The New Celebrity Fundraising

Omaze

When executives at a charitable-fundraising site told Luis Miranda they believed an online campaign headlined by his son could raise $1 million, his first thought: Not possible.

Yes, Lin-Manuel Miranda had shot to stardom with his Broadway musical Hamilton. But the goal seemed absurd to the senior Mr. Miranda, who knows a thing or two about fundraising. He did it for years as the founder and one-time head of the Hispanic Federation, where his last gala raised about $900,000. That event took months of preparation. What could the organization really expect to squeeze out of a sweepstakes keyed to a one-off video?

By the time the one-month online effort closed last summer, donors had given $1.3 million to the Hispanic Federation, in increments as small as $10, for a shot at winning Hamilton tickets. Lin-Manuel Miranda — already scheduled within an inch of his life, according to his father — didn’t have much time to give to the campaign. What made the seven-figure haul possible was his sizable social-media following and Prizeo, one in a surging crop of for-profit fundraising websites that are helping overbooked celebrities raise cash for charities.

Gala dinner, meet Omaze. And Represent. And Chideo.

Those at the intersection of celebrity and philanthropy say such sites are booming as the pool of “famous” people charities can tap has swelled to include internet personalities born of YouTube and Instagram. (For some groups, even a popular local personality is a start.) The fundraising sites are taking celebrity-driven charitable campaigns and public relations, once limited by the size of a ballroom or the reach of print and broadcast media, out to a primed, eager, and potentially far larger audience.

It isn’t always a low-budget production, as those who work regularly with such companies note. Products and business models vary, but some of the star-powered fundraising sites charge as much as 20 percent of a campaign’s net revenue, plus transaction fees and production and fulfillment costs. And in an industry legendary for being built on whom you know, there’s no “borrow-a-star” — charities usually must bring existing celebrity relationships to these types of campaigns unless they are lucky enough to have one unexpectedly knock on their door.

Still, many veterans of Hollywood are bullish on the new modes of celebrity collaboration.

“The value there is, ‘Wow, I have just expanded my message and constituency by 10 times, and I raised money,’ as opposed to, ‘I just raised money but I didn’t really meet anybody new,’” says Brian Gott, the chairman of Steven Spielberg’s Starlight Children’s Foundation and a former publisher of Hollywood trade magazine Variety.

Fighting Chance

Ronda Rousey, the first woman to achieve superstar status in the bloody and controversial sport of mixed martial arts, has spoken publicly for years about her own mental-health issues. She started raising money for Didi Hirsch Mental Health Services in 2013, so it wasn’t a cold call when Ms. Rousey, who was planning to pitch a new T-shirt, offered to donate $1 to the charity for each one sold.

Participating required minimal staff time, says Didi Hirsch’s longtime chief executive, Kita Curry, but the details still needed attention. For example, the shirt featured an image of Ms. Rousey and the words “Don’t Be a D.N.B.” The abbreviation stands for “do-nothing bitch,” an expression Ms. Rousey used in an attention-grabbing interview to describe women unwilling or unprepared to support themselves.

“We did talk about it,” Ms. Curry says. “We decided we could live with that.”

The shirts were sold through Represent, a for-profit company that helps people design and sell their own merchandise. Giving a slice to charity is an option but is not required.

With Ms. Rousey riding a wave of publicity amid a trio of big fights, shirt sales totaled about $2.3 million. Didi Hirsch got $56,000 — less than 3 percent of the total. Still, it was a big chunk of money for the charity, and the publicity was a huge bonus, says Ms. Curry.

“It’s like a matching gift that is hard to quantify,” she says. “Such public advocacy also brings more donors to mental health — donors that have avoided the cause.”

‘Rocket Fuel’

Martin Edwards, chief executive of Julia’s House, had never heard of the fundraising site Omaze before 2015, when actor Robert Downey Jr. used it to net about $1.2 million in donations for the charity, which provides children’s palliative and hospice care in southwestern England. The sweepstakes-style campaign was built into Disney’s marketing of its billion-dollar Iron Man franchise, which helped make Mr. Downey one of Hollywood’s highest-paid stars. (He was introduced to Julia’s House by British filmmaker Guy Ritchie, who had directed Mr. Downey in Sherlock Holmes.)

