Oprah’s Dwindling Donations

By Kitty Kelley

Last week Oprah Winfrey posted an announcement on the website of Oprah’s Angel Network, saying she was folding the charity and would not be collecting any more money from her viewers to donate to various charities. Since 1998 she has collected $80 million.

Oprah did not say why she folding the wings of her angels but the Chicago bureau of the Associated Press quoted her spokeswoman, Angela De Paul, as saying it was not because donations had dwindled.

However, in reviewing the most recent tax returns of Oprah’s Angel Network, it appears that is exactly what has happened. The viewer donations to Oprah’s Angel Network have fallen off by almost half of what they once were.

The 2008 donations ($5,485, 511) were approximately fifty percent less than the 2007 donations ($11,808, 750), and these were well below the average annual donations ($14, 417, 074) during  2004-2007. Although the 2009 tax returns have not yet been filed those of previous years suggest that Oprah’s Angel Network has been steadily losing donations from viewers over the last few years.

The question is why. One reason is the plummeting economy that has slammed all charities. Studies show that the most generous among us are frequently those who have the least. In other words, it is not the rich who given consistently and generously but those with much less disposable income—the demographic of Oprah’s viewers. While Oprah still reigns as the number one talk show host, she has lost 3 million viewers since 2007, which would naturally diminish her donations.

A review of the tax returns of Oprah’s Angel Network indicate that she has been donating more than one-half of her viewers’ contributions to help the needy in Sub-Saharan Africa ($2, 821, 611 in 2008) and non-U.S regions in North America ($2,409, 594). The total for non-US grants and distributions: $5,231, 205. The total for U.S. grants: $3,354,322.

Some might suggest that the 150,000 viewers who contributed to Oprah’s Angel Network are contributing less now because she is donating more of their money outside the U.S. But Oprah’s fans did not give their money with strings attached. Wherever she wanted to give was fine with them and in the last few years she has decided to position herself more as a global philanthropist and concentrate most of her giving to Africa.

In March Oprah staged a 10 day online auction on Ebay (“Oprah’s Great Closet Cleanout”), selling 40 pairs of shoes and boots, 42 purses and 101 items of clothing, including jackets, skirts, blouses, sweaters and dresses. Each item was tagged as belonging to Oprah: “Oprah Winfrey Prada Red Suede Peep-Toe Heels” drew bids of over $573.00. “Oprah Winfrey Black Chanel Quilted Evening Bag” drew $2025.00. “Oprah Winfrey Carolina Herrera Dress, Worn on Show!” drew $1125.00.

Oprah did not reveal the total figure raised from her online auction but she did reveal that all proceeds went to the Oprah Winfrey Leadership Academy in South Africa. Oprah’s previous online auctions (1999, 2004 and 2005) benefitted Oprah’s Angel Network, which at the time gave most of their donations to U.S. charities.

As the only major contributor to her two remaining charities– The Oprah Winfrey foundation (total assets in 2008: $165,919,695) and The Oprah Winfrey Leadership Academy Foundation (total assets in 2008: $47, 431, 721)—Oprah has taken a financial hit in the value of her investment assets. An examination of the tax returns from each foundation shows she has had significant losses, which may explain why she recently hired the chief investment officer away from the LA billionaire Eli Broad to manage her investments.

Needing to concentrate on an investment strategy that will build a lasting endowment for her school in South Africa suggests why Oprah decided to discontinue Oprah’s Angel Network. Having invested over $40 million in The Oprah Winfrey Leadership Academy, she needs to put all her resources into keeping her legacy afloat.