In nonprofit game, athletes post losing records
Some true benefactors, but Globe finds others give little of what’s raised
However low Josh Beckett’s public esteem sank toward the end of his six-plus seasons in Boston, two things often redeemed the pitcher in the eyes of Red Sox fans: his spectacular playoff performance during the team’s 2007 championship season and the generosity of his Josh Beckett Foundation.
The nonprofit’s annual Beckett Bowl, a popular celebrity bowling tournament, typically generated about $100,000 for Boston Children’s Hospital. Even in a season of chicken and beer and a historic late-year collapse, who could complain about that?
But an examination of the group’s financial records — part of a Globe review of more than 150 Internal Revenue Service filings by 50 nonprofits operated by professional athletes — reveals that just 37 cents of every dollar raised by the Josh Beckett Foundation went toward its mission to “improve the health and well-being of children.” That’s far less than the 65 to 75 cents that nonprofit specialists say is an acceptable minimum.
James Abundis/Globe Staff
In fact, many nonprofits that help burnish the reputations of pro athletes fall well short of those standards, the Globe review found. Among the 50 nonprofits examined, nearly half spent less than 65 percent of revenues on charitable programs and donations.
For example: New England Patriots receiver Deion Branch formed his own foundation in 2006 — the year after he was named the Super Bowl’s most valuable player — aiming to aid children who, like his son Deiondre, suffer from the effects of meningitis. Branch speaks about the cause with obvious sincerity, but just 28 percent of funds raised went to charitable efforts between 2006 and 2009, before revenues dropped to a level where the foundation was no longer required to submit full financial reports. Half of the money given to charity was directed toward initiatives unrelated to meningitis, such as supplying sports equipment to schools.
A foundation started by New York Yankees third baseman Alex Rodriguez gave only 1 percent of proceeds to charity during its first year of operation in 2006, then stopped submitting mandatory financial reports to the IRS and was stripped of its tax-exempt status. Yet the group’s website still tells visitors the A-Rod Family Foundation is a nonprofit organization.
When Baltimore Ravens receiver Anquan Boldin won a team award for charity and volunteerism in 2010, his nonprofit gave away less than a fifth of the money it raised. A celebrity golf tournament ate up most of the funds.
Beckett’s bowling event does the same. And though the Beckett Bowl is the only event on the foundation’s yearly calendar, the organization has consistently reported to the IRS that executive director Jason Oberle , Beckett’s boyhood friend, devotes an average of 20 hours per week to foundation-related work, on top of his other jobs as a luxury real estate agent and president of a sports marketing firm. For his effort, Oberle collected a $50,000 salary from the Josh Beckett Foundation in 2010, the most recent year for which an IRS filing is publicly available.
Oberle insisted the foundation’s money has been well spent and said he has been fairly compensated for “a conservative estimate” of his time commitment to the nonprofit.
“I’ve spent a lot of time working on partnerships with businesses, where we get a percentage of revenue,” Oberle said. “But some of them have fallen through because Josh was traded” to the Los Angeles Dodgers less than a week after his final Beckett Bowl last August.
To be sure, many of the hundreds of nonprofits started by pro athletes offer valuable services or make large donations to charities. Some athletes are almost as good at bringing attention — and money — to important causes as they are at their sports. A nonprofit founded by San Francisco 49ers quarterback Alex Smith, for instance, raised $839,244 between 2008 and 2010 and spent 91 percent of the funds on scholarships and grants to help foster teens attend college and transition to adulthood.
Foundations started by current and former Boston stars like Paul Pierce, Cam Neely, Vince Wilfork, Curt Schilling, and Ray Allen also funnel large portions of revenue to their chosen causes.
But athletes’ foundations often raise surprisingly little money, overspend on fund-raising events, and direct small percentages of revenue toward their stated goals.
