Celebrity Foundation to Close Following Watchdog Investigation

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Shane-Warne

Shane Warne / Tourism Victoria

January 28, 2016; Business Insider

Australian superstar cricketer Shane Warne recently announced that he would shut down his twelve-year-old foundation supporting seriously ill and underprivileged children and teenagers.

When the foundation continued to fail to disclose its financials, Fairfax Media and watchdog group Consumer Affairs Victoria paid attention. In response, ten years of financials were requested for audit through fundraising disclosure laws. According to the Sunday Age, auditors were only able to obtain data from 2011 to 2013 because earlier records were either “missing or unavailable.”

Once complete, the findings from the three-year period uncovered excessive fundraising cost and minimal giving. Reports found that the foundation raised $1.8 million but only distributed $281,000 to charitable causes, with $1.2 million documented as expenses. This was calculated at a contribution equivalent to 16 cents on the dollar.

In addition, several articles highlighted that Warne’s brother was hired to lead the organization for a period of time, prior to the hiring of a former Crown Casino poker manager—likely connected to the foundation’s annual poker events. The event was listed among several high price-tag fundraisers held annually. Neither of the positions’ salaries appeared overly excessive; however, the reports found that both salaries would often exceed the amount of dollars actually distributed to charitable organizations during a given year, raising questions of performance and overall accountability.

Warne continued to defend his foundation even during his recent announcement to close. Articles report that he would routinely announce that the foundation had raised a total of $8M to support the charity’s mission, of which, he has recently shared, an estimated $4M will ultimately be gifted to charities prior to its closing in March. If this is accomplished, this would result in roughly $300K of additional contributions distributed in the next two months to generate an increase from the foundation’s current calculation of $3.7M.

If all of these statistics are combined, the picture becomes even more interesting. If the foundation raised $8M since inception and gifted 3.7M total, yet only contributed the small percent of dollars raised during the three-year audit, the organization must have experienced a dramatic, sharp decline in success—similar to falling off of a cliff. From 2004 until 2011, the foundation would have been donating on average, an estimated 56 cents on the dollar to children and teenagers in need. The foundation would then have experienced major challenges in success to drop to just under 16 cents on the dollar in the following three years. In addition, Emma Coleman, the foundation’s most recent chief executive, who resigned after three months in the position, shared before her resignation that the group had not filed financials for 2014 because they had not given any charitable gifts during the year. If confirmed, this would of course be the equivalent of hitting rock bottom, dropping to zero cents on the dollar.

Reading the headlines can create a stream of emotions for us in the field. We know that there is so much good work that takes place, and celebrity charities play an important role in the solution to our global challenges. It is easy for disappointment to set in with yet another controversial headline. Fox News ran a story a few years ago regarding trusted celebrity charities. The article served as a reminder of Kanye West’s similar decision to close his charity after it was brought to light that all of the $570,000 raised in 2010 went to administrative fees with none disbursed to charity. Others included Wyclef Jean, who was “humiliated when it was discovered that instead of helping the people of Haiti, his fund had squandered millions.” Rosie O’Donnell, Madonna, Oprah Winfrey and Michael Bolton—all were stated to have “been slammed in the past for their charities’ performance.”

Shane Warne is not new to this kind of speculation and questioning off the field, having been banned from cricket on several occasions for different reasons including accepting money from bookmakers. This in no way means that Warne cannot establish and maintain a successful foundation that can create good in the world with the right administrative team.

Already in the eye of the public, when celebrities make the decision to establish a foundation, it sets a tremendous opportunity for both support and critique. Two publications quoted Shane Warne as stating that the poor performance of the foundation was “not done with malice or incompetence.” When all the data is brought to light, there does not appear to be another category to rest the blame.

An article by ThinkProgress reminds us that it takes great skill and hard work to be an actor or an athlete. It also takes knowledge, experience, and skill to successfully run a charitable organization. Even when there is no malice or ill will, honest people with good intentions can find themselves wishing they had paid as much attention to who was overseeing the accountability and effectiveness of their charity as they do to their professional careers. Both are equally about quality, outcomes, and surrounding yourself with the right talent.

As for the rest of Shane Warne’s story, according to Victoria News, Warne’s closure of the foundation is not going to stop the probing by watchdogs.—Michelle Lemming