Everybody knows that charity bicycle races have become popular and effective fundraisers for diseases. Well, popular certainly—but effective? Ask Doug Nelson, executive director of the AIDS Resource Center of Wisconsin, who proclaims himself “surprised and disappointed with the result” of last year’s bikeathon. Out of a total $806,000 raised, the charity wound up with just $52,000, or 6.5 percent of every dollar raised. Another nonprofit received just over $400,000 (or 28 percent) from the $1.5 million raised by its participants, according to the Associated Press. Both blamed middlemen and race organizers for charging exorbitant fees.
iGave at the Office
Another building block on the road to Internet philanthropy is in place. iGive.com, the online shopping mall that donates a percentage of all its customers’ purchases to their designated charities, has come up with a process that allows users to take tax deductions on the portion of their purchase that goes to charity. But as with so many Internet ventures, online philanthropy seems so far to be more promise than profit. iGive.com boasts that it has raised $307,000 for over 5,300 nonprofits through the purchases of its 68,000 members. Those numbers sound impressive; but a little quick arithmetic reveals that that translates into less than $60 per nonprofit—better than nothing, but still not much.
Baby You Can Deduct My Car
We’ve all heard those radio ads urging us to donate old cars to charity. The Associated Press reports that car donations have soared in recent years. Last year the American Kidney Association accepted a record 56,000 vehicles—an increase of 39 percent over the year before. Ideally in such transactions, everybody’s happy: The charity gets a car, and the donor gets a hefty tax deduction while avoiding the hassle of selling the old boat. Well, almost everybody’s happy. The Internal Revenue Service now warns that many people are erring by deducting full “blue book value” for their not-quite-so-valuable old jalopies. Moreover, some of the outfits appear to be fronts for used car dealers. In exchange for as little as 1 or 2 percent of the proceeds from the car sales, some charities lease out the use of their name to these middlemen, who then do the advertising, pick up the cars, and sell them for a handsome profit.
Charity: It’s Not Just for Breakfast Anymore
Used to be that you needed to win a Super Bowl, or at least a gold medal, to get your face on a box of Wheaties. But now it seems like everybody’s getting in on the act. A company called Famous Fixins matches celebrities with food products and donates a portion of the proceeds to charities named by the celebrities. There’s Sammy Sosa hawking “Slammin’ Sammy’s Frosted Flakes,” Cal Ripken lining up for “Cal’s Classic O’s,” Alex Rodriguez going to bat for “A-Rod’s 40/40 Crunch,” and now Tim Duncan plugging “Slam Duncan’s.” Other brands include the Houston Astros infield and the entire New York Mets baseball team, with proceeds going to the team’s charities. No word yet on a Dennis Rodman flavor.
Hearts of Gold
Businesses in regulated and politically unpopular industries have long understood the value of a little “strategic” (read: visible) philanthropy. But it still comes as something of a surprise to hear about the essential philanthropic work performed by…exotic dancers. At least, that is what a new professional association of “gentleman’s clubs” would have us believe. Perhaps spooked by the astringent crackdown that Mayor Rudolph Giuliani has visited upon New York’s “adult entertainment” industry, Greta Shamy, proprietress of Philadelphia’s “Delilah’s,” told the Philadelphia Inquirer that she and the other owners “want to get the word out” on all the charitable work they do. “We are all very active in charities. A lot of my girls were involved in a charitable event last night that raised $10,000 for multiple sclerosis.” Shamy adds that her “entertainers” would “love to do breast cancer, would love to do battered children.”
Another Day, Another Nine Figure Donation
It wasn’t so long ago when giving away $100 million was pretty big news. In 1996, when Samuel and Aline Skaggs pledged that very amount to San Diego’s Scripps Research Institute, it was front-page news for days and garnered the couple the top spot on Slate magazine’s list of the year’s most generous donors. When Ted Turner announced his plans to give what amounted to about $100 million a year for ten years to the UN Foundation, it landed him the cover of Newsweek. But such large donations are becoming less rare, and some wonder whether we have become inured to such grand scale giving. When the W. H. Keck Foundation announced last month that it was giving $110 million to the University of Southern California Medical School—the largest-ever gift to a medical school—the New York Times, Time, and Newsweek didn’t even find it worthy of mention, much less the front page.
