Starkey ends celebrity-packed gala, the biggest celebrity gala in Minnesota, replacing it with benefit concert

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The Starkey Hearing Foundation’s high-profile red carpet, star-studded gala — the biggest celebrity gala in Minnesota each year — is ending after a nearly 20-year run.

Since 2001, the philanthropic arm of Eden Prairie-based Starkey Hearing Technologies has held a glitzy gala with prominent politicians, pro athletes, singers, actors and Olympians — from Elton John to Buzz Aldrin, Adrian Peterson and former presidents Bill Clinton and George W. Bush.

This year, Tani Austin, who started the gala, said the foundation is “moving into a new era,” replacing it with a private benefit concert called “Summer Sounds” on July 20.

“It was always designed to go out on top,” Austin said, adding the gala had “reached that peak” after 18 years. “We’re just moving forward … it was an unbelievable era.”

The concert will feature performances by Sammy Hagar and Huey Lewis, and will honor Billy Crystal and Larry Fitzgerald at the Armory in downtown Minneapolis. The foundation is nixing the red carpet and black tie attire, encouraging “summer chic” dress, and “shrinking and focusing” its event on the people involved with their work; 800 people are expected to attend, not the 1,600 the gala drew — though there will still be celebrities from all over the world, Austin said.

The concert will also cost less, she added, so the foundation can put more money into its programs donating hearing aids to people in need all over the world.

“It took a lot of time and resources that could be spent elsewhere,” Austin said.

More Minnesota nonprofits and foundations are scrapping black tie galas in favor of more casual, informal fundraisers or specially-brewed beer launches in hopes of broadening their appeal and attracting younger donors. Big galas can also be a gamble; while it draws wealthy donors and publicity, it also comes with a high price tag.

“Organizations are moving away from them to look for more cost-effective ways to raise money … A lot of nonprofits are more and more focused on a small handful of really wealthy donors,” said Dan Sassenberg, president of the Minnesota chapter of the Association of Fundraising Professionals, adding that generally, galas cost 50 cents for every $1 they raises. But, he added, a benefit concert “is still in the big gala vein.”

Austin’s husband, Bill Austin, owner of Starkey Hearing Technologies, bought a small earmold business in 1970 and built it into one of the nation’s largest hearing aid manufacturers, with an estimated $800 million in annual revenue and more than 4,000 employees. Austin, one of the wealthiest Minnesotans, started the charity in 1984.

The global foundation had a low profile until Tani Austin launched the celebrity gala, “So the World May Hear,” in 2001. That year, she said, 600 people showed up. Since then, no other nonprofit or foundation in Minnesota has attracted the number of stars as Starkey’s annual gala.

“It was always about the work, not the party,” she said of the gala.

According to IRS forms, the gala has raised about $6 million each year in the past few years. In 2017, it raised $5.9 million and cost about $300,000 to put on — less than some previous years. In 2015, the gala raised $5.8 million and cost $1.1 million to put on. The year before, the gala drew $6.2 million and cost $1.6 million to put on, according to the tax forms.

This year’s benefit concert aims to thank and celebrate foundation supporters, Austin said. She said the foundation fundraises year round and is “getting close to” the $6 million the gala brought in each year over the past few years.

“There won’t be a lot of fundraising that night,” she added about the concert.

The foundation’s global work includes spending millions of dollars on travel for its “hearing missions” all over the world — from Africa to the Caribbean. In 2017, the foundation reported to the IRS that nearly all of its $27.5 million in revenue came from contributions and grants — about $17 million of which was noncash supplies, food and beverage, hearing aids and accessories and hearing aid batteries.

While the galas have drawn a lot of publicity, the foundation has drawn criticism from the deaf community that the foundation doesn’t fund much in the local community and said its marketing exploits deaf children and adults.

The business side has also attracted controversy. Just last month, a group of former employees sued Starkey Laboratories, accusing the leaders, including Bill Austin, President Brandon Sawalich and former President Jerry Ruzicka, of financially hurting the hearing aid manufacturer’s Employee Stock Ownership Plan. Ruzicka and other former executives were also prosecuted on charges they defrauded the company of millions or benefited from their actions. This week, Ruzicka began serving a seven-year prison sentence.

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