Star investigation: The high cost of sports charities
Old 04-24-2010, 05:30 PM   #1 (permalink)
DVS
in la la land

I'm stuck being a Rap Fan
 
DVS's Avatar
 
Join Date: Nov 2008
Location: Its jeffb's world we just post in it
Posts: 6,000
Representing:
Default Star investigation: The high cost of sports charities

Next time you plan on spending money on a charity. You might want to overlook anything affiliated with MLSE

Quote:
More than half the money raised in the name of charity by Maple Leaf Sports and Entertainment was spent on fundraising and administration last year.

And the story is much the same at many professional sports foundations across Canada, a Star investigation has found.

Lavish gala dinners, golf tournaments and lotteries held by Canadian NHL club foundations routinely eat up between 40 and 65 per cent of revenues — and as much as 80 per cent in the case of the Edmonton Oilers’ foundation in 2008 — intended for disadvantaged children and community development.

Experts say well-run charitable operations should be directing less than 20 per cent of their charitable income on fundraising and administration.

“Canadians love their hockey teams, but it appears the charitable spending among these teams don’t return that affection as expected,” says Toronto forensic accountant Charles Smedmor.

“As community investments go, there are much better places to put your charitable dollars.”

Dr. Bruce Kidd, who was announced as chair of MLSE’s Team Up foundation in December, said his board of directors is “very concerned about the costs.”

“We are looking at the costs and the return on all of our activities and we’re trying to make them more effective to get the costs down to where they represent the industry standards or better than that.”

Fundraising and administration consumed 55 per cent of the $1.5 million raised last year by Team Up, according to the foundation’s self-reported figures to the Canada Revenue Agency.

That compares to 17 per cent reported by the Montreal Canadiens Children’s Foundation, the lowest figure among the country’s six NHL club foundations., the lowest figure among the country’s six NHL club foundations.

The other four team foundations reported internal costs of between 42 and 65 per cent last year.

The figures from Team Up, a newly-branded merging of philanthropic efforts for the Toronto Maple Leafs, Raptors, Marlies and Toronto FC, raise questions about the charity’s oversight of charitable dollars, say financial experts and forensic accountants who reviewed the records for the Star.

“The smart money isn’t giving through sports foundations (like Team Up) to achieve impact,” says Kate Bahen, managing director of Charity Intelligence Canada, a non-profit organization that analyzes charity finances. “(MLSE) is a massive hockey machine. But to present Team Up as experts in community development is a stretch.”

Asked what he’d tell a client donating money to Team Up, forensic accountant Ken Froese says: “I’d say find another way to give it more directly … to where it will make a difference.”

Froese, who reviewed Team Up’s filings for the Star, said he was “surprised” by the numbers.

“It should be the leading example in Canada for a sports foundation. But the foundation is a way of raising money and a lot of the use of the funds gives you advertising for the Raptors or the Toronto Maple Leafs. Other (charities) are more intent on solving issues and less on administration.”

Kevin Nonomura, Team Up’s treasurer and senior vice-president of finance for MLSE, said “this past year was a tough year for us.”

“We understand, from an outside perspective, it doesn’t look very good. … I’d like (fundraising and administration costs) to be as low as possible. And that’s why we’re trying to look at diversifying the way we raise money and try and find more efficient ways, effective ways to raise money.”

The federal Charities Directorate, which regulates the country’s 83,000 registered charities, says fundraising of more than 35 per cent of revenues triggers an examination “to determine if there is a trend of high fundraising costs.”

The Star’s analysis shows five of the six NHL team charity foundations exceed that threshold. All continue to operate without penalty.

CRA officials don’t comment on specific charities and their fundraising costs.

“(The numbers) tell me that Anglo-Canadian sports teams should stay out of the charity business based on the efficiency by which they generate and expend their funds,” says Ian Wintrip, a Toronto forensic accountant.

“When you look at (Team Up’s) administration and fundraising costs ... your objective wouldn’t be to have an organization like that. You would have loftier goals than that.”

Team Up and similar NHL club foundations do contribute to important community work.

Over the past 15 years, the Leafs Fund and Raptors Foundation — predecessors to Team Up — raised close to $30 million for disadvantaged youth, says a December press release announcing the newly named foundation.

MLSE has dedicated about $1.6 million over the past four years to building and refurbishing 13 hockey rinks, six basketball courts and three soccer pitches.

