This is an extended version of a letter published March 29 in The Boston Globe.
ON FEB. 24, the Globe published an article titled “In nonprofit game, athletes post losing records.” As the brother of a cancer survivor and a pitcher for the Boston Red Sox who founded the Strike 3 Foundation (www.strike3foundation.org), it is unclear to me how a real loss could be defined within the context of raising money to cure a disease. What percentage of a dollar disbursed makes that dollar too little to bother raising? What research oncologist turns away $37,000 because it isn’t $100,000? Was the $400,000 that the Strike 3 Foundation granted to Yale New Haven Children’s Hospital as the founding sponsor of Connecticut’s first bone marrow transplantation program a loss? I may not be equipped to answer this question, but I would be happy to connect the author of the article to the oncologists, nurses, patients, and families at Yale who could probably share some insight.
Akin to the sabermetrician who would argue that WAR (Wins Above Replacement) is the single comprehensive metric of a player’s total contribution to his team, nonprofit rating agency, Charity Navigator, cites seven financial performance metrics for measuring the financial health of a charitable organization. The Globe appears to have focused on one area, dividing program service expenses by gross revenue, to define whether a charity loses in supporting improving the health and well-being of children. As the brother of a childhood cancer survivor, it just doesn’t feel that simple.
As a data-driven individual who appreciates transparency and a balanced portrayal of information when forming an opinion, the unbalanced views of this article are not only strikingly unsettling but potentially damning. As an example, the graphic that the Globe uses to illustrate his findings invites scrutiny. If we can assume that what is being portrayed is that 54 percent of the sample size of 50 athlete charities disburse more than 61 percent of their annual revenues to cause, we are left with the question of how does this compare to the other 1.5 million actively reported nonprofit organizations in the United States. Further, 50 of 1.5 million seems like an insignificant cross-section. Of the 50 charities evaluated in the Globe research, it is also unclear what consideration was given to whether the charity was in its first years of existence and/or whether disbursements were being strategically pooled over a specific span to fund a more substantive project.
The Strike 3 Foundation has disbursed $740,000 in the past three years towards initiatives directly related to our mission, with guidance provided by our medical director and in partnership with the Conquer Cancer Foundation of the American Society of Clinical Oncology and renowned cancer specialists at Yale New Haven Children’s Hospital, The Children’s Hospital of Philadelphia, Children’s Hospital and Research Center of Oakland, and Connecticut Children’s Medical Center. Our 2012 form 990 will reflect a percentage of revenue disbursed to cause greater than 90 percent. In 2010, it was 39 percent. In 2008, the year the charity was formed, it was a paltry 21 percent. Were we losing until 2012? Should people have stopped buying tickets to our fund-raising events? Was the $400,000 that the Strike 3 Foundation granted to Yale New Haven Children’s Hospital as the founding sponsor of Connecticut’s first Bone Marrow Transplantation Program a loss, when the percentage of revenue disbursed did not exceed 65 percent pre-2012? I may not be equipped to answer this question, but I would be happy to connect the Globe to the oncologists, nurses, patients, and families at Yale who could probably share some insight.
This article was published in the Globe’s Business section. Nonprofits, like businesses, have expenses. Growing organically and containing general and administrative (G&A) expenses is a challenge that faces Fortune 100 companies and nonprofits alike. Fund-raising expenses are largely dependent upon what for-profit businesses are willing to sponsor, donate, or discount their venue spaces, products, and services to. Fund-raising expenses for the Strike 3 Foundation have held steady averaging $82,000 annually since 2010. G&A expenses have also held steady, averaging $8,600 in the last three years. Zero percent of the Strike 3 Foundation expenses are employee compensation.
The Strike 3 Foundation is an all-volunteer organization. Our volunteer team consists of lawyers, teachers, accountants, management executives, doctors, marketing professionals, technologists, and professional baseball players who have families and full-time jobs at companies like General Electric, Ernst & Young, Neopost, the Boston Red Sox, and Accenture. G&A as a percentage of revenue in 2012 was less than 2 percent. In 2010, 2.6 percent. In 2009, 2.7 percent. Simply, expenses have stayed flat, while revenue and disbursements to the cause have steadily increased and continue trending positively.
A prospect who makes an out in his first at-bats isn’t labeled a bust, a start-up that doesn’t turn a profit on day one isn’t tagged a failure, and yet the Globe implies that a nonprofit that doesn’t meet “nonprofit specialist acceptable minimums” is a loser. Is the CEO of a for-profit company expected to underwrite expenses out of his own wallet as a solution to his business not living up to Wall Street expectations? Why, then, does the Globe intimate that an athlete underwrite expenses out of his own wallet as a solution to his nonprofit not meeting the 65 percent disbursement metric?
I implore the Globe to show more balance and complexity. Citing a for-profit consultant as an expert on athlete charity best practices, Greg Johnson, who evokes such brilliant emanations as “that kind of crap” and “self-serving as hell” when speaking of athlete fund-raising events, doesn’t instill much confidence in the data being presented. In the summer of 2011, during a series in New York, 12 players from the Yankees and Athletics shared lunch before their game with 75 donors of the Strike 3 Foundation. In the fall of that year, Sarah Tasian, MD was awarded a $50,000 research grant from the charitable arm of the American Society of Clinical Oncology (the Conquer Cancer Foundation) sponsored in full by the Strike 3 Foundation, for predicting biochemical and genetic responses to JAK inhibitor therapy in patients with CRLF2-overexpressing acute lymphoblastic leukemia, a cancer that approximately 20 percent of children will relapse and die from. If in 2011, I had sought the expertise of Mr. Johnson, perhaps he would have advised our donors to shun that “self-serving as hell” luncheon, lest they expose themselves to “that kind of crap,” leaving $0 for Dr. Tasian’s research. Then again, by adding thousands of dollars in athlete charity consulting fees to our form 990, we may have just been digging ourselves a deeper hole.
Publicly available charity IRS filings help provide financial transparency to donors and potential donors, allowing them to align their dollars and time to charities of their choice. Being a professional athlete provides me with choices; a choice to align my money, time, name, and notoriety to a charity of my own or even in support of other teammates. A child, or the parent of a child, with cancer, or craniosynostosis, or 22q11.2 deletion, or autism, or cystic fibrosis, or Down syndrome, or cerebral palsy, or hemophagocytic lymphohistiocytosis is faced with choices too. Many of those parents are athletes and teammates, who have made choices to make a difference, whether publicly or privately, and the transparency of their intentions won’t be found on a tax form, or a bar chart, or calculated by some ratio, or on the black and white pages of a newspaper. Rather, you can be sure they mean to do good by the looks in their eyes and the pain in their hearts. Maybe it’s time we applaud that.
Correction: An earlier version of this story misnamed the American Society of Clinical Oncology.