In Nonprofit Game, Athletes Post Losing Records Some True Benefactors, but Globe Finds Others Give Little of What’S Raised
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You can now read 10 articles each month for free on BostonGlobe.com. Read as much as you want anywhere and anytime for just 99¢. Business In nonprofit game, athletes post losing records Some true benefactors, but Globe finds others give little of what’s raised By Callum Borchers | GLOBE ST A FF FEBRUA RY 24 , 201 3 MA TTHEW J. LEE/GLOBE STA FF/FILE 2012 Josh Beckett rolled the first ball with 5-year-old Phoebe Davis at the sixth annual Beckett Bowl at Jillian’s Lucky Strikes Lanes in Boston. The bowl benefits Children’s Hospital. But just 37 cents of every dollar raised by his charitable foundation went toward its mission. 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? CONTINUE READING BELOW ▼ 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. In fact, many nonprofits that help Related burnish the reputations of pro Graphic: Donation inflation athletes fall well short of those at the Roger Clem ens Foundation 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. CONTINUE READING BELOW ▼ 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.