Hollywood discovers it can do good while turning a profit

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When Simon Fuller brings back the charity-based "Idol Gives Back" segment during this season's "American Idol" on Fox, the CEO of 19 Entertainment (and creator of the show) will be doing something highly unusual in the network TV realm.

"The way network television is, it's challenging to hand over an entire night for charity," says Fuller, who adds that he was initially stymied in 2007 in trying to figure out how to blend charitable giving with television viewing in the U.S.

"And then it occurred to me that I control the biggest entertainment show in America, so why don't I turn over that show to raising awareness and funds for worthy causes," he says.

That may have been unusual for network television at the time, but the concept took off, and broadcasters have since paid greater attention to offering airtime for charities, donating script- and airtime to cross-network appeals raising awareness about cancer and promoting volunteerism.

But Fuller's efforts are part of a bigger wave. To varying degrees across the entertainment industry, entrepreneurs have been exploring new and different ways to contribute to social change. The traditional public perception of corporate charity efforts is that as little as possible is given by the company, primarily for tax write-off purposes; and secondarily to burnish the company image -- little of which has anything to do with making the world a better place.

That is changing in increments, as consumers, business owners and celebrities reshape their concept of giving and taking. The spectrum of these new-fashioned businesses run the gamut of possibilities -- from Participant Media, a "cause marketing social action company" in the words of CEO Jim Berk; to Commit Media, which matches celebrities and causes; to Inside Sports & Entertainment Group, which allied with the Giving Back Fund in the summer to auction off A-list sports/celebrity packages, with a portion of the profits going to charities; and even smaller businesses like Madison & Mulholland which, among other things, turns swag suites into opportunities for celebrities to give to their own personal causes.

All of these companies do good. But not just out of the goodness of their hearts -- they're all in it, on one level or the other, to make money.

"Companies are identifying a value option in social change," says Jason Saul, CEO of Mission Measurements, which helps nonprofits and companies measure and improve their social impact. "Social issues have taken on economic importance now more than ever, and therefore people are willing to pay for social change -- so a market was created."

Take Participant Media, which finances, distributes and promotes such films as 2006's "An Inconvenient Truth," 2008's "Food, Inc." and this year's "The Soloist." Participant was founded in 2004 by former eBay president Jeff Skoll, and the company's films -- as well as the social issues they illuminate -- are all part of a bigger social action package. Participant, for example, trained teachers and opened rural libraries in connection with 2007's "The Kite Runner" and trained hundreds of lawyers to provide pro bono services in connection with that year's release of "The Visitor." The film is the centerpiece of any campaign at Participant, but the company uses multimedia (like its TakePart.com) to engage audiences before, after and during the release to keep the conversation and activism going.

Since "Truth" came out, says Participant's Berk, six climate goals have been introduced; 106,000 tons of carbon was offset thanks to programs connected to the film, and the film is used as part of five countries' school curricula.

"We're not saying that the film is the single issue (behind these changes), but it's a catalyst," Berk says. "There's a visible link that sparked the conversations that occurred."

Commit Media emerged in 2005 from seeds similar to Participant's: A former executive -- in this case, Jive Records' Paul Katz -- opted to shift gears from strictly making money to making a difference while earning money. "We take entertainment and public figures who have an authentic interest in a cause, and match them with a nonprofit," he explains.

Katz points to Harrison Ford as an example of such matchmaking: Ford has worked with Conservation International for many years, so Commit paired him with the Environmental Defense Fund. Commit also matched polio survivor Itzhak Perlman with Rotary International's efforts to eradicate polio as part of an upcoming concert with the New York Philharmonic on Dec. 2.

Commit's clients are usually the nonprofit, but Katz also fields celebrities who call after being paired, having liked the setup, asking for help with his or her own personal campaign. That feedback business takes up perhaps 20% of his company's time, and is growing.

"A lot of agents and managers have great intentions (for clients), but little time," Katz says. "So they ask us to help them. We don't charge, we're not looking to take the client, we don't want to be movie producers, we want to be doing exactly what we're doing."

A different kind of matchmaking goes on at Inside Sports and Entertainment Group, which services corporate clients and "high net worth individuals" with "unique access to sports and entertainment," according to COO and co-founder Ety Rybak.

That kind of exclusivity has little to do with philanthropy, but in pairing up with the Giving Back Fund, Inside Sports now devotes part of its business to creating incredible package events that go up for auction on Giving Back's Web site.

"We provide our packages at a discounted rate, we tell (the nonprofit) what we'd like to get back from it, and they put it up for auction," Rybak says. "They keep anything over the minimum bid, which is the cost that goes to us. If it doesn't get bid on, the nonprofit doesn't lose any money, and we retain the package."

