracting bottlers to supplying labels and other materials.
It has been worth the effort, Schleuning says. H to O’s first projects included providing funds to dig three water wells and two water systems in Senegal.
H to O works with reputable charities such as St. Jude Children’s Research Hospital, Habitat for Humanity, Operation Smile and the Salvation Army.
Even long-standing, high-profile charities like the Conrad N. Hilton Foundation are constantly learning so they can stay on track, helping those most in need while following government rules.
Eric Hilton, foundation director and son of the late hotel entrepreneur, says much effort is put in making sure nothing falls through the cracks.
“When we make a donation, the recipients have to follow strict regulations and we continuously check on them,” he says. “We don’t simply stamp a gift and forget about it.”
The Hilton foundation has given away more than $450 million since its inception in 1944, between $40 million and $45 million of that in 2005 alone. Causes include education, childhood illnesses and poverty locally and abroad. Donations have also covered natural disasters worldwide.
Matt Peterson of Global Green USA offers some insight in corraling names for a good cause.
“It’s about relationships,” Peterson says. “As you get better known it’s easier for people to find you and want to work with you.”
Of course, celebrities get involved in charity to bolster their image or repair bad press, but in many cases, celebrities are genuinely interested in helping.
“We’ve been fortunate that the people who work with us are thoughtful, committed and intelligent,” Peterson says. “It shows in their level of commitment and involvement.”
He points to Leonardo DiCaprio, who spends a lot of time reading and educating himself about global warming so that when he speaks about it he sounds authoritative and genuine.
Not all celebrities need to become experts to make a difference.
“Sometimes they’re not good at public speaking, but it’s still great that they can bring attention to an issue and lend their name to it,” Peterson says.