November 18, 2013; Post Crescent
Erik Litke, reporting for the Gannett Wisconsin Media Investigative Team, has an interesting review of the charities established by high profile athletes and sports teams in Wisconsin, suggesting that some don’t report their expenses appropriately, use their money efficiently, or file reports at all. In nearly all cases, the sports charities were relatively small; of 43 active charities, 16 had less than $50,000 in annual revenue, and 29 reported less than $250,000. Litke says that the Wisconsin athletes’ charities are not as troubled as those of Alex Rodriguez of the Yankees, which distributed only one percent of the money it raised, and Lamar Odom, whose cancer research charity didn’t give a dollar to that cause in eight years.
But the Gannett team did find problems. For example, former Green Bay Packer LeRoy Butler’s charity seems to have had 10 years of activity without ever filing a financial statement with the IRS. Litke also says that Butler’s work combined nonprofit and for-profit activities. Six athletes’ charities had their tax-exempt status revoked and one other disbanded. Litke identifies charities established by former Packers quarterback Brett Favre and former Milwaukee Bucks center Samuel Dalembert as falling well short of the other sports charities in terms of the proportion of revenues devoted to the charities’ purpose. Former Packer Donald Driver also had an anomalously low proportion of its revenues in one particular year devoted to charitable program activities, but Driver himself explained that in 2009, he began devoting a larger portion of revenues toward building cash reserves for the long-term sustainability of the charity.
However, at least three of the charities—one created by former Wisconsin Badgers player Michael Finley, and those created by former Packers defensive linemen Gilbert Brown and Vonnie Holliday—reported that they spent every nickel they raised for program, with no administrative, fundraising, or other expenses, though what they included as “charitable activities,” such as Holliday’s inclusion of accounting expenses as charitable, suggested that there might have been problems of categorizing and reporting expenditures accurately.
Litke cited CharityWatch’s Daniel Borochoff on the point that athletes might be using charitable activities for image enhancement: “If you’re a big-time athlete, you’ve got the mansion, you’ve got the model girlfriend, what other notch can you have on your belt? Well, having your own charity,” Borochoff told the Gannett team. “You’re in a position to raise some very significant money, and if they don’t, it does make one question their sincerity or their motivation for their cause.”
While attributing much of athletes’ charitable activities to ego may be a bit overstated, athletes’ charities may or may not benefit from contributions from the athletes’ own pockets. In most cases, the athletes are raising and spending the donations of other people, who are drawn to contribute to a charity founded by a favorite athlete. He is correct about image enhancement as a part of many athletes’ strategies, often crafted by their lawyer-agents and in some cases even negotiated as part of their contracts, obtaining contributions from their teams. Many athletes really do care about their charities, but agents often have different motivations.
The Gannett team is producing a series of articles on the charities of Wisconsin-linked athletes. One guesses that there will be in-depth reporting on Butler’s charity or on the reporting problems of Finley, Brown, and Holliday. We would love to hear examples—not PR, but real citations—of athletes’ charities that are doing good work in their communities, reporting accurately, and putting real money into their charitable causes.—Rick Cohen