“Athletes’ charities are subject to many pitfalls because most of them are not trained in how to raise and distribute money, and it’s difficult,” said Greg Johnson, executive director of the Sports Philanthropy Project in Boston, which has advised Major League Baseball and other sports organizations on charitable best practices. “A lot of them get into expensive golf tournaments and that kind of crap. They can be self-serving as hell.”
In some cases, it is difficult to gauge a nonprofit’s true impact. The Roger Clemens Foundation records the sum of its charitable contributions on IRS filings based on the “fair market value” of tickets and memorabilia donated to charity auctions, instead of the prices at which the items sold.
When the the seven-time Cy Young Award-winning pitcher’s foundation gave an autographed Red Sox jersey to the Cystic Fibrosis Foundation in March 2011, for instance, Clemens’s nonprofit reported a charitable contribution of $2,000 — what his memorabilia partner, Tristar Productions Inc., considered to be the jersey’s fair market value — even though the sale yielded only $1,000 for the Cystic Fibrosis Foundation.
The accounting method is legal, according to nonprofit lawyers, and the foundation has disclosed price differences to the IRS. But the group’s reported donation total does not accurately represent the benefit its gifts have brought to their recipients. Between 2009 and 2011, the Roger Clemens Foundation claimed $83,308 in donations of tickets and memorabilia that sold for $75,423 — inflating their charitable value by 10 percent.
Even when players set out with noble goals, they frequently overestimate their drawing power and their managerial skills, nonprofit specialists say.
Barry Dym, executive director of the Institute for Nonprofit Management and Leadership at Boston University, said an athlete who feels a genuine call to philanthropy should consider establishing a nonprofit under the umbrella of one of the roughly 650 “community foundations” already operating in the United States. Community foundations help multiple nonprofits reduce their overhead costs by pooling resources.
Celtics point guard Rajon Rondo moved his nonprofit to the Bluegrass Community Foundation in Lexington, Ky., where it has thrived after a challenging first year on its own. The Rajon Rondo Foundation, which asks supporters to donate $5 for every assist the All-Star records during NBA games, raised a total of $209 in 2009 and spent all of the money on IRS filing fees.
“The first thing I did was stick a knife in the foundation and said, ‘We can’t afford this. This is silly,’ ” recalled Samuel K. Brown, a Kentucky accountant who became Rondo’s financial adviser after the nonprofit’s formation.
The collaboration with Bluegrass has helped Rondo support the Massachusetts Society for the Prevention of Cruelty to Children, where he has been an active volunteer in an after-school program since his rookie season.
“I remember his first visit, and he really just clicked with the kids,” said Mary McGeown, the organization’s president. “He has continued to play a role in their lives, taking them shopping or for pizza, always out of his own pocket.”
Other athletes also have shown an ability to improve the operations of their nonprofits. Swimmer Michael Phelps famously pledged to start a foundation with the $1 million bonus he received from Speedo after winning eight gold medals at the 2008 Summer Olympics in Beijing, but the first two years were like a false start for his nonprofit: $700,671 of revenue (Speedo pays the bonus over time) and just $22,000 to charity.
In the next two years, however, the Michael Phelps Foundation collected even more and gave away three quarters of the money raised, most of it to a swimming program at the Boys & Girls Clubs of America. In 2011, the foundation doubled the previous year’s revenue from a charity golf tournament while cutting expenses by a fifth.
“We learned a lot from the first tournament [in 2010],” said Mya Thompson, the foundation’s director of operations. “We looked at what our major expenses were and got sponsors to cover some of them, and had a much better year the second time.”
More often, athletes’ foundations continue to struggle, even as the players are celebrated for their perceived giving.
Boldin’s nonprofit raised $53,005 at its annual Q-Festival in 2010 — the foundation’s sixth year in existence — but spent $46,879 staging the three-day event, which included a golf tournament at the PGA National Resort & Spa in Palm Beach Gardens, Fla.
