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For the love of the game and community: evaluating professional athletes' charitable giving
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For the love of the game and community: evaluating professional athletes' charitable giving
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Copyright 2015 Emily Cabrera FOR THE LOVE OF THE GAME AND COMMUNITY: EVALUATING PROFESSIONAL ATHLETES’ CHARITABLE GIVING by Emily Cabrera A Thesis Presented to the FACULTY OF THE USC GRADUATE SCHOOL UNIVERSITY OF SOUTHERN CALIFORNIA In Partial Fulfillment of the Requirements for the Degree MASTER OF ARTS (STRATEGIC PUBLIC RELATIONS) December 2015 2 Dedication “A life is not important except in the impact it has on other lives.” – Jackie Robinson To my parents who never had much but always found a way to give to those in greater need. No matter how many degrees I earn, what job I have, or how far I am from Fourth Street, the selflessness instilled in me will always prevail. 3 Acknowledgements “Make fate your friend.” – John Wooden Three years ago, I was invited to sit in on Jeff Fellenzer’s class by a friend who attended USC. During my visit, I sat two rows away from Ned Colletti, the general manager of my childhood favorite team: the Los Angeles Dodgers. I was in awe (and envy) of USC’s access to such influential sports figures. What I didn’t know, was that during my visit I was also sitting two rows away from Jeff Fellenzer, who would end up being more influential to my life and career than I can even fathom now. As fate would have it, I was selected to be Fellenzer’s teaching assistant for the very same class I visited. I’ve met some pretty legendary people as a T.A. for his class, but none whose humble spirit, patience and wisdom impact me more than that in which Fellenzer exudes. I could never thank him enough for agreeing to be my committee chair for this thesis. I am truly grateful to call him a mentor and a friend. 4 Table of Contents Chapter One: Introduction ......................................................................................................... 8 Athlete Philanthropy: Why It Matters .................................................................................. 9 The Forefathers of Sports Philanthropy ............................................................................. 11 Chapter Two: Philanthropy’s Effect on Reputation ............................................................... 19 Increased Brand Value ...................................................................................................... 21 Effect on Endorsements .................................................................................................... 25 Chapter Three: Gold Standards of Sports Philanthropy ........................................................ 27 Tiger Woods Foundation .................................................................................................. 27 Andre Agassi Foundation for Education ........................................................................... 28 Chapter Four: Characteristics of Successful Foundations ..................................................... 31 Proper Formation .............................................................................................................. 31 Proper Financial Advisement ............................................................................................ 33 Chapter Five: Leagues Hitting Home Runs in Corporate Social Responsibility .................. 35 In-Kind Donations ............................................................................................................ 35 Team Foundations ............................................................................................................. 36 Sport Outreach Programs .................................................................................................. 37 Chapter Six: Philanthropic Options ......................................................................................... 39 Support an Organization ................................................................................................... 39 Donor Advised Funds ....................................................................................................... 42 Planned Gifts ..................................................................................................................... 43 5 Chapter Seven: Philanthropy Fumbles and Flops ................................................................... 45 Executive Boards .............................................................................................................. 45 Conflicts of Interest & Employee Compensation ............................................................ 46 Dormant Foundations ....................................................................................................... 48 Chapter Eight: The Need for All-Star Advisers ....................................................................... 50 The Opportunity ............................................................................................................... 52 Alternative Support Options ............................................................................................ 53 Chapter Nine: Conclusion .......................................................................................................... 56 The Philanthropy of the Future ......................................................................................... 56 Suggestions ....................................................................................................................... 59 Bibliography ................................................................................................................................ 62 Appendix A: Industry Interview ............................................................................................... 69 Appendix B: Industry Interview ............................................................................................... 73 Appendix C: Industry Interview ............................................................................................... 78 6 Executive Summary This thesis examines the effectiveness of professional athlete philanthropy and provides an extensive look into the most popular form of athlete philanthropy, a private nonprofit foundation, analyzing characteristics of those that have been sustainable and exposing the pitfalls of those that have been unsuccessful. In addition to examining foundations, other key topics discussed include alternative philanthropic opportunities for athletes (besides creating a foundation), how philanthropy affects a professional athlete’s brand image, and how philanthropy can be utilized to positively impact an athlete’s for-profit endeavors. Ultimately, the main purpose of this thesis is to examine the complexity of creating an 501(c)(3) organization and evaluating its effectiveness in helping an athlete to make a positive difference in society. By highlighting these complexities, it exposes the insufficient oversight of celebrity nonprofits and the immediate need for experienced nonprofit professionals to oversee an athlete’s strategic philanthropy. 7 Preface Research Methodology In preparation for this thesis, the author performed both primary and secondary research activities. Qualitative primary research consisted of interviews with sports industry professionals who have experience working with athletes and philanthropy. Qualitative data presented herein came from one-on-one interviews with the following individuals: 1. Leigh Steinberg – Founding agent at Steinberg Sports with more than 40 years of experience representing clients in the sports and entertainment industries; 2. Towalame Austin – Philanthropy executive at Roc Nation with 17 years of experience managing celebrity philanthropies, most notably the Magic Johnson Foundation and Rihanna’s Clara Lionel Foundation; 3. Jenny Price – Director of Community Relations for the Los Angeles Angels of Anaheim. Steinberg and Austin provided information and insight regarding their experiences advising professional athletes on philanthropy. Additionally, Price provided information and insight from the perspective of a team’s community relations efforts and the opportunity it presents for the team’s players. These individuals also expressed their views on how the effectiveness of athlete philanthropies can improve going forward. For secondary research, the author gathered extensive information on nonprofit management, sports philanthropy and athlete brand management from a carefully selected roster of books, news articles, studies, professional white papers and websites. 8 Chapter One: Introduction Forming charitable foundations became increasingly popular for professional athletes in the late 1980s and early ‘90s. It was not uncommon at the time for athletes to employ their family or friends to run their charity, whether paid or unpaid. 1 In many cases, those acquaintances did not have the dedication or expertise to manage a sustainable nonprofit organization. Today there are approximately 2 million nonprofit organizations in the United States, which altogether generate close to $300 billion annually. 2 Despite examples from numerous failed athlete charities, many professional athletes still choose to pursue their philanthropic passions by establishing a charitable foundation. While their intentions may be good, their lack of expert advice may be poisonous. Starting a foundation is not the best fit for every athlete looking to make a positive difference in the community. Having a successful foundation requires a significant amount of funding, time and expertise that most athletes cannot commit to. 3 An athlete’s consideration of philanthropy should be taken as seriously and with as much diligence and expertise as any of his or her other business decisions. The most effective philanthropists develop their charitable giving programs and priorities in a way that mirrors a corporation’s decision to pursue corporate social responsibility (CSR). This would require the athlete to develop his or her initiatives with an eye toward positively affecting and enhancing this 1 Kroichick, R. Charity has pitfalls for athletes. Milwaukee Journal Sentinel, 21 Nov. 2001. Web 2 "Giving USA 2015 Highlights." Giving USA. N.p., n.d. Web. 1 Aug. 2015. 3 Pollick, Marc. "Charities Offer Many Opportunities for Athletes to Give Back."SportsBusiness Journal, n.d. Web. 01 Aug. 2015. 9 or her brand. Athletes should gather their teams of experts (i.e., financial advisers, agents, publicists, family and friends) to consider all types of charitable options and access their resources. 4 While athletes continue to struggle with their personal strategic philanthropic initiatives, the dedication to CSR within the leagues and teams they play for has risen rapidly. CSR at the league level often involves philanthropy, but is much more than simply giving monetary donations. 5 As a result of efforts by leagues and teams, professional athletes are presented with more opportunities make a positive impact on their communities than ever before. Athlete Philanthropy: Why It Matters Corporate social responsibility can be broadly defined as the responsibility of organizations to be ethical and accountable to the needs of society as well as to their stakeholders. 6 CSR has become a hot topic among businesses after research showing its effects on consumer attitudes. Consumer perceptions, and more important, consumer purchasing behavior, are being strongly influenced by how a company communicates its CSR efforts. Research shows 80 percent of people believe that large companies have a moral responsibility to 4 Pollick, Marc. "Athletes’ Charitable Actions Often Develop Dual Paths to Success." SportsBusiness Journal. N.p., n.d. Web. 5 Stoldt, G. Clayton, Stephen Dittmore, and Scott Branvold. Sport Public Relations: Managing Stakeholder Communication. 2nd ed. Human Kinetics, 2012. Print. 6 Ibid. 10 society. The percent of consumers who believe that a company’s social responsibility is very important has risen from 28 percent to 44 percent over a four-year period. 7 Athletes have the opportunity to influence consumer perceptions through philanthropy in the same way that companies use CSR. When an athlete takes part in philanthropy, specifically those that result in direct face-to-face access, her or she effectively develops connections between him or herself, the team, fans and general public. Specific outcomes of this enhanced connection include: decreased sensitivity to ticket price increases and decreased sensitivity to disappointing team performances. 8 Given the combination of visibility, strong community connections and high expectations among the public, philanthropy can be more mutually beneficial than for other entities. 9 Even without face-to-face interaction, the virtual intimacy created between celebrity and audience often has very real effects on the manner in which individuals negotiate the experience of their every day lives. 10 Unlike other entertainers, sport creates a perception for fans of interaction with real individuals participating in games that are unpredictable. An athlete seems more connected to the public than other celebrities in film or music because their actions in sport come off as intuitive, dramatic in real time and authentic. 11 In other words, unlike movie or TV stars whose on-screen performances are flawless, fans see athletes miss a jump shot or strike out, 7 Okunniwa, Tove. "The Rise and Rise of CSR." Warc. AdMap, May 2007. Web. 8 Stoldt, G. Clayton, Stephen Dittmore, and Scott Branvold. Sport Public Relations: Managing Stakeholder Communication. 2nd ed. Human Kinetics, 2012. Print. 9 Andrews, David L. Sport-- Commerce-- Culture: Essays on Sport in Late Capitalist America. New York: Peter Lang, 2006. Print. 