How The Blake Lively Saga Led A Billionaire To Shut Down His Foundation

Forbes

2 days ago

A ll appeared normal at the Wayfarer Foundation in the weeks prior to its announcement that it was shutting down. The team was actively recruiting a grant manager and summer interns. A new manager of growth and culture started in April. Employees were planning events with Wayfarer's nonprofit grantees. Even its billionaire founder, Steve Sarowitz, was talking about a bright future, emailing grantees on April 9: 'Though we're living in a time of profound change, the Foundation remains committed to our mission [...]. Our work is only beginning and we have much to do together.'
Then, around 5:30 a.m. on Monday, April 28, Sarowitz awoke to a dwindling fire in a trash can in the driveway of his home in a Chicago suburb; he put it out with two water bottles, according to a fire department report. Later that day, his wife received a text from an unknown sender claiming to have helped set the fire. The person threatened to kidnap the couple's daughter, a senior at Northwestern University, writing that she wouldn't 'make graduation' unless they forked over $80,000, a Lake County State's Attorney's Office spokesperson confirms.
'If you guys are prepared to spend a hundred million to ruin the lives of Ms. [Blake] Lively and her family, we are sure you can spare a few for your daughter,' the text said, referencing a claim in actress Blake Lively's lawsuit against Sarowitz, his partner Jason Baldoni and the film studio they cofounded, Wayfarer Studios.
The threats kept coming and became increasingly violent, per an indictment filed with the 19th Judicial Circuit Court of Illinois. By that Friday, Sarowitz had decided to shut down his foundation. 'Upon unanimous decision of the board of directors, today we will begin the process of sunsetting,' he wrote on Facebook, Instagram and LinkedIn, hours after informing staff. In an email to grantees, he added that the foundation would honor existing grants, but provided no specific explanation for the closure: 'We have determined that this decision is necessary to ensure the long-term sustainability and impact of our charitable mission.'
'I was shocked when I heard the news,' says Christopher LeMark, founder and CEO of Coffee, Hip Hop & Mental Health, one of the nonprofits Wayfarer had been funding. 'It's hard to even put on paper how much they were doing for us.'
'We decided that private giving was a better way to go forward,' Sarowitz tells Forbes , explaining that he will start donating through a donor-advised fund instead. DAFs are increasingly popular philanthropy vehicles for high-net-worth individuals, in part because they do not require filing public financial reports. He adds: 'Foundations can be slow and bureaucratic. This gives us a lot more flexibility and allows us to give more money with fewer resources.' DAFs also allow the ultra wealthy to give in near secrecy.
Justin Baldoni and Blake Lively captured in a scene from their movie "It Ends with Us," in which Baldoni plays an abusive husband. The movie came out in August 2024. Four months later Lively sued Baldoni, Sarowitz and Wayfarer Studios. Jose Perez/Bauer-Griffin/There's ample reason for Sarowitz to want privacy at the moment. In December, Blake Lively sued him, Baldoni and Wayfarer Studios. She accused Baldoni of sexually harassing her on the set of their movie It Ends with Us , which he directed, they co-starred in and the studio produced. She alleged that Baldoni then illegally retaliated with a media smear campaign—funded by Sarowitz—when she spoke out about his behavior. He, Sarowitz and the studio have denied the allegations. They countersued Lively for defamation and extortion, claims that a judge dismissed on June 9.
The Wayfarer Foundation was widely reported to be Baldoni's organization when the news of its closure broke. According to Forbes reporting, though, it was Sarowitz's entity: He provided the funding, while Baldoni advised on its activities as a board member. Sarowitz contributed some $160 million to the foundation, which doled out nearly $60 million to over 200 nonprofits from its 2021 founding through 2024. (He's contributed another $90 million to a separate charitable family foundation with a separate mission that his wife runs.)
