Your Message Here
The Ad Council is a network of newspapers, television stations, and radio broadcasters who donate space to run public service announcements created by ad agencies who donate their talents to worthy causes. It’s a big effort, representing about $1 billion a year in free advertising for good causes. Now USA Today reports that, while “the goal is to advocate non-controversial, non-partisan good works,” a recent campaign by a group with a partisan political edge has “slipped under the radar screen” and threatens to undermine the Ad Council’s credibility. USA Today claims that EarthShare, an environmentalist umbrella group, “violates the ethical codes that the Ad Council advocates for its partners” by including among its constituents 14 groups some that are “deeply enmeshed in advocacy” and have a “clearly partisan” political message. Among the EarthShare groups that have benefited from $250 million worth of free Ad Council advertising are Greenpeace, Friends of the Earth, the Environmental Defense Fund, U.S. Public Interest Research Group, and the Natural Resources Defense Council. USA Today warns that the Ad Council needs “to keep their distance from charitable groups with high-minded goals but clear political agendas.”
But for Whom?
Californians were shocked earlier this year to learn from the state attorney general that only a small fraction of the money collected by charitable fundraisers in that state actually wound up going to charity. Now it’s Ohioans’ turn to fume. The Ohio attorney general has just released a report indicating that charities there wound up with a puny 27 cents out of every dollar collected in their name by professional fundraisers. While the Better Business Bureau recommends that a charity should expect to see at least 65 percent of funds raised on its behalf, the Columbus Dispatch reports that out of the more than 400 charitable organizations using professional fundraisers to solicit from Ohioans in 1999, only 37 reached that standard. Among the most egregious cases cited by the report was the fundraising campaign of the Cancer Fund of America. Just 12 percent of the $6.4 million raised in the state for them last year actually found its way into the nonprofit’s coffers. A spokesman for the group was equivocal: “The numbers always bother you because you want to do better. You always say, ‘Geez, I wish there was some other way of doing this.’ But there isn’t.”
Oh for a Charity with a Really Big Moving Truck
In yet another example of an iffy philanthropic vision brought low by the wrecking ball of reality, Silicon Valley tech mogul Ali Moghaddam found himself in a dilemma familiar to many of his peers: He wanted to upgrade his ranch-style home, but land prices had shot up so dramatically that it made more sense to build from scratch on his current lot. Demolishing the old house would cost upwards of $20,000 and it must have seemed like a waste tearing down a perfectly nice residence when the demand for Silicon Valley housing was so high. Moghaddam thought up an innovative charitable solution: donate his house to whatever nonprofit would come and haul it away. The charity would get the house, Moghaddam would get his lot (and a tax break), and everyone would live happily ever after. It turned out that moving the 2,200 square-foot home was a bit more of a burden than local nonprofits were willing to accept. Despite being deluged with calls from intrepid bargain seekers looking for a free home (people sent him photos of their children along with “heart-wrenching tales” of being priced out of the area), Moghaddam simply could not find a charity that was willing to relieve him of his house. He even sweetened the deal, throwing in some furniture and his 1990 Honda Accord. But “in the end,” laments the San Jose Mercury News, “the bulldozer got the house.” For his part, the would-be philanthropist was deeply frustrated by the experience, and even claims to have lost employees who had read about his offer in the newspaper (“They asked me for more money—‘If you want to give to charity, why don’t you increase my pay?’”). His advice to those who would follow in his philanthropic footsteps? “It was a nightmare. I would not recommend this to anybody.”
The Washington Times admits that it’s an unexpected blend: “It’s not often that conservatives get involved in ‘socially responsible’ causes benefiting Latin America.” All the more reason to be impressed by the story of two entrepreneurs who are trying to save souls and improve lives one coffee bean at a time. Former Microsoft executive John Sage, 38, “always hoped to find a way to put my business and faith together.” After a conversation with Chris Dearnley, 39, an old friend from Harvard Business School, about costs and profit margins on coffee grown in Costa Rica, the two came up with a plan: grow gourmet coffee there, market it in the United States via the Internet, and plow the profits back into Costa Rica for the benefit of poor children. The workers make money, and the children get the charity. What distinguishes “Pura Vida” coffee from many other “socially responsible” businesses is that all of their profits go to charity. The two entrepreneurs don’t regret using their business acumen for an Internet startup whose goals extend beyond a lucrative IPO: “You meet these kids and you hear their stories,” Dearnley says. “The more you get involved with something like this, the more you see and realize the need.”