10 Ibid. 11 Ibid. 11 making them seem more accessible and human. For these reasons, the unique “star power” that a professional athlete provides for a nonprofit has the ability to set that organization apart from other nonprofits without celebrity support. The Forefathers of Sports Philanthropy Magic Johnson When it comes to philanthropy, few athletes have done more with their stardom than Earvin “Magic” Johnson after two years as a basketball star at Michigan State University. Johnson was selected as the No.1 pick in the 1979 NBA Draft by the Los Angeles Lakers. By the end of his rookie season, he was already making an impact on and off the court. Not only did he help the Lakers win the 1980 NBA Championship, he also established his first philanthropic initiative, the Magic Johnson All-Star Camps. These camps were available to children and teens in Los Angeles and Michigan communities. 12 Five years after starting his All-Star Camps, Johnson created a charity event titled “A Midsummer Night’s Magic” which included a celebrity basketball game and a black-tie dinner with proceeds benefiting the United Negro College Fund. 13 After winning four NBA championships and three Most Valuable Player awards, Johnson’s career and influence was at an all-time high in 1991. That influence proved to be extraordinary after announcing that he was retiring from the NBA because he had been infected 12 "History - Magic Johnson Foundation." Magic Johnson Foundation. N.p., n.d. Web. 02 13 "Magic Johnson's Gala Midsummer Night Magic Gets $1.3 Mil for UNCF." Jet Magazine, October 19, 1992. Google Books. 12 with HIV. Johnson’s statement on Nov. 7, 1991, altered the perception of an epidemic that had been demonized and was devastating communities across the country. 14 The decision to create the Magic Johnson Foundation (MJF) was confirmed after the overwhelming community response to his announcement that came in the form of donations and letters of support. 15 Although the MJF was initially created to fight HIV/AIDS through grant-making, the organization has now evolved to address additional concerns in urban communities such as the lack of educational opportunities and the absence of empowerment. Today, the organization’s three core programs include HIV/AIDS awareness and prevention, the Taylor Michaels Scholarship program and Community Empowerment Centers. 16 The success of the MJF can be greatly attributed to the dedication of Johnson’s staff over the years. Towalame Austin began her career in the nonprofit sector with the MJF, where she served as Director of Corporate Relations and Special Events nationwide, then Executive Vice President, and President, respectively. 17 During her tenure as President, Austin helped the organization create a previously nonexistent operations plan that was previously nonexistent. The benefits of building such a plan included increased structure within the organization, and the ability to assemble anecdotal data to properly measure and articulate the outcomes from different programs. During this time, Austin believes that the staff and board of directors were very 14 Gregory, Sean. "Magic Johnson and HIV: The Lasting Impact of Nov. 7, 1991. TIME, 07 Mar. 2012. Web. 15 "Overview - Magic Johnson Foundation." Magic Johnson Foundation. N.p., n.d. Web. 07 Sept. 2015. 16 "MJF PROGRAMS - Magic Johnson Foundation." Magic Johnson Foundation. N.p., n.d. Web. 07 Sept. 2015. 17 "Towalame Austin LinkedIn Profile." LinkedIn. Towalame Austin, n.d. Web. 10 Sept. 2015. 13 engaged, which contributed to successfully building structure, and an operations plan, plus planning for the organization’s future. Johnson’s genuine care for his community is evident in almost all of his decisions. Whether it’s nonprofit or for-profit, community is a common thread throughout all of Johnson’s endeavors. In addition to the MJF, Johnson runs Magic Johnson Enterprises, with subsidiaries that included, at some point: Magic Johnson Productions, Magic Johnson Theaters and Magic Johnson Entertainment. Through Magic Johnson Enterprises, he became a trusted expert in urban community investments and creating redevelopment opportunities in underserved communities. When considering Johnson’s business portfolio and examining the descriptions of the different partnerships, these business entities all touch the community in some way. They are all centered in urban communities, and focused on helping families, creating jobs and providing information and awareness. Examples of Johnson’s urban community investments include a chain of movie theaters which he’s since sold plus Burger King restaurants and health clubs, which he still owns. In 2006, MJE created a deal with Sodexo, the world’s largest food services and facilities management company. 18 Magic Johnson’s philanthropic efforts since his playing days have certainly helped sustain his brand, especially within Los Angeles. Johnson’s list of community partnerships as well as successful business ventures has allowed him to become one of the most respected former NBA players today. 18 Snyder, Benjamin. "Magic Johnson: The Businessman behind the Basketball Legend." Fortune. N.p., 09 Dec. 2014. Web. 07 Sept. 2015. 14 Leigh Steinberg Leigh Steinberg has represented some of the most successful athletes and coaches in professional football, basketball, baseball and hockey. His 35-year career includes representation of the No.1 overall pick in the NFL draft for an unprecedented eight times in conjunction with more than 60 first-round NFL picks. The late, great Los Angeles Times sportswriter Jim Murray once described Steinberg’s philanthropy philosophy as, “[a]nybody can get a multimillion dollar contract for a kid who can throw a football through a brick building…the trick is to mold the money and the man into a whole person so he isn’t just another rich bore when his athletic season is over.” 19 While molding the money and the man, Steinberg has emphasized the importance of giving back to society. He attributes his philanthropic standards to his father’s advice. His father, a former principal at Fairfax High School in Los Angeles, emphasized two things: 1) Treasure relationships, and 2) Try to make a positive difference in the world by helping people who couldn’t help themselves. He insists that all of his clients contribute to their communities, whether it be through contributions to their alma maters or donations to charity. 20 His philanthropic standards have 19 Murray, Jim. "Leigh Steinberg Is Not the Stereotyped Sports Agent."Reading Eagle [Reading, PA] 14 May 1984: n. pag. Google News. Web. 20 Cox, T. Having a ball: Sports agent Leigh Steinberg is a multimillion-dollar marvel, whether batting for will clark or fragile-fingered Troy Aikman. Orange County Business Journal, 12(38), 23. 1990. Web. 15 played a pivotal role in the formation of countless charities for his clients and has helped direct more than $750 million to various charities internationally. 21 Steinberg’s contracts had some of the most unconventional provisions in the profession. He doesn’t just recommend that his clients give back, he makes it mandatory and includes it in their contracts. For example, former star NFL kicker Rolf Benirschke’s contract included a commitment of $50 for every field goal to a fund to save animals. Another client, New York Jets All-Pro defensive end, Mark Gastineau, donated to charity for every sack. 22 Most agents would not consider making charity a contractual obligation because it’s untraditional and could be risky in recruiting clients. For most talented players signing with their first agent, the requirement to give to charity may be undesirable because they’re hungry for their first big payday. Steinberg was confident in his philosophy and knew that there were about a thousand NFL certified agents, so if athletes didn’t like his philosophy, they certainly had a number of alternatives. Steinberg learned that athletes may have agreed to the requirement at first because charitable activity is always a good thing to be involved in, but once they had done it, they became passionate about it. According to Steinberg, the benefits that athletes typically receive from charity involvement were more than “feel good” emotions. They allowed the athlete to use and further develop his non-athletic skills. They allowed him to build relationships in the community, many times 21 Appendix A: Interview with Leigh Steinberg 22 Murray, Jim. "Leigh Steinberg Is Not the Stereotyped Sports Agent."Reading Eagle [Reading, PA] 14 May 1984: n. pag. Google News. Web. 16 serving as the genesis for a second career. For example, Steinberg helped athletes build the executive boards of their foundations. The members of these boards were leading business executives, and leaders within their communities. One of Steinberg’s clients, former All-Pro safety, Deron Cherry of the Kansas City Chiefs, was a perfect example. Cherry created the Terry Foundation, which allowed him to network and build relationships with countless businesspeople including a few who worked for Anheuser-Busch. Through the connections he made, Chery was able to purchase a lucrative Anheuser-Busch distributorship upon retiring from the NFL in 1991. Some observers believe Steinberg's good-citizen approach is a false front, just good public relations for his clients. Regardless of what others believed his motives were, Steinberg says that his goal is to help young athletes achieve their dreams and be the best people they can be, and collectively they make a difference in the world. He believes strongly that today’s society is unfortunately filled with athletic misbehavior and that it’s powerful to have an athlete talk about charity and community. Steinberg’s first key is to make sure whatever charity or cause his athletes choose, they choose it must be based on something that is personally important to them. This philosophy proved to be very successful for Steinberg’s clients. For example, his client Warrick Dunn was raised by a single mother. This experience influenced his decision to create Warrick Dunn Charities, which provides programs and services to improve the quality of life for single parents and their children. 23 Another client, the late NFL Hall of Fame linebacker, Derrick Thomas, was challenged by dyslexia. His first-hand experience influenced his decision to set up the Third and Long Foundation to aid youth who were dyslexic and reading-challenged. 24 23 "About Us." Warrick Dunn Charities. N.p., n.d. Web. 24 "3rdandlong." 3rdandlong. N.p., n.d. Web. 17 Steinberg says that the most successful cases of athletes establishing effective charities came about when the athletes received an emotional charge from working with the charity. The true testament to Steinberg’s charity requirement is the fact that many of the foundations he helped create have withstood the test of time, and more important, his clients’ careers. Hall of Fame quarterback with a career in both the NFL and Canadian Football League,Warren Moon created the Crescent Moon Foundation in 1989, which is still actively pursuing its mission to support the educational pursuits of youth dedicated to their communities. 25 Steinberg attributes Crescent Moon’s success to the professional help that the Crescent Moon Foundation received. As a result of the experienced staff, the programs were successful and sustainable. Most significantly, the staff knew how to keep administrative costs down and the percentage of money to the charity up. Similarly, Hall of Fame quarterback, Steve Young’s Forever Young Foundation is an example of a successful private pass-through foundation. The IRS describes such as a private foundation as one that distributes all contributions received in any year, whether cash or property. 26 Essentially, all of the money raised goes to help other charities. Since 1993, the Forever Young Foundation has awarded grants to organizations that serve children facing significant physical, emotional and financial challenges. 27 25 "About Us." Crescent Moon Foundation. N.p., n.d. Web. 26 "Private Pass-Through Foundation." Internal Revenue Service. N.p., n.d. Web. 27 “Forever Young Foundation.” Forever Young Foundation. N.p., n.d. Web. <www.foreveryoung.org>. 18 Steinberg’s philanthropic efforts have created a model of excellence for other athlete advisers. Although his philosophy is unorthodox, it has proven to have a lasting impact on his clients and the communities they reach. 19 Chapter Two: Philanthropy’s Effect on Reputation Behind every charitable approach, a professional athlete should have an intention to provide added value to society. It is imperative for professional athletes to understand that their team and their communities are interdependent. It is in the athlete’s best interest for not only his team to thrive, but for his community to thrive as well. Similarly, it’s in the community’s best interest for its sports organizations to prosper. Thus, the philanthropic initiatives that athletes pursue help create healthy communities that in turn nurture their teams. 28 Many sport managers and communications specialists believe that there is value in being seen “doing good.” A study of NFL fans in two cities was conducted to determine how a team’s CSR activities related to team reputation. The study found that CSR did indeed have a positive effect on perceived reputation, and recommended that sport organizations adopt CSR as part of their mission… and emphasized communicating their CSR actions to constituents. 29 Similarly, for an athlete’s image to be enhanced by supporting charitable causes, his actions must be communicated to the public. Promotional communication of this nature can be a tricky proposition to avoid an athlete being perceived as self-serving. For the communication to be positively received, it must be factual and cannot embarrass or exploit those receiving the support. 