Here’s a topic that invariably comes up at our lectures, usually because a photographer had done a “good deed” for a charity and got “punished. Basically it’s understanding that “not for profit” (NFP) is a tax designation, not necessarily a business philosophy. Many “not for profits” and charities actually make a lot of money for some people. Not all, there are some wonderful and philanthropic non-profits and charities. In this scenario we have a composite of several of Ed’s letters which address an entity when its really not clear whether the photographer was dealing with a stand alone, real charity or just some good PR being done by a major corporation.
Assume here that he photographer charged nothing for sizable job and signed a detailed contract to do so. The contract was not horrible, as some we’ve seen, but on the other hand, it’s wasn’t great either. With the names cleverly conjured, here is a sample letter/lesson/ primer on the topic:
1. The Agreement does not specifically address the model release issue. If there are people being used in any these images there should be executed, written releases…always, all of the time, no exceptions. The issue is not addressed here and there are potentially many scenarios that can come back to bite Photographer if the images appear in places not intended. Simple model releases would have covered the issue.
2. The Agreement permits the licensee to pretty much assign usage rights and use the images for other purposes. There should have been very specific and limited permissible uses set forth in detail in the Agreement. Any misuse by the client can be covered by – among other things – an indemnification clause making them (THE CHARITY) responsible to pay legal fees incurred by and any judgement against photographer.
3. One thing you always, always, always do is set a “real price” for the license and/or shoot fee. So (we are slightly over simplifying here) assume the client is a regular commercial enterprise, retail product or company. Let’s use “Ed’s Gluten Free Gluten” (available at any trendy market) and the fees and expenses would be as follows:
++++++++++++++++++++++++++++++++++++++++
Grant of License/Usage: Use in consumer print, POP at all Fairway stores, Acme Supermarkets and Zabars stores only.
Usage term: Commencing 1/2/13 and terminating on 1/1/15.
Shoot Fee 2 days @ 3,000 per day……….$ 6,000.00
License/Usage fee…………………………… 35,000.00
Expenses (Itemized) ………………………… 3,000.00
Total due ……………………………………….$44,000.00
++++++++++++++++++++++++++++++++++++++++
So the balance due would be $44,000. OK?
Now, you are going to do the very same work, same usage etc. for say, The American Cancer Society, a totally legit charity.
You make the same bill, set it up the same way, put all the charge there and then in BIG letters you clearly reflect that Photographer has discounted his/her fee and/or “eaten” the expenses (to whatever degree) and thus the Balance Due is $-0- or maybe $3,000 for the expenses, if that’s the arrangement. If you are waiving any/all rep commissions or fees – put it on the bill. Its great PR and this type of billing enables the “client” to know the value of the services and if there is ever a claim for say copyright infringement, this invoice can be used to help establish photographer’s “real” going rates. Consult your accountant as to other things that the photographer and/or rep may be able to do which may benefit their own tax situation.
4) In any event, Photographer MUST register all of the images immediately. No excuses. Remember that a “not for profit” is simply a tax status and alone is no reason to discount any fees. Sometimes drug companies run “not for profits”. Here’s the real life example we use in our lectures – names made up – this was used to screw the photographer, the model and the model agency. It worked like a charm and was “discovered” by Ed only as a result of a third party ripping off the photo.
“Stop Diabetes Now, Inc” an IRS certified not for profit entity approaches photographer and model agency. Ads to “Get Tested for Diabetes” to be used in newspapers and magazines throughout the US. Actual usage – every single major newspaper in America including all NYC papers, the WSJ, USA Today, Time, Newsweek etc. 1 year usage term. Ad theme is that everyone should go get tested especially Afro-Americans, the overweight etc. Sounds great, noble, warm and fuzzy. Everyone agrees to discount big time, their normal fees for such a good cause.
Well it turns out (and this is common) that “Stop Diabetes Now, Inc.” is run in all respects by one of the biggest drug companies in the world, a name everyone knows which we will call “Big Pharma, Inc”. Just so happens that one of Big Pharma’s most profitable division sells -gasp! – diabetes testing equipment and insulin. What appears to be a PSA is simply a consumer ad in disguise. Of all the people who go and get tested by any doctor, clinic or medical facility the odds are about 50% that a Big Pharma product will be used to conduct the test. Of those who are tested and are prescribed insulin and/or some other drug for treatment, then the odds are about 60% that the drug they get will be manufactured by Big Pharma. All who test positive will need a testing device and likely a lifetime supply of test strips. The odds that those products actually purchased will be made by Big Pharma, are about 50%.
Bottom line – assume Joe Blow decides to go to his doctor and he tests positive. She prescribes drug(s) and testing kit and Joe Blow takes care of himself by testing 3 times a day and uses the exact amount of medication he needs. He then lives a healthy 30 years and at the ripe old age of 89, dies peacefully in his sleep the day after the Jets win the Super Bowl. Big Pharma will have made at least $30,000 in sales on Joe Blow alone. Nothing illegal about any of it. Most health insurance carriers, Medicare or Medicaid will pay most or all of the costs so Big Pharma doesn’t have to worry about Joe Blow not being able to pay the costs.
So Big Pharma by using this ploy has made way more money than say, Ford motor company does when it sells a big consumer item like a Focus. Solution? Google the NFP or charity entity and do your homework. Check on the provenance of any “non-profit” even if it appears to be a charity. Don’t judge the book by the very deceptive and perfectly legal, “cover”.
Finally, there is no reason not to insist upon a prominent photo credit. If you are going to shoot at a discount or without charging anything, buy all means get that free advertising for yourself.
#1 by Matt Timmons on September 24, 2012 - 7:39 pm
I’ve learned that just because a business announces that they are doing a “charity fund raiser” doesn’t mean they are doing it for the charity. Case in point, I know a small scam business that calls themselves a modeling agency. They set up a charity runway show to raise money by selling tickets to the show to benefit a youth shelter. Agency tells their models that they don’t get paid to do the show because it’s for charity, then recoups the fees for the models from the funds raised for the charity without telling the models. Free model labor, money made for it, free promotion for the “agency” as a charitable contributor. I look at charity events with a whole new set of eyes now.
#2 by Jack and Ed on September 25, 2012 - 2:57 pm
From Ed:
Right you are. It is an open secret that celebrities often charge substantial appearance fees to attend charitable events. Often it is because they are “in the know” and have done their homework. No reason a photographer, model or model agency shouldn’t do the same. If you want to do something for a good cause, make sure that the organization is as good as the cause.