Inspired by Sarowitz's Baháʼí faith, the name Wayfarer was meant to evoke traveling the path toward a more unified world. The foundation—which aimed to promote social justice and empower minorities—tried to avoid being associated with the studio's legal drama, which has captured the public's attention like few other Hollywood spectacles in recent years. For instance, it armed staff with language to help differentiate between the two entities. But sharing the now controversial Wayfarer name may have led to its shutdown.
'To me, the purpose of money is to serve humanity. Period,' Sarowitz told Forbes in an interview in Highland Park, Illinois last year discussing his giving, before the controversy erupted.
Yet the shuttering of Wayfarer complicates that goal, and may have turned its 150-plus grantees into the latest casualties of the PR circus. Some say their nonprofits will struggle to survive without Wayfarer's backing. 'One thing private foundations can provide is stability and as close as you can get to a long-term commitment to funding,' says Brian Mittendorf, an accounting professor and nonprofit specialist at Ohio State University. 'To suddenly shut down all at once undermines that.'
W ell-established private foundations typically sunset over years, not weeks.
Several media outlets blamed Wayfarer's shuttering in part on financial difficulties arising from the legal battle. That's not likely the case. While experts say the hefty legal, security and PR expenses could already total $40 million, Sarowitz still has an estimated $2.3 billion fortune, which stems from founding payroll firm Paylocity (market cap: $10.2 billion) decades ago and running it as CEO until 2011. While $1.6 billion of that is tied up in Paylocity shares, Forbes estimates he has another $700 million in cash and other investments—more than enough for him to have funded the foundation's 2025 budget of $40 million for several decades.
When asked why he shut down so quickly or if there were specific events that led to his decision, Sarowitz declined to comment on the Lively lawsuit or the personal threats and instead simply said that now was 'as good a time as any.'
The day after Wayfarer announced its shutdown, police arrested a suspect in the arson and blackmail incidents: Eduardo Aragon, 26; he has been charged with 13 criminal counts of arson, intimidation and harassment. Illinois does not allow bail at all, and Aragon must remain in custody until the case is resolved, a judge ruled. The next court date is scheduled for July 8.
Nevertheless, Sarowitz has remained on high alert. He stationed 24/7 security guards outside his homes as well as the foundation headquarters, according to a source familiar with the deployment.
Foundation staff signed NDAs as part of their severance agreements, so none would speak to Forbes on the record. But two former workers who asked not to be identified said that safety concerns were discussed at Wayfarer even before the arson. Several defendants named in Lively's case have said they received death threats in recent months.
Safety concerns at many nonprofits have increased since President Trump's inauguration, says Elisha Smith Arrillaga, research VP at the Center for Effective Philanthropy. That's been especially true if their work lies in a controversial area: 'Anything can become a lightning rod.'
S arowitz, who is 59, still plans to give away all his money well before he dies. His interest in social justice began early, inspired in part by getting bullied and beaten up for being Jewish while growing up in Homewood, Illinois. In 1997, he founded Paylocity, which took off after he launched one of the first cloud-based payroll systems in 2004. By the time it went public in 2014, Sarowitz had stepped away from day-to-day involvement, though he stayed on as chairman until August and still sits on the board.
That IPO turbocharged Sarowitz's wealth and inspired his pivot to philanthropy. Meanwhile, friends teased him for continuing to fly coach, drive a Prius and dress simply. 'I'm not interested in luxury,' he told Forbes last year.
Around the time of the IPO, after studying the Bahá'í faith for a few years at the recommendation of a friend, Sarowitz says he had an epiphany, followed by a four-day spiritual transformation while visiting the prophet Bahá'u'lláh's shrine in Israel. His wife promptly sent him to two psychologists. He appeared to be in something like a manic state, constantly elated and sleeping little. Sarowitz formally converted in 2015.
'Baháʼí made the most sense to me. I have a very logical mind,' he told Forbes last year. Baháʼís believe that all faiths are manifestations of the same fundamental religion—and it would be illogical to think that the billions of people who follow Christianity, Islam and Judaism are all mistaken, he argued.