30 28 Andrews, David L. Sport-- Commerce-- Culture: Essays on Sport in Late Capitalist America. New York: Peter Lang, 2006. Print. 29 Walker, Matthew, and Aubrey Kent. "Do Fans Care? Assessing the Influence of Corporate Social Responsibility on Consumer Attitudes in the Sport Industry." Journal of Sport Management (2009): 743-69. Human Kinetics. Web. 30 Stoldt, G. Clayton, Stephen Dittmore, and Scott Branvold. Sport Public Relations: Managing Stakeholder Communication. 2nd ed. Human Kinetics, 2012. Print 20 To understand how individuals perceive celebrity endorsements, one can refer to the “attribution theory” which suggests that individuals make casual inferences, that, in turn, allow them to understand events they observe and experience related to a celebrity. If a celebrity makes a socially responsible choice despite the probability of both time and monetary loss, individuals determine her or his ethical standard as the primary reason for the socially responsible behavior. 31 On the contrary, individuals will discredit a celebrity’s motive if they conclude that the celebrity has made the endorsement for financial gain or to improve her or her reputation rather than for pure social good. 32 An athlete’s philanthropy cannot be perceived as a tactic to divert attention from his or her negative publicity. Studies suggest that a perceived lack of sincerity in the celebrity’s motives to endorse an organization can have a detrimental effect on the her/his credibility and endorsement effectiveness, even if the celebrity is well-matched with the cause. 33 Towalame Austin firmly believes that charity should never be a motive solely to increase the brand image of her clients at Roc Nation. She understands that it’s helpful for people to know when celebrities are doing great work within their communities. This is because athletes and entertainers are scrutinized in the media for their performance and personal reasons, but often times the public is unaware of the positive differences they are making in their communities. On 31 Kelley, H. H. “Causal schemata and the attribution process.” New York, NY: General Learning Press, 1972. 32 Mowen, J. C., & Brown, S. W. “One explaining and predicting the effectiveness of celebrity endorsers.” Advances in Consumer Research, 1981. 8, 437–441. 33 Sun-young Park & Moonhee Cho. “Celebrity Endorsement for Nonprofit Organizations: The Role of Celebrity Motive Attribution and Spontaneous Judgment of Celebrity-Cause Incongruence.” 2015. Journal of Promotion Management, 21:2, 224-245, 21 the contrary, it’s not uncommon for some celebrities to request that their charity not be publicized for fear that the public will perceive it as a marketing or public relations ploy. Increased Brand Value Whatever the motives behind starting a charity, it is clear that philanthropy has the potential to increase an athlete’s brand value. Previous research on celebrities and sport stars has shown that young people tend to accept sport stars as role models, express high levels of identification, and show positive behavioral intentions, including purchasing athlete-related products, positive word-of-mouth and brand loyalty. 34 Philanthropic activities can produce goodwill and favorable attitudes among the general public. These positive feelings are generated among three groups: 1) People who personally interact with the athlete through the philanthropy initiative, 2) People who hear of the personal contact from those who experienced it firsthand, and 3) People who learn of the positive experience on behalf of the athlete through mass media coverage. 35 34 Bush, A. J., Martin, C. A., & Bush, V. D. “Sports celebrity influence on the behavioral intentions of generation Y.” Journal of Advertising Research, 2008. 44(1), 108-118. 35 Stoldt, G. Clayton, Stephen Dittmore, and Scott Branvold. Sport Public Relations: Managing Stakeholder Communication. 2nd ed. Human Kinetics, 2012. Print. 22 Unmediated Communication Unmediated communication efforts would include meeting face-to-face and physically interacting with another person. In addition to producing goodwill, unmediated communication efforts are often newsworthy and may result in considerable publicity. Unlike other news about the athlete, the resultant publicity from the act of unmediated communication efforts tends to be more controlled and favorable toward the athlete. This is evident in the case of retired professional soccer player, David Beckham. On July 23, 2015, Bleacher Report reported that David Beckham granted a Stage 4 Cancer patient his bucket list wish. 36 The patient, Andy Moss, shared a YouTube video, addressing Beckham, in which he explained the creation of his bucket list and how meeting Beckham was at the top of his list. 37 36 Fay, Sean. "Beckham Fulfils Cancer Patient's Wish." Bleacher Report. N.p., 23 July 2015. Web. 37 Moss, Andy. "From Andy Moss, Stage 4 Cancer Patient to David Beckham." YouTube. YouTube, 22 June 2015. Web. 23 Figure 1: David Beckham Twitter Mentions Line Graph It is not mentioned how Beckham became aware of the video, but Moss’ wife posted a photo to Instagram where she explained that Beckham’s manager made all of the arrangements, 38 which included round-trip airfare from the Moss home in Arizona to Beckham’s home in Los Angeles. During their visit, Beckham and Moss recorded a video to update Moss’ YouTube followers. The author conducted a content analysis on David Beckham Twitter mentions from June 1, 2015 through August 31, 2015 using Radian6. Results showed that the story regarding Beckham and Moss significantly increased the amount of Tweets Beckham was mentioned in (as shown in Figure 1). 38 Moss, Leyla. Instagram. N.p., June 2015. Web. 24 Figure 2: David Beckham Word Cloud In addition to analyzing the volume of tweets, the sentiment of tweets that included the words “Beckham and cancer” or “Beckham and patient” were manually analyzed. Tweets analyzed were posted between July 7 through July 29, 2015. There were a total of 1,544 Tweets meeting all the aforementioned criteria. The sentiment of Tweets was coded as being positive, neutral or negative. Positive Tweets included words with positive connotations such as one-of-a- kind, hero, or special. Neutral Tweets were designated as such because they were presented as news and did not include any positive commentary on the topic. Of the 1,544 Tweets, no Tweets were negative, 81.9 percent of Tweets were neutral, and 18 percent were positive. The results of David Beckham’s publicity from his unmediated tactics prove that not only can this type of philanthropic action be beneficial for philanthropy purposes, but for publicity purposes as well. 25 Effect on Endorsements Leigh Steinberg could attest to the fact that an athlete’s philanthropy heightened his profile, making him more attractive to advertisers. It was certainly not Steinberg’s motivation, but it was an added benefit because endorsers were looking for a transference of positive name recognition to their product. Sport stars are often perceived as epitomizing social ideals and masculine virtues, and as embodying values that will readily transfer into consumers’ every day life. 39 Therefore, it is easy for athletes to transfer their positive image to endorsed products. When executed thoughtfully, taking all the assets of an athlete’s brand into consideration, charitable acts by and on behalf of an athlete can advance the business goals of their brand, extend an athlete’s career in the spotlight far beyond his playing days, and contribute to the good of the community. For example, Towalame Austin understands that it helps when her clients have an authentic, very consistent, very sustainable reputation of doing great philanthropic and charitable deeds, when considering partnerships. One clear instance that Towalame referenced was with Magic Johnson. Corporations loved him because of what he did for communities and what he stood for. His motto, his purpose and his drive was authentic, and corporations could see that. This would directly correlate with what the company stands for. Whether it was building stores or selling products to the communities that Magic Johnson was actively part of, corporations 39 Lines, G. (2001). Villains, fools or heroes? Sports stars as role models for young people. Leisure Studies, 20(4), 285-303. Retrieved September 14, 2009, doi:10.1080/02614360110094661 26 have connected with him as an ambassador because of who he is and what he has done on both the business and charity sides. 27 Chapter Three: Gold Standards of Sports Philanthropy Finding a flawless nonprofit organization is not an easy task. There are websites such as Charity Navigator and Guidestar, which provide databases of nonprofit organizations and attribute a rating to each based on their performances. For professional athletes’ foundations, a high rating is a rarity on the aforementioned sites. The following foundations stand out among other professional athlete foundations for their performances and sustainability. Tiger Woods Foundation According to those who monitor nonprofit foundations, few athletes are in the same class as superstar golfer Tiger Woods when it comes to charitable endeavors. Woods and his late father, Earl, created the Tiger Woods Foundation (TWF) in 1996 as a vehicle to educate and provide scholarships to young students. 40 Since its formation, the TWF has added two related nonprofits: the Tiger Woods Charity Event Corp. and the Tiger Woods Learning Center in Anaheim, Calif. 41 After nearly two decades, the organization is thriving with generous corporate sponsors, successful high-profile events, an impressive board of governors list, and a full-time staff of 53. 42 The TWF even survived Woods’ highly publicized infidelity scandal and divorce in 2010. Although Woods lost $22 million in personal endorsements, no TWF corporate sponsor 40 Fish, Mike. "Tiger Woods Foundation Carries on Its Mission despite the Distractions and Upheaval in Woods' Personal Life." ESPN.com. ESPN, 24 Mar. 2010. Web. 41 Sforza, Teri. "Tiger Woods' Charities Raised $50 Million. What Now?" OC Watchdog Blog: Orange County Register. Orange County Register, 21 Aug. 2013. Web. 42 "Tiger Woods Foundation." GuideStar. N.p., n.d. Web. 28 attempted to sever ties with the foundation. 43 The TWF was given the highest rating - four out of four stars by Charity Navigator, an organization that provides a comprehensive rating on most nonprofit organizations in the United States. 44 The rating is calculated after reviewing an organization's income statements, then assessed on financial performance metrics, and accountability and transparency performance metrics. By computations provided by TWF, 92 cents of every dollar spent went back to the organization's programs. Additionally, TWF claims its programs have positively impacted the lives of more than 10 million young people. 45 Andre Agassi Foundation for Education Another athlete whose foundation has had notable success is Hall of Fame tennis player Andre Agassi. He formed the Andre Agassi Foundation for Education (AAFE) in 1994. It has since provided more than $60 million to support programming at the Andre Agassi College Preparatory Academy and the Agassi Boys & Girls Club, as well as other causes that help children in the greater Las Vegas area. 46 According to his foundation’s website, the organization has raised more than $180 million to benefit its mission, including $118 million raised from the Grand Slam for Children fundraising event. 47 43 Wei, Will. "Tiger Woods Lost $22 Million In Endorsements In 2010." Business Insider. Business Insider, Inc, 21 July 2010. Web. 44 "Charity Navigator Rating - Tiger Woods Foundation." Charity Navigator. N.p., n.d. 45 Sforza, Teri. "Tiger Woods' Charities Raised $50 Million. What Now?" OC Watchdog Blog: Orange County Register. Orange County Register, 21 Aug. 2013. Web. 07 Sept. 2015. 46 "Andre Agassi Receives CoSIDA's Dick Enberg Award." USA Today. Gannett, 16 June 2015. Web. 47 "With Education, There Is Hope." Andre Agassi Foundation RSS. N.p., n.d. Web. 29 The AAFE does not just raise funds; it also drives reform through participating in practice, policy and partnerships, in order to transform public education for underserved youth in the United States. Just seven years after AAFE was founded, Agassi opened the Andre Agassi Preparatory Academy which houses an elementary, middle and high school in one of Nevada’s most historically underserved and economically challenged neighborhoods. The success of the school is evident in its 100 percent graduation and college acceptance rates among its first senior class in 2009. 48 Its success is also evident in the handful of Nevada state education legislative initiatives that it has introduced and supported such as the Senate Bill No. 330. This bill was also known as the Initiative for a World-Class Education in Nevada, which helped create concrete goals and measurable objectives to improves education statewide and also establish performance pay. 49 In order to keep foundation expenses low, AAFE uses a shared services model which allows the organization to employ only one full-time staff member, while the other staff members are employed by Agassi Graf Holdings. The one full-time staff member is Julie Pippenger, who serves as the Chief Operating Officer of AAFE. 50 AAFE emphasizes the importance of transparency, and believes its operations and governance should be open to all. As a result, AAFE provides its policies, financials, tax returns and list of trustees on its website. This blatant transparency is not as common as it should be for nonprofit organizations, and is most definitely a rarity among professional athlete foundations. 