The story appeared in the Boston Globe in February, but now it is making headlines in the Dominican Republic. Today, Thursday 9 May, Listin Diario covers the Boston Globe investigation of the declarations of more than 50 athletes to the United States Tax Department (IRS). The investigation revealed that the charitable organization set up by Alex Rodriguez, as well as other well-known sports personalities, donates a much lower percentage to charitable causes than was expected.
In general, it was expected that nonprofit organizations donated between 65 and 75% of their income to charitable causes, whereas in actual fact most of the income is being used to pay expenses and the salaries of the employees at the foundation. According to the Boston Globe almost half of the foundations analyzed that belonged to the 50 athletes donated less than was expected.
Rodriguez was not the only athlete whose foundation did not meet the rules, but without doubt he was one of the most prominent. In 2006 he, together with Jay-Z set up a tournament to help his A-Rod Family Foundation and raised US$403,862. However, the IRS reported that barely 1% of this amount was used for charitable causes: US$5,000 for Jay-Z’s Shawn Carter Scholarship Fund, and only US$90 for a minor league baseball team in Miami. As a consequence the organization has lost its status as a non-taxpayer.
According to the Boston Globe, other famous athletes also have foundations that do not meet the requirements, such as Dodgers’ pitcher Josh Beckett, Ravens’ receiver Anquan Boldin, and Roger Clemens. “Some athletes’ self-run nonprofits accomplish so little that their chief function appears to be public relations,” says the report.
On the other hand there are some celebrities who are very supportive of charitable causes, such as Alex Smith, whose foundation hands over 91% to charity and Michael Phelps, whose foundation donates 75%.
The Boston Globe concludes that the key is that the organizations should be more austere and avoid luxurious events such as golf tournaments and private concerts. Less money should be spent on luxurious galas and high directors’ salaries.
www.listindiario.com/el-deporte/2013/5/8/276192/Alex-Rodriguez-entrego-solo-1-de-donaciones-a-causas-beneficas
http://www.bostonglobe.com/business/2013/02/24/nonprofit-game-many-athletes-post-losing-records/a0Eqoz6RUYORFhT0T0j0EO/story.html