How Ryan Cavanaugh Betrayed Habitat for Humanity

Relativity Media has been in a lot of financial trouble lately, so much so that the bankrupt company will be dismantled and auctioned off on the first of October. That probably hurt a lot of investors and employees, but it turns out that the kind of empty promises that led to the company’s bankruptcy also hurt Habitat for Humanity.

Back in 2007, at the end of a weeklong event in Los Angeles, Relativity Media’s founder and CEO Ryan Cavanaugh handed the group an oversized check for $1 million. That was enough money to build 250 homes for poor people in the area, and was supposed to signal the start of a campaign called Building a Greater Los Angeles.

Unfortunately, the money never appeared. When lawyers from Relativity Media first contacted Habitat for Humanity about the donation, they made the point that some of that total would be donated by the company, and some would be raised during the upcoming campaign. After looking into this donor, who at the time was not well known, the charity agreed to everything, as it seemed like a pretty good bet. Cavanaugh had made a lot of other charitable donations, and had a number of people who were willing to vouch for him.

For whatever reason though, despite his past good works, or his tendency to bring those works up at every single opportunity, Cavanaugh never gave that money. True, Relativity Media did donate a total of $35,000 over the next two years, essentially as bribes to include the Habitat for Humanity logo on their Christmas cards, but that’s it.

People in and associated with the charity were understandably upset. Here this man made a huge gesture, in front of 1,000 volunteers as well as former president Jimmy Carter and then California governor Arnold Schwarzenegger and then L.A. mayor Antonio Villaraigosa, which he never even tried to follow up on. It was embarrassing, and it turns out that such a donation was too good to be true.