One such example is the Super Bowl package; through the Inside Sports/Giving Back collaboration, an auction high bidder could watch the big game in Pittsburgh Steelers quarterback Ben Roethlisberger's suite.

"You can get into Super Bowl parties and into the Super Bowl, but you can't watch it with him -- but for the benefit of his foundation, you can," says Marc Pollick, Giving Back's CEO and founder. "All of our celebrity relationships are like that -- they're looking to grow their foundations and do good in the world. We can enhance that immeasurably."

So how did entertainment industry philanthropy get to this stage? Part of it stems from frustration over the way traditional philanthropic efforts work -- or don't work, says Stacy Palmer, editor of the Chronicle of Philanthropy: "When you look at all the problems that have not been solved in the world, people are looking for other ways to come about doing it."

Cecile Frot-Coutaz, executive producer of "Idol Gives Back" (and CEO of production for FremantleMedia North America) notes that more companies are working social good into their very makeup; during the past five years, she says social responsibility is becoming part of many companies' mission statements. "Corporations that are profitable almost have a duty to give back in some ways," she says. "Our philosophy is using the power of entertainment to touch people."

Another shift has come in the public perception of celebrity freebies, tied largely into the controversy over awards season swag bags and gift suites. Once the bags became a lightning rod, their purpose shifted 180 degrees.

"A couple years ago, I did (an event) with diamond watches (given away), and everyone was like a little kid at Christmas," says Jane Ubell-Meyer, CEO of Madison & Mulholland. "But now the sensibility has changed.

Hollywood has always been generous as a group, but now it's not about them getting -- it's about them giving."

Ubell-Meyer's company still sets up gifting events, but this time attending celebrities make gift bags to be given to their personal charities -- not enjoyed at home. "Because it's for their charity, it's more important to them," she says. "It goes from a sense of 'I want' to 'Wow, I'm doing something important for my charity.' There's a nice shift in energy to that."

Yet, for all the shifting energies and celebrity matchmaking and pro bono lawyers hired, at heart is that none of these companies are themselves nonprofits. New state laws (LC3 laws) are beginning to allow the establishment of low-profit companies -- hybrids of nonprofits and businesses -- but every business profiled here was established before the first of those laws were enacted in 2008.

Coming out of Jive, Katz says he knew he didn't have to struggle as a nonprofit: "I liked the idea of (Commit Media) being self-sustaining and not having to go to grants," he says.

Commit has an egalitarian approach to getting paid, though -- on a sliding scale ("if zero is on the scale," clarifies Katz). Larger nonprofits with big budgets pay for Commit's services; smaller ones that Commit takes a shine to pay nothing.

Ubell-Meyer pays for the services and facilities that make up her gift events, but to make money back she sells tables and sponsorships. "And we don't take a cut of anything," she says. "We just get paid by the clients that join us, the people that have tables and the people who have sponsors."

Participant's Berk says that yes, his company measures success via boxoffice receipts -- but also based on social impact, based on specific metrics set up for each film. He notes, "I always want to be able to look at (founder) Jeff and say that if you had spent this money directly on the issue you would not have had the impact we had with this film. That's what's important to us."

At Inside Sports, there is no such sense: "This is a strategic, for-profit marketing relationship," Rybak says. "We love the fact that we're also helping while we're doing it, but for us the goal is to drive the bottom line."

And arguably, Inside Sports is working a loophole -- those "high net worth" individuals are having a harder time justifying extravagant spending since the recession took hold, but marrying it with a charity seems to make it all right, for shareholders and customers alike.

Notes Pollick: "In this marketplace where it's so hard for corporations to sponsor charities or do any kind of corporate entertaining. How do you explain to your customers that we just laid off a third of our workforce, but we're going to have a big Super Bowl party? It doesn't fly -- unless you can tie it into charity."

Whatever the motivation behind all of this philanthropic change, however, Mission Measurement's Saul sees it as a good thing to have large companies trying to solve social problems. "They have greater reach, greater R&D capital, better talent and brand power," he says. "If you have a strong brand, you'll be able to do more to influence and reach people than if you're a small start-up or a grassroots organization. Corporations are becoming social change vehicles because there is now a business motive to do so."

Palmer warns that it's unwise to rely on any one source -- business, nonprofits or even the government -- to cure the world's ills. "A lot of people feel that's dangerous," she says.

But what is emerging, she says, is hopeful: "What you see today are people in those different worlds talking to each other a lot more. There's recognition that no one sector in society can take responsibility. The problems we face in this world are too great -- and everybody needs to play a part."
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