Shriver and Bono have negotiated arrangements with the likes of Gap, Motorola and Giorgio Armani, and are constantly looking for other interested parties. "The Paul Newman project has been doing this for 25 years. I chose the for-profit form for this because I wanted it to have the for-profit energy," Shriver says.

JOHN WHITEHEAD donated millions to set up an emergency fund for disaster relief. The fund provides immediate help, and the money is paid back when other contributions come in.

He has his critics, who point out the inherent conflict of a for-profit venture with nonprofit ends—$17 from sales of each Motorola (RED) phone supports the Global Fund, for example. "My answer to them is, ‘Get out your calculator, and see if you can do better,’" he says. "If you don’t get criticized, you’re not doing anything important."

The challenge of maintaining the marketability of a campaign such as his with mercurial consumers seems more pressing than answering detractors. Shriver acknowledges that the success of (RED) over the long term will depend on whether or not his corporate partners can and will continue to create products that sell. Newman’s Own food products are items that consumers replenish every few weeks and continue to buy as long as they like the taste. But T-shirts and mobile phones with a charitable message are decidedly faddish. "The thing we’re doing is a very, very difficult thing to do, and may still fail," he concedes. "It’s a risky thing; we could go right on our butts here."

Shriver has created five-year partnerships with each company, but will offer no guarantees as to what might happen when these contracts expire. Adlai Wertman, a former investment banker with Prudential who is now CEO of Chrysalis, a job-training program based in Los Angeles, contends that the idea of a nonprofit counting on retail sales presents an inherent stumbling block on the path to sustainability. His charity has never operated such a venture. "A nonprofit needs consistency," he says. "If you need $3 million a year to run a nonprofit, you need the money this year. A retailer might give you $4 million this year and $1 million next year." The fluctuating nature of retail sales, he adds, would make it a difficult source of funding for a charity. The Global Fund, however, makes grants rather than provide charity services, so Shriver could potentially find other sources of revenue, if (RED) income begins to lag, without disrupting the programs he funds.

John Whitehead, a former cochairman of Goldman Sachs who is now chairman of the firm’s foundation and in his sixth decade as a director of the International Rescue Committee (IRC), devised a tough-love strategy for making certain that the organization never runs out of the capital it needs to operate. Whitehead and the Mellon Foundation gave IRC $10 million in 2002 in the form of the John Whitehead Emergency Fund. The fund pays for emergency responses to global crises, with the stipulation that the charity pays back what it spends from the fund with contributions from other donors. The fund allowed IRC to send aid to Darfur in 2003 and to Pakistani earthquake victims in 2005 without having to wait for a foundation’s board meeting or governmental assent. "The IRC was a beloved organization, but not always financially on solid ground," says Janet Harris, the committee’s vice president of development. "John saw the organization extend itself without having the financial foundation underneath it. His funding will be used over and over and over again. And it will leverage much bigger donors."

So far the plan to use it to leverage, or at least inspire, bigger donors seems to be working. IRC used some of Whitehead’s gift as seed capital to start the Freedom Fund, of which the John Whitehead Emergency Fund is now a part, as an ongoing campaign for endowments and emergency funding. Maurice "Hank" Greenberg, former chairman of AIG, was inspired by Whitehead’s generosity. In 2006, his Starr Foundation gave a $7 million grant to the Freedom Fund, which has amassed approximately $80 million. Paul Newman has also given money to the fund.

"One of the chief motivators for people to give to the fund is they know the IRC responds so quickly—within 72 hours—to a humanitarian emergency. What if they’re on vacation, what if their family foundation doesn’t have a meeting for 30 days?" Harris says. "We borrow from the fund, and we report back to them that the funds are repaid again. So they know their money is sustainable, that it is being used over and over again, but that the corpus of the fund remains essentially full within each year."

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