48 "With Education, There Is Hope." Andre Agassi Foundation RSS. N.p., n.d. Web. 49 Ibid. 50 Ibid. 30 Interestingly, Agassi has recently decided to pursue the for-profit side of building schools. He teamed up with a group of investors to start a hedge fund. With this new venture, Agassi will no longer run schools; instead he will buy the land, finance construction and rent the school back to a charter. Agassi publicly shared his hesitance for this business decision. After considering the struggles he faced to finance his own charter school, he learned that charity has its limitations. 51 Agassi’s recent decision is a perfect example of how an athlete’s philanthropy can help shape his business ventures. 51 Farmer, Blake. "Andre Agassi's Pivot to Education Capitalist." Andre Agassi's Pivot to Education Capitalist. Marketplace Education, 29 Oct. 2014. Web. 31 Chapter Four: Characteristics of Successful Foundations Proper Formation A successful foundation can only be as good as its resources. The first characteristic of successful foundations is proper formation. Prior to the actual formation process, there is a preformation procedure that is extremely important for the athlete to understand. This stage creates the discussion for what the foundation hopes to accomplish before beginning the formation process. 52 There are three common reasons for starting a foundation: 1) Classified as personal reasons, such as helping others who find themselves in a situation that the athlete may have experienced themselves, 2) Idealistic reasons such as providing people with opportunities related to traditions or culture, and 3) Economic reasons such as providing for people of a certain region or socioeconomic group to enhance the athlete’s community. 53 Other important considerations during the preformation process include deciding who will run the foundation. Some options would include conducting a hiring process to find qualified individuals with backgrounds in nonprofit management. Another option would be using a community charitable foundation that can conduct the administrative work. Hiring an experienced professional would also alleviate concerns or questions the athlete may have with the tax consequences of his or her proposed charity. 54 52 "Starting a Foundation." Council on Foundations. Council on Foundations, n.d. Web. 53 Ibid. 54 Ibid. 32 Start-up capital is mandatory for a foundation to begin functioning. Most commonly, athletes plan to donate all of the foundation’s start-up capital. If an athlete does not follow this approach, there would need to be a plan in place to secure enough funds. In addition to possibly contributing to the start-up capital, the athlete would need to decide how much time he or she would need to contribute to the administration and management of the organization. 55 The formation process is the stage where the foundation actually becomes a legitimate organization. At this stage, it is essential for the athlete’s adviser to comprehend the basic legal rules that govern the formation and regulate the activities of foundations. Included in this process are the options on what legal form the foundation will take, generally either a trust or a corporation. This process must be completed under state law and varies by state. Each state has its own statutes that govern both the forming and running both a trust and a nonprofit. 56 It is important that the athlete and the adviser understand the option between a trust and a corporation. A trust is less formal in formation and operation. There are fewer state requirements regarding meetings, minutes, state filings, officers and other record-keeping. Amending a trust however, is more difficult than a corporation. This usually requires court approval or a notification to the state attorney general. 57 Corporations are more formal and require articles of incorporation, bylaws, regular meetings, minutes, state filings and other reporting requirements. A corporation can have more 55 "Starting a Foundation." Council on Foundations. Council on Foundations, n.d. Web. 56 Ibid. 57 Ibid. 33 flexibility and provide greater protection from personal liability for directors. Unlike trusts, corporate bylaws can facilitate amendments, if necessary. 58 Towalame Austin has advised numerous individuals on the formation of their foundations. She emphasizes the importance of having an initial conversation where the requirements and expectations of starting a foundation are explained. If the client still believes strongly about starting a foundation, then she would proceed with their options moving forward. Proper Financial Advisement It is estimated that most athlete foundations are relatively small, having annual budgets of $25,000 or less. If so, they may lack sufficient support to be successful, given that start-up costs can reach $20,000 and that a minimum of $50,000 is needed for annual operations. A common recommendation is that in anticipation of at least $100,000 in operating expenses, foundations should start with a minimum of $500,000 in assets. 59 This significant investment may deter athletes who are early in their career from starting a foundation. For this reason, Leigh Steinberg suggested that his clients wait until they have at least a year as a professional before making any significant philanthropic decisions. Similarly, Towalame Austin found that it was common for athletes to start a foundation at a young age without knowledge of the governing and management that goes into a successful endeavor. In 58 "Starting a Foundation." Council on Foundations. Council on Foundations, n.d. Web. 59 Stoldt, G. Clayton, Stephen Dittmore, and Scott Branvold. Sport Public Relations: Managing Stakeholder Communication. 2nd ed. Human Kinetics, 2012. Print. 34 her experience working with Magic Johnson and former NBA standout Alonzo Mourning, she believes that their foundations were successful because they were retired and were able to focus solely on their businesses and their giving. 35 Chapter Five: Leagues Hitting Home Runs in Corporate Social Responsibility One NBA executive said that the league encourages player participation in programs such as NBA Cares as an alternative to setting up their own foundations after observing that many players and agents do not understand how challenging it is to form and operate foundations successfully. 60 The NBA is not alone. In sport, issues of social responsibility are being embraced by most leagues. The organizations that take part in CSR are able to consider and respond to broader social needs and expectations. CSR often involves philanthropy, but is much more than simply writing a check. 61 In-Kind Donations An in-kind donation is a contribution of products to charitable causes and is common within the sports industry. In-kind donations offer two advantages: 1) They are often valuable assets that can be auctioned or raffled off for significant amounts of money by the charity, and 2) For the sport organization, the true cost of an in-kind donation is relatively low. In many cases, used equipment is often earmarked to support charitable causes. 60 Babiak, Kathy, and Brian Mills. "An Investigation Into Professional Athlete Philanthropy: Why Charity Is Part of the Game." Journal of Sport Management 26 (2012): 159-76. Print. 61 Stoldt, G. Clayton, Stephen Dittmore, and Scott Branvold. Sport Public Relations: Managing Stakeholder Communication. 2nd ed. Human Kinetics, 2012. Print. 36 For example, the Los Angeles Angels of Anaheim Community Relations department helps numerous charitable organizations throughout Southern California by regularly donating various items to for fundraising auctions and raffles. Any interested organization is able to visit the team’s website and complete a request form to be considered for a donation. In addition, the Angels have a group ticket program, that gives nonprofit organizations an opportunity to receive free tickets to an Angels home game. 62 Team Foundations Over the last 20 years there has been a dramatic rise in the number of professional sport franchises with team-related foundations. The Angels Baseball Foundation is the nonprofit entity of the Los Angeles Angels of Anaheim. It was created in 2004 and has since awarded many grants to worthy organizations throughout the community, ranging from music programs to at- risk youth shelters. The majority of funding received comes from team fundraisers and donations from local citizens and private organizations. 63 It is common for a team’s foundation to make donations in support of charitable events staged by a player’s individual foundation. For example, the Angels Baseball Foundation has supported Albert Pujols’ and C.J. Wilson’s personal charities. The Angels support players’ foundations as much as possible by providing signed memorabilia, monetary donations and operational support. 62 "In-Kind Donations." Los Angeles Angels. N.p., n.d. Web. 63 "Angels Baseball Foundation." Los Angeles Angels. N.p., n.d. Web. 37 Many players who do not have personal foundations still have charitables causes that they support. For example, Jered Weaver and his wife are involved with the Special Olympics of Southern California. Each spring the Angels assist Weaver’s wife with her “Mystery Gold Ball Grab Bag” fundraiser held at Angel Stadium, with proceeds going directly to the Special Olympics. Sport Outreach Programs Growing the game is often an emphasis when sport organizations structure community outreach programs. MLB’s Reviving Baseball in Inner Cities program (RBI) was established in 1989 to offer young people in economically disadvantaged areas of Los Angeles an organized baseball program that teaches fundamentals of the game and offers playing opportunities. Efforts such as RBI allow sport organizations to invest in community improvement while also cultivating future participants and followers. As such, they may be considered forms of strategic philanthropy. Similar to Major League Baseball’s RBI program, many National Hockey League teams have established their own hockey development programs. The Los Angeles Kings operate an extensive hockey development plan with programs that include the “Lil’ Kings Learn to Play Hockey Program,” which gives about 700 Southern California children an opportunity to play hockey for the first time and receive brand-new uniforms and equipment. In addition, the Kings host hockey camps, clinics and multiple events throughout the year. The Kings also employ a 38 street team, called the LA Kings Chariot that takes hockey to the streets at schools, parks, rinks, parties and other types of community and charity events. 64 Overall, teams and leagues are recognizing the importance of community relations and CSR. As their programs continue to grow each year, more players will take part in outreach efforts. If the athletes do not wish to pursue philanthropy on an individual basis outside of their team or league, it is certain that they will interact with the community through their team or league efforts. 64 "HOCKEY EVENTS." The Los Angeles Kings. N.p., n.d. Web. 39 Chapter Six: Philanthropic Options It is important for professional athletes to understand that a foundation is not the best fit for everyone trying to make a difference in their community. Towalame Austin recalls telling clients on many occasions that it isn’t necessary for everyone to start a charity. The liability of starting a nonprofit is huge, in contrast, there are many opportunities that don’t pose such a large liability. After an athlete has expressed his or her charitable interests and what causes he or she would like to be involved in, he or she can move forward with alternative options to accomplish those goals. Support an Organization It has become increasingly common within the last 15 years for charities to establish relationships with celebrity supporters. 65 It is not unusual for larger charities to create a celebrity ambassador program with multiple high-profile individuals from different industries. Charities use celebrity support to raise funds and raise awareness, and to lobby for their causes. Athletes establish foundations in instances where the cause they plan to support is not being served by other nonprofits. If other services already exist, the athlete may be able to leverage his or her celebrity and resources just as effectively by supporting an existing organization. Sports philanthropy is no different from general philanthropy in that more will be achieved with far greater efficiency if opportunities to join forces and pool resources are viewed 65 Brockington, D., and S. Henson. "Signifying the Public: Celebrity Advocacy and Post-democratic Politics." International Journal of Cultural Studies18.4 (2014): 431-48. Web. 40 as paramount. 66 Charities can benefit from a professional athlete’s support, not only because the athlete may have resources that charities need, but also because they can serve as highly visible supporters. Volunteerism is the most powerful form of support that professional athletes can provide. The personal engagement that occurs through volunteerism communicates a deeper commitment to social responsibility than an in-kind or cash contribution. Nonprofit organizations depend on their donors to achieve mission-based objectives. Nonprofit studies document that contributions are associated with the quantity and quality of information made available to donors, as well as the efficiency of operations. 67 Nonprofits that spend more to increase awareness, in general and through fundraising campaigns, tend to receive greater public support. 68 One can draw on celebrity research in the for-profit sector based on consumer psychology. Said research shows that celebrity endorsers can be effective in persuading consumers under certain circumstances such as through their expertise, trustworthiness or attractiveness. 69 The effects of persuasion are more likely in situations where consumers have low interest and knowledge of the product. If this same effect translates to celebrities endorsing 66 Pollick, Marc. "With Teamwork Much Can Be Accomplished in Charitable World." SportsBusiness Journal. N.p., n.d. Web. 07 Apr. 2008. 