The Sweetest Think Tank
Milton Hershey established a trust to support the school for orphans he founded in 1909. Last January the school asked a probate court to declare that the trust had “failed” in its mission and needed to have its terms revised. The problem: Too much money. According to the Wall Street Journal, the Milton Hershey School has a $752 million surplus on its endowment of $5 billion. After providing its 1,050 students with all they could need, at a cost of $60,000 annually per pupil, and spending $227 million on new construction projects, there’s still money left over. The school wants to start a research institute (think tanks can be costly: $25 million to build, with a $25 million annual budget), but needs the court’s approval that this is a purpose Mr. Hershey would have endorsed. Another example of how trust writers can spare their descendants and the institutions they wish to help a lot of anguish by clearly specifying their will in the event of foreseeable contingencies—even “good” contingencies.
Last issue’s “Briefly Noted” reported on the ouster of the trustees of Hawaii’s Bishop Estate, one of the nation’s wealthiest but (until recently) least-known charitable organizations. The trustees were removed from their $1-million-a-year positions by a court ruling that found their pay to be excessive. The trustees countered that even though the average compensation for directors of large foundations (assets over $1 billion) is just $15,000, they should not be judged on that scale since their duties and responsibilities were closer to those of chief executives. Now an IRS study concludes that the trustees “should” have been paid between $60,000 and $160,000. The Honolulu Star-Bulletin reports that the trustees “could end up paying back significant sums” of their salaries under the federal “intermediate sanctions” law. What is worse for them, the law provides for substantial penalties for any compensation deemed “excessive.”
A Cruel Lesson in Supply and Demand
The students at Highland Community School in Colorado earned a lot of attention for themselves and their cause when they raised $50,000 in a charity drive to buy the freedom of Sudanese slaves. But the law of unintended consequences is offering the students a nasty surprise. All that money had the effect of driving up the price of the slaves—resulting in more people being captured and put up for sale. The Denver Post reports that international human rights organizations have asked the children to stop their fundraising.
Getting in on the Ground Floor
Market madness has officially hit the nonprofit sector. Volunteer Exchange, a San Jose, California, nonprofit, is distributing a prospectus for its Initial Public Offering (IPO) scheduled for next month. Shares will be available for the initial bargain price of just a dollar each. But according to Philanthropy News Network, there is a small catch: the shares are not—and never will be—worth anything. The goal of the IPO is to generate a buzz of interest for Volunteer Exchange. Apparently knowing their IPO-crazed Silicon Valley “market” only too well, they hope to raise $70,000 through the offering.
Two Catholic institutions have received enormous donations from somewhat unexpected sources. Media tycoon Rupert Murdoch gave $10 million toward the construction of the Cathedral of Our Lady of the Angels in Los Angeles. The money is to be used to build a conference center for the 3,000-seat cathedral, which is scheduled to open in 2001. Murdoch, who is not Catholic, explained that, “Cardinal Mahony’s wonderful vision for this new cathedral…deserves everybody’s support.” Meanwhile in Utah, philanthropists Samuel Skaggs Jr. and his wife Aline gave $42 million to the Catholic Diocese of Salt Lake City for the construction of a mammoth new school, to be named the Skaggs Catholic Center. Based on the design of a medieval monastery, the 57-acre campus will contain a day care center, an elementary school, and a high school, with 75 classrooms, three gymnasiums, two stadiums, and 14 miles of fiber optic cable. So far, applications to the school are running at better than twice what the Diocese expected. Even more remarkable is the fact that the gift was entirely unsolicited. According to the Associated Press, Skaggs, after retiring as chairman of American Stores Co., a national drug and grocery chain built by his father and Baptist minister grandfather, read in the newspaper of the diocese’s need and called to offer help. At the time of the gift, which was made through the Skaggs Family Foundation for Roman Catholic and Community Charities, Skaggs had not yet converted to Catholicism. Utah Bishop George Niederauer said, “It may very well be the largest gift ever to Catholic primary and secondary schools.”
My Kid Could Do That—On Drugs
Does drug use inspire great art? That is the theme of a controversial art exhibit titled “The Ecstatic,” currently on display at the Trans Hudson Gallery in New York’s trendy meat-packing district. The exhibit features paintings of hemp leaves and hallucinatory photographs of drug users. Who funded what the Wall Street Journal describes as an argument “that drug use can have a positive, inspirational effect on art”? According to the Journal, it was none other than financier/philanthropist George Soros, through a $25,000 grant from his New York-based Lindesmith Center. Copies of Soros’s 1997 Washington Post op-ed piece “The Drug War Cannot be Won” were distributed to attendees at the packed exhibit opening.