It also provides hundreds of “in-kind” gifts – autographed jerseys, plaques and memorabilia – to registered charities and schools to support their own community-based work.

Foundation records obtained by the Star show that nearly 60 per cent of the more than 750 gifts Team Up donated last year were valued at $25 or less.

All of those little gifts amount to a big drain on resources, says forensic accountant Smedmor.

“Team Up's administration costs appear to be eating more of its donation and investment income than expected.”

Fundraising was Team Up’s single biggest expenditure last year at nearly $700,000.

In one case last year, the foundation paid a fundraiser nearly $24,000 to generate $3,200 in funds.

That $20,000 fundraising shortfall reflects a recent change in “strategic direction” towards attracting for philanthropic donations, says MLSE spokesperson Rajani Kamath, who would not name the fundraiser.

“We were prepared to make a short-term investment to recognize a long-term gain for our foundation.”

Many of the typical fundraising activities of sports foundations like Team Up come with big overhead.

Every dollar that comes in from game night 50/50 draws — lotteries that direct half the ticket sale proceeds to the charity and the other half to a winning ticket holder — only bring in 40 to 45 cents on the dollar, says Nonomura.

“It has the lowest net and highest expenses against it. … From the 50 cents we’re getting, we have to pay for the lottery licenses, the ticket printing and … someone to manage the program. It’s a high cost.”

Compare that to the Montreal Canadiens’ foundation, whose game-night lotteries (50/50 draws are not permitted in Quebec) hands back less than 20 per cent of total revenues to winners while keeping 80 per cent as charitable income.

Charity fundraising dinners – the bread and butter of many sports foundations – are one of the biggest revenue eaters.

A gala fundraiser held by the (Vancouver) Canucks For Kids foundation raised $300,000 for the charity’s work with children in need last year, says executive director Debbie Butt.

But that’s only after spending $200,000 to stage the event.

“You’ve got a hotel ballroom, you’ve got to pay $60 a head and you’ve got 700 people in the room … you have alcohol and corkage, then you have lights and staging,” said Butt, whose charity spent $2.1 million on fundraising and administration last year — 42 per cent of its total revenues.

“That’s a big overhead.”

It’s no coincidence that sports foundations overwhelmingly target children as their charitable focus, says Bahen of Charity Intelligence.

“If you want to raise money, of course you pick kids’ causes because that will outdraw a charity for seniors eight to one. But this isn’t serious giving. It’s fundraising, marketing and glitz. The less you spend on flower arrangements and glitz, the more that goes to good.”

The Montreal Canadiens Children’s Foundation raised $3.4 million last year – more than doubling Team Up’s revenues -- without holding a gala fundraising event.

“I have seen gala dinners with costs of hosting up to 40 to 50 per cent of gross take,” said Pierre Boivin, chair of the foundation and president of the Montreal Canadiens. “We don’t have that as a recurring event.”



Danielle Robinson, president of the Sens Foundation, says high event costs are a struggle in most sports charities.

“People expect a certain quality of event when they’re paying a $4,000 for a table (at a gala),” said Robinson, whose foundation spent 49 per cent of revenues on fundraising and administration last year.



“A 30 per cent target as something we should all be striving to sit around.”

The Toronto Blue Jays’ charity, the Jays Care Foundation, spent 39 per cent of total revenues on fundraising and administration in 2008, the last year it reported its figures.

That’s high, says executive director Danielle Silverstein.

“It’s a number I pay attention to. We’re very focused on it. … I’d love for it to be under 30 per cent.”

The Edmonton Oilers Community Foundation shows the highest fundraising costs among Canadian NHL club foundations.

It spent 65 per cent of its revenues on internal costs last year – down from 80 per cent in 2008.



That dramatically higher spending — totaling $6.5 million last year and $9.1 million a year earlier — is largely attributable to an initiative unique to NHL club foundations: A high-profile lottery that includes lavish prizes such as cars, trips and a luxury home.



“Expenses are high because that’s the nature of the program,” said foundation executive director Natalie Minckler. “We were looking for ways to raise big dollars and bake sales weren’t going to cut it.”
DVS is offline   Boss Key Wife Key Reply With Quote
Old 04-26-2010, 10:05 AM   #2 (permalink)
Unacceptable?! Did you see the pool? They flipped the bitch!

