SBD/Issue 71/Sports & Society

NBA Player-Operated Charities Often Encounter Problems

Average NBA Player Foundation Puts Just $0.51
Of Each Dollar Spent Toward Charity Programs
About 100 NBA players have shown a "philanthropic passion," but their foundations "face a dizzying array of problems, especially those set up by the athletes themselves without outside expertise," according to tax documents cited by Siler, Semerad & Lewis in a special two-part report for the SALT LAKE TRIBUNE. Often raised in "modest circumstances before parlaying their talent into multimillion-dollar NBA contracts, these players devote a portion of their wealth to charity, frequently targeting children with backgrounds similar to their own." While the 89 stand-alone NBA charities reported revenue of at least $31M between '05-07, only about $0.44 of every dollar raised, or $14M, "actually reached needy causes." The average NBA player foundation puts $0.51 of each dollar it spent "toward charitable programs, well below" the $0.65 per dollar that "most philanthropic watchdog groups view as acceptable." Tax records indicated that "budgets are quickly eaten up by poor planning and administrative costs." A majority of player charities are "unimpressively funded and their activities poorly documented," and up to 25% of those foundations analyzed "lacked even basic documentation required" by the IRS. Few player-run charities "hire full-time directors to manage daily operations, and players commonly put family members, friends and former sports associates on their boards, despite IRS rules requiring that a majority of board members be nonrelatives." Siler, Semerad & Lewis wrote while "shining examples of NBA charity work abound," player foundations' "noble motives often go awry, as even the league acknowledges." NBA Senior VP/Community & Player Programs Kathy Behrens: "'We don't shy from it. There are horror stories ... of guys who set them up because their agent said to or they thought it was a good idea and they had good intentions, but not a good plan. That causes trouble.'' The NBA and NBPA "know there's a problem," and they have "begun to address it as a formal part of the league's annual rookie orientation." Behrens: "We tell the players to take their time, that the first thing they need to do is not go out and set up a foundation. It's a lot to take on and we really encourage the guys to just do it intelligently. It's like starting your own business and sometimes people forget that" (SALT LAKE TRIBUNE, 12/28). The SALT LAKE TRIBUNE's Siler reviewed the five charities operated by Jazz players, and they "so far appear to have avoided major problems" (SALT LAKE TRIBUNE, 12/28).

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