How Celebrity Disaster Relief Donations Work
Four days after Hurricane Maria, Jennifer Lopez appeared at a press conference with New York Governor Andrew Cuomo and announced she’d be contributing $1 million to the relief efforts. Her significant gesture matched the seven-figure gifts that stars, like Sandra Bullock and Leonardo DiCaprio, had made earlier this year to recovery organizations working in Houston, and was on par with the many multi-organizational efforts major celebrities have put forth in the wake of domestic terrorist acts, like Ariana Grande's Manchester Benefit Concert, the concerts held in honor of the victims of mass shootings at Paris' Le Bataclan and Orlando's Pulse nightclub, and, most recently, the efforts we're sure to see in regards to the massacre in Las Vegas.
Unlike other celebrity philanthropic initiatives, disaster relief, both natural and manmade, requires a quick response and is rarely accounted for in giving plans, leaving donors a short window to logistically manage the liquidation of funds, finding out where best to direct those funds and how to be confident they’re being deployed appropriately. Maggie Neilson, co-founder and CEO of Global Philanthropy Group, which advises corporations and wealthy individuals like Angelina Jolie, Shakira and John Legend on their giving, spoke with Billboard about the process and thinking behind ultra high-level donations to all types of disaster relief.
How are celebrities able quickly make a major donation in the days after a natural disaster or domestic terrorist act, like the shooting in Vegas?
In my experience, how celebrities give following a natural [or manmade] disaster is very much the same as how non-celebrities give, in the sense that it tends to be extraordinarily emotionally driven. I was working with one celebrity who gave very generously after Houston, and at one point the celebrity’s financial advisor told me he had some concerns. He said if we give at this level after every natural disaster, the client isn’t going to have any money left. I said, "I wouldn’t really worry about that. How worried were we about the seven thousand people in India who died of floods this summer? Some disasters just hit the radar screen, some don’t." Sometimes, clients are able to give an explanation regarding a specific issue. Houston, for example, is home. We know people from there, it’s a part of the country that looks and feels like where many other Americans are from, so I get why one client would donate more to that cause than another.
There’s also the fatigue that kicks in afterward. One disaster after another, and the fact that we know there will be a lot more in the future means we’re not going to see the same level of giving. The effort and importance placed on donating to Houston was so large because a number of high-profile folks have connections to Houston and/or Texas, the images were so shocking to so many who know the city well, and, of course, it was the first major hurricane of the season. Puerto Rico speaks for itself; the situation there is arguably far more traumatic, but other than a few big-time Puerto Ricans, no one seems to be caring. Giving is very emotional and very heart driven, and in the moment celebrities will have the drive to overrule the people or financial advisors around them who are saying, "hold on, let’s wait a minute. Maybe give less." But, you know, at the end of the day a lot of them have the money to give.
What is the process of freeing up the actual funds like?
Some of them do it in straight-forward ways. They call their financial manager, ask to cut a check and if they have an advisor like me, they come and ask which organization is best. I get calls from a lot of people who aren’t my clients because they know we're reliable, so we always have a standard list of organizations we send to them right after anything happens. Artists also have more maybe a little more creative ways of making money that differ from the average person. I've worked with artists who say, "hey, I have this album coming out next week, what if I just donate all my proceeds from this song? Or hey, I just did this appearance, could we put that $100,000 towards this instead?" Where the actual funds come from tend to be beyond working from a checkbook.
Of course, I'll always see donations that go to organizations that make me cringe a little bit. I remember seeing donations right after Haiti and thinking, "well, that unfortunately could have been a little bit better spent, but your heart was in the right place."
How do people settle on a specific dollar amount to contribute?
There’s a lot of psychology around this that people talk about, specifically with galas. I think a lot of it has to do with what they call "benchmarking" or "anchoring". We know that if someone throws down at a million, people who were going to give say twenty or fifty thousand go up to a hundred thousand. And if they regard that person who threw down a million as their peer, they’re not going to publicly announce what they gave unless it's on the same level. I think what Kevin Hart did around Houston [where he challenged celebrity friends via social media to donate] was fascinating. I’ve seen a lot of celebrities do that at galas, but that was the first time I saw that kind of cajoling and calling each other out used that publicly on social media, not in a room. I’ll be curious to see if that becomes a trend or not. That psychology, whether on social media or otherwise, is one that celebrities and all high net worth individuals have used for years. "I’m going to tease you into giving big at my charity because I know you’re going to do the same to me in the Fall," type of thing.
How do people know which organizations to direct their money towards immediately after a disaster?
Some people have advisors, but I think they’re in the minority. The nice thing about the proliferation of media today is that generally, so many major publications write a "where to give" list and I think those tend to be fairly reliable. You can always reliably give to certain organizations, but you may not agree with how they spend it. A lot of people don’t agree with the Red Cross because they're known for not giving all the funds sent for that specific event to that disaster. But you can also make the "in good faith argument," saying that the Red Cross goes to Puerto Rico when nobody cares. So reasonable minds can disagree, but I tend to agree with 90% of the larger organizations I read about.
The only time things get a little less reliable is when folks try to make recommendations about local organizations. Sometimes an organization that’s local might be really strong at what they do, but then if they receive an influx of funds, especially if something just happened to make them loose infrastructure, they could end up using their new funds unreliably, causing their ability to reliably disseminate funds six months later to be not as high.
If somebody’s giving a big gift how do they plan for it?
Due to the psychology of these disasters, everyone has generally forgotten and moved on a couple of weeks later, so giving tends to be with whatever assets you have control over in that moment. I’ve seen people who worked on a project, like an album or a song, for a year and the check is about to come in and they’re like, "just give the check to them." I don’t find disaster relief giving to be pre-planned in the way that non-emergency giving is. Most people of means have advisors who say, "you’re going to give X percent per year, where do you want to give it, what kinds of organizations?" Disaster giving is way more of an in-the-moment, emotional decision. I don’t think I’ve yet to see it be a part of anyone’s standing plan. Interestingly, when we create giving plans, more so for companies than celebrities, we always say that your customers and employees are going to want to have the ability to respond through you, so put a nominal percentage to the side for those emergency or disaster situations. It’s not really an earmark thing, it’s more of a let me look around at what’s on my desk or available to me at this moment.
How do people ensure that their donation is being spent the way they intended it to be spent?
I have been one of the most vocal critics of some of the problems I see in the non-profit space. I see that being a problem far less these days. I think that most non-profits are under so much scrutiny and I think the quality of their boards are so high that donations are being used appropriately for the most part. Again, when I referenced those lists that various media sources put out, I don’t think there’s a single one of those that I have concerns about in terms of how they use their funds, and I’m a skeptic. Where I would be a little skeptical is where the friend’s cousin is going down and taking a truck. Although, that’s me just being cynical because most of those people are probably more honest than average. The more well-known organizations that you’re going to have heard of or see get listed, I think everyone can sleep well at night if you donate there.