TwitterMore Fun With Alex
2 Mar 2013
I’m pretty sure there has never been a professional athlete who has damaged his own brand more than Alex Rodriguez. This guy just doesn’t get it. In a story that will probably receive far too little attention because it isn’t a “juicy” scandal, the Boston Globe investigated the charitable foundations set up by professional athletes and found that they don’t contribute a lot of the money they raise to charity. For example, the Josh Beckett Foundation only gives 37 cents of every dollar it raises to charity. (Charities typically give around 70 cents of every dollar raised to charity.)
But Alex is in a class by himself. The Alex Rodriguez Foundation raised $403,862 in 2006 and have a total of $5,090 to charity. After that it stopped submitting financial records to the IRS and was stripped of its non-profit status.
Where did the other $398,000 go? Great question and one that we will probably never get an answer for. But, that’s really beyond the point. The better question is how a guy who was making $25-million a year at the time couldn’t figure out how to make sure that almost all of his foundation’s money got to charity? After all, Alex earned $398,000 in less than 3 games in 2006.
Mar 03, 2013 @ 07:41:23
I know you have Alex near and dear to your heart but to me he was mentioned in the article for shock value. The numbers don’t lie. Often it is another way to keep the hanger-ons happy is my guess.
Mar 03, 2013 @ 13:07:25
Another opinion: setting up and running a complex entity involves a certain amount of overhead, accountants, lawyers, tax lawyers, publicists, ad (almost) infinitum. It establishes a hurdle point of revenues below which nothing goes out the door except to overhead. This might be a contributing factor. Annual overhead “is what it is”.
Alex is a big target, many people hate him for a variety of reasons … this revelation about his foundation is, I agree, a way for the article to get eyeballs.
Mar 03, 2013 @ 13:47:38
Mitchell and BL, I will grant you that the article using him is a way to get eyeballs. And, Mitchell makes a good point about setup costs. But, the fact remains that the foundation stopped filing tax returns and got stripped of its non-profit status. That doesn’t sound like an entity interested in charitable works to me.
Mar 04, 2013 @ 00:02:20
Peter,
What it honestly sounds like to me is an entity that realized it was either about to or had already failed and so they closed shop. Did they close shop in the most elegant way? Nah – they screwed that up in Alex fashion. Someone probably said, “we’re toast, forget it” and then simply failed do the administrivia needed to shut it down, cause doing all of that was too expensive and/or time consuming.
I see investment banking deals now that require about a quarter mill in expenses to third party professionals just to be permitted to start seeking investors – once an investor is captured, 33% of the investors gross returns annually go to overhead. That is a huge hurdle on small deals or small ventures.
Another wacky example of eqregious overhead? Did you know that government grants for community development activities will net – wait for it – sitting down? – take a deep breath – 20 cents on the dollar to the recipient group. Yes, 80 cents of every dollar goes to overhead and grant monetization. Holy fecal matter, Batman!
- end rant
To mangle Mel Brook’s screenplay in History of the World …. “it’s good to be a third party professional to financial transactions”