November 19, 1993 at 05:00 AM EST

It’s no secret that benefit concerts and albums are a snowballing trend in the music business. But recent allegations that only 3 percent of the money raised by Dionne Warwick‘s foundation for AIDS research made it to charities, and that Giant Records will turn a rumored $2 million profit on Common Thread, their album to benefit Don Henley’s Walden Woods Project, raise a troubling question: Are there benefits from these good intentions?

Yes and no. With their huge production costs, charity concerts are at best a gamble. Benefit albums, on the other hand, are cheaper to produce (artists donate royalties; record companies need only recoup manufacturing costs) and can channel funds to charities for years. So far, royalties from the Warwick- led “That’s What Friends Are For” total $1.7 million, all of which has gone to AIDS charities. Likewise, 1990’s Red Hot + Blue compilation album produced $4 million in AIDS donations.

Beyond being good PR, these benefit albums are considered break-even affairsby most labels. “We’re not making any money on In Defense of Animals,” says Restless Records president Joe Regis. How, then, does Giant Records justify its large profit? Not very well. “We’re busting our ass to sell this record,” said a Giant source. “Would we be doing that if it was 100 percent for charity? Probably not.”

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