Around 2018, Sarowitz met Baldoni, from whom he sought advice for a documentary he was producing on the origins of Baháʼí. Baldoni, who also follows the faith, was already running a small company called Wayfarer Entertainment and a small nonprofit called The Wayfarer Foundation that put on an annual Skid Row Carnival of Love for unhoused residents of L.A. Sarowitz joined the foundation board and worked with Baldoni to transform the film company into a new entity that he would finance, Wayfarer Studios. Since 2020, the studio has helped produce a diverse array of films it deems to have positive messages, like Garfield and Will & Harper . It Ends with Us depicted overcoming spousal abuse.
Sarowitz has also created Wayfarer Theater, a cinema outside Chicago that only plays movies that 'uplift the spirit.' For him, that means no gratuitous sex, violence or drug use, and no objectification of women. Movies like The Life of Chuck , Jurassic World Rebirth and Everything's Going to Be Great are currently playing.
In 2021, when Baldoni changed his foundation's name to BeLove.org, Sarowitz started his own Wayfarer Foundation, which he funded entirely himself. Baldoni, who was a 'key advisor' to Sarowitz's entity, will continue to advise him on new philanthropic efforts, says Sarowitz. The foundation, which was supposed to disburse nearly $40 million this year (up from about $20 million), funded nonprofits that identified as having a spiritual purpose.
'If you only apply material solutions, which we tend to do—we see a person who's starving and give them food; we see a person who's homeless and give them a home—we haven't actually solved the core problem,' he argued. 'And it becomes, in the long run, a band-aid solution.'
Wayfarer estimated it was the first significant donor for 15% of grantees. Grantees' annual budgets were usually around $1 million and always less than $5 million, meaning they often relied heavily on Wayfarer, which bequeathed more and smaller awards than was typical for a private foundation of its size. Its 152 recipients in 2023 received an average of $127,804.
'It goes back to the entrepreneurial spirit that Steve has,' the foundation's former executive director, Laura Herrick, told Forbes last year. 'He has seen so often what can happen when somebody invests in a project early on, and the impact that it can make.'
Most of Wayfarer's donations were unrestricted—a rarity among private foundations, which often prefer to fund programs rather than salaries or other crucial operational expenses. Grantees gushed to Forbes about the ultra-supportive attitude of the foundation's staff (who regularly sent them care packages and showed up to their events), and Sarowitz himself. They praised the fact that Wayfarer gave not only donations but mentorship, including trainings in everything from communications to fundraising.
Wayfarer shut down for good on June 30. By then, nearly all remaining grants had been paid, according to Sarowitz, though a few final sums are going out in the next couple of days. He says he will keep funding many grantees in private, though it's unclear which ones, and to what extent future donations will be commensurate with the old. He also says he is not accepting any new grant solicitations at this time. 'At times, my biggest frustration is feeling like I'm an ATM and not a human being,' he told Forbes last year.
Many of those previously funded by Wayfarer who hadn't submitted their renewal applications before the buzzer are scrambling. 'We'd just started the conversation with them to fund us again,' says Takisha Miller, executive director of Chocolate Milk Café, which organizes lactation support for African diaspora families. But she hadn't yet applied. 'So we're not promised anything. Which is why it's unfortunate—like, 'Aw man, one more month…''
Organic Oneness founder Syda Segovia Taylor's renewal application was denied, but Sarowitz has assured her that he will continue to fund her in some way privately. She remembers learning of Wayfarer's closure during a break at her annual board gathering. 'I was like, 'Okay, you guys, our safety net is not as thick or as wide as we thought,'' she says. But like all grantees with whom Forbes spoke, her primary emphasis was gratitude for Wayfarer's support until now. 'I feel like they've prepared me for this moment,' she says, citing guidance she'd received on fundraising and strategizing. 'Now I've just got to stand on my own two feet.'
No matter how Sarowitz proceeds as a philanthropist, his decision to step back and go dark has had an impact. 'I looked to them as an example of what a foundation could be,' says Mary Carl, executive director of Miracle Messages, a group helping people experiencing homelessness. 'For that to be taken away from some of the nonprofits that are very small is devastating for their sustainability.'
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