May 21, 1998 | Read Time: 7 minutes
Two years ago, Michael Jordan shut down his foundation following criticism in news accounts that it spent too much money on overhead, including a $47,500 payment to his sister to run it. Last month, the singer Michael Bolton found himself denying that less than 15 per cent of the money his foundation had raised through special events had gone to charity.
A new fund in Boston says it is offering a solution to such mishaps in celebrity philanthropy.
The Giving Back Fund is seeking gifts from athletes and entertainers and then creating charitable funds that bear their names — even though their money is actually pooled into a communal fund.
The Giving Back Fund manages all of the legal and organizational details. It invests the assets, investigates potential grantees, files annual reports with the Internal Revenue Service, and even designs and updates separate World-Wide Web pages for each foundation.
In return, Giving Back charges a maintenance fee equivalent to 3 per cent of the donor’s foundation assets — or 2 per cent if the donor employs his or her own executive director. However, just as with gifts to any community foundation, donors do not have to pay the annual 2-per-cent excise tax on their assets’ net investment income that they would owe if they ran a private foundation.
Since signing up its first donor, the National Basketball Association player Dee Brown, in December, the Giving Back Fund has amassed about half a million dollars in assets. That is a far cry from its goal of possessing $20-million in assets by the end of 2001. When it reaches that goal, the foundation says, it will be self-sustaining and will no longer rely on the pro bono help it now receives from lawyers, accountants, and grant-making experts.
Like a community foundation, the Giving Back Fund encourages people to set up donor-advised funds — which means that the contributor can recommend charities that should receive donations. The donors can set up the funds in their own names, and can even call them “foundations” so that it appears to the public that they have their own charitable enterprise.
But Giving Back is different from typical community foundations because it has made a point of courting the famous — although it does accept donations from people not featured in Who’s Who.
Marc Pollick, president of the fund, is optimistic he will reach his $20-million goal now that he has attracted two marquee philanthropists.
Mr. Brown, co-captain of the Toronto Raptors, established the Tammy & Dee Brown Foundation with his wife in December. Their fund supports groups that teach parents child-rearing skills and supplies needy schools with sports equipment and teaching tools. The couple contributed more than $50,000 in December and plan to give at least that amount annually over the next four years — the duration of Mr. Brown’s Raptors contract.
Mr. Pollick, who was previously founding director of the Elie Wiesel Institute for Humanitarian Studies, in Boston, says he won over Mr. Brown through a mutual acquaintance, who knew that the athlete “wanted to do something charitable but didn’t know how.”
The football star Doug Flutie created the second celebrity fund last month: the Doug Flutie, Jr. Fund, named in honor of his 6-year-old son, who is autistic. The fund aids groups that help poor families with autistic children and charities that conduct research on autism.
The 1984 Heisman Trophy winner from Boston College, who signed with the National Football League’s Buffalo Bills this year, says he and his wife knew they wanted to do something for autism charities after they discovered that their son had mysteriously developed the disease when he was 3. Until then, Mr. Flutie says, “he was a perfectly normal 2 1/2-year-old boy.”
“He developed physically, speaking in sentences, playing basketball with me, messing around on the floor playing games,” says Mr. Flutie. “By the time he was 3 to 3 1/2, he lost all speech. He was totally withdrawn.”
Mr. Flutie adds that the costs of caring for an autistic child are steep. Just buying a specially equipped tricycle can cost $400, and private schooling can bankrupt a poor family.
“What we decided to do,” he says, “was put a foundation together that can raise some money, allocate it to families that can’t afford to educate their children or give them proper care, as well as put money toward research and hope to find some kind of cure.”
The Fluties have contributed only $12,500 from the quarterback’s signing bonus with the Bills, but they intend to seek donations from others to expand the foundation’s assets. They will play hosts next month at a fund-raising event at the Official All Star Cafe in New York that Mr. Pollick estimates could net $500,000.
Mr. Flutie says he was encouraged when he learned about the Giving Back Fund.
“You hear the horror stories,” he notes, about other athletes running foundations. “Five per cent of the money going toward the actual research or the area where they’ve allocated funds and 90 per cent or 95 per cent taking care of the paperwork and the overhead, whatever the cost of running the thing — that was a fear.”
Janet Hill, mother of the basketball star Grant Hill and a member of the Board of Advisors to the Giving Back Fund, agrees with Mr. Flutie that the fund is an ideal way to help well-intentioned athletes avoid mistakes.
“It’s very difficult for individuals to form a private foundation,” she says. “There are lots of steps to be taken, lots of rules by the I.R.S. If athletes are under 25, I don’t think they learned any of this at a Duke or anywhere else.”
Her son, who played at Duke University, however, will not be contributing to the Giving Back Fund because he has already set up the Grant Hill Foundation under the auspices of the Community Foundation for Southeastern Michigan, in Detroit, where he plays for the N.B.A.’s Pistons.
However, Ms. Hill, who is vice- president of the public-relations firm Alexander and Associates, in Washington, says she will spread the word to others: “I would recommend it to any high-net-worth individual.”
If the rest of the 19 well-connected members of the Board of Advisors do the same, the Giving Back Fund may see its assets swell. The board includes the sportscaster Bob Costas, the lawyer Alan Dershowitz, the Olympic sprinter Florence Griffith Joyner, and Anne Woolf, whose late husband founded the sports agency Bob Woolf and Associates, in Boston.
Mr. Pollick says his biggest obstacle to reaching other athletes is getting through their agents.
“There’s a tremendous paranoia among agents that if anyone else comes close to their client that you’re going to steal them,” says Mr. Pollick. “I’ve had agents say to me, ‘We know that you’ll be the best person to run their foundation, but we can’t let you anywhere near our clients because what if you have a third cousin a year from now who becomes an agent and they take our client away.’ ”
As a result, he has written up “an exhaustive non-compete agreement” that he offers to sign with agents.
Mrs. Woolf says she intends to help. “I’ve dealt with athletes who have started foundations,” she says. “They are all well-intentioned, but they’d give it to their brother, their brother-in-law, their hair dresser. I’d see how unprofessional it was.”
Beyond athletes, the next big push, says Mr. Pollick, is into Hollywood, to cultivate movie- and television-industry donors.
Still, non-celebrities have proved to be instrumental to Giving Back and currently provide most of the foundation’s assets. Among them are the owners of Ciao Bella, an Italian restaurant in Boston that caters to N.B.A. players; an endowment for Shelter Legal Services, a Boston legal-services group that is supported by Mr. Flutie’s agent; and Anne Woolf, who turned her family’s philanthropy over to it.
Not everyone is cheering on the Giving Back Fund.
Greg Schupra, vice-president for donor relations at the Detroit community foundation that oversees Mr. Hill’s fund, questions the reasoning behind creating a national foundation. “You can’t know every charity across the nation,” he says.
“I would question a national foundation’s ability to really advise their donors well,” he says. “Here, we have developed an expertise in Detroit charities and feel we know how to advise them to maximize their support for the community.”
Mr. Pollick says he has enlisted 13 “seasoned foundation-management professionals” to assist his fund and will gladly work “with any local community foundation.”
He says the key difference that his foundation offers is “the appearance of the stand-alone foundation.”
“With most community foundations, you’d have to look through their coffee-table-size annual report to find the celebrity’s fund in there,” he says. “With ours, it gets billing in lights all over the country, if they want it that way.”
He notes, “Let’s face it, that’s important to some celebrities.”
