An analysis of hundreds of tax documents filed by NBA player charities has found that many of the foundations — especially those set up by the athletes themselves — face a dizzying array of problems, the Salt Lake Tribune reports.
Although many NBA players devote a portion of their wealth to charity, those efforts often go awry, the Tribune found. According to the paper's analysis, while the eighty-nine standalone charities set up by NBA players reported total revenue of $31 million between 2005 and 2007, only 51 cents of every dollar spent by the typical charity was allocated to charitable programs — well below the 65 cents most philanthropic watchdog groups view as acceptable. Moreover, up to a quarter of the charities analyzed could not produce the basic documentation required by the IRS; about a third of the charities were funded by the athlete's own wealth rather than a sustainable stream of donations; and only a few of the player-run charities had hired full-time directors.
Not all player-run foundations are poorly managed, of course. Former Houston Rockets player Dikembe Mutombo, retired Miami Heat player Alonzo Mourning, Steve Nash of the Phoenix Sun, and Carmelo Anthony of the Denver Nuggets each have created successful foundations with annual budgets of $1 million or more. But according to University of Illinois professor Scott Tainsky, who researched the foundations as a graduate student, the average amount raised by player-run foundations — $325,564 in 2006 — is inflated by the largest of them, leaving the median in the low six figures.
The NBA and the NBA Players Association acknowledge that there's a problem with player foundations and have begun to address the issue as a formal part of the league's annual rookie orientation.
"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," said NBA senior vice president Kathy Behrens. "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."