67 Harris, Erica E. "Analysis of the Value of Celebrity Affiliation to Nonprofit Contributions." Nonprofit and Voluntary Sector Quarterly, 2014. Web. 68 Tinkelman, Dan. “Factors Affecting the Relation between Donations to Not-for-Profit Organizations and an Efficiency Ratio.” Research in Governmental and Nonprofit Accounting, 1999.Volume 10, 135-161 69 Till, B.D., M. Busler. “The match-up hypothesis: Physical attractiveness, expertise, and the role of fit on brand attitude, purchase intent, and brand beliefs.” Journal of Advertising, 2000. – ʋ29 (3). – pp. 1-14. 41 nonprofit organizations, it could be extremely beneficial for organizations that may be having difficulty increasing awareness. Celebrity-endorsed ads tend to be perceived as credible, and generate desirable outcomes such as favorable attitudes toward the ads and brands, especially when consumers believe the celebrity matches with the product. 70 Similarly, the relationship between a celebrity endorser and a cause is strengthened when the celebrity’s features are carefully matched up with the image of the organization. 71 In an analysis of the value of celebrity affiliation on nonprofit contributions, research showed that organizations with celebrity spokespeople are more efficient. This efficiency was proven through lower overhead ratios, effective operations, less spending on fundraising expenses, and most important, more contributions from donors. 72 It’s important to note that celebrity affiliation has a relatively small effect on donations. According to an analysis of the value of celebrity affiliation to nonprofit contributions, donors still find the charity’s core mission, beneficiaries and activities to be more important. 73 The results also suggest that the presence of any celebrity is nearly equivalent to an A-list celebrity 70 Till, B.D., M. Busler. “The match-up hypothesis: Physical attractiveness, expertise, and the role of fit on brand attitude, purchase intent, and brand beliefs.” Journal of Advertising, 2000. – ʋ29 (3). – pp. 1-14. 71 Sun-young Park & Moonhee Cho (2015) Celebrity Endorsement for Nonprofit Organizations: The Role of Celebrity Motive Attribution and Spontaneous Judgment of Celebrity-Cause Incongruence, Journal of Promotion Management, 21:2, 224-245 72 Harris, Erica E. "Analysis of the Value of Celebrity Affiliation to Nonprofit Contributions." Nonprofit and Voluntary Sector Quarterly, 2014. Web. 73 Ibid. 42 affiliation. This is an important consideration for nonprofits that are daunted by finding an A-list celebrity. In conclusion, charities can use a professional athlete’s endorsement to establish credibility and trust. 74 This trust is created through the extensive publicity, the credibility signal they offer, and the favorable images they associate with nonprofits. 75 Therefore, nonprofit organizations which attract and align themselves with the right fit of celebrity spokespeople are expected to enjoy greater public support than nonaffiliated nonprofits. 76 The results suggest that nonprofit managers may increase awareness of their organizations through celebrity endorsements, which would allow funds typically spent on fundraising and promotion to go toward programs. Donor Advised Funds In recent years, many donors - athletes among them - have turned to the much more economical charitable vehicle called donor-advised funds (DAF), which allow the same tax deductions as a stand-alone public charity and are commonly found at community foundations or large financial institutions. An athlete may take a tax deduction (up to 50 percent of adjusted 74 Babiak, Kathy, and Brian Mills. "An Investigation Into Professional Athlete Philanthropy: Why Charity Is Part of the Game." Journal of Sport Management 26 (2012): 159-76. Print. 75 Goldsmith, Ronald E., Barbara A. Lafferty, and Stephen J. Newell. "The Impact of Corporate Credibility and Celebrity Credibility on Consumer Reaction to Advertisements and Brands." Journal of Advertising 29.3 (2000): 43- 54. Web. 76 Harris, Erica E. "Analysis of the Value of Celebrity Affiliation to Nonprofit Contributions." Nonprofit and Voluntary Sector Quarterly, 2014. Web. 43 gross income for cash gifts and 30 percent for appreciate properties such as stock) for the tax year in which the donation was made. Donor-advised funds make philanthropy simpler on the administrative side. The athlete would make an irrevocable contribution to a fund, claim a charitable deduction on his or her tax returns and recommend how the money in the fund should be distributed to charity. While the typical DAF does not offer the ability to hire staff or hold special-event fundraisers, fees for administration generally run at less than 3 percent annually of assets in the account. DAFs are good starting points for donors who are just getting their charitable feet wet. The funds are focused on making grants, as opposed to creating charitable programs or holding fundraisers. Recently, Congress passed sweeping legislation around DAFs after several years of some rather creative and wide-ranging interpretations of their original intent by some charitable and financial institutions. 77 While the full repercussions of these new laws have yet to be determined, the DAF remains a good alternative for athletes looking to give back without a lot of administrative time or money invested. Planned Gifts Planned giving options include bequests, charitable remainder trusts, charitable lead trusts, pooled income funds and charitable gift annuities. Planned gifts can be created through community foundations or charities. Some planned gifts allow donors to contribute appreciated 77 Pollick, Marc. "Charities Offer Many Opportunities for Athletes to Give Back."SportsBusiness Journal, n.d. Web. 01 Aug. 2015. 44 property, like securities or real estate. In return, the donor can receive a charitable deduction for the full market value of the asset and pay no capital gains tax on the transfer.Most charities give a variety of options for planned gifts. The variety of options can allow the athlete and adviser to decide based on their circumstances and financial goals. 45 Chapter Seven: Philanthropy Fumbles and Flops Many athlete charities prove to be failed statistics for a variety of reasons - some deceptive, some unethical, some illegal and others just plain ignorant. Some athletes depend on their foundations as tax write-offs. Others assume they cannot be criticized because at the end of the day, their intentions are good and they’re giving to charity. The endless reasons behind starting a foundation are just as extensive as the reasons why a foundation fails. Executive Boards A nonprofit foundation must have an executive board, also referred to as a governing board. The executive board has the ultimate authority over the organization. There are guidelines created by the Better Business Bureau (BBB) to ensure that the executive board is active, independent and free of self-dealing. 78 The BBB suggests that a nonprofit organization must have a board of directors that provides adequate oversight of the charity's operations and its staff. Meeting adequate oversight includes - but is not limited to - regularly scheduled appraisals of the CEO's performance, evidence of disbursement controls such as board approval of the budget, fundraising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances. 79 78 "Charity Accountability Standards." Better Business Bureau. N.p., n.d. Web. 79 Ibid. 46 This BBB suggestion is often overlooked by athletes when considering all that is expected from a properly managed nonprofit organization. Leigh Steinberg admitted that initially the administration of his clients’ charities would be done by someone in their family. Many of them would engage their parents or friends to serve as the administrator. The practice seemed to work fairly, well but according to Steinberg, it became clear that the Better Business Bureau requirements were hard to meet. In addition, the BBB requires that a board of directors includes at least five voting members who must hold a minimum of three evenly spaced meetings per year of the full governing body, with a majority in attendance, and face-to-face participation. Of those members, there cannot be more than one or 10 percent (whichever is greater) directly or indirectly compensated person serving as a voting member of the board. The board’s chair or treasurer cannot be compensated. Lastly, board or staff members should not make a transaction that may represent conflicting interests with the charity, resulting from any relationship or business affiliation. 80 Conflicts of Interest & Employee Compensation Athletes sometimes use their charities to provide jobs for friends and relatives. When athletes put their friends and/or relatives in charge of their charity, whether they're drawing a salary or not, it's unlikely that those people have the necessary dedication or experience to raise money and spend it wisely. 81 Often this presents a conflict of interest because family members 80 "Charity Accountability Standards." Better Business Bureau. N.p., n.d. Web. 81 Lavigne, Paula. "Athlete Charities Often Lack Standards." ESPN. ESPN Internet Ventures, 31 Mar. 2013. Web. 47 have the ability to expense purchases and trips through the foundation. The BBB requires financial statements to include a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of expenses were allocated to fund raising and administrative activities. Questionable Spending An investigation of 115 charities founded by high-profile, top-earning male and female athletes showed that of the $31 million generated over three years by those organizations, only 44 percent actually reached good causes. 82 Even though athletes who create charities are often multi millionaires, only about a third of their charities have total assets of $500,000 or more. Athletes often use a charity's money to finance all sorts of costs that go beyond the charity's needs, such as expensing a weeklong stay at a five-star resort during a business trip. If a charity spends money on activities not consistent with its stated mission, that could be a violation of tax law that might draw the attention of the IRS or a state attorney general's office to prosecute. 83 The ratio of direct charitable dollars spent to overhead expenses is a critical guideline and a standard of evaluation for nonprofit organizations. According to the Better Business Bureau, a charity should spend at least 65 percent of its total expenses on program activities and no more than 35 percent of related contributions on fundraising and overhead. The best managed foundations often boast 4:1, 5:1 ratios, with the most efficient boasting 9:1 ratios of dollars going directly to charitable programs. 84 82 Lavigne, Paula. "Athlete Charities Often Lack Standards." ESPN. ESPN Internet Ventures, 31 Mar. 2013. Web. 83 Ibid. 84 Pollick, Marc. "Charities Offer Many Opportunities for Athletes to Give Back."SportsBusiness Journal, n.d. Web. 01 Aug. 2015. 48 When Leigh Steinberg noticed that his clients’ foundations were not meeting the BBB guidelines, he knew he had to find outside help with expertise. Steinberg’s biggest concern was ensuring that the appropriate amounts of funds were given to the charities from the money raised. He witnessed countless athletes putting on a lavish golf tournament with little to no profit going back to charity. The lavish events were great “rapport raisers” but not great fundraisers. 85 This also reiterates the importance of having experienced professionals on the executive board because the board must approve an annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration. 86 Dormant Foundations Researching athlete foundations can be difficult because many of them have become dormant. Many are behind on filing the required Internal Revenue Service (IRS) tax returns, or the returns are filled with errors and omissions. The IRS problems can go unnoticed for years because the IRS and states' attorney general offices don't audit every single return belonging to nonprofit organizations. 87 A foundation’s management team must be diligent to maintain its 501(c)(3) status. Organizations must provide proof of complete annual financial statements when requested. For organizations with a total annual gross income over $500,000, statements should be audited in accordance with generally accepted auditing standards. For charities with annual gross income of less than $500,000, a review by a certified public accountant satisfies this standard. For charities 85 Appendix A: Leigh Steinberg Interview 86 "Charity Accountability Standards." Better Business Bureau. N.p., n.d. Web. 87 Lavigne, Paula. "Athlete Charities Often Lack Standards." ESPN. ESPN Internet Ventures, 31 Mar. 2013. Web. 49 with an annual gross income of less than $250,000, an internally produced, complete financial statement is accepted. 50 Chapter Eight: The Need for All-Star Advisers The 2010 Fidelity Charitable Advice and Giving Survey revealed that 31 percent of advisers don’t feel knowledgeable enough about charities to discuss the topic with their clients. According to the Fidelity survey, many advisers feel it is presumptuous to bring up charitable giving with a client. Results showed that 44 percent of advisers do not proactively offer charitable planning advice because they see philanthropy as a client’s personal decision, so they typically wait to see if the client will address it first. 88 On the other hand, a study released by Fidelity Investments in 2012 found that 72 percent of financial advisers working with clients averaging at least $1 million in investable assets reported that discussing charitable giving strengthened their relationship with their clients. In addition, 37 percent said the discussion helped to build multigenerational relationships with their clients. 