RUSSELL SIMMONS surrounded by children’s artwork at his Rush foundation’s gallery in New York. (Photograph by Timothy White.)

These newly minted–and in many cases astonishingly young–philanthropists are filling some crucial funding gaps. Hip-hop foundations tend to focus on education and arts groups, supporting grassroots organizations. Such groups are often too tiny or entrepreneurial to attract funding from larger, traditional charities. "Any time you start a business or a philanthropic organization, you’re trying to fill a void, and there is a tremendous [funding] void for grassroots organizations," Simmons says. "For people to give their money to the Urban League, it’s a safe bet. There’s nothing wrong with the Urban League, but what about these other issues?"

While hip-hop has long since crossed the color line, and the work of these foundations is not constrained by race, the hip-hop community brings an insider’s awareness of the needs of poor black Americans–at a time when black charities’ already small share of grants from traditional foundations is shrinking. Allocations dropped to 1.6 percent in 2003, down from 3.8 percent in 1998, according to the Foundation Center, a New York—based organization that tracks nonprofit giving. Many of these foundations target needs in the rappers’ home communities that are often overlooked by conventional charities. "Philanthropy, in a sense, was organized to preserve the culture, and our culture is not foremost on the minds of people outside of our community. So having this new wealth being more focused on the community is very valuable," explains William Merritt, president of the Newark, N.J.-based National Black United Fund, which supports philanthropic organizations that aid black Americans.

Russell Simmons carves out time to personally investigate potential beneficiaries. He spent an afternoon in a trash-filled parking lot in Crown Heights, Brooklyn, in 2001, watching a performance by the Jackie Robinson Steppers. The group was performing in threadbare uniforms, and their instruments were held together by tape. Rush Philanthropic later donated $20,000 to the Steppers, and Simmons and his wife personally donated funds. The donations enabled the group to buy new uniforms and instruments, and to enter competitions. In 2004, they won the national high-step championship and are in talks to perform at New York Knicks games.

Hip-hop philanthropists who overcame poverty and the temptations of the streets are often well-positioned to reach out to blacks in need, especially to the fans who idolize them. Jay-Z, who grew up in Brooklyn’s crime-ridden Marcy Projects, started the Shawn Carter Scholarship Fund in 2003 to help those, such as GED recipients and released inmates, who are ignored by most scholarship grantors. His mother, Gloria Carter, who runs the fund, says the objective is to educate urban children who are bright, but who may not be able to meet other scholarships’ stringent requirements. "We come from the ghetto, and I know how hard it is to get money for education," she says. The fund has awarded 10 scholarships, mainly to students who plan to return to their home communities to help after college. Carter plans to expand the group this year and establish an after-school center at Marcy.

Chingy, who grew up on St. Louis’ North Side, is just 26, and he, too, has a foundation, Chingy for Change, which provides college scholarships. Founded in 2003, the organization works with local principals to select scholarship winners. Chingy holds fund-raising concerts and visits local schools to encourage kids who grew up like he did, telling them that there is a way out of poverty. "It’s really important for me, because as a kid coming up, I didn’t have that much," he says. "Now that I established my career . . . it’s like, you go back, and the kids that can’t really help themselves, you help them."

Foundations can also create an incentive for more giving. Lisa Franklin, Chris Bridges’ financial advisor and a board member of his Ludacris Foundation, says the rapper felt more comfortable making larger donations after–as an established philanthropist–he became privy to private information about needy organizations.

THE EFFORTS of Ludacris (front center) to help Katrina victims were furthered by help from his music-industry peers.

Serial Entrepreneurs
Some observers, however, wonder if these young stars possess the staying power to fund philanthropy over the long term. The most dedicated artists do seem to be laying a solid financial foundation, using music-industry success to springboard into new businesses, turning themselves into durable, multifaceted brands. The elder statesman at a mere 48, Simmons now hawks everything from jewelry to debit cards. Jay-Z, 36, hung up his microphone last year to become CEO of Def Jam. He also produced clothing and sneakers with Reebok, and owns a stake in the New Jersey Nets basketball team. He is said to be worth some $300 million.

These artists are also becoming icons for their peers in the hip-hop pantheon and the millions of fans who worship them. After Katrina hit, Roberta Shields says her son received numerous calls from other stars who wanted to help. Soon the Ying Yang Twins and Lil’ John and the East Side Boyz were bringing baskets of supplies for 15 displaced families that Ludacris was moving into temporary housing. Ludacris, at 28 a multiplatinum rapper, radio show host and critically acclaimed actor, collaborated with MTV last December to broadcast his outreach to Mississippi high school students affected by the hurricane.