The Nonprofit That Keeps Hollywood Stars’ Charities From Flaming Out – The Hollywood Reporter

Keeping Stars’ Foundations in Financial Order

THR Photo Illustration By Ryan Olbrysh; Cooper: Jon Kopaloff/WireImage. Reynolds: Rodin Eckenroth/WireImage. Legend: Amy Sussman/Getty Images for The Recording Academy. Collins: Michael Campanella/Getty Images. Cardi B: Prince Williams/WireImage.

In the world of celebrity giving, the road to scandal is often paved with the best intentions. Consider the case of Brad Pitt’s Make It Right Foundation, which built homes for Hurricane Katrina survivors, only to face a class-action lawsuit over major structural defects. Or Sean Penn’s CORE, a disaster-relief nonprofit that has been lauded for its work in Haiti and during the pandemic, but was rocked by accusations of labor violations and financial mismanagement. There is little reason to doubt the genuine goodwill of such stars, but just as fame can draw attention to a worthy cause, it can amplify the reputational hit when things go wrong and undermine the aims of their nonprofits.

Last year, when another A-lister made headlines after it was alleged that his charity had been funneling money to his for-profit company, Ines Kuperschmit, chair of the board of directors at Social Impact Fund, forwarded an article about the star to her team. “I knew instantly,” she says. “I thought to myself, ‘He’s working with a fiscal sponsor who isn’t doing it right.’ ”

Social Impact Fund (SIF), The Hollywood Reporter‘s 2023 Philanthropic Organization of the Year, is doing it right, having earned the trust of a clientele that includes Cardi B, Bradley Cooper, Kerry Washington, Ryan Reynolds and Blake Lively, Shawn Mendes, Lilly Singh and Lily Collins, among many other celebrity do-gooders since 2013. As a fiscal sponsor, SIF works with charities to alleviate the administrative burden of setting up shop so they can be up and running more quickly and focus their attention on raising and distributing funds. By partnering with SIF, charities operate under its 501(c)(3) tax-exempt classification rather than filing for their own.

Greg Propper, SIF’s president emeritus, explains: “If you want to raise and give away money, you really only have a few choices: You have to either start your own 501(c)(3) — and then you have to file with the IRS every year and have a board and pay lawyers and accountants — or you can open a fund hosted at another 501(c)(3) that really exists to serve as a platform for philanthropists who want to make a difference.”

The red tape involved in philanthropy can ensnare the most well-meaning and well-funded projects, distract from core missions and often doom charities altogether. “It’s not that hard to get the 501(c)(3) status — it’s actually really hard to keep it,” says SIF executive director Craig Cichy, who previously was a program officer for philanthropic services at the Entertainment Industry Foundation, Hollywood’s original major fiscal sponsor that was founded in 1942. “People are eager to do good,” he says. “But once stars wade into the paperwork involved, they often realize, ‘Oh my God, what did I get myself into?’ It’s not easy to do good.”

The Social Impact Fund enables stars to do all sorts of good. It has helped Cooper set up his One Family Foundation, which works to improve treatment outcomes by finding solutions that ease financial burdens for low-income cancer patients and their families. It has assisted Mendes in establishing his namesake foundation, which empowers youth activists to pursue various causes, providing unsolicited grants as well as scholarships. Earlier in August, Reynolds and Lively announced that their Group Effort Initiative — which works to secure job and internship placements in Hollywood for people from underrepresented communities — had helped place more than 1,000 people in the three years since its inception. “We are incredibly pleased and we wouldn’t be where we are today without the Social Impact Fund, whose unique structure allows the ability to focus on fundraising and programming,” Reynolds tells THR.

“You really trust that Craig and his team are doing things properly,” says Collins, whose SIF-sponsored Lily Collins Empowerment Fund provides grants to organizations supporting girls’ self-esteem and education such as Go Campaign. “That is how you want to be making change — knowing that your funds and your donations are being properly handled.” Adds Collins, who was SIF’s first client when she began working with them back in 2015, “I didn’t have the resources and wasn’t in a place to create my own foundation, yet I knew I really wanted to make donations and be able to grow a fund so that when there was an emergency like COVID or Black Lives Matter or the SAG-AFTRA relief fund, you can do it in a way that’s organized.”

A fiscal sponsor is responsible for running due diligence on all the charities it partners with; any violation could threaten its own tax-exempt status. When SIF considers a prospective client’s project, it ensures not only that the operation is in compliance with IRS rules, but also that the organizations on the ground that ultimately benefit from the funding are poised to make the best use of it. Cichy estimates that SIF receives more than 50 inquiries a week from celebrities and wealthy non-celebrities alike, but turns most away.

Propper founded the Social Impact Fund 10 years ago. Another early client was John Legend, whose FreeAmerica initiative is dedicated to criminal justice reform. Legend, like several of SIF’s future partners, had been a client of Propper’s for-profit social impact agency, Propper Daley. Now, Propper Daley is one of several such agencies referring clients to SIF. “Greg’s team will reach out and say, hey, we have a client that, you know, needs a fiscal sponsor,” says Cichy, “and we’ll actually go through the exact same vetting with them that we do with everybody else.”

Anonymous Philanthropy is another social impact agency that has brought clients to SIF, including Inherit the Music, the music-education charity founded by Alisha Ballard and Kings of Leon. Anonymous has worked with SIF for nearly eight years. “The number one reason is the simplicity,” says Anonymous CEO Noah McMahon. “They handle so much of the stuff that’s complicated, the legal stuff, the accounting, etcetera. They make things very easy.”

Since its founding, Social Impact Fund has hosted more than 50 charitable programs, which have collectively raised nearly $80 million. “It is uniquely tailored to the creative types in [Hollywood], who work really long hours and the moment that they have this creative spark to do something good for the world, you want to capitalize on that and get them rolling,” says Kuperschmidt.

SIF’s clientele has recently expanded beyond entertainment to include sports figures as well as altruists not in the public eye. It’s also working to nurture the next generation of philanthropists, such as actors Talia and Armani Jackson, as well as The Kid Laroi, whose foundation helps kids in the musician’s native Australia find their way into the entertainment industry.

Cichy says he is careful not to take credit for the impact that SIF’s clients have had on society. “But what we do take credit for,” he says, “is we help make that work possible.”

A version of this story first appeared in the Aug. 16 issue of The Hollywood Reporter magazine. Click here to subscribe.