89 The contrast of the two surveys provide a glimpse of the current situations athlete advisers find themselves in when considering philanthropy. Every athlete, with the few exceptions of those who represent themselves, employs an agent who is responsible for handling business and legal deals, negotiating contracts, and helping the athlete manage his or her money. The agent also has the opportunity to be the first person to discuss philanthropy with a client. Unfortunately, most agents don’t take advantage of this opportunity. 88 "Fidelity Survey 2010." Fidelity Charitable. N.p., n.d. Web. 89 "Fidelity Survey 2012." Fidelity Charitable. N.p., n.d. Web. 51 The results of the 2010 Fidelity survey strengthen the notion that often philanthropy is overlooked for a variety of reasons. An agent’s priority is for the client’s energy and focus to be solely on their sport. This may deter some agents from recommending philanthropy. No one would be able to shut down this concern more than Leigh Steinberg, who required his athletes to dedicate time to helping others. His reasoning was that because a lot of the charitable work (dinners, golf tournament, etc.) are done in the athletes’ offseason, there should not be time conflicts. Steinberg claims that the engine that pulls the train is the athlete’s performance on the field. A key part of mentoring players is ensuring their focus, but encouraging them to have well- rounded lives is just as important. Another reason for athletes rejecting philanthropy could be simply that the agent does not have the resources to provide advice on nonprofit development or strategic philanthropy. Agents are usually the founders or CEOs of their own sports management agencies. The agents usually employ an accountant, a publicist and a marketing manager at the very least. Often the publicist or marketing manager may be passed the responsibility to handle an athlete’s charitable efforts. This further proves that the athlete may not have the best resources to pursue philanthropy. If an agent truly cares about the needs and success of an athlete’s philanthropy, employing an experienced nonprofit professional will be a higher priority because athlete philanthropy continues to grow. A report in the Salt Lake Tribune in 2008 indicated that in the NBA alone, more than 100 athletes had established their own charitable organizations. 90 As this number continues to grow across leagues, it is imperative that athletes and their advisers 90 Siler, Ross, Tony Semerad, and Michael C. Lewis. "NBA Player Charities Often a Losing Game." Salt Lake Tribune 26 Dec. 2008: n. pag. Print. 52 understand that a successful foundation requires a significant amount of funding time and expertise. The Opportunity The celebrity industry (i.e., the institutions and individuals responsible for the manufacturing of celebrity identities) has evolved into a multi-faceted, integrated and highly modernized phenomenon through which “people can be manufactured into, and marketed as, celebrities in any field.” 91 The goal of this celebrity-making process is for the individual and her/his representatives to create the various business facets of cultural production and foster a consistent and highly visible celebrity identity. 92 Philanthropy may be an overlooked characteristic during the celebrity-making process, but it is beneficial for those who realize and genuinely understand the influence it can create. Initial discussions regarding philanthropy can start proactively as a way to manage the large amount of charitable requests that a new professional athlete invariably will receive. A diligent adviser will be able to walk through a checklist of these requests, including requests for personal appearances, use of likenesses and images, and charitable donations. With these requests, the adviser should also detail the risks and rewards of each. Towalame Austin knows this process all too well. She claims that athletes often expressed interest in starting a foundation. She would then proceed to explain how a foundation takes a personal commitment, and a financial commitment, plus a commitment of time and 91 Andrews, David L. Sport-- Commerce-- Culture: Essays on Sport in Late Capitalist America. New York: Peter Lang, 2006. Print. 92 Ibid. 53 resources. Sometimes this conversation would lead to a change of heart for the athlete. Instead of starting a foundation, Austin would recommend other ways to give back. But, there are exceptions. Austin cites Dwyane Wade as an example of an athlete who was fully committed to the success of his foundation. Like her previous clients with successful foundations, such as Magic Johnson and Alonzo Mourning, Wade’s foundation was successful because he was active within the organization. She recalled nights when she would meet Wade at the arena after his game or even after his practices. His efforts showed that he was totally committed and understood that his involvement was vital, and was about more than just showing up to events. For those who aren’t ready to make the same commitment as Wade, they can consider smaller steps to prepare for larger involvement. Alternative Support Options Outside of agents and sports management agencies, there are a number of organizations that are assisting athletes in managing the challenges to identify and support good causes. Athletes for Hope In 2007, a group of elite athletes who shared an unparalleled commitment of time, energy and resources to various charitable causes began a dialogue. They recognized many fellow athletes shared their desire to make a positive difference in the world, but didn’t know where to begin. As a result, they founded Athletes for Hope in an effort to eliminate barriers to giving back and bring all nonprofit inspired athletes together for a common goal: to make a difference in the world. The founders of Athletes for Hope include Alonzo Mourning, Andre Agassi, Jackie Joyner-Kersee, Jeff Gordon, Mia Hamm, Muhammad Ali and Warrick Dunn. Their current 54 membership includes more than 1,500 athletes across numerous sports leagues, including the NFL, NBA, MLB and NHL, as well as the Olympic Games. Athletes for Hope’s programs allow its member athletes to get involved with charities and causes across the United States. Giving Back Fund The Giving Back Fund (GBF) is a national nonprofit organization that provides philanthropic consulting, management and administrative services to professional athletes, celebrities, high-net-worth individuals, corporations and nonprofit organizations. Notable GBF clients include NFL quarterback, Ben Roethlisberger, former NBA star, Yao Ming, and longtime MLB standout, Justin Morneau, among others. Athletes can hire GBF if they are looking to establish a new charitable entity, if they need help with an already established charity, or if they simply want assistance with charitable giving. GBF has advised more than 200 athletes, entertainers, entrepreneurs, and other high-net-worth individuals. GBF has overseen the distribution of more than $30 million in charitable grants within the United States and other countries, and has developed dozens of unique scholarship, mentoring, medical, arts and other philanthropic programs. The Giving Back Fund was one of the organizations that Leigh Steinberg recommended to his clients. To ensure that his clients’ foundations met Better Business Bureau standards, he referred them to community charitable foundations such as GBF. The athletes could still have their own foundations but the administration, taxes, filings and responsibilities of meeting the bureaucratic requirements were handled by GBF. This allowed Steinberg and his clients some peace of mind, alleviating worries that the organization wasn’t meeting standards or requirements. Additionally, GBF and similar groups were experts on fundraising, so the days of 55 spending too much money on lavish events - with no profit to charity - were a problem of the past. Private Nonprofit Consultants Just as athletes hire an accountant to handle their finances, an agent to handle various contracts, and a publicist to handle media issues, they can hire a nonprofit consultant to handle his or her philanthropic initiatives. Services are provided through companies such as Rounding Third, a consulting firm that specializes in recognizing, educating and advising in the field of sports philanthropy. Alyssa Greenberg founded Rounding Third after 13 years of experience with professional sports teams, athletes, leagues and national organizations, where she developed and executed impactful strategies, partnerships and programs. A private consultant such as Greenberg can plan and manage large-scale awards, events and campaigns, as well as create and execute programs. In addition, they can work with existing organizations to help develop an impactful and sustainable strategy. 93 93 "Team." Rounding Third LLC. N.p., 23 May 2015. Web. 56 Chapter Nine: Conclusion The Philanthropy of the Future As technology continues to advance, so will the opportunities for athletes to embrace technology to enhance their philanthropic footprint. When Leigh Steinberg began his career as an agent the Internet wasn’t popular and social media didn’t exist. Although much has changed since then, Steinberg understands that online communication has replaced traditional media, especially for young people, as the place to find primary sources of information. Today he stresses the importance of creating a vibrant website and maintaining a decent following on Twitter, Instagram and Facebook. Steinberg believes that they are all important outlets to provide a positive face to the world. It’s critical that an athlete today be conversant in all forms of new media, and understand how to project his or her image on every platform. Social Media An athlete needs to understand that “doing good” doesn’t have to mean to be extravagant by starting a foundation or hosting an event; it can be much simpler through the help of social media. For example, Los Angeles Clippers veteran guard Jamal Crawford often holds spontaneous Q-and-A sessions via his Twitter account. 94 These sessions allow Crawford to interact with fans in a very unfiltered, intimate and genuine way. These interactions can help people understand Crawford’s intentions behind business and nonprofit endeavors. Crawford helped further develop the Seattle Pro-Am, a basketball league in his hometown. All of the 94 Crawford, Jamal. Twitter. N.p., n.d. Web. <www.twitter.com/jcrossover>. 57 league’s proceeds go toward his foundation, The Jamal Crawford Foundation. 95 Crawford’s foundation has programs that include basketball camps and clinics, Christmas toy drives and backpack giveaways. 96 Although his foundation primarily focuses on youth in the greater Seattle area, Crawford is able to interact and share his wisdom as a 15-year NBA veteran with fans via his Twitter account. Similarly, other athletes could do the same through motivational posts, blogs or Google Hangouts. Digital Civil Society Social media is what’s in today, but what about tomorrow? According to a leading philanthropy scholar, Lucy Bernholz, the philanthropy of tomorrow will include the social economy – private capital used for public good. 97 Bernholz describes digital civil society as the ways we use our private resources for public benefit in the digital age. It is becoming increasing popular for digital data and infrastructure to be used for many socially positive purposes – think mobile phone apps to inform pregnant women of prenatal care options, or crowdsourcing websites that provide home-cooked meals for homeless 95 Vertsberger, David. "Jamal Crawford Is Trying to Keep Seattle's Basketball Dreams Alive." Grantland. N.p., 23 July 2014. Web. 96 "Programs." Jamal Crawford | Official Site. N.p., n.d. Web. 97 Bernholz, Lucy. "Philanthropy and the Social Economy: Blueprint 2015 | GrantCraft." GrantCraft. N.p., 9 Dec. 2014. Web. 58 shelters. Many of these digital applications that are making a difference in society are not affiliated with nonprofit organizations. When considering how athletes can get on board with this trend, the opportunities are endless…and some have already started. Take 2015 NBA Finals MVP Stephen Curry, for example. Curry has partnered with an online company, CoachUp, where he serves on its Athlete Advisory Board. CoachUp is a website and mobile application that allows athletes to find private coaches. Users are able to enter their location and training goals, which result in recommendations made by CoachUp. Users are able to sort through coaches based on criteria such as distance, price and reviews. Once users have found a coach that is a good fit, they can message the coach or book him immediately. 98 Curry claims to have joined CoachUp as a way for him to “pay it forward” and help kids throughout the country. It is an extension of how much coaching has meant to him, and helped him throughout his life. No matter the sport or skill level, Curry believes that kids should have access to great coaches to develop their game, hone their skills and build their confidence. 99 A strategic plan to use a mobile app or website could be executed to increase awareness for an athlete’s preexisting cause. This type of plan could be used for Texas Rangers pitcher Jake Diekman who has publicly shared that he struggles with ulcerative colitis, an inflammatory bowel disease that he has lived with for 18 years. Diekman often shares photos and words of 98 “How CoachUp Works." CoachUp. N.p., n.d. Web. 99 Ibid. 59 encouragement to others struggling with Crohn’s and colitis via his Facebook, Twitter and Instagram accounts. Last March, Diekman designed a T-shirt, which was then mass produced and sold with all proceeds benefiting towards the Crohn’s and colitis Foundation. 