Lincoln, We Barely Knew Ye
University development offices are nothing if not sophisticated when it comes to tracking and storing information about prospective donors, including data on such potentially ingratiating minutiae as a donor’s favorite food or martini preference. But even with all that information, sometimes a prospect can still surprise, as Lincoln Knorr recently did with his alma mater, the University of Michigan. Knorr, who co-founded and ran a Detroit machinery manufacturing company, died in 1998. He had been an unobtrusive alum, giving about $1,000 a year but never serving on an alumni committee or marching in a homecoming parade. “We didn’t even have him on our radar screen,” says a university spokesman. Thus the surprise when they learned that Knorr had named the school as the ultimate beneficiaries of two complex trusts that should be worth about $1 billion to the university by the time they vest over the next 30 to 40 years. Knorr, who never married and had no children, left no stipulations, according to the Detroit Free Press, other than that “consideration be given” to the business and law schools.
Giving from the Soul
Everybody knows that James Brown “feels good.” Now he wants other people to feel good too. Reuters reports that the “Godfather of Soul” has a “brand new bag: philanthropy.” The singer recently completed a personal bond issue (an odd yet increasingly common financial transaction whereby celebrities essentially securitize the future expected earnings of their catalogues), and has pledged a sizeable chunk of the $30 million he plans to pocket from the deal to endow a foundation. The artist responsible for such hits as “I Got You” and “Sex Machine” explains that “there are a lot of people that need a lot of help and we want to help them— I have everything that I need. I set up a foundation to help underprivileged people, a lot of churches, and we’ve sent a lot of people to school.”
The Perils of Pledging
Admit it: It feels good giving money away. There is an undeniable rush that comes from pledging money to groups and causes you support. But for some people, the craving for that good feeling surpasses their ability to pay for it. Such seems to be the strange case of Pittsburgh metallurgical engineer Nathan DiGiambattista. In a moment of high-minded charitable largesse in 1994, Mr. DiGiambattista pledged $25,000 to a local synagogue in memory of his father. The problem is, Mr. DiGiambattista has only paid $900 of that pledge, and is now being sued to make up the difference (he claims business setbacks plunged him into debt, and according to the Pittsburgh Post-Gazette is now working part-time in a hardware store). Laments DiGiambattista, “I read the Book of Job for entertainment.” A suggested motto for Donors Anonymous: “Give with your head, not over it.”
E.T. Phone the Foundation Center
When NASA cut off funding for the Search for Extraterrestrial Intelligence (SETI) project in 1993, private donors, including the Packard Foundation and Intel co-founder Gordon Moore, stepped into the breach. Now another group of tech-savvy philanthropists, including former Microsoft executives Paul Allen and Nathan Myhrvold, are upping the astronomical ante, donating $12.5 million to allow SETI to continue to search the stars for signs of alien life. The new grant will allow SETI, in partnership with UC-Berkeley, to construct the largest telescope ever built for the purpose of detecting signals from aliens. SETI plans to establish the array of 500 to 1,000 receiving dishes in a remote area of northern California, so that the faint signals they are searching for will not be interfered with by Earth-based radios and cell phones.
It’s a small thing, but it’s still nice to see that some people can walk softly while carrying a big checkbook. In the span of just a few days in July, the Bill and Melinda Gates Foundation announced three grants: $40 million for the homeless, $44 million for tuberculosis research, and $40 million for malaria research. The low-key style of their announcement is refreshing—no staggering them into successive weeks to maximize news coverage, and no agglomeration of unrelated grants into a lump sum to produce a headline-grabbing “Gates Makes $120 Million Worth of Grants” press release.
Thanks, but No Thanks
A number of charities may be left wrestling with a novel problem as a result of the recent “Ask O. J.” Internet event. A Web site offered viewers the opportunity to ask the football-player-turned-murder-suspect questions. For this privilege, would-be questioners had to pay a $10 registration fee. Simpson, who is refusing to pay an outstanding civil judgment against him for the deaths of his ex-wife and her friend, vowed at the time of the online event’s announcement that all of his proceeds would go to “charity.” In subsequent interviews, he named a number of specific nonprofits, many of which were quick to emphasize that they did not want his money or the attendant publicity. Simpson responded by suggesting that he might “quietly” drop them a check in the mail. No word yet on whether any of these awkward donations has been fished out of the mailbag, but at least one charity—Camp Good Times in Washington state—breathed a public sigh of relief last week when it found that it was not on the list. A spokesman for the charity that runs the camp expressed “relief” at the non-grant. Perhaps Mr. Simpson could donate the funds to a charity dedicated to searching for the “real killers”?