A foundation bearing a famous name carries instant credibility, but a name is marketing, not accountability. The good news is that nearly every charitable organisation in the United States has to file an annual information return with the IRS — the Form 990 family — and those filings are public. Reading one is the single most effective way to see what a celebrity’s foundation actually does with its money.
First, find the filing. Candid, the organisation formed from the merger of GuideStar and the Foundation Center, offers a free 990 Finder, and ProPublica’s Nonprofit Explorer hosts millions of filings. Candid’s own guidance, ‘Highlights of IRS Form 990’, walks through the form’s sections and flags the fields donors find most useful — a helpful companion when the document first looks intimidating.
Check which form you are reading, because it tells you how the organisation is structured. A private foundation — which is how many celebrity vehicles are set up — files the Form 990-PF, headed ‘Return of Private Foundation’. Public charities file the standard Form 990. The distinction matters: private foundations are typically funded by one source and are subject to specific payout rules, while public charities draw broad support.
For a private foundation, head to the grants. The 990-PF lists the grants it paid, usually with the names of recipient organisations and the amounts. This is the clearest evidence of whether a foundation is actually funding charitable work — and to whom — rather than simply holding or accumulating assets.
Then test it against the payout rule. Private foundations are generally required to distribute roughly 5% of their investment assets for charitable purposes each year. Comparing the grants paid with the foundation’s asset base shows whether it is meeting that obligation or merely parking donations. A foundation sitting on large assets while granting very little deserves a closer look.
Weigh grantmaking against overhead. Total expenses on the return include operating costs such as salaries, travel and administration alongside the charitable grants. If a celebrity foundation spends heavily on events, staff or the founder’s expenses while distributing comparatively little to working charities, the filing will show it — and that is exactly the kind of imbalance a name on the letterhead can obscure.
On a public-charity 990, look at Part VII, which lists officers, directors and key employees and their compensation, and the governance section, which asks about board independence and conflict-of-interest policies. These reveal whether the organisation is run with proper oversight or effectively as one person’s project.
Read more than one year where you can, since a single filing can be unrepresentative. And remember a 990 shows the money, not the mission’s quality, so pair it with the foundation’s own reporting. For help interpreting specific lines, use Candid’s guide and the IRS pages on private foundations, and consult a professional if a filing raises questions you cannot resolve.
Source date: February 29, 2020. Contextual photograph; it does not depict the people or the specific event described in this article. Photo: E911a, CC BY-SA 4.0 ↗.
Sources & further reading
- Candid (GuideStar) – Highlights of IRS Form 990 ↗
- IRS – Private foundations ↗
- ProPublica Nonprofit Explorer ↗
This article is editorial coverage, not an endorsement. For donations or programme participation, go directly to the organization’s official website.
