Using guidelines set by nonprofit watchdogs Charity Navigator, the Better Business Bureau and the National Committee for Responsive Philanthropy, “Outside the Lines” found that 74 percent of the nonprofits fell short of one or more acceptable nonprofit operating standards. The standards cover all sorts of aspects, such as how much money a nonprofit actually spends on charitable work as opposed to administrative expenses and whether there are enough board members overseeing the organization.
Among the “Outside the Lines” findings:
• Many athlete charities fail the effectiveness test for a variety of reasons, ranging from the deceptive and unethical—if not illegal—to the simply neglectful and ignorant. Some athletes set up foundations as tax-planning vehicles. Others dispute the nonprofit standards overall, saying as long as they spend at least some money on actual charity they should not be criticized.
• In many cases, OTL had a hard time measuring a charity’s actual effectiveness because it was behind on filing its IRS tax returns or the returns were filled with errors and omissions. Problems can go unnoticed for years as the main agencies that oversee charities—the Internal Revenue Service and states’ attorney general offices—don’t audit every return.
• Even though the athlete charities often are named in honor of wealthy sports icons, only about a third of them had total assets of $500,000 or more. Multimillion-dollar charities that actually run programs, such as those founded by Tiger Woods, Lance Armstrong, Andre Agassi and Richard and Kyle Petty, are rare. ...
Yankees third baseman Alex Rodriguez—who signed a record-breaking $275 million contract in 2007—also had two foundations. Much like [Randy] Moss’ charities, both seem to have fizzled. It’s hard to tell exactly what happened because neither foundation has filed a tax return since 2006, prompting the IRS in 2011 to revoke their tax-exempt statuses.
One of the foundations reported earning $368,000 from a fundraiser in 2006. It gave $5,000 to a scholarship fund and $90 to a Miami-area Little League. That year, it had about $300,000 left after myriad expenses, and it’s unclear where that money went, even though the IRS has specific rules about what is supposed to happen to funds leftover in a foundation that decides to shut down.
The ballplayer’s website lists a number of donations, totaling in the millions, that Rodriguez has made directly to other nonprofits, including the University of Miami, and a partnership he has with the Boys and Girls Clubs of Miami-Dade County. But it doesn’t say what happened to either of the foundations started in his name. Multiple calls to Rodriguez’s business manager and agent were not returned.