Get off my lawn
 
Renihan_00's Avatar
 
Join Date: Nov 2008
Posts: 2,330
Representing:
Default

Most charities out there barely get any money to the actual cause. I saw something on breast cancer a while back where I found out that the vast majority of the money raised goes back into events to raise "more awareness".

Almost nothing makes it to the labs to help.

I was at a charity event a year or so ago called motionball. I don't know if anyone else has been to it before, it's a great time, but is supposed to be a charity event.

I remember when they announced how much money they had made from the event, I was disgusted at how low it was. Then you look around and you see that the event has an open bar, all kinds of free food and fucking chocolate fountain!!!!

Are you kidding?

It is my opinion that most people that end up RUNNING charities end up doing it for the wrong reasons. They may start with good intentions but one of the following usually happens:

1) They realize that they get to greatly increase their own social status through running events that will end if they find a solution to their cause.

2) They realize that if they find a solution to their cause, they will no longer have a job.

3) The charity outgrows them so they have to have someone else (or a board) in charge and they end up falling victim to 1 or 2.

It's BS! In the elevator the other day, I saw that the top Canadian charities pay the people running them on average over 200 k a year. Where is the charity in that?!

When you get these big charities all your fucking money goes to overhead.

There was an Italian doctor that claimed to have found the cure for MS. The Canadian MS foundation weren't even going to look into his claims until they got the heat turned up on them by the public to do so. WHY?!

I hate charities. Far too often, the main beneficiaries are the people running it and they just use the cause for their own benefit. They are nothing but exploiters!

Last edited by Renihan_00; 04-26-2010 at 10:08 AM.
Renihan_00 is offline   Boss Key Wife Key Reply With Quote
Old 04-26-2010, 10:37 AM   #3 (permalink)
www.torontoraptorsforum.com

giant steps
 
'trane's Avatar
 
Join Date: Dec 2007
Posts: 15,191
Representing:
Default

the stephen lewis foundation puts 95% of its fuding towards the people it helps. just sayin'...


renihan - you should try working in the non-profit sector sometime to see just how difficult it is to run programs on the ridiculously tight budgets we have. sure there are a some bad eggs, but there are a huge number of really good ones too. charities and non-profits need to attract top talent as well dude. paying everyone cheap wages just isn't going to do that.

those executive directors that make $200k - how much do you think they would make in the private sector? they tend to work longer hours with no perks and a smaller pay in order to work for something they believe in. is that reason to take them to task for making too much money? ridiculous.
'trane is offline   Boss Key Wife Key Reply With Quote
Old 04-26-2010, 10:56 AM   #4 (permalink)
Unacceptable?! Did you see the pool? They flipped the bitch!

Get off my lawn
 
Renihan_00's Avatar
 
Join Date: Nov 2008
Posts: 2,330
Representing:
Default

Quote:
Originally Posted by 'trane View Post
the stephen lewis foundation puts 95% of its fuding towards the people it helps. just sayin'...


renihan - you should try working in the non-profit sector sometime to see just how difficult it is to run programs on the ridiculously tight budgets we have. sure there are a some bad eggs, but there are a huge number of really good ones too. charities and non-profits need to attract top talent as well dude. paying everyone cheap wages just isn't going to do that.

those executive directors that make $200k - how much do you think they would make in the private sector? they tend to work longer hours with no perks and a smaller pay in order to work for something they believe in. is that reason to take them to task for making too much money? ridiculous.
I've audited several non-profit companies, so I have a very good understanding of what happens inside them financially and culturally.

I'm not saying it's easy to run a charity, but the problem is they are often being run like business and they shouldn't be!

YES, they could make more in the private sector, but it isn't the private sector and the wages shouldn't be compared. They shouldn't EXPECT any renumeration for their services because the time should be donated as charitable time to cause they really believe in.

The average family income in Canada is what, 26,000? Why do we need to pay some of these people 200k? It's all personal opinion but to me it's too much. I am willing to bet you could find retired people who would be happy to do the jobs for free.

"the stephen lewis foundation puts 95% of its funding towards the people it helps" - GOOD! There are some very very very well run charities and I salute them. If you are giving 95% of your funding to people and you are taking 200k, I don't care.

