Nobody made a greater mistake than he who did nothing because he could do only a little.
– Edmund Burke
It’s not a sight you see every day.
Imagine a 300-pound NFL lineman, sitting next to you in the passenger seat of your car, tears rolling down his face. Why? Because as he watches his former high school football team practice, he suddenly realizes he’s found a way to make an impact. This lineman, fortunate to perform at the top of his profession in the nation’s most popular sport, is witnessing right before his eyes the physical embodiment of his charitable giving. By sharing his blessings with others, he has made a difference in their lives, and it touches his heart. He is changing lives.
Scenes like this one can – and do – play out all across the country. But even more is needed.
This particular NFL player provided the funds for his alma mater and other schools within his hometown community to purchase new equipment, by collecting tax-deductible contributions to his nonprofit corporation, under the umbrella of a structure called fiscal sponsorship. These donations were raised and distributed safely, securely and without worries. That’s the beauty and ease of the fiscal sponsorship model, which is among the most simple and responsible ways to fulfill one of life’s deepest desires, whether for a professional athlete, a celebrity, or any of us – the desire to give.
To give is to make the world a better place. We know this to be an essential truth, but sometimes we don’t know the correct approach or the best practices of charitable giving. If handled incorrectly or unethically, as the saying goes – the bigger you are, the harder you fall. The drive among athletes, celebrities and other high-profile individuals to enter the world of philanthropy is an understandable means to take their good fortune, and lift up those less fortunate. These individuals want to help heal those who are sick, give students a healthy meal, a good book, a path to achieve at school, or provide athletes a better shot at success on the playing field.
For the man or woman in the spotlight, those who perform as the best in the world of sports or entertainment, being on this national or even international stage, gives them presence and power, but this bright light can also shine in the wrong direction. All of a sudden it’s the athlete or celebrity in trouble when the charitable efforts are mishandled, critical legal steps are missed, or even ignored in the process of giving. Suddenly there’s nowhere to run to, nowhere to hide. The media loves to see a hero go down, and the IRS is charged with enforcing compliance – they couldn’t care less about fame or “good intentions” toward supporting a good cause. Break the rules and suffer the penalty, pure and simple.
Fear impedes many players from giving back – the media scrutiny, the risk of damaging their reputation and brand, the thought of a legacy being tarnished by even a one-time compliance violation.
It doesn’t have to be this way, and the solution is simple. Giving is easy, if you have a helping hand. Every dream needs a team.
One of the best methods to enter the world of philanthropy is through the fiscal sponsorship process. One of the best in the business is the Players Philanthropy Fund, PPF for short. The organization was started back in 2011, by two-time Super Bowl Champion, Baltimore Ravens Kicker, Matt Stover, Emil Kallina of Kallina & Associates and Seth McDonnell of Waverly Management.
Stover knows all about the challenges of philanthropy in the world of a pro-athlete. “The story begins with God leading me to a lot of good people,” says Stover. “They counseled me through a situation financially where my wife and I sold a company back in 2006 for substantial profit and we were able to gift that part of the company to a donor advised fund.”
The process worked, but it came with some challenges including what Stover saw as a lack of flexibility in gifting these funds to whomever and wherever he wanted.
That’s when Stover met McDonnell, literally in the carpool line of a Baltimore County School their children attended. Through his own business, McDonnell provides administrative and office management services to private foundations. He, along with estate planning expert Kallina, suggested Stover build something to protect and create flexibility with his own philanthropy efforts, as well as give other high-profile athletes, entertainers and other individuals an opportunity to do the same.
Make it safe. Make it secure. Take the worry out of being a philanthropist.
“Players do what they do on the field, and that’s play,” says McDonnell. “But brand is so important. A life of tremendous financial success is new to many of these professional athletes. They didn’t live in that world, or come from that place. Many came from nothing. Some have grand plans to give, but we need to slow them down and protect their brand, so their giving does exactly what it is intended to do.”
