Sports Reference

A Wall Street Journal article.

Throughout pro sports, the individual charity has become practically institutionalized. Teams, leagues and agents all rally players to become philanthropists as a way to boost the athletes' images while giving back. But if there is plenty of encouragement to get players to conduct charitable activities, there is much less guidance that would help these athletes, most of whom are newcomers to the world of philanthropy.

Indeed, at a time when much of the philanthropy world is keenly focused on the question of efficiency, many athletes' foundations are out of step. Baseball's highest-paid player, Alex Rodriguez, has a foundation that supports mental health and other causes; only a third of its spending in 2005 went to charitable activities, the rest going to administrative overhead.

The foundation of Seattle Seahawks wide receiver Darrell Jackson directed 6.7% of its total spending in 2005 to charity.

The indoctrination begins almost as soon as players turn pro. In baseball, for instance, players-union chief Don Fehr toured spring training camps this year to encourage rookies to get involved in their communities. At least 22 players from the NBA and 37 from the NFL now have personal foundations.


Players, teams and leagues leverage these charitable efforts to market themselves. Players often grant interviews on television, radio and in print on the condition that they be allowed to talk about their latest philanthropic work. Teams tout this work on their Web sites and in media guides that reporters reference for their stories.

When his foundation opened a playground in the Bronx in 2004, New York Giants wide receiver Amani Toomer was on hand for a ribbon-cutting ceremony that was also attended by Caroline Kennedy. In 2005, Mr. Toomer's foundation, which had end-of-year assets of about $133,000, gave $392 to charity; in July of that year he was invited to ring the opening bell at the Nasdaq Stock Market because of the foundation's work.

Teams see player philanthropy as critical, in part because of a widening rift between athletes and fans. Players' salaries have hit astronomical levels, even as leagues have had to crack down on player misconduct. At the same time, rising ticket prices have made it harder for many fans to see games.

"The first thing about marketing a team is that fans have to relate to the players as people," says Bernie Mullin, the chief executive of the Atlanta Hawks and Atlanta Thrashers. "We sit down with every player to find out about their lives and families to see if there's a cause that's touched their lives... It's not 100% altruistic -- we're a business," he says.

The Wall Street Journal reviewed the latest available tax filings for 85 individual-athlete foundations. Of those, 35 devoted more than 75% of their spending to charitable programs, the standard guideline.

Players say the foundation approach to philanthropy has advantages. For one thing, it enables them to hold events and fundraisers, and solicit donations from people, including corporate sponsors. New England Patriot Junior Seau's foundation received a $900,000 grant from Fuji Computer Products of America. The foundation started by Houston Texans wide receiver Andre Johnson raises most of its funds from a three-day event in Houston. In 2005, golfer Vijay Singh's foundation received $350,000 in donations, none of it from the golfer himself. Mr. Singh made grants of $100,000 in 2004 and 2006, says David Lightner, a trustee of the foundation.

"If I just wrote personal checks, people wouldn't know as much about what we're doing," says Vince Carter, a co-captain for the New Jersey Nets. Mr. Carter's foundation, Embassy of Hope, sent just a third of its spending to programs in 2004, the most recent year for which records are available. Mr. Carter, who created his foundation in his rookie year, before he bought his first house, has also made major substantial donations outside of his foundation, including $2.5 million to his high school.

Critics note that some of these organizations provide employment for athletes' relatives and friends -- many of whom have no experience in philanthropy -- whose salaries are paid out of the foundations. Players say they prefer to hire friends and family members because they have a better understanding of the goals and are willing to work for little or no money. Steve Nash's foundation paid $27,500 salaries to its two employees, Mr. Nash's sister and Jenny Miller, the foundation's executive director and a close childhood friend. The point guard for the Phoenix Suns says it would be impossible to find anyone else to do the work for that amount of money and that the two women both share his lifelong interest in the environment.


Giving Back: Andre Agassi greets children at an event for his foundation.
Despite the emergence of mega-charities like the Bill & Melinda Gates Foundation, most private foundations, especially family foundations, don't have huge assets. This also applies to many athletes' foundations, and tends to result in lower efficiencies because of standard legal and accounting costs.

Mary Ford, Gary Payton's agent, says that foundation's 2005 performance doesn't tell the whole story, and that there were other years when more money was spent on charitable programs. She also says the foundation's money is donated by the player himself: "It's all out of Gary's pocket," she says. Darrell Jackson's agent, Brian Mooney, says Mr. Jackson's foundations sponsors a large basketball tournament in a troubled neighborhood that results in a financial loss but which benefits the community. And Kashyap Bakhai, Alex Rodriguez's accountant, says the baseball player made charitable contributions of almost $700,000 outside the foundation in 2005.

