The philanthropic efforts of celebrity athletes leave a lot to be desired. In his 5-part series in The Arizona Republic reflecting 6 months of investigative work, investigative sports journalist, Jason Wolf, takes a deep dive into the charities of Walter Payton Man of the Year Award winners and other NFL players. For this series he interviewed CharityWatch Executive Director, Laurie Styron, for her take on what players should know before making a decision to start their own charities, and better ways for these athletes to leverage their fame to make a positive impact.
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Styron said, "You know, it's a real missed opportunity here, because there's all the elements here for this to be a great success and a win-win-win for everybody...We have athletes, most of whom genuinely care about making the world a better place and doing some good charitable work. We've got people who are famous, who have the ability to amplify the work of charities and leverage their fame to raise money for existing organizations."
"The win-win-win is that, if this was done correctly, if this was done in a way where you eliminated a lot of these smaller, individual organizations...and [instead supported] existing charities...It's a win for donors who want their donations spent efficiently and responsibly. It's a win for the athletes who can look back and say, wow, I really did accomplish something. This wasn't just lip service or an award I got. I actually can look and see that I helped 3,000 kids get educated, or I helped clean up the water in a city that was contaminated in a struggling area. And most importantly, last but not least, it's a win for charities. It's a win for the causes."
"Because if what you're really trying to do with your charitable efforts is make an impact in the world--a positive impact--an award is not going to do that. What's going to do that is making sure, however it's done, that you get the most money that you possibly can, to the best charities that you possibly can, that can accomplish the most good. And that's a win-win-win for everybody. All the elements are there, and it's not too late to make that happen."
They are the NFL's most-honored players. Why did their nonprofits often spend so little on charity?
"Twenty-three of the past 26 Walter Payton NFL Man of the Year Award winners have founded a 501(c)(3) tax-exempt organization since the award was named in honor of Payton, the 1977 recipient, shortly after his death in 1999," according to The Arizona Republic. This raises a concern that some athletes may be incentivized, intentionally or not, to start up nonprofit organizations without understanding the risks and obligations associated with doing so.
"Running a charity is a full-time job. So, you're an athlete. You're probably at the peak of your career, many of you. Do you have the time and energy to provide oversight of a nonprofit organization? Probably not," Styron says in her interview with Wolf.
Russell Wilson's Why Not You Foundation raises millions. Less than half goes to charity.
"'Doing good deeds and showing care and compassion for other people is something we should all do,' said Laurie Styron, the executive director of CharityWatch, the only independent charity watchdog group in the U.S. 'It doesn't require founding a charity. An important part of how a nonprofit justifies its existence is by quantifying what it is accomplishing relative to the resources it receives," Styron told The Arizona Republic after analyzing the tax filings of Russell Wilson's Why Not You Foundation.
According to The Arizona Republic, "Form 990 federal tax returns from the nonprofit's inception through 2021 show it reported $7.5 million in revenue and $7 million in expenses during its first eight years of existence. Less than half of the money--$2.8 million, or 39.6 cents of every dollar spent--has gone to charitable activities, all as grants to other nonprofits.The remaining $4.2 million has paid for fundraising, administrative and management expenses, including the salaries of three employees, who have received $1.9 million combined."
"The function of a charity's board is to provide governance and oversight, including the checks and balances necessary for ensuring that decisions are being made in the best interest of the charity and not private individuals,'" Styron told The Arizona Republic. "A board can't do its job if it's not independent. If someone is being paid too much relative to the value they are bringing to the organization, there is no independent governing body at this charity to stop this from happening. It's a virtual free-for-all," Styron continued.
As a horrified national audience witnessed Buffalo Bills safety Damar Hamlin suffer cardiac arrest and collapse on the field, many were soon after inspired to flock to the GoFundMe crowdfunding site to make donations in response. In a few short days the crowdfunding campaign on the GoFundMe site had collected donations totaling to more than $8.7 million. The balance about a month later reflects just over $9 million in donations.
The problem? “None of the donations are tax deductible,” according to reporting by investigative journalist Jason Wolf forThe Arizona Republic. The February 8th, 2023 article cites Andrew Morton as the source of this information—a partner at Handler Thayer, LLP, who chairs the firm’s sports and entertainment philanthropy group and is legal counsel for The Giving Back Fund, which now serves as the fiscal sponsor for The Chasing M’s Foundation.
As reported by The Arizona Republic, “’Nobody made a charitable contribution’ Morton said, ‘despite the fact that it said Chasing M’s Foundation, despite the fact that GoFundMe says ‘donate.’…People who gave $10 or $20, no big deal. But people who gave tens of thousands of dollars. And I promise you, the people who gave tens of thousands of dollars did not consider that it might not be charitable.’”
As previously reported by CharityWatch, a legal entity by the name of Chasing Millions, LLC is registered with the Pennsylvania Department of State as an active “Domestic Limited Liability Company” (LLC) with an initial filing date of 08/09/2022. This legal entity, not being a registered 501(c)(3) public charity with the IRS, is not eligible to offer tax-deductibility on the money people give to it.
The Giving Back Fund “has yet to collect the money from the GoFundMe as the parties work through the issue,” according to The Arizona Republic.
Read: Chasing M's Foundation: A Case of Crowdfunding Gone Wrong?
Over the past year CharityWatch has been called upon to provide analysis and commentary for several investigative articles about celebrity athletes and their charities. Regarding Brett Favre's Charitable Foundation, Styron told ESPN "Founding a charity to purportedly help breast cancer patients and underserved and disabled children and then using it instead as a vehicle to funnel funds to a volleyball facility that exploits the tragedies of other human beings for the benefit of the extremely privileged--it's morally reprehensible."
Styron said of Tom Brady's charity when speaking to The Daily Beast, "A charity's board members have a fiduciary duty to act in the best interest of the charity at all times. Doing so becomes more complicated when there are competing interests between nonprofit and for-profit legal entities, particularly when the two organizations share key staff who have to balance their fiduciary duties between the two."
When commenting on concerns about the Washington Commanders Charitable Foundation, Styron told ESPN, "There are so many red flags here, it's hard to keep score. Taxpayers who subsidize the existence of public charities also have a stake in knowing that nonprofits aren't being used to forward the personal interests of the people running it...One person can't govern themselves. There is no board. There is no independence. There are no checks and balances against conflict or competing interests..."
For more in The Arizona Republic's 5-part series, read:
Some NFL players find efficient ways to give back
'I was deceived': NFL players raise questions about Prolanthropy, group that managed their nonprofits
Prestigious Payton Man of Year celebrates philanthropy, but NFL offers players little guidance