That’s how PPF was born, (https://www.ppf.org/). And the model quickly shifted from donor advised funds to fiscal sponsorship. The words are big, but the concept is simple – give an athlete or entertainer the ability to create a nonprofit under the umbrella and guidance of a “parent” tax-exempt 501(c)(3) organization like PPF, then give them the flexibility to go out and raise funds with the peace of mind knowing that is all he or she has to do. PPF does the rest. The high-profile individual gets to have fun being a philanthropist and give back to the community, leaving PPF to sweat the small stuff. And that’s so important, because when it comes to nonprofits, it’s the small stuff that trips you up.
“I wanted to do this because as an athlete I understood the complexity of the situation out there,” says Stover. “Through PPF the player can set up their own foundation, then we handle the legal, financial and compliance issues behind their charitable giving and fundraising. The athlete does not have the time, experience, or ability to hire a staff to do this. Most importantly, we have created the vehicle that keeps the player’s brand from being tainted.”
Whitney Mercilus, a fierce and competitive outside linebacker for the Houston Texans, is one of many successful PPF clients. When looking to start a foundation, Mercilus took his time. He spent five years looking for the right cause before deciding to launch WithMerci Foundation. WithMerci was born out of this tough linebacker’s compassion for so many families dealing with the enormous costs and challenges of raising children with special needs. The organization provides advocacy services and support to these families. With PPF working invisibly in the background, a recent fundraiser called “Dine WithMerci” raised about $50,000 in donations, (https://www.withmerci.org/).
Living is giving.
Andrew Morton is familiar with athletes and giving. As a partner at Handler Thayer, Morton is chair of the firm’s sports and entertainment philanthropy group. He serves a large client base of high-profile public figures who wish to maximize their social impact. He also serves as counsel for PPF. Morton says if fiscal sponsorship is the right fit, he goes out of his way to make the concept easy to understand. “Why wouldn’t a player want to take advantage of fiscal sponsorship?” says Morton. “Just because you can throw a football doesn’t mean you are a philanthropist. Just because you want to give doesn’t make you a nonprofit management executive. From a legal standpoint, the legalities and compliance responsibilities of a nonprofit don’t differ much from other corporations like Microsoft or Apple.”
Morton says he can’t overemphasize this point. “Most people don’t realize that a nonprofit is a business,” he says. “There are substantial compliance and oversight responsibilities. If you don’t address them, or slip-up, even the best of intentions can backfire. And unfortunately the stories that make the news on celebrity philanthropy are not about the good that’s being done, but instead tend to focus on ‘celebrity philanthropy gone wild’ – the mistakes that are made, and the brands being destroyed.”
“People, especially athletes, do want to give back. But they’ve seen so many negative stories, and often they’ve been burned before. So they are hesitant. But fiscal sponsorship solves those problems. It takes care of everything.”
Ryan Diem played nearly a dozen years in the NFL as a lineman for the Indianapolis Colts and like many NFL players wanted to give back. Since 2005, Ryan has been the celebrity host of the Allie & Friends Golf Classic, (https://www.allieandfriends.org/). Allie Neff was only a few days shy of her 4th birthday when she lost her battle with Stage IV neuroblastoma, a pediatric cancer. The golf events have raised more than a million dollars in the fight against the deadly disease. Recently Diem and the Allie & Friends organization have worked under PPF’s fiscal sponsorship model. Under this “umbrella” where PPF serves as the 501(c)(3) nonprofit, Diem has been able to efficiently and responsibly host the events, with PPF working in the background to handle best practices for the organization and oversee and manage all compliance. Raising funds by hosting an event is perfectly acceptable under fiscal sponsorship. The most recent Allie & Friends golf classic raised over $75,000 for the nonprofit in its fight to beat pediatric cancer. The fiscal sponsorship becomes a win-win for everyone.
The process of making this happen is streamlined and efficient – the athlete or entertainer incorporates a nonprofit in whatever business name they chose, and then contracts with the fiscal sponsor, like PPF. The fiscal sponsor then files a trade name, (commonly called a “doing business as” or “d/b/a” registration), in the name of the player or celebrity’s corporation and goes about the job of administering best practices. In this way, the founder’s corporation can operate as a nonprofit as well, under the fiscal sponsor’s umbrella. All financial management, periodic reporting, administrative responsibilities and tax filings are handled by PPF, allowing its high-profile clients to do what they do best – solicit donations through events, auctions and experiences to raise funds. Most importantly, this gives the athlete or celebrity peace-of-mind that they are achieving their philanthropy mission while their brand and personal assets are protected.
