When actor Rosario Dawson (perhaps best-known recently for playing Ahsoka Tano in the “Star Wars” series “Ahsoka”) decided to create a charitable fund last year, she turned to fiscal sponsor-to-the-stars Social Impact Fund (SIF) to help. Her new nonprofit, called Rio Dawn Foundation, aims to begin grantmaking in 2024/2025, supporting large national and international groups as well as smaller community-based groups with low overhead — “activists and changemakers” around the world, as the foundation’s executive director Pellagia Gambiza put it.
Rio Dawn used SIF to save money and time — and ensure legal compliance. “Using a fiscal sponsor allows us to have the peace of mind to focus on strategy and operations, while the administrative components that take up so much mental, physical and financial costs are taken care of by the experts,” said Gambiza by email. “Research shows that the first few years of a foundation are pivotal in determining mission, vision and strategy for sustainable growth.”
A fiscal sponsor does what again?
Fiscal sponsorship may not be a hot topic at most backyard barbecues this summer, but in the world of nonprofits and philanthropy, it is one movement of the moment. As a refresher: A fiscal sponsor is an existing nonprofit willing to house a charitable startup under its own structure, generally for a small fee. This allows the new founder or founders to receive tax-deductible donations and make grants without having to go through all the paperwork of setting up as a wholly independent nonprofit. A fiscal sponsor can handle tasks such reporting, filing, HR — even processing donor thank-you letters — as our IP Explainer details. Using a fiscal sponsor to start a charitable project is like the nonprofit version of hiring a wedding planner to help with your ceremony and reception — a paid professional who can ensure that all the tiki torches get lit, letting you concentrate on walking down the aisle without having to stop every two minutes to strike a match.
The rise of the fiscal sponsor is part of a wider, decades-long trend toward professionalization in philanthropy, as well as the sector’s increasing reliance on intermediaries, consultants and other third-party servicers. Fiscal sponsorship has grown more since the year 2000 than in the entire last half of the 20th century, according to a 2023 field scan done by Social Impact Commons and the National Network of Fiscal Sponsors. Nearly three-quarters of the 100 fiscal sponsors surveyed said they’d formed since 2000.
For Hollywood celebrities eager to start a nonprofit without having to, you know, start a nonprofit, SIF is their fiscal sponsor. As Craig Cichy, executive director of SIF, told IP: “People think doing good is easy and it’s not. It can be overwhelming. Social Impact Fund can relieve some of that burden and take on a project under our existing structure.”
A brief history of Hollywood giving
SIF, which celebrated its first decade last year, grew out of the much older Entertainment Industry Foundation. Founded in 1942 by Samuel Goldwyn, Humphrey Bogart, James Cagney, and the Warner brothers, the foundation has long served as a “gateway for giving” for entertainment industry professionals, as its website puts it. The Entertainment Industry Foundation played a role as a fiscal sponsor for celebrity donors “forever,” said Cichy, who worked there as the program officer for philanthropic services and was the point person for a variety of projects, including those started by Christina Applegate, the Black Eyed Peas, Charlize Theron and Comedy Central. “We didn’t call them fiscal sponsorship when I was there. We called them charitable service funds, but in practice, they were fiscal sponsorships,” Cichy said.
When the Entertainment Industry Foundation decided to stop serving as a fiscal sponsor in 2013, it left a gap in the charitable giving ecosystem for entertainment industry professionals, such as actors, some of whom earn tens of millions a year not only from movies but also from guest appearances and endorsements. That’s a lot of money in the hands of would-be givers whose day jobs are not in the nonprofit sector. Greg Propper and Mark Daley, who were running Propper Daley, an impact consulting and strategy firm that works with corporations, nonprofits and the entertainment industry, founded SIF to fill the fiscal sponsorship void left by the Entertainment Industry Foundation. They asked Cichy to help get it up and running. (The Entertainment Industry Foundation has since resumed its fiscal sponsorship role.)
The Social Impact Fund launched in 2013, with singer, songwriter, producer and actor John Legend’s Show Me Campaign as its first fiscally sponsored project. Other celebrities who have worked with SIF include Madonna, Kerry Washington, Bradley Cooper, Shawn Mendes, Ryan Reynolds, Blake Lively, Jonathan Bailey, will.i.am and Rosario Dawson.
Last year, The Hollywood Reporter named SIF as its Philanthropic Organization of the Year. The nonprofit also has reaped praise from its celebrity clientele. Reynolds’ and Lively’s project, Group Effort Initiative, helps connect people from underrepresented communities to jobs and internships in Hollywood. As Reynolds told The Hollywood Reporter about the choice to use SIF, “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.”
Why celebrities turn to fiscal sponsors
Giving back can pose unique challenges when you are so famous that you can’t walk down the street for a boba tea without being mobbed. One risk? Being criticized for making a big mistake. Another risk? Making a big mistake. Notable celebrity philanthropy fiascos include Brad Pitt’s efforts to build homes for Hurricane Katrina survivors (which faced a class-action lawsuit over structural flaws) and Sean Penn’s pandemic effort CORE (criticized by some employees for failing to protect them from sexual harassment and financial mismanagement).
If your every outing to the farmer’s market is analyzed and critiqued on social media, starting a public service project can feel extra daunting. “Because they are in the public eye, trying to do good is heavily scrutinized,” said Cichy. “You never hear about people doing good work until they mess something up. If someone wants to do something good, I just want to make sure they do it right.”
The flip side, of course, is that all that attention can be funneled to causes celebs care about, a key point made during the Hollywood Social Impact Summit held in L.A. in July. As with other celebrity funders who spoke at that summit, Dawson is leveraging her own visibility as part of her philanthropic approach. “We recognize that our power lies in amplifying the voices of small and medium-sized organizations who often struggle to gain access to funding spaces that we have access to,” said Gambiza.
Looking ahead
Cichy said that SIF has seen a spike in activity over the past four years in particular. “We all saw a massive influx of projects during the early days of COVID, and also around the heightened social justice responses of that time.” He pointed to the killings of George Floyd and Breonna Taylor as events that pushed more people to start organizations as a way to do something. “There was so much need and response. People wanted to feel as if they were responsibly reacting.”
As with philanthropy writ large, celebrity giving is continuing to evolve. Young, up-and-coming talent and influencers are particularly motivated to start programs to give back, said Cichy. “There is more opportunity than ever for people to respond to something that’s important to them. They’re all looking for some way to do good, and some way to respond to something that’s triggering. With all these platforms that are heavily merged, it’s becoming core to what they’re looking to do. Every generation becomes activists in their own way.”
