In the News
On February 23rd, Callum Borchers of The Boston Globe published an article titled “In nonprofit game, athletes post losing records.” After reading the article, I was moved to respond. It was and remains unclear to me how a real loss could be defined within the context of raising money to potentially cure or treat a child with a disease. What percentage of a dollar disbursed makes that dollar too little to bother raising? What research oncologist or pediatric cancer program turns away $37,000 because it isn’t $100,000? In my profession, wins and losses are discretely defined when the final out of a baseball game is made. In life, and in my philanthropic endeavor, the Strike 3 Foundation (www.strike3foundation.org), I do not believe that the efforts and good intentions of those people, athletes or not, who devote time to helping others in need, can result in an unequivocal loss. Are there opportunities for further operational efficiencies? Sure, but aren’t there always?
Akin to the sabermetrician who would argue that WAR (Wins Above Replacement) is the single comprehensive metric of a player’s total contribution to his team, nonprofit rating agency, Charity Navigator, cites seven financial performance metrics for measuring the financial health of a charitable organization. Mr. Borchers chose, singularly, program service expenses>65% as the performance metric used to define whether a charity loses in supporting “improving the health and well-being of children.” I, too, can partake in the remedial exercise of dividing Part IX Row 25 Column B, by row 12 on the IRS form 990, but as the brother of a childhood cancer survivor, it just doesn’t feel that simple. As a data driven individual who appreciates transparency and a balanced portrayal of information when forming an opinion, the unbalanced views of this article, are not only strikingly unsettling but potentially damning. As an example, the graphic that Mr. Borchers uses to illustrate his findings invites scrutiny. If we can assume that what is being portrayed is that 54% of the sample size of 50 athlete charities disburse >61% of their annual revenues to cause, we are left with the question of how does this compare to the other 1.5M actively reported nonprofit organizations in the United States? Further, 50 of 1.5M seems like an insignificant cross-section. Of the 50 charities evaluated in the Globe research, it is also unclear what consideration was given to whether the charity was in its first years of existence and/or whether disbursements were being strategically pooled over a specific span to fund a more substantive project.
The Strike 3 Foundation has disbursed $740,000 in the past three years towards initiatives directly related to our mission, with guidance provided by our Medical Director and in partnership with the Conquer Cancer Foundation of the American Society for Clinical Oncology and renowned cancer specialists at Yale New Haven Children’s Hospital, The Children’s Hospital of Philadelphia, Children’s Hospital and Research Center of Oakland, and Connecticut Children’s Medical Center. Our 2012 form 990 will reflect a percentage of revenue disbursed to cause >90%. In 2010, it was 39%. In 2008, the year the charity was formed, it was a paltry 21%. Were we losing until 2012? Should people have stopped buying tickets to our fundraising events? Was the $400,000 that the Strike 3 Foundation granted to Yale New Haven Children’s Hospital as the founding sponsor of Connecticut’s first Bone Marrow Transplantation Program a loss, when the percentage of revenue disbursed did not exceed 65% pre-2012? I may not be equipped to answer this question, but I would be happy to connect Mr. Borchers to the oncologists, nurses, patients, and families at Yale who could probably share some insight.
This article was published in the Business section of The Boston Globe. Nonprofits, like businesses, have expenses. Growing organically and containing general and administrative (G&A) expenses is a challenge that faces Fortune 100 companies and nonprofits alike. Fundraising expenses are largely dependent upon what for-profit businesses are willing to sponsor, donate, or discount their venue spaces, products, and services to. Fundraising expenses for the Strike 3 Foundation have held steady averaging $82,000 annually since 2010. G&A expenses have also held steady, averaging $8,600 in the last three years. 0% of the Strike 3 Foundation expenses are employee compensation. The Strike 3 Foundation is an all-volunteer organization. Our volunteer team consists of lawyers, teachers, accountants, management executives, doctors, marketing professionals, technologists, and professional baseball players who have families and full-time jobs at companies like General Electric, Ernst & Young, Neopost, the Boston Red Sox, and Accenture. G&A as a percentage of revenue in 2012 was <2%. In 2010, 2.6%. In 2009, 2.7%. Simply, expenses have stayed flat, while revenue and disbursements to cause have steadily increased and continue trending positively. A prospect who makes an out in his first at-bats isn’t labeled a bust, a start-up that doesn’t turn a profit on day one, isn’t tagged a failure, and yet Mr. Borchers implies that a nonprofit that doesn’t meet “nonprofit specialist acceptable minimums” is a loser. Is the CEO of a for-profit company expected to underwrite expenses out of his own wallet as a solution to his business not living up to Wall Street expectations? Why, then does Mr. Borchers intimate that an athlete underwrite expenses out of his own wallet as a solution to his nonprofit not meeting the 65% disbursement metric?
I implore the Globe to demand more balance and complexity of its staff-writer. Citing a for-profit consultant as an expert on athlete charity best practices, Greg Johnson, who evokes such brilliant emanations as “that kind of crap” and “self serving as hell” when speaking of athlete fundraising events, doesn’t instill much confidence in the data being presented. In the summer of 2011, during a series in New York, 12 players from the Yankees and Athletics shared lunch before their game with 75 donors of the Strike 3 Foundation. In the fall of that year, Sara Tasian, MD was awarded a $50,000 research grant from the charitable arm of the American Society for Cancer Oncology (the Conquer Cancer Foundation) sponsored in full by the Strike 3 Foundation, for predicting biochemical and genetic responses to JAK inhibitor therapy in patients with CRLF2-overexpressing acute lymphoblastic leukemia, a cancer that approximately 20% of children will relapse and die from. If in 2011, I had sought the expertise of Mr. Johnson, perhaps he would have advised our donors to shun that “self serving as hell” luncheon, lest they expose themselves to “that kind of crap,” leaving $0 for Dr. Tasian’s research. Then again, by adding thousands of dollars in athlete charity consulting fees to our form 990, we may have just been digging ourselves a deeper hole.
Publically available charity IRS filings help provide financial transparency to donors and potential donors, allowing them to align their dollars and time to charities of their choice. Being a professional athlete provides me with choices; a choice to align my money, time, name and notoriety to a charity of my own or even in support of other teammates. A child, or the parent of child with cancer, or craniosynostosis, or 22q11.2 deletion, or autism, or cystic fibrosis, or down syndrome, or cerebral palsy, or hemophagocytic lymphohistiocytosis is faced with choices too. Many of those parents are athletes and teammates who have made choices to make a difference, whether publically or privately, and the transparency of their intentions won’t be found on a tax form, or a bar chart, or calculated by some ratio, or on the black and white pages of a newspaper. Rather, you can be sure they mean to do good by the looks in their eyes and the pain in their hearts. Maybe it’s time we applaud that.
By Craig Breslow
The Strike 3 Foundation heightens awareness, mobilizes support, and raises funding for childhood cancer research.
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Strike 3 Foundation
PO Box 191
Monroe, CT 06468