In his weekly “Stories I’d like to see” columnist, journalist and entrepreneur Steven Brill spotlights topics that, in his opinion, have received insufficient media attention. This article was originally published on Reuters.com.
1. Looking at athletes’ charities:
I was at a dinner last week in which the featured speaker was New York Yankees shortstop Derek Jeter. Jeter spent much of the time talking about Turn 2, the foundation he and his family established soon after he joined the Yankees. It sponsors programs intended, as its mission statement explains, to get kids in impoverished communities “to turn away from drugs and alcohol and ‘Turn2’ healthy lifestyles.” There was also a video about the charity’s work and the hands-on involvement of Jeter, his parents and his sister.
It was impressive, and the foundation’s latest publicly available tax return (for 2010) supports that first impression. A relatively modest charity with about $3.4 million in assets, Turn 2 used those assets to spend about $200,000 more than the $2.3 million it received from investment income and contributions. The biggest contribution was almost $600,000 from Jeter; the rest came from donors such as Gatorade, Nike, and the Yankees. The money went to support a wide variety of after-school and summer sports clinics and other youth programs in New York, Tampa (where Jeter has a home and the Yankees train), and Kalamazoo, MI (where Jeter’s family lives).
Jeter, his sister and their parents draw no salaries, and the highest salary, $101,000, goes to a non-relative listed as the foundation’s full-time president.
On the other hand, there’s his teammate Alex Rodriguez’s AROD Family Foundation. It has a flashy website but has not filed a tax return since 2006. That tax return listed just $400,000 in income, $368,000 of which was from one fundraising event. Only $35,000 came from contributors, who were not listed.
A-Rod’s foundation paid out a mere $5,090 in grants and contributions — $5,000 to a Miami scholarship fund and $90 to a Miami little league.
About $103,000 was recorded for expenses other than those grants, meaning the foundation had a $295,000 profit, or about 75 percent on its $400,000 in income.
I have no way of knowing what has happened to the nearly moribund AROD foundation since 2006, and the website — which features A-Rod’s now-ex-wife (who signed the tax return) as his partner in the charity — appears not to have been updated since 2007. It would be interesting to find out.
Even more interesting would be a report on the most prominent athletes’ charities. Which ones do the most? Which do the least and are mostly for show? Do any of these IRS-sanctioned tax-exempt organizations pay friends or family members inappropriately high salaries? (There were no members of A-Rod’s family drawing a salary from his foundation.) And which not-so-prominent athletes devote substantial portions of their money and time to good works?
2. Ambulance chasing in Bangladesh?
Jim Yardley’s comprehensive report in The New York Times last Friday about the supply chain that links garments sold by major Western retailers to the sweatshop in Bangladesh where 112 workers were killed in a fire last month could provide a road map for plaintiffs lawyers — even the all-star American variety — to bring all kinds of suits, some of which may even be legitimate.
Major corporate brands like the ones Yardley cites, such as Wal-Mart and Sears, mean potential defendants with a lot deeper pockets than Bangladesh-based Tazreen Fashions Ltd. That’s the company that is reported to have operated the factory where Yardley described multiple violations of fire safety standards. Of course, there is the question of how to link a Wal-Mart or a Sears to any of the factory owners’ apparent negligence, much less blame them for it.
However, companies like Wal-Mart have been increasingly pressured into monitoring - and reporting publicly — conditions where their products are made, no matter where they are located or even if, as seems to have happened here, the manufacturers they sign up then assign the work to subcontractors.