The staff at Julia’s House made a video about the charity, posted it to their website, and did some local promotion of the campaign. The heavy lifting was done by Omaze, which produced a slick video featuring Mr. Downey plugging a chance to win a trip to Los Angeles for the premier of Avengers: Age of Ultron in exchange for donations starting at $10. It was promoted on his Facebook page, with its then-26 million followers, among other places.

The campaign grossed just over $2 million, according to Mr. Edwards, with most of the donations coming from the United States, where Julia’s House was little-known. Gifts also came from China, Italy, and other countries. The donor data was made accessible to the nonprofit.

“It was like putting rocket fuel in our appeal,” Mr. Edwards says.

Charity Network

At What Cost?

Rocket fuel or no, some nonprofit leaders and charitable fundraisers say the costs of such campaigns deserve scrutiny. They point to Planned Parenthood Advocacy Project Los Angeles County, a political-advocacy arm of the women’s-health nonprofit, which said as of late March it had received about $750,000 from ongoing sales of “Nasty Woman” T-shirts in a campaign operated by Omaze and headlined by comedian Samantha Bee.

To be sure, it was a nice bump in revenue from an unexpected source. However, Omaze has taken in more than three times that much from the sale of nearly 100,000 pieces of merchandise — a total of $2.48 million to date.

Omaze says its campaign costs include manufacturing, fulfillment, marketing, and administrative overhead and that it is proud to be “above the industry standard” in delivering at least $7.50 per shirt sold to its nonprofit partner.

The company declined to provide a sample contract or specifics on the exact costs for each part of the campaign to The Chronicle, but it said detailed information is given to its nonprofit partners. Ms. Bee was not paid for the “Nasty Woman” campaign, nor are any of the personalities who headline Omaze efforts, the company says. Co-founder Matt Pohlson describes Omaze as a full-service shop that produces high-quality merchandise while also making sure the talent is maximizing the reach of the campaign.

“As a result of all of those services, the actual money that went to Planned Parenthood — if you compare it with all of the other T-shirt campaigns that are out there — the absolute dollars that went to them is significantly higher than you would have if we didn’t provide those services,” Mr. Pohlson says.

“The question is, would you rather have a higher percentage of $500,000 or little lower percentage of $2.5 million?”

Planned Parenthood Advocacy Project Los Angeles County said in a statement that working with Omaze allowed it to reach an audience that would have been inaccessible without the company’s celebrity-driven website and marketing reach.

“Reaching new donors using traditional fundraising practices can be expensive and staff intensive for a nonprofit,” the organization said. “Omaze provides those services in a way that is fairly easy and requires relatively little lift internally.”

But some nonprofit leaders and consumer advocates argue that the average consumer is not financially literate enough to understand what terminology like “100 percent of net proceeds” — language used in the “Nasty Woman” T-shirt campaign, among others — means in terms of the share of dollars that actually reach nonprofits.

“Why is this important?” asks Daniel Borochoff, president of CharityWatch, a third-party nonprofit watchdog. “Because charities could actually get hurt by this in that people might go out and buy a T-shirt in lieu of making a charitable contribution. They think, ‘Wow, I’ve done my share, I’ve helped a charity,’ and maybe you have just helped a little bit.”

The competition for charities to build relationships with celebrities is fierce, Mr. Borochoff says, putting them in a weak bargaining position for negotiating their participation in such campaigns. Turning down what can seem on the surface like cost-free fundraising is really hard to do, he notes.

“If a celebrity product marketer comes to them, they will probably be tempted to accept terms that maybe aren’t as good as they could be,” he says. “But I do think they have an obligation to their supporters to be clear about how it helps the cause.”

