Incomplete Pass

by | May 15, 2017 | Al's Observations | 8 comments

It’s reasonable to think that when you make a donation to a particular charitable organization, the funds will be used in a way that supports that organization’s mission. But as a recent Boston Globe article by Bob Hohler explains, that’s not how it always works, particularly when there are celebrities involved. In this case, the charitable bait-and-switch involved New England Patriots quarterback Tom Brady – a stellar athlete, for sure, but a philanthropic klutz. And, sadly, Brady’s approach to charitable giving is typical of the kind of pseudo-philanthropy that infects celebrities from the NFL to the White House.

It turns out that for the past decade or so Brady has worked out a gentlemen’s agreement with Anthony Shriver, the Founder and CEO of Best Buddies. Best Buddies is a heretofore well-respected organization dedicated to ending the social, physical, and economic isolation of people with intellectual and developmental disabilities. Tom Brady – a handsome and famous celebrity, as well a top athlete – has been a fixture at Best Buddies events in Massachusetts, and his participation in their fundraising activities has by all accounts helped Best Buddies raise tens of millions of dollars. (People pay Best Buddies significant money, apparently, to ride on a tandem bicycle for a few minutes with Tom Brady, or to go to a party where Brady is the guest of honor.)

So far, so good. And, frankly, for Brady to leverage his celebrity to promote significant charitable giving is exactly what famous athletes should do. But it turns out that Brady hasn’t actually been doing it for free. According to the Globe story, in exchange for Brady’s work on its behalf, Best Buddies has been making payments of $250,000 to $500,000 a year (a total of $2.5 million to date) into the “Change the World Foundation,” a private foundation whose only trustee is a certain quarterback named Thomas E. Brady, Jr.

Best Buddies hasn’t been paying Brady per se – the funds have gone into his private charitable foundation, not into his personal bank account – but the payments essentially give Brady money to support his lifestyle and business affairs. How so? Because Brady has used the money in the Change the World Foundation to make charitable gifts that have nothing to do with developmental disabilities, but a lot to do with his personal history and friendships. For example, Brady’s foundation has made grants to his alma maters – a Catholic high school in California and the University of Michigan – and grants to the private schools his children have attended in Boston and New York. Other grants have gone to foundations directed and controlled by fellow athletes and teammates.

And at least one grant seems to be openly self-serving. In 2015 Brady’s foundation sent $100,000 to the TB12 Foundation, a charity that provides support (presumably for scholarships) for amateur athletes to participate in Brady’s TB12 nutrition/training program. You need to understand that TB12 is a for-profit entity owned by Brady, so this “charitable” support for participants would, I’m presuming, find its ways into the coffers of his business. Moreover, the TB12 Foundation pays salary and benefits totaling over $150,000 to a man named Jeff Surette, who also happens to be Senior Vice President at TB12 – again, Brady’s for-profit business. (TB12 did not respond to my requests for an interview.)

So let’s review the flow of the money: People donate generously to Best Buddies (a public charity) so they can be in proximity to Tom Brady at certain events; Best Buddies then makes significant annual gifts to Brady’s private foundation as a quid pro quo for his fundraising appearances; Brady uses that Best Buddies money to make alumni and parent gifts to schools his family is associated with, and to donate to his friends’ charities; Brady also uses the money to provide scholarships to athletes enrolled in his for-profit training and nutrition business – which is to say, to pay himself; and the foundation that oversees those scholarships also pays a bundle to the person who runs his for-profit company.

The first problem with this set-up? Until the Globe story came out, donors to Best Buddies had had no idea that a portion of their contributions are being shunted into a Brady-branded entity that has nothing to do with helping people with intellectual and developmental disabilities.

The second problem? There’s virtually no contribution from Brady himself. The Globe reports that 98% of the money donated to the Change the World Foundation since 2006 has come from Best Buddies. Brady’s net worth is in excess of $180 million. I would suggest that someone worth that much could make gifts to nonprofits he supports without relying on another entity (in this case, an operating charity) to provide the dough.

The third problem? Some of the charitable money seems to be going to prop up income (through scholarships) and reduce expenses (by paying salary) for Brady’s for-profit nutrition and training business, TB12.

The fourth problem: There’s no apparent sense of shame by Brady or his apologists. In fact, Sports Illustrated ran an extensive analysis by sports law professor Michael McCann, the gist of which was that this arrangement was fine, because it didn’t technically violate any laws, and because much good resulted from Brady’s involvement with Best Buddies. McCann misses the point that Brady could have done all that work for Best Buddies and helped support the inflow of contributions without getting any direct or indirect compensation whatsoever. In the old days, that’s what athletes did. They endorsed charitable causes and made contributions. They didn’t create vanity charities named after themselves and make deals with other charities to fund them.

There is a long history of athletes legitimately using their wealth and fame to support worthy causes. Roberto Clemente, the great outfielder for the Pittsburgh Pirates, was a noted humanitarian and philanthropist who died in a plane crash in 1972 while attempting to fly emergency supplies to earthquake victims in Nicaragua. Tennis star Billie Jean King has been deeply involved in social justice and health issues from LGBT rights to AIDS research. Basketball great Dikembe Mutombo donated $15 million for the construction of a hospital in his native Congo, and has been generous with a multitude of charitable organizations around the world.

But Tom Brady is no Roberto, Billie Jean, or Dikembe. His approach is much more like his personal friend Donald Trump, whose charitable foundation, as reported in the Pulitzer-Prize-winning Washington Post series by David Farenthold, was for the most part not funded by Trump, but by NBC Universal and other business partners in lieu of direct payments for services. Trump, like Brady, has used other people’s money to enhance his philanthropic profile and personal brand, without for the most part reaching into his own pocket. And by taking contributions into their foundations, rather than into their bank accounts, neither man had to pay any income taxes on the revenue.

But I’ll give Trump credit (a rare moment for me): At least the payments Trump took into his foundation were from for-profit entities. On the other hand, Tom Brady, the golden boy with five Super Bowl rings, $180 million in assets, an estimated $40 million-a-year income, a supermodel wife, and matinee idol good looks, cut a deal to take money from a charity devoted to helping people with developmental and intellectual disabilities. It’s shameful on the part of Brady, ill-advised on the part of Best Buddies, and an example of what can go wrong in philanthropy when charity takes a back seat to celebrity.

Copyright Alan Cantor 2017. All rights reserved

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