(Corrects spelling in second paragraph to Livestrong)
By Mitch Lipka
Nov 15 You don't have to spend much time
listening to Angelina Jolie or Bono to know that celebrities can
help raise awareness for charities. Just about anyone with the
name recognition to make it into "People" magazine has used that
power to promote a cause or two.
But the recent fall from grace of cyclist Lance Armstrong,
who established the cancer-fighting Livestrong charity,
highlights the risks of that approach. The charity that lives by
fame can be hurt by it too. Armstrong recently cut all ties to
the organization after he was stripped of his Tour de France
titles amidst charges that he cheated.
Perhaps even more illustrative of just how risky celebrity
tie-ins can be is the recent collapse of musician Wyclef Jean's
Yele Haiti Foundation, which collected more than $16 million to
aid victims of the 2010 earthquake that crushed the capital city
of Port-Au-Prince and left hundreds of thousands homeless. Yele
closed its doors in September in the face of questions about how
it deployed some of its money.
"We typically warn donors that ... (a celebrity connection)
... is a good way to learn about organizations, but it isn't a
seal of approval," says Sandra Miniutti, vice president of
Charity Navigator, a service which evaluates nonprofits.
Not all charities with celebrity tie-ins have problems, and
not all troubled charities have those famous figureheads.
Livestrong is likely to live up to its name, even without
Armstrong. The charity has reported that donations are up, not
down, since the scandal broke, and that fewer than a dozen
donors have asked for refunds.
Here are a few pointers for those who want to follow the
lead of their favorite stars when they contribute:
-- You've got plenty of choices. The website
LookToTheStars.org lists over 3,000 celebrities linked to over
1,880 charities, with everything from Rihanna's own Believe
Foundation, which helps terminally ill children, to Daniel
Craig's public donations to the Royal National Lifeboat
-- Dig deeper. Before making a donation, look up the charity
of your choice on at least one of these sites:
CharityNavigator.org; Guidestar.org, the Better Business
Bureau's Wise Giving Alliance (bbb.org/us/charity); the American
Institute of Philanthropy (Charitywatchdog.org) and
A key item to consider in an organization's financials: How
much money goes to the actual cause versus administrative
overhead? Charity Navigator says at least 75 percent of a
charity's funding should be spent on the do-good programs
-- Look beyond the finances. Not every organization that is
involved in a specific cause will have the same focus. A
cancer-related organization might target education or patient
care or research, for example. "It's critical that donors really
take the time to learn what the charity does so they don't get
burned on the back end," Miniutti says. "Don't assume."
It's also worth noting what role celebrities play in the
charity. When a famous person attaches her name to a well-known
and regarded nonprofit, that's one thing. When the rock star
establishes his own nonprofit, then you have to vet it with
extra care as you would any new charity that doesn't already
have a track record.
-- Ignore your phone. It is routine for charitable calls to
come from professional telemarketing companies that could take a
large percentage of the donation. "People still haven't gotten
the message that they should just hang up," Miniutti says. "They
should not donate over the phone." Phone solicitations also
don't allow you the time to evaluate the organization, and make
it more likely you end up giving to a group with a name that
sounds familiar but isn't the one you had in mind.
-- Look for expertise. Even well-intentioned boosters can
hurt a cause if they don't know how to run a charity, and a
legitimate group may simply be ineffective if its leaders don't
know how to run it. Check out the boards and executives who
serve the charity you're considering and make sure they have
experience in the nuts and bolts of philanthropy.
-- Avoid tricky approaches. The Better Business Bureau warns
would-be donors to steer clear of charities that send pitches
that look like invoices, or that exaggerate the financial need
of their organization or its cause. Beware, too, of groups that
substitute an emotional appeal from a star for the more detailed
explanation of how they operate.
-- Give more to fewer causes. You can make your charitable
giving more effective if you focus it. When you make larger
donations to fewer groups, you cut down on the number of groups
that will spend money continuing to market to you. And if you
give larger amounts to smaller or local charities, you may have
more influence on how they are deployed. Finally, you'll have
fewer groups to research and more money to support those causes
that mean the most to you - and to Justin Bieber.
(Follow us @ReutersMoney or here;
editing by Linda Stern and Prudence Crowther)