Doug White, former director of Columbia University’s fundraising-management program, says charities engaging in such efforts need to protect their integrity by reviewing marketing materials and insisting that campaigns include language making crystal clear how they will benefit the organization. If the charity is going to get $7.50 a T-shirt, he says, then the campaign should state that.

“We need to do more,” Mr. White says of nonprofit leaders’ responsibility to be transparent with the public. “I don’t expect the personality to do it. I certainly don’t expect the for-profit that is organizing it to do it.”

Internet Gold

Mr. Pohlson and Ryan Cummins conceived Omaze after attending a Boys & Girls Clubs gala in Los Angeles that featured a celebrity auction. Rabid fans of Magic Johnson, they watched in dismay as bidding for some one-on-one hoops time with the Lakers legend rose far above their budgets — they were in graduate school at the time — eventually selling for about $15,000 to a prominent local philanthropist.

“We were driving home that night, and we got to talking about it, and we were saying, ‘Think about how much more money they could have raised for the Boys & Girls Club, and how much more awareness they could have gotten, if for just $10 that same experience was put online.’” Mr. Cummins says.

By the time they started Omaze in 2012, the friends, who had met as undergraduates at Stanford, had already spent years producing large-scale, celebrity-laden cause campaigns and events such as the 2007 Live Earth concert and an all-star show celebrating the Clinton Foundation’s 10th anniversary in 2011. The first Omaze campaign solicited online donations in exchange for a chance to be a guest judge on the Food Network’s Cupcake Wars. It generated $980 for the veterans group Team Rubicon.

Fundraisers with comedian Jon Stewart and the rock band Linkin Park followed. The more promotion on social media and in traditional media that the celebrity participants were willing to do, the more money was raised. High-quality video was the rainmaker, the Omaze partners discovered. In 2013, Breaking Bad actor Aaron Paul shot a promo video for a campaign in which he offered a chance to hang with his castmates during a screening of the show’s finale. The campaign pulled in $1.7 million for anti-bullying group the Kind Campaign, which was started by Mr. Paul’s wife.

“That is really when we knew that we had arrived in terms of a model that really brought together all ingredients — celebrity, charity, storytelling, and technology — to raise exponentially more than those types of experiences would ever raise through a traditional model,” Mr. Cummins says.

The business partners see no sign of a slowdown in their model, or their company. A surge in civic activism has meant a significant increase in interest in Omaze’s campaigns, Mr. Pohlson says, and the firm is growing “ahead of best-paced projects.”

The Field

The executives at Omaze are by no means the only ones working to perfect the star-powered online-fundraising formula. A number of celebrity-tailored sites offer a variety of products and experiences and some different ways of donating.

There are companies like Represent, which helps personalities sell merchandise online with campaigns that in some instances set aside a portion of revenue for charities — a model professionals working in celebrity-focused philanthropy say is poised for major growth.

Long-running Charitybuzz auctions off experiences like lunch in Malibu with actress Julia Roberts and show-business commentator Dave Karger. Chideo bills itself as the YouTube of charitable-cause video content. Entertainers, athletes, and others — the recognizability factor varies from household names to ‘Who?’ — star in clips doing everything from directly soliciting donations to working out at the gym.

British company Givergy, which is currently offering auction items like a pair of shoes worn by Prime Minister Theresa May, has started to introduce some of its fundraising products in the United States.

The ties among the sites are many. Billionaire internet entrepreneur and philanthropist Todd Wagner owns three — he founded Chideo in 2014 and acquired Charitybuzz and Prizeo in 2015 — and runs them under the name the Charity Network. After selling to Mr. Wagner, the founders of Prizeo moved on to start Represent.

There are other sites wherein celebrities are just one piece of the business. Actor and environmentalist Edward Norton co-founded the crowdfunding site CrowdRise in 2010. (Filmmaker Judd Apatow was an investor; the site was recently purchased by competitor GoFundMe.) Mr. Norton says he can name dozens of people with varying degrees of fame who have “been able to leverage their own financial capacity massively” and raise charitable dollars on CrowdRise by offering tickets to shows and visits to sets.