The problem is, most of them aren't like this.
Renihan_00 is offline   Boss Key Wife Key Reply With Quote
Old 04-26-2010, 11:10 AM   #5 (permalink)
www.torontoraptorsforum.com

giant steps
 
'trane's Avatar
 
Join Date: Dec 2007
Posts: 15,191
Representing:
Default

Quote:
YES, they could make more in the private sector, but it isn't the private sector and the wages shouldn't be compared. They shouldn't EXPECT any renumeration for their services because the time should be donated as charitable time to cause they really believe in.

The average family income in Canada is what, 26,000? Why do we need to pay some of these people 200k? It's all personal opinion but to me it's too much. I am willing to bet you could find retired people who would be happy to do the jobs for free.
surely you jest. how do i pay my mortgage without a salary? do you really want non-profits run by retired people and those that don't expect high wages? i'm thinking you want smart people. well educated and well connected people who know how to acquire funding, how to use it wisely, how to foster properd board goivernance and how to follow accounting procedures and the fundamental rules of running a large organization. you want people who can maximize service delivery and figure out how to get the most out of the money you have. these are ceo's of large organizations, not middle managers of fly by night organizations.

donating my time to charity? you must be kidding. i do that by making far less doing what i do now than i did when i worked for private enterprise. the exec director of my agency made a huge amount more than she does now when she worked in the private sector too, and she took a massive may cut to do what she does now.

we already work long hours for less pay and without any perks. we already are expected each year to deliver more service and more programs on increasingly tighter budgets. now you want to take away our best people because you think they make too much money and replace them with retirees?

jeepers.
'trane is offline   Boss Key Wife Key Reply With Quote
Old 04-26-2010, 11:20 AM   #6 (permalink)
Unacceptable?! Did you see the pool? They flipped the bitch!

Get off my lawn
 
Renihan_00's Avatar
 
Join Date: Nov 2008
Posts: 2,330
Representing:
Default

Quote:
Originally Posted by 'trane View Post
surely you jest. how do i pay my mortgage without a salary? do you really want non-profits run by retired people and those that don't expect high wages? i'm thinking you want smart people. well educated and well connected people who know how to acquire funding, how to use it wisely, how to foster properd board goivernance and how to follow accounting procedures and the fundamental rules of running a large organization. you want people who can maximize service delivery and figure out how to get the most out of the money you have. these are ceo's of large organizations, not middle managers of fly by night organizations.

donating my time to charity? you must be kidding. i do that by making far less doing what i do now than i did when i worked for private enterprise. the exec director of my agency made a huge amount more than she does now when she worked in the private sector too, and she took a massive may cut to do what she does now.

we already work long hours for less pay and without any perks. we already are expected each year to deliver more service and more programs on increasingly tighter budgets. now you want to take away our best people because you think they make too much money and replace them with retirees?

jeepers.
Here-in lies the problem! You want the chairty run like a business, when it isn't a business! When you try run it like a business, you are going to have all the costs of a business.

YES you can make more in the private sector. By the same argument why aren't we then paying our prime minister more than someone at a the wealthiest private corporation? Don't we want the best and brightest?
Renihan_00 is offline   Boss Key Wife Key Reply With Quote
Old 04-26-2010, 11:27 AM   #7 (permalink)
www.torontoraptorsforum.com

giant steps
 
'trane's Avatar
 
Join Date: Dec 2007
Posts: 15,191
Representing:
Default

i'm not asking for equal salaries. most ceo's of large organizations make a hell of a lot more than $200k, especially when you include perks. i'm just saying that if you expect good people to take pay cuts, you can only expect them to go so far. no one can afford to work for free.

if it's not run like a business, how should it be run? we are still expected to follow proper board governance, proper accounting procedures, etc. we still have to have well-connected contacts, we still have to report our finances, we still have to manage our funding and allocate resources, we still have to stay out of the red. how do you do any of this and not run it like a business, when almost all of the same laws apply?
'trane is offline   Boss Key Wife Key Reply With Quote
Old 04-26-2010, 11:39 AM   #8 (permalink)
Unacceptable?! Did you see the pool? They flipped the bitch!

Get off my lawn
 
Renihan_00's Avatar
 
Join Date: Nov 2008
Posts: 2,330
Representing:
Default

Quote:
Originally Posted by 'trane View Post
i'm not asking for equal salaries. most ceo's of large organizations make a hell of a lot more than $200k, especially when you include perks. i'm just saying that if you expect good people to take pay cuts, you can only expect them to go so far. no one can afford to work for free.

if it's not run like a business, how should it be run? we are still expected to follow proper board governance, proper accounting procedures, etc. we still have to have well-connected contacts, we still have to report our finances, we still have to manage our funding and allocate resources, we still have to stay out of the red. how do you do any of this and not run it like a business, when almost all of the same laws apply?
I think that we have a bit of a chicken and egg problem there because you make a good point. When you still have to meet a lot of regulatory requirements it forces a business type structure and adds in crazy reporting costs.