100 Taking all of this into account, Diekman would be a perfect candidate to consider creating a mobile app. The app could include all of the content Diekman posts on his social media, making it a one-stop shop for fans and those who support the Crohn’s and colitis Foundation. There he could post motivational photos, blog posts and even sell his shirts. The app could also provide helpful information on dealing with Crohn’s and colitis, and where to find the nearest healthcare professional. Diekman’s hypothetical plan is just one of many that could be created for athletes and tailored to their individual causes. Suggestions In order for athletes to have a successful game plan for doing good, they need to be seen in the community; get involved, meet people and get feedback, and show the community that they truly care about issues they believe are important. Agents such as Leigh Steinberg and advisers like Towalame Austin are proof that athletes can use their talent for so much more than money and fame. They just need the right guidance. With the rise of corporate social responsibility within leagues and their teams, athletes have the opportunity more than ever before to piggy-back off a team or league’s community relations efforts to make a difference. In addition, athletes have society at their fingertips. Not only are millions of people seemingly 100 "Gut It Out: Jake Diekman's Fight Against UC." Crohn's and Colitis Foundation of America. N.p., n.d. Web. 60 hanging on their every spoken word, many more have access to their websites and social media platforms. Technology and new media will allow athletes to voice causes and concerns that matter most to them. The athletes who decide to make the full commitment to start a nonprofit organization should expect to be held to the same standards as any other foundation. An athlete should take this endeavor very seriously, just as they would any business deal with their name and likeness attached to it. The athlete needs to ensure that those managing his or her foundation are knowledgeable about best practices. A successful foundation should include programs that are focused on a particular social problem or cause, that are designed to achieve outcomes which are positively impactful to a community. In addition, the effectiveness of programs should always be measured and evaluated on how they can be better. 101 To whom an athlete gives, how he or she gives, how much he or she gives, why he or she gives, and perhaps most important, how genuine the public interprets his or her giving will greatly determine the effectiveness of giving. Charitable giving is much more complex than simply giving a monetary donation to an organization. Therefore, it should not only be financial advisers in the position to address charitable giving. It is up to agents and other brand managers to take on the important role of guiding the athlete toward responsible decision-making. 101 Hopkins, Jared. "No Lack of Charities, but a Lack of Information." Tribunedigital-chicagotribune. N.p., 22 June 2010. Web. 61 An athlete’s philanthropic initiatives require managerial decision-making, but are also highly dependent on communication efforts. Organizational communication and public relations must be the strong foundation to lead successful philanthropic efforts. Public relations professionals are uniquely qualified to lead philanthropic efforts, given their expertise of managing and maintaining stakeholder relationships. The only way things will change , and an athlete’s philanthropic efforts will be sustainable over time, is if athlete advisers refocus the discussion away from the legal and financial obligations, the IRS and the media, and begin to consider the lost opportunity to make a positive impact. 62 Bibliography "3rdandlong." 3rdandlong. N.p., n.d. Web. "About Us." Crescent Moon Foundation. N.p., n.d. Web. "About Us." Warrick Dunn Charities. N.p., n.d. Web. "Andre Agassi Receives CoSIDA's Dick Enberg Award." USA Today. Gannett, 16 June 2015. Web. <http://www.usatoday.com/story/sports/college/2015/06/16/andre-agassi-dick-enberg- award-cosida/28813479/>. "Angels Baseball Foundation." Los Angeles Angels. N.p., n.d. 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Web. 69 Appendix A: Industry Interview Leigh Steinberg: Agent, Steinberg Sports Growing up, my father emphasized two things. One was to treasure relationships, and the other was to try to make a positive difference in the world and help people who couldn’t help themselves. We’d go city by city to set these foundations up. Initially, the administration of those charities would be done by someone in their family. So they would use their parents, their friends, to be the administrator. It worked fairly well, but after a while, it became clear that the Better Business Bureau requirements for what they thought was an appropriate amount actually given to the charity out of the money raised were hard to meet. So an athlete would do a golf tournament and by the time he got done playing, with all the expenses, it was very hard to show much of a profit and that would run up against Better Business guidelines. It also was a situation where the bookkeeping needed to be done by a professional. So we knew that we wanted to continue the concept, but what had happened was that there came to be community charitable foundations. A big one is the Giving Back Foundation, another one is Coaching Charities with Kevin Kaplan. And what they do is serve as an umbrella and the players still has his own foundation, but the administration, the taxes, the filings, the bureaucratic requirements were done by the community foundation. So no longer did we have to worry about maybe the bookkeeping was suspect that we weren’t meeting standards or requirements. Those groups became experts on fundraising. Athletes would begin to understand that things like golf tournaments, which were every week in the NFL, were great “rapport raisers” but not great fundraisers because you couldn’t get a great profit. So people like Jake Plummer and Warrick Dunn would do bowling tournaments, where the overhead was much lower. So they began to diversify some of the ways in which to raise funds. The other problem with it is obviously fraud. Someone throws a golf tournament and gets a number of comps for charity, so they get comps in kind. In other words, an alcohol producer provides endless bottles of vodka, all to be used in the tournament. But many times you would find that the staff was keeping clothes or alcohol or something for themselves because the temptation was there. Were you ever concerned that your clients weren’t genuinely committed to charity and it was just a mandatory requirement? No, they had amazing choices. There were probably about a thousand certified agents in the NFL, so if they didn’t like the philosophy, they certainly had a tremendous amount of other 70 choices to make. The curious thing about charity is that they might have done it at first because it was a good thing to do, but once they had done it they got into it. It allowed the athlete to use his non-athletic skills and allowed him to develop his non-athletic skills. It allowed him to build relationships in the community and many times that was a genesis for a second career. So an athlete might have on his board someone who is a leading businessman. Duron Terry had the Terry Foundation and he was a safety for the Kansas City Chiefs. When he retired he was able to purchase the Anheuser-Busch distributorship. In Missouri, Bud beer is a license to print money. So it helped them that way, in that they were meeting people. So for example, if you have a player on the 49ers, they play in Santa Clara, so you’d ask the players what businesses are approximate to this? Well there’s the big venture capital community, high-tech, so it’s not by chance that someone like Brent Jones has a $2-billion hedge fund and Steve Young has been on the board of a number of different groups in high-tech. Which of your clients has had the most successful charity efforts? Warren Moon played 23 years in the NFL and is in the Hall of Fame. He has the Crescent Moon Foundation, and they’ve sent hundreds of kids to school on his scholarship. He had professional help in running the foundation and held professional fundraisers, they’ve done a number of dinners, a bowling tournament to fund it. They’ve kept the administrative costs down and the percentage of money that actually goes to the charity up. Warrick Dunn has the Homes for the Holidays program. Homes for the Holidays has put 143 women into the first homes they will ever own by making the down payment and having Home Depot outfit them. So once again he’s had professional help in it and been able to maximize the amount of money going to charity. He’s given a good chunk of the money himself, so that gives him more power to ensure that everything is properly done. Steve Young has the Forever Young Foundation. The Forever Young Foundation is a pass-through charity. In a pass-through charity, they raise money and the goal is to help different charities. Charities can apply for a grant, so if you have X amount of money, then you split it up among the charities. So you’re not using the money yourself, you’re using it to help other groups. Was there ever a time that charity posed as a distraction? I don’t think so. A lot of the charitable work - dinners, tournaments are done in the athlete’s off season so there’s not a time conflict. Second of all, to the extent that they are run by other 71 people, it doesn’t seem to make a difference. As a matter of fact, I think that we might wait to do a full-scale charitable push until the athlete has a year in. So the point is that yes, the engine that pulls the train is performance on the field but the point is making sure that the player’s focus is the key part in mentoring. But I think it’s part of a well-rounded life, and it brands an athlete in a positive way. Do you think that an athlete’s philanthropy can effect his paid endorsements? Absolutely, because the higher profile an athlete has, the more attractive the athlete is to advertisers. That isn’t the motivation, but endorsers are looking for a transference of positive name recognition to their product. They don’t just give endorsements for endorsement’s sake. They are actually looking that the athlete has enough of a high Q rating that they can transfer something positive. How do you feel that new media can help an athlete’s philanthropic efforts? The Internet has replaced traditional media, especially for young people, as the place to find their primary source of information. Having a vibrant website, having a good Twitter following, Instagram, Facebook, all those ways of providing a positive face to the world, are important. I think it’s critical that an athlete be conversant with that, and understand how to project that image on every platform of new media. Steinberg’s thoughts on PR professionals advising athletes’ nonprofit initiatives: In a world filled with athletic misbehavior, to have an athlete standing up and talking about charity and community is powerful. The first key in all this is to make sure that whatever they choose, make sure they choose it based on something that is important to them so that they are sincere about it, so they feel like they are making a difference in the world. Then you’re going to get passionate toward it. It’s not a situation where you can pick a charity for someone just so he’s doing charity. You look into his own background. For example, Warrick Dunn was raised by a single mother and he puts single mothers into homes. Derrick Thomas had dyslexia so he had a program to help those with dyslexia. Someone will have a brother who died of cancer and he’ll have a special feeling about that, or someone grew up in the inner city and they want to do something for at-risk youth. So the point is, you have to match the charity so that the athlete gets an emotional charge from it because you have a chance to make a difference. 72 The goal is to assist people in the world and these are core values that are important. That’s all I really do at the end of the day… I help young athletes achieve their dreams and be the best they can be, but collectively we can make a difference in the world. 