The “Circle of Giving,” as Lew Wasserman once called it, is going through change in Hollywood.
The ailing economy, shrinking corporate sponsorships and an emerging sense of new priorities and activism have left a number of Hollywood’s leading charities struggling to preserve their core cause and the bottom line.
Even with strong celebrity support, benevolent institutions have seen donations decline in the double digits in recent years, causing charities to consider the way they have traditionally done business.
“Everyone is hurting,” states Joel Hock, the CEO of Solutions With Impact, the event-management company that organized the recent the Rally for Kids with Cancer Scavenger Cup in L.A. “The days in which someone on a committee who knows you phones you and taps you on the shoulder to buy a table are ending. The days in which sponsors come on board because they get an ad in the program are gone.”
“Charities are the first to go because people don't have that extra income to give,” Laurie Grad, co-chair of the Alzheimer’s Association, told TheWrap. “A lot of loyal people have had to cut back their giving by half.”
But, she added, the business of Hollywood itself also has had an impact.
"Traditionally, most studios come in for a $10,000 table, same things with the networks, but we've also lost a lot because of the mergers,” Grad said. “We used to get both NBC and Universal for a table for $10,000 each, now we get $10,000 once.”
That loss is partially why, even after cutting production costs and streamlining organizational expenditures, the revenue from the association’s annual A Night at Sardis musical revue has declined.
The star-studded, Broadway styled evening, which has helped bring in nearly $16 million over the years, slipped from $1.2 million in 2006 to under $1 million at its 17th anniversary show performance of “Damn Yankees” at the Beverly Hilton this March.
“A lot of publicly held companies can’t give as much as they used to, because they are held to a standard about how much money they are giving away when people are suffering from massive layoffs,” said Judy Levy of L.A. event-coordinating firm Levy, Pazanti & Associates.
“Across the nation, across every industry -- and even in what I think is one of the most generous industries of all,” Levy said, “fundraising is down anywhere from 20 to 40 percent.”
But it isn’t just the loss of corporate sponsors and a bad economy. “There are now so many charities in this town,” Grad said, “that giving has been diversified -- everyone has their own charities.”
And not all of these established charities in the “old” sense.
From Leonardo DiCaprio and the environment to George Clooney and Darfur to Angelina Jolie and Africa and Brad Pitt and New Orleans, younger celebrities in particular are now aligning not with specific charities but with general causes that are near and dear to them.
“The previous generation gave generously to United Way and big community-based organizations like MPTF and said here’s my money, we trust that you are doing the best for the charity,” Ken Scherer, CEO of the Motion Picture and Television Fund, told TheWrap. “Today’s donor wants to have a direct impact -- ‘I can educate these three kids or I can help fix autism.’
“I think more it’s about ego-driven, or vision-driven philanthropy, where you have a vision, you want to make a difference and you want your money to work.”
Despite the fact that the MPTF Foundation raised nearly $24 million last year, tightened budgets is something that the almost 90-year-old beneficiary entertainment employees support organization is acutely aware of.
“Today, charities are struggling to maintain mission,” Scherer said. “MPTF, like other charities, is having to adapt to a new form of philanthropy.”
The MPTF, which announced earlier this year that it would be closing its Long Term Care Center due to rising costs and falling revenues, was, Scherer said, down over $1 million from the year before due to declining corporate contributions and presenting sponsorships.
Like many long-standing charities, the MPTF found it had to change its model.
In the last decade, for example, the fund has dramatically stepped up its fundraising efforts with numerous celebrity-heavy events throughout the social calendar. Of the money raised last year, $11 millon came from events such as the Night Before, the now annual A Fine Romance and smaller gatherings and golf tournaments.
Then there’s the Rally for Kids with Cancer Scavenger Cup, which roared off the starting line for the first time on May 1. The rally sought to beat the downward trend with strategically leveraged media coverage built around a series of events including a dinner at the Roosevelt Hotel, a private function at the Beverly Hills home of supplement millionaire Bill Phillips and a race around the city.
Hosted by Eva Longoria Parker, who serves as the national spokesperson for PADRES Contra El Cancer, 23 teams were sponsored by companies such as United Airlines and MSN’s Wonderwall.com who paid $25,000 and up to drive through seven task-oriented pit stops. Also, up for bid were celebrity navigators, such a Longoria, her NBA star husband Tony Parker and KISS’ Gene Simmons -- who at $60,000 was the second costliest celeb after Longoria-Parker.
Hock told TheWrap his tactic was to rely less on the big sponsorships and instead attract a wider stable of corporate sponsors and donors in the $50,000 to $100,000 range in a series of events “you get to do, play and attend over a two-day period of positive energy.”
He was very clear about his method and the reasons behind them. “The key for organizations to flourish in the future and to generate sponsorships,” he said, is in how innovative and how creative they can be in integrating the sponsor’s name, product or service throughout the entire initiative.”
For example, for the Scavenger Cup, title sponsor Wonderwall was woven into every aspect of the events and media coverage.
That for Hock is the new reality of Hollywood charity -- and “it’s very difficult for a one-night rubber-chicken gala to do that,” he said.
For Scherer, the situation is part of the far bigger puzzle stumping the entire entertainment and media industry. “There is a changing economy in our business that places like MPTF have come to depend on, and I don’t think we know yet how it’s going shake out,” he told TheWrap.
“I do know we just can’t keep doing business as we’ve done it in the hopes that someone is going to step up and give us a lot of money. We’re in transition, and I just don’t know where this thing ends.”