Good for Business

Stars’ embrace of some of these fundraising sites is partially about wanting to help and partially about business, say consultants and others who work on and study such partnerships. That’s because associations with charities and causes is increasingly a core part of building a public persona.

Bobby Maylack, chief marketing officer at Represent, says it parallels the social-good evolution in corporate America. A decade ago, the idea that one could buy a pair of Toms shoes and a second pair would go to a poor child overseas was a sensation, Mr. Maylack says. Today, consumers habitually look to spend their dollars with brands they perceive as socially responsible.

“I think with celebrities the same thing could be said,” says Mr. Maylack, whose clients include action hero and former California Gov. Arnold Schwarzenegger. “Maybe everyone doesn’t have the best intentions and are wanting to do it for publicity or their career, but it is good for the world. And at the same time, there are so many more resources today, and it is becoming such an expected thing.”

Charity is being integrated into movie-marketing campaigns, album releases, and television-show promotions in ways distinct from even a few years ago, say those who do the work.

“What really changed to me is social media,” says Mr. Wagner, who with business partner Mark Cuban sold internet-radio company Broadcast.com to Yahoo in 1999 for $5.7 billion before moving on to other ventures, including the Charity Network. “Ten years ago there was no Facebook and there was no Twitter. You had no ability to rally a fan base if you were a celebrity. You had to use traditional media.”

Mr. Apatow, who has helped raise millions for groups like the writing-skills nonprofit 826LA, puts it this way: “If we do an event and all of the comedians who are performing at that event tweet about it, potentially there are millions of people learning about the charity around the country.”

Spencer Shwetz

Public-Relations Risk

Building relationships with prominent individuals still takes time and effort, according to charity staff and consultants who work on such partnerships, and there are always risks. Bouts of bad publicity do happen, something nonprofits need to consider in teaming up with celebrities. (Most recently, YouTube’s biggest star, a gamer known as PewDiePie who has raised seven figures for charity, lost lucrative business deals after including anti-Semitic content in his videos.)

“A consequence of hypercommunications is that people live their lives more than ever in the public eye,” said Genevieve Shaker, associate dean for development and external affairs at Indiana University-Purdue University Indianapolis, who teaches a class on philanthropy and the famous. “Celebrities are people just like the rest of us, and sometimes life doesn’t go as planned.”

How Today's Stars Are Raising Charitable Dollars Online

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The analog, star-laden charity event is at no risk for extinction, say nonprofit leaders and their celebrity supporters. But being able to maximize celebrity relationships with new online tools is incredibly valuable, says Joel Arquillos, executive director of 826LA. Even groups with long-running support from entertainers like Mr. Apatow — some years as much as one-third of 826LA’s annual $1.7 million in fundraising stems from ties to the entertainment industry — grapple with shifting availability and schedules. Online efforts can be a lucrative supplement to live events.

One of the nonprofit’s most memorable fundraising efforts came in 2013, when Mr. Apatow organized a live reading of the script of Anchorman by the hit comedy’s original cast. The campaign included an Omaze raffle for a spot on stage, which raised $50,000 of the event’s total take of about $450,000.

“For actors who can’t attend your June 4 event, you can do something online that really takes your brand to another level,” Mr. Arquillos says.

Mr. Martin of Julia’s House is frank in saying he doesn’t see these types of campaigns producing large numbers of repeat donors.

“I think it is fair to say that it was because they were fans of Robert Downey Jr. that they took part,” Mr. Edwards says. “They didn’t have a link to the southwest of England. Whether that converts into future support for our cause, I would doubt it very much.”

Still, the results were pivotal for Julia’s House. One unpredictable and unmeasurable result? Because of the massive publicity, two children’s palliative-care programs in the United States got in touch, Mr. Martin says, and he is now advising them as they develop.

And the money that Mr. Downey helped raise via Omaze? It is being used to build a new facility, set to open in May.

“It ultimately accelerated our children’s services by several years,” Mr. Edwards says.