Thursday, February 28, 2013

In Defense of A-Rod (Sort of)

Last week The Boston Globe wrote a piece that examined the charities of several well-known athletes.  The conclusion was that their overall financial effectiveness was less than stellar.  Among the poor performers, it seems that everyone has latched on to Alex Rodriguez' charity, The ARod Family Foundation, as the worst.  The stories pillorying A-Rod have spread across the spectrum, from Breitbart to Huffington Post.  The damning evidence is that the charity brought in revenue of over $400,000, mostly from a poker tournament, in 2006 but only paid out $5,090 in grants that year -- about 1% of its revenue.  Yes, this sounds quite bad.  As a Red Sox fan, I can't believe I am saying this, but I think the rush to judge A-Rod is a bit premature.  I'm willing to believe his charity could have been poorly run and failed to achieve its stated mission (after all, 2006 was its first year and the last in which it filed tax forms; its status was revoked in 2010 as a result).  I just don't think the evidence being provided for this is sufficient to make that conclusion.

Looking at the organization's IRS Form 990-PF in 2006, it did raise $403,862 in revenues that year.  Of that, the majority ($368,862) was from the charity poker tournament discussed widely.  Most people infer that since only $5,090 was paid out for charitable causes, the rest must have been wasted on salaries/perks for those in the foundation.  However, it paid no salaries, and its primary expenses were the cost of running the poker tournament.  The remaining funds, about $290,000, were simply retained by the organization at the end of 2006.  The poker tournament, where the bulk of the revenues originated, was in November 2006.  So, it is not entirely reasonable to expect all of its proceeds to have been collected and disbursed in the period of one month.  Again, I am not saying the funds were disbursed properly; what I am saying is that the 2006 filing does not provide sufficient information to make that judgment.  Since there is no 2007 filing, though, we are left to guess...

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