10 Common Mistakes Celebrities Make When They Engage In Philanthropy

1. In lieu of receiving direct payment for services in making appearances, they will ask the payor to pay the “compensation” to their charity. This triggers a concept known as the “assignment of income” doctrine, resulting in tax the celebrity and ultimately less money to the celebrity charity.
2. Celebrities that are not entirely funding their own 501c3 organization but are generating funds from the general public make the mistake of calling it a “foundation’” which it is not; a private foundation is for high net worth folks who solely fund the 501c3. This is a misnomer and leads the public to believe that the foundation is full funded thereby creating the false impression of a rich organization and spurning fundraising efforts which further frustrates the celebrity.
3. The celebrities will form their own 501c3 nonprofit corporation and many times this is simply an administrative burden which becomes costly, frustrating and fruitless and leads to more problems and less solutions. Each celebrity should carefully about how to engage in philanthropy including “donating time, likeness, image, name” etc or to utilize a donor advised fund or a fiscal sponsor or to create their own entity or to just utilize a for profit.
4. Hiring family members to help run the charity or to sit on the board of directors.
5. Not being more careful about the campaigns they are endorsing. Do research. One slip up can be very costly in terms of sponsorship and goodwill for the celebrity.
6. They don’t donate time, thereby a less purposeful connection is made which means not as much fulfillment and happiness from the connection.
7. Not teaming up more with existing charities and other celebrities to create awareness for their passion on philanthropy.
8. Not utilizing the strategies of social media in such a way that create the type of “mark” and ability to be an influencer
9. Not leveraging their existing relationships to donate their time, money and energy
10. Not engaging in philanthropy at all. It is a shame individually and for the benefit of goodwill, and, their celebrity’s own happiness to engage in any philanthropy; almost a crying shame.