Though just 17 percent of the foundation’s proceeds went to charity that year, Boldin, who sponsors and supports a number of charitable activities in the Baltimore community, won the Ravens’ Walter Payton Man of the Year Award, an honor for good works he received again this past season. Neither Boldin’s agent nor a person listed as the Anquan Boldin Foundation’s principal contact responded to e-mailed questions or to requests to interview Boldin.
Sports fans share some of the blame for the shortcomings of athletes’ foundations, suggested Mark S. Rosentraub, codirector of the Michigan Center for Sport Management and a faculty affiliate of the Nonprofit and Public Management Center at the University of Michigan. Rosentraub said athletes feel burdened by a societal expectation that they — blessed to make millions playing games — will “give back” by starting foundations they may be ill-equipped to lead.
“I’m not sure why we expect them to be that different from everyone else,” he said.
Athletes often can make greater charitable impacts by giving time and money to existing nonprofits that are well established and well run, said Johnson, the Sports Philanthropy Project director. Patriots quarterback Tom Brady is a high-profile example of an athlete who has chosen to work with groups like Best Buddies International and the Make-A-Wish Foundation, instead of starting his own nonprofit.
Some athletes’ self-run nonprofits accomplish so little that their chief function appears to be public relations.
Rodriguez talked openly about his desire to reverse bad publicity in 2006 after being exposed as a member of an underground poker club. He started a foundation and teamed with rapper Jay-Z to host a celebrity poker tournament for charity.
“I got in some trouble for poker last year, so why not turn it around and raise some money for the children?” Rodriguez said in an interview with MLB.com at the time.
The event helped the A-Rod Family Foundation raise $403,862 in 2006, but little found its way to charity, according to IRS records. The foundation gave $5,000 to Jay-Z’s Shawn Carter Scholarship Fund and $90 to a Little League Baseball club in Miami.
Rodriguez’s agent did not respond to requests to interview the slugger.
By Rodriguez’s standard, the Josh Beckett Foundation is a model organization. But the big right-hander's nonprofit has its own problems. Oberle, the director, acknowledged that Beckett Bowl expenses have consumed a significant portion of the foundation’s revenue and that some event extras, like a performance by country singer Jason Aldean in 2010, have not lived up to expectations as major attractions.
But Oberle said the foundation also has brought joy to children by sending Beckett on visits to Children’s Hospital, where a cancer treatment room bears his name.
“Looking at numbers doesn’t necessarily show the impact that an event has,” Oberle said. “You can’t put a price on the impact that it has on the children that attend the event and those who are impacted by the funds raised.”
While many athletes struggle to make a difference through their nonprofits, others succeed by simplifying fund-raising efforts, being generous with their own money, or hiring a professional staff. Here are three who put those principles into practice:
Athlete: San Francisco 49ers quarterback Alex Smith
Nonprofit: Alex Smith Foundation
Mission: Helping foster teens attend college and transition to adulthood
Funds raised 2008-10: $839,244
Percent to charitable causes: 91
Why it works: Smith eschews expensive fundraisers in favor of free ones, like a mustache fund-raiser in which supporters found people to sponsor their facial hair.
Athlete: New York Knicks forward Carmelo Anthony
Nonprofit: Carmelo Anthony Foundation
Mission: Education and recreation
Funds raised 2008-10: $3.3 million
Percent to charitable causes: 87
Why it works: Most of the foundation’s money comes from Anthony or his company, Melo Enterprises Inc. The All-Star’s personal generosity ($2.9 million between 2008 and 2010) keeps fund-raising costs down.
Athlete: Retired quarterback/ESPN analyst Steve Young
Nonprofit: Forever Young Foundation for Children
Mission: Academic, athletic, and therapeutic support for children facing physical, emotional, and financial challenges
Funds raised 2008-10: $6.2 million
Percent to charitable causes: 75
Why it works: Young’s foundation pays a six-figure salary to its president. But for its investment in professional leadership, the nonprofit gets prolific and efficient fund-raising in return. In 2010, for instance, four special events raised $946,485 and cost just $229,772. SOURCE: IRS filings