You need the regulation so that the charity can be run honestly.
If you have the regulation it hampers the ability of the charity to run.

The reason I suggest retirees at 0 dollars is because it removes the ultimate motive to ensure that you have a positive net cash flow WITHIN the business. If your remove the need for positive net cash flow then you can use marginal social wellness as the measure (like in enviromental economics) of the charities output.

I would LIKE to think that if it was "the norm" you would be able to get retired executives to run charities for free as opposed to paying them nominal amounts that don't really impact their savings to sit on a board. This probably would not work out the way I would hope.

I'm not suggesting that I have a solution, but the current structure really drives me crazy because it can just lead to a wealth redistrubtion from the wealthy to the middle-class. That's not really the intention of the charity. If it was, you might not find as many donors haha

Maybe I should combine my accounting and economics degrees, sit there and come up with some crazy solution to the charity problem for the rest of my days!
Renihan_00 is offline   Boss Key Wife Key Reply With Quote
Old 04-26-2010, 11:45 AM   #9 (permalink)
www.torontoraptorsforum.com

giant steps
 
'trane's Avatar
 
Join Date: Dec 2007
Posts: 15,191
Representing:
Default

you would be worth a lot of money to the non-profit sector if you could...

and to the retirees point - let me just say that the exec director of our agency puts in about 55-60 hours per week, minimum, and a lot more when you factor in evening meetings and all of the city-wide involvement stuff as well. that doesn't sound much like retirement, does it?
'trane is offline   Boss Key Wife Key Reply With Quote
Old 04-26-2010, 11:47 AM   #10 (permalink)
Unacceptable?! Did you see the pool? They flipped the bitch!

Get off my lawn
 
Renihan_00's Avatar
 
Join Date: Nov 2008
Posts: 2,330
Representing:
Default

Quote:
Originally Posted by 'trane View Post
you would be worth a lot of money to the non-profit sector if you could...

and to the retirees point - let me just say that the exec director of our agency puts in about 55-60 hours per week, minimum, and a lot more when you factor in evening meetings and all of the city-wide involvement stuff as well. that doesn't sound much like retirement, does it?
hahaha no it isn't! You know how people get when they "retire" though. Some people dont' actually want to retire.

I was working for a while in the retired executives area of a HUGE canadian corporation. Most of the guys in there were late 70's and they couldn't stop going to the office haha

You know the type.
Renihan_00 is offline   Boss Key Wife Key Reply With Quote
Old 04-26-2010, 05:21 PM   #11 (permalink)
enjoying having the keys to destiny

perusing ancient database
 
ClingRap's Avatar
 
Join Date: Dec 2007
Location: The far side of the Universe.
Posts: 1,846
Representing:
Default

unfortunately you need to run organizations, especially ones that are not-for-profit, as a for-profit business if you want it to be sustainable in this economy. Ethics are quite often impractical in this economy. I worked in the "fair trade" sector for four years as an independent business, and myself and my employer adopted a for-profit approach to our pricing. There were tonnes of other vendors who bought a product for say 10$ from an artist and then sold it for 12$ How do you squeeze a living out of 2$?

I think the same is true here. The economy in and of itself is unethical, and so doing ethical work involves a more strategic ethics for the not-for-profit sector. I think the bullshit high-class philanthropic thing has never been about the charities. it's about rich people feeling good about themselves and their affluence through being magnanimous. It's been that way since the Victorian era and so the article misses the point. Critiquing philanthropy for being what it is, is pointless.

There's nothing wrong with making a profit if what you do with that profit is ethical. If it isn't unintegris. I think that's what Trane is pointing out here, and rightfully so.
ClingRap is offline   Boss Key Wife Key Reply With Quote
Reply


Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


All times are GMT -4. The time now is 04:21 PM.


Powered by vBulletin® Version 3.7.1
Copyright ©2000 - 2015, Jelsoft Enterprises Ltd.
Copyright RaptorsForum.com 2005-2011

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24