The world of nonprofit giving can be daunting and confusing, but fiscal sponsorship brings it all into clear focus. Morton says, “the more people understand it, the more they love it and want to do it. It is so quick and easy for the athlete. It’s the right answer for anyone who doesn’t have the experience, or the dollars to deal with creating and managing a tax-exempt organization, which is a significant undertaking. Fiscal sponsorship provides the solution. It offers everyone and anyone, with any name anywhere, the ability to be a philanthropist and have impact, without worry about compliance and administrative expenses.”
Impact is key. Morton says while it’s great to be a highly-paid athlete or celebrity who can motivate millions of dollars in contributions toward a national nonprofit, it’s difficult to see where the specific dollars go, or what the money truly does. “Though it might seem odd,” says Morton, “in a way it’s easier to perceive the personal impact through raising $10,000 for a local community library, school or playground than ten million dollars raised in support of long-term medical research. To me, anybody can make a difference. For that one guy today it’s all about impact. I always encourage clients to figure out a way to do it that we can see. And you can do it safely through fiscal sponsorship.”
Something is always better than nothing. Brandon Warehime, Administrator and Marketing Coordinator for PPF says, “I don’t think the nonprofit and contribution part of sports is covered enough and how much power the athletes have.” Warehime says if more athletes and entertainers knew about the fiscal sponsorship model and an organization like PPF, which can protect their brand, than more of these individuals who wield so much power and influence would take part.
Eleanor Shriver Magee, Executive Director, echoes those same sentiments about protecting the clients and their brand under the fiscal sponsorship model. “Our model is a good choice,” says Magee. “We provide a cost-effective alternative with the look and feel of a standalone nonprofit business, without having the athlete or celebrity worrying about running that business. We do that for them. They get to go out and be philanthropists and get hands on with the people they serve. They get to create a brand and we work in the background.”
Fiscal sponsorship and PPF were a perfect fit for Marlin Jackson. For over ten years, Jackson was an NFL defensive back for the Colts and Eagles. When he retired in 2011, he relied on the PPF model to create the Fight for Life Foundation, which has assisted more than 3,000 deserving, but underserved youth develop the social and emotional qualities needed to be successful in life, (http://fightforlifefoundation.org/).
You never know the life you change, who might one day change others. That’s why the tiniest gift counts, the smallest amount of monies raised to help another in need might just be the ticket to turn a life around, to give someone a reason to believe, to allow someone to live out their dream. So many of those who step into the arena of professional sports, or who entertain the masses, are already living their dreams and they want to share.
Professional athletes and celebrities most always have a cause and are looking for a way to give back, to engage philanthropy in a manner that makes sense. Making sense of it all is a major reason to consider fiscal sponsorship and an organization, like PPF, to make sure it’s done right and with great care. For just like the words of Mother Teresa, it’s important to remember, “It’s not how much we give, but how much love we put into giving.”
Life’s about love. Living is giving. Find a way.
By, Mark Brodinsky
To learn more about The Players Philanthropy Fund and how to create a charitable foundation visit, (https://www.ppf.org/).
PPF on Twitter: (https://twitter.com/PlayersPhilFund)
PPF on Facebook: (https://www.facebook.com/PlayersPhilFund)
PPF on YouTube: (https://www.youtube.com/channel/UCO3zHONm3H2o4ZW2BuTdCRw)
“Working with PPF allows us (Allie and Friends Foundation) to focus on our goals, not worry about accounting, tax filing or compliance. As an added bonus, Matt Stover has the experience on the sports side of things to understand the demands, goals and time restraints that other current and former professional athletes have.” – Ryan Diem
“Our partnership with PPF has helped the Ed Reed “Eye of the Hurricane” Foundation in various ways. PPF’s behind-the-scenes support allows us to easily help the schools we’ve adopted, provides us fast effective resources and helps us to grow our initiatives as a foundation. Our partnership over the years has been invaluable.” – Ed Reed