The handful of very large foundations launched by athletes are among the most efficient. Tiger Woods's foundation, which makes grants to community-based childrens' programs, had assets of almost $82 million at the end of 2005. Lance Armstrong's foundation had $34 million. Both reported spending or program support that was more than 75% of their total expenditures.

Charities have been in the spotlight in recent years as natural disasters have led to an outpouring of donations just as watchdog groups and legislators have been calling for greater accountability. Unlike public companies, which make quarterly earnings reports, most charities are only required to file the Form 990 to the Internal Revenue Service, and some experts say this information is incomplete or inconsistent.

Following a series of well-publicized cases of abusive practices, federal and state regulators have moved to crack down on charities and boost supervision. Last summer's landmark pension-reform bill included provisions to increase the accountability of donor-advised funds and other charitable-giving vehicles. At the same time, the charity sector has rolled out programs to rate nonprofits and evaluate how leanly and efficiently they operate.

While much of the debate centers around tax and other abuses, many donors have also been critical of charities that spend too much money on their own administrative costs rather than on delivering services to the needy. Some charities argue they need to spend significant sums of money on overhead and fundraising in order to grow and to attract quality staffers. They also say finances aren't the only measure worth watching; donors should also consider how effective a charity is at its mission.

Barry Zito, a pitcher with the San Francisco Giants, decided it didn't make sense for him to go through the trouble and expense of creating a foundation when he launched a program called Strikeouts for Troops to raise money for soldiers injured in Iraq. Prior to the start of the 2005 season he promised to donate $100 every time he struck out a batter.

For last year's season, he doubled the amount and had 151 strikeouts. He also persuaded other players to make donations based on their pitching and hitting. "It took some time, about two years, for me to get comfortable with the idea that I had the capacity to give away money," he says. "If you start out not having any money, the first inclination is, gosh, I have to hold onto it."

Hines Ward, a wide receiver for the Pittsburgh Steelers, has also avoided the foundation route, turning to another foundation to help mixed-race Korean children instead. He says he found his cause after a visit to Seoul with his mother last year. Born in South Korea to a black American serviceman who was stationed there and a Korean woman, Mr. Ward says he didn't know much about his background until the trip, which he took shortly after he was named the Most Valuable Player of Super Bowl XL.

Seeing how poorly mixed-race Korean children are treated, Mr. Hines vowed to find a way to help them. "It's shocking what these kids have to put up with," he says. "They told me they were not allowed to play on the national teams, and they grew up being told, 'you look like a monkey -- go back to the zoo.'"

He made another trip to Seoul one month later and has raised more than $500,000 for his effort. Rather than create his own foundation, he had his attorney, Andy Ree, arrange to have the Pittsburgh Foundation, a community foundation, handle the money. "Hines can accomplish all of his goals without going to the trouble and expense of creating his own foundation," says Mr. Ree, who estimates that it would have cost $10,000 to set up the foundation and at least $25,000 a year to operate.

Female athletes haven't created as many foundations as men, in part because it is the big male-only professional leagues -- the NBA, NFL, and MLB -- that do the most to encourage player charity. But many female athletes are charitable and some have created foundations. Chris Evert's foundation raised $843,304 in 2005 and donated most of the money to an organization that assists at-risk children in Florida.

A foundation created by Mia Hamm, the recently retired soccer star, supports efforts to help young women who are involved in sports as well as bone marrow transplant patients. Dawn Staley, Marion Jones and skater Kristi Yamaguchi have foundations that work to assist needy children.

Players who are considering starting a foundation generally seek advice from their agents and financial advisers. "If a player wants to have events -- auctions or golf outings -- a foundation can make sense," says Michael LoVerde, a partner at Wilkin & Guttenplan, which provides accounting and financial advice to about 80 professional baseball players. He says he tells them they should consider no more than 15% of their income to be discretionary, including charitable efforts.

Inevitably, some players grow tired of the hassles associated with foundations. When the board of the Kenny Lofton Youth Foundation gathers next week in Dallas, it is expected to shutter the organization. Larry Kent, one of the three board members, says the decision comes from Mr. Lofton, an outfielder with the Texas Rangers, who will continue to do charitable work but wants "one less thing to have to deal with."