73 Appendix B: Industry Interview Towalame Austin: Philanthropy Executive, Roc Nation Sports What would you say was your biggest accomplishment while working with the Magic Johnson Foundation? I honestly feel like it was during the last five years of my tenure there. When I was in that presidency role, I was able to help the organization create its operations plan because prior to that we were not operating with a formal operations plan. We ended up going through a process that took two years; we worked with a consultant and she helped us build the operations/business plan. From there came a lot of structure. We were able to really put a lot of anecdotal data together and properly measure and articulate our outcomes from the different programs that we were operating, and really just think about the future of the organization from a programming perspective. At that time, we were coming up on our 20-year anniversary, so it was perfect timing and we felt really good about it. Everyone was engaged - the staff, the board of directors - it was a really great time in terms of building structure and building operations and planning for the organization’s future. Magic Johnson has one of the most established athlete foundations – what can be attributed to that success? I think he’s just been lucky to have good leadership, honestly. Beginning with himself, he’s such a visionary and he knows what he wants to do. He really cares about the community, so everything he does - whether it’s on the nonprofit side or for-profit side - community is a common thread throughout all of his business and philanthropic endeavors. If you look at his business portfolio and you look at the descriptions of the different partnerships, they all touch the community in some kind of way. They are all focused in urban communities, they all focus on helping families and creating jobs and providing information and awareness, and giving back. I really would attribute it to his vision. We were his foot soldiers, so we just got it done and in order for him. I attribute it to his vision and his discipline to stick with it and get it done. 74 What are some common mistakes or pitfalls that you’ve seen athletes make in regards to their own foundations? I’ve also been fortunate enough to work not only with Magic Johnson, but Alonzo Mourning and a little stint with Dwyane Wade, I worked with his organization for just a little over a year which sort of overlapped when I left the Magic Johnson Foundation. I think where the guys were at the time in their careers, and in their life in general, with the exception of Dwyane Wade, they were retired players and they were focused on their business and their giving. I really attribute their success to that. One of the mistakes that athletes or entertainers make is starting these foundations very young and not really being knowledgeable of all the governing and management that it takes to have a successful foundation. And I think you mentioned it before: not having the right people in place that have the knowledge, and them not being committed. You can say you want a foundation, but it takes a personal commitment, a financial commitment, a commitment of time, resources. So you can’t say that you want to start it and then you walk away from it. I think that’s one of the reasons that Dwyane, Alonzo and the Magic Johnson Foundation have been successful is because they’re at the board meetings, they take the calls. I’ll use Dwyane Wade as an example. We would go to the stadium sometimes to meet him right after the game or we would meet him right after practice. These guys are really committed and really understand that their involvement is needed, and they can’t walk away from it and just show up at an event. Would you recommend starting a foundation to current professional athletes? Why or why not? What are other options? I think it depends on the client, honestly. Contrary to what I just said, I work for Rihanna right now. She’s 26, she’s an international pop star, one of the most recognizable faces in the world. But she actually came to me and said she wanted to start a foundation. Before we even launched the foundation to the public, she was already financing the organization personally and was already giving and doing things in Barbados, through the foundation; it was a private foundation. So it really kind of depends on the client. 75 I’ve also had people come to me, especially when I left the Magic Johnson Foundation. I got a lot of phone calls from young athletes and entertainers just wanting to start a charity. I like to have a conversation with them - let’s meet, let’s talk about this - so that I can explain what this means and what the expectations are. Then if they are serious after hearing what’s expected and what’s needed, I would recommend different things and it really depends. I don’t think everyone needs to start a charity. That’s not the first thing I recommend. If you want to give, you can give in so many different ways. You don’t have to take on the liability of starting a nonprofit. I really try to talk to them and figure out what their goals are and give them options to accomplishing those goals. Some people just want to give back to their communities and there are so many other ways to do that versus starting your own charity and running programs and doing some of the robust programming that you see with the Magic Johnson Foundation and the Alonzo Mourning Foundation. And those foundations end up doing way more; they have full-on staff that are offered with their programs. I try to have a conversation with them to see what their goals are and what they want to accomplish. I give them options without having to start a foundation, but if they are adamant about a foundation, then we talk about that a little more. Starting a 501(c)(3) is not the first thing I recommend because you learn that a lot of people just want to give and there are so many ways they can do that without starting a charity. But some people are adamant, like Rihanna was adamant, but she also understands and thus far she’s been very successful. So it really depends on who you’re talking to and who they are. Rihanna is my primary client, but I also advise and consult with our other clients who have charities or are charitable on our roster. So I’m pretty much the go-to. There’s myself, and I have an amazing colleague in New York. We work together to manage the entertainment and sports clients on our roster in terms of charity. Why is the brand image of your clients important? And does philanthropy contribute to a positive image? [Rihanna] is not starting the foundation for brand image, that’s not her purpose. Rihanna does so much anonymously. If I told you, you would probably flip over your table. And on the contrary, a lot of people don’t even know she has a foundation. If you look at her brand imaging, you would probably never even know. If you look at some of the stuff when we launched her charity in December 2014, she had started a charity two years prior and even prior to that when she first started in the entertainment industry, she was giving back using her name, likeness, doing appearances, campaigns and she 76 helped raise millions of dollars for UNICEF and great organizations. If you go to her website Claralionelfoundation.org, you’ll see her history of giving that we’ve outlined prior to starting her foundations. She helped raise millions of dollars for other charities. It was never something she did for brand image. I think some people may do it for brand. I think it’s really good for people to know when [celebrities] are doing great work because a lot of times you have athletes and entertainers who get slammed in the media for whatever they’re doing, but a lot of times those guys are also very visible and give to different communities. A lot of times people don’t want people to know that because they don’t want the public to think that it’s a ploy or a marketing PR ploy. So a lot of people are quiet about it. Most of the clients I’ve worked with never did it for brand image. They did it because they had a truly genuine care, need and want to support communities, people and causes. Even here at Roc Nation, no one has ever come to me and said, “Hey you know what, I just got into this issue, I got some bad PR out there, find me something to do or someone to give some money to so I can turn my image around.” That hasn’t been the case. I’ve been fortunate, even at this position… people come to me because it’s a service that we provide. And people who opt into this service, who reach out to me and want to give and want to learn more how I can help them grow and develop their philanthropic footprint, are truly genuine, and want to help and want to do something good for their communities… and it has nothing to do with brand image. I am blessed enough to not have dealt with that, and I have been very strategic in who I work for to not ever be in that position. There have been people who have approached me that I wouldn’t [work for them] because that isn’t their goal. What, if any, effect does philanthropy have on paid endorsements? I think it helps when you have an authentic, very consistent, very sustainable reputation of doing great philanthropic and charitable deeds. With Magic Johnson, corporations loved him, because of what he did for communities and what he was about. His motto, his purpose and his drive was very authentic and [corporations] could see that. And that correlates to who they are as a company and possibly even assisting them with reaching those communities. Whether it was building stores or selling product to these communities or enter into these communities, they used him as that ambassador because of who he is and what he has done on both the business and charity side. 77 It’s the same with Alonzo, where I think he’s highly sought-after because he is such a beacon in the community and he has done so much. It’s really appealing to corporations or organizations when they have that same motto or interest. If they are in healthcare or insurance, things that are helping communities are really easy to make that correlation. I think it’s a win-win for both sides. Especially with corporations. Look, they are a business and they want people to make purchases whether its Coca Cola, a car company or a retail company. Whatever it is, the bottom line is to put products in consumers’ hands. If they can attach themselves to someone who is attached to the community in a very endearing way, then why not partner with that individual to do so? I think it works. Companies and people partner when they have common interests. 78 Appendix C: Industry Interview Jenny Price, Director of Community Relations, Los Angeles Angels of Anaheim What opportunities do Angels players have to get involved with CR? The Angels’ CR has many events for our players to get involved in the community. During the baseball season we have monthly visits to CHOC (Children’s Hospital of Orange County), we have an “Adopt a School” program with school visits to five elementary schools, RBI clinics, Make-A-Wish visits, ABF Children’s Holiday party at ESPN Zone, and various fundraisers for ABF (Angels Baseball Foundation) like the 5K run and golf tournament How does Angels CR support players’ personal foundations? We provide staffing, signed memorabilia, monetary donations and operational support to the various players’ charities. The Angels support players’ foundations as much as possible. Many players’ foundations have a staff of their own to run fundraisers and outreach programs. We always try to provide extra hands when needed. Many players who do not have personal foundations still have a nonprofit or cause they want to support. For example, Jered Weaver and his wife Kristin are big supports of the Special Olympics of Southern California. Each spring we assist Kristin in her “Mystery Gold Ball Grab Bag” fundraiser, with proceeds going directly to the Special Olympics. Other ways we help is donating autographed memorabilia and experiences to players’ fundraisers for their foundation. Is it common for players to ask how they can get involved? It is not common, that is part of the reason I spend time in spring training so I can educate our players on what we do in the community and let them know how they can be involved. Some of our players prefer to remain anonymous and donate money to ABF. Why is it important for Angels CR to have dedicated support from players? It’s important for players to give back to the community that supports the team. Also the players can be looked upon as role models for kids, and it is important for kids to hear their story of staying in school, giving back, etc.
Abstract (if available)
Abstract
This thesis examines the effectiveness of professional athlete philanthropy and provides an extensive look into the most popular form of athlete philanthropy, a private nonprofit foundation, analyzing characteristics of those that have been sustainable and exposing the pitfalls of those that have been unsuccessful. ❧ In addition to examining foundations, other key topics discussed include alternative philanthropic opportunities for athletes (besides creating a foundation), how philanthropy affects a professional athlete’s brand image, and how philanthropy can be utilized to positively impact an athlete’s for-profit endeavors. ❧ Ultimately, the main purpose of this thesis is to examine the complexity of creating an 501(c)(3) organization and evaluating its effectiveness in helping an athlete to make a positive difference in society. By highlighting these complexities, it exposes the insufficient oversight of celebrity nonprofits and the immediate need for experienced nonprofit professionals to oversee an athlete’s strategic philanthropy.
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University of Southern California Dissertations and Theses
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Asset Metadata
Creator
Cabrera, Emily A.
(author)
Core Title
For the love of the game and community: evaluating professional athletes' charitable giving
School
Annenberg School for Communication
Degree
Master of Arts
Degree Program
Strategic Public Relations
Publication Date
11/11/2015
Defense Date
11/02/2015
Publisher
University of Southern California
(original),
University of Southern California. Libraries
(digital)
Tag
celebrity,Charity,corporate social responsibility,nonprofit,OAI-PMH Harvest,philanthropy,professional athlete,Professional Sports
Format
application/pdf
(imt)
Language
English
Contributor
Electronically uploaded by the author
(provenance)
Advisor
Fellenzer, Jeff (
committee chair
), Floto, Jennifer (
committee member
), Thorson, Kjerstin (
committee member
)
Creator Email
cabreraemilyann@gmail.com,eacabrer@usc.edu
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https://doi.org/10.25549/usctheses-c40-197481
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UC11278289
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etd-CabreraEmi-4031.pdf (filename),usctheses-c40-197481 (legacy record id)
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etd-CabreraEmi-4031.pdf
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197481
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Thesis
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Cabrera, Emily A.
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University of Southern California Dissertations and Theses
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The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the a...
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Tags
celebrity
corporate social responsibility
nonprofit
professional athlete