Author: Madeleine Smith | UC Berkeley School of Law | J.D. Candidate | Posted: August 12, 2019
While the Hollywood awards season is meant to celebrate the year’s achievements in film, television, and music, much of the media coverage focuses on another art—fashion. After every awards show, outlets from tabloids[1] to The Wall Street Journal[2] dissect who wore what designed by whom. This year, The New York Times asked another question in its piece “Who Are You Wearing and Where Did They Donate?”.
Vanessa Friedman, the Times’ fashion director, and chief fashion critic used her column to profile RAD (Red Carpet Advocacy).[3] Founded by Arianne Phillips, an Oscar-nominated costume designer, and Carineh Martin, a luxury brand consultant, RAD is seeking to “change the conversation on the red carpet” by inextricably linking the fashion coverage to philanthropic causes.[4]
RAD works with stylist and celebrities to select the pieces they will wear on the red carpet, and then goes to the designer or fashion house to request a donation to the celebrity’s charity of choice. The designer chooses the amount and donates the funds directly to the cause.[5] Then, in social and traditional media coverage, the charity is tagged or identified alongside the designer.[6]
That is it.
The business model is basically asking someone for a donation and them saying yes. But, add in the luster of Hollywood, luxury fashion, and social media, and RAD has become a buzzworthy topic on the awards show circuit.[7]
The confounding simplicity has unsurprisingly invited questions and criticism about RAD’s strategy and its potential to “move the needle.”[8] Friedman’s column indirectly addresses some of these concerns in a short parenthetical explanation, stating “RAD is not a nonprofit, . . . [but] the goal is to eventually turn RAD into a B-corp.”[9] Friedman also explains that the designers pay RAD a 15% fee on top of the donation, a third of which Phillips and Martin subsequently donate to charity.[10]
Although RAD’s role seems limited to coordinating between stylists and designers, there is no doubt some amount of overhead (i.e., drafting contracts, monitoring media coverage, etc.) that warrants the 15% fee. However, Phillips’ and Martin’s choice to donate part of the fee suggests that they are not viewing RAD as a substantial income generator.[11]
If that is the case, RAD might be better suited as a nonprofit 501(c)(3) public charity or private foundation. That would ensure it maintains mission lock and takes advantage of tax breaks to maximize its impact.
If RAD was a 501(c)(3) private foundation, it could accept designers’ donations and then pay them out to other charities as grants, meeting the 5% “payout rule.”[12] Then, designers would be able to classify the entire sum (donation + “fee”) as a tax-deductible contribution. Additionally, the 15% fee would fall below the 22-cents-per-dollar that respondents deemed a “reasonable allowance for overhead” according to a 2012 survey from the Chronicle of Philanthropy.[13]
Perhaps more importantly, the nonprofit designation could give RAD the stamp of approval it needs to convince those skeptical of its intentions and impact.[14] One such skeptic put it bluntly in the comments section of the Times article – “I don’t like it. Change your setup to a 501 non profit and I love it.”[15]
As it evolves, RAD will need to prove that it’s not just a philanthropic whim of out-of-touch Hollywood insiders. The “nonprofit” label won’t do all of the work, but, in the business of red carpet fashion, everyone knows that labels matter.
[1] https://www.usmagazine.com/stylish/pictures/oscars-2019-red-carpet-fashion-see-celeb-dresses-gowns/
[2] https://www.wsj.com/articles/fashion-on-the-oscars-red-carpet-11551062460
[3] https://www.nytimes.com/2019/01/30/fashion/red-carpet-advocacy.html
[4] https://www.wearerad.org/why-be-rad
[5] https://www.nytimes.com/2019/01/30/fashion/red-carpet-advocacy.html
[6] https://www.wearerad.org/mandy-moore-sag-awards-2019
[7] https://variety.com/2019/film/awards/support-times-up-inclusion-and-other-issues-through-fashion-1203143052, https://www.instyle.com/news/camila-cabello-rad-grammys, https://www.telegraph.co.uk/fashion/events/ready-woke-red-carpet-season
[8] https://www.wearerad.org/about
[9] https://www.nytimes.com/2019/01/30/fashion/red-carpet-advocacy.html
[10] https://www.nytimes.com/2019/01/30/fashion/red-carpet-a
[11] https://www.youtube.com/watch?time_continue=1&v=Az8BUxP4Uik
[12] https://www.ncfp.org/blog/2008/oct-what-is-the-five-percent-payout-rule.html
[13] https://www.fastcompany.com/40528257/donors-cant-st
op-believing-that-nonprofits-pay-too-much-overhead
[14] https://www.youtube.com/watch?time_continue=1&v=Az8BUxP4Uik