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

The Starkey Hearing Foundation's high-profile, red carpet gala — the biggest celebrity event 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 attracted prominent politicians, pro athletes, singers, actors and Olympians to the state — 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 party called "Summer Sounds" on July 20.

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

The party will feature a performance by Sammy Hagar and honor Billy Crystal and Larry Fitzgerald at the Armory in downtown Minneapolis. Huey Lewis also will attend. The foundation is ending the red carpet and black tie attire, encouraging "summer chic" dress, and focusing its event on the people involved with its work; 800 people are expected, not the 1,600 the gala drew — though there will still be celebrities, Austin said.

This year's event will cost less, she added, so the foundation can put more money into its programs to donate hearing aids to people in need worldwide.

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

More Minnesota nonprofits and foundations are scrapping black tie affairs in favor of more casual fundraisers or specially brewed beer launches in hopes of broadening their appeal and attracting younger donors. Big galas can also be a gamble; while they can draw wealthy donors and publicity, they also come with big price tags.

"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. He said that generally, galas cost 50 cents for every $1 they raise.

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 event, "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 as many as Starkey's annual affair.

"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 — less than some previous years. In 2015, the gala raised $5.8 million and cost $1.1 million. The year before, it drew $6.2 million and cost $1.6 million, according to the tax forms.

This year's event aims to thank and celebrate foundation supporters, Austin said. She said the foundation raises money 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.

The foundation's global work includes spending millions of dollars on travel for its "hearing missions" all over the world. 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 as well as hearing aid batteries.

While the galas have drawn publicity, the foundation has drawn criticism from the deaf community that it doesn't devote much effort to local people in need.

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.

Kelly Smith • 612-673-4141