News Article: Pro sports charities hoarding cash, overspending on fundraising, watchdog says

[jbeck5]

In those secular/religious debates I always hear how every charity has to show their books except religions which for some reason have a free pass.

Do sport charities not have to show all their numbers?

Like where are all the dollars going to, if not for the cause?

 

[Qward]

Wheres that photo of the owner with 50/50 tickets at a game a few years back...

"Congratulations to Eugene Melnyk and his continued winning streak in our 50/50 raffles. An unprecedented 20 straight wins!!"

 

[PeterSidorkiewicz]

In those secular/religious debates I always hear how every charity has to show their books except religions which for some reason have a free pass.

Do sport charities not have to show all their numbers?

Like where are all the dollars going to, if not for the cause?

I am not caught up when it comes to Canadian non-profits, but in the USA you have to show your books, which is usually your 990. This is a good website for public access information.

GuideStar nonprofit reports and Forms 990 for donors, grantmakers, and businesses

 

[Pangu]

One of the potentially problematic aspects of these charities is that they are used to advertise businesses. I mean, when they have an ad for their charity, its also acting as a charity for the NHL team. Its in the team's interest for the charities associated with them to "fundraise" as much as possible. It would be interesting to know if that is what is happening here or if it is something else.

 

[Sens of Anarchy]

 

[Pangu]

It seems about a third of their revenue goes to fundraising - which appears to be higher than most charities' total overhead. I would be interested in knowing if fundraising is clearly a distinct act from advertising the Sens brand or whether fund-raising serves to advertise the Sens brand. I am also curious whether it is legal for a company to use an attached charity to advertise their brand - it seems to me that the Sens should pay for advertising for the Sens foundation when it also advertises the brand of their for-profit enterprise.

 

[Micklebot]

Président of thé foundation was on the radio, apparentoy part of the problem is that 50/50 payout is considered expenses, while the entirety of ticket sales is revenue, and most of their revenue comes from gaming and gala sales. Basically those numbers paint a very incomplete picture, at least according to her.

 

[JungleBeat]

Pretty disgraceful.

 

[Sens of Anarchy]

Président of thé foundation was on the radio, apparentoy part of the problem is that 50/50 payout is considered expenses, while the entirety of ticket sales is revenue, and most of their revenue comes from gaming and gala sales. Basically those numbers paint a very incomplete picture, at least according to her.

I think she was very open and welcome to questions and transparency. .Brady Tkachuk only got 8 goals last year. A number on a page doesn't paint a complete picture. Its not all Melnykism.

 

[Pangu]

Président of thé foundation was on the radio, apparentoy part of the problem is that 50/50 payout is considered expenses, while the entirety of ticket sales is revenue, and most of their revenue comes from gaming and gala sales. Basically those numbers paint a very incomplete picture, at least according to her.

That doesn't sound right. If you look at how the numbers are presented, they only put the net income of the 50/50 draw in the income part and describe this in the the below note: Ottawa Senators Foundation

"Note: Ci backed out the 50/50 lotteries from fundraising revenues and expenses and presented them as net, decreasing total revenues and expenses by ($1.8m) in F2017, ($95k) in F2016 and ($109k) in F2015."

So I don't think that the 50/50 draw is why they have so much advertising and so much overall overhead. Sounds like she was being misleading if that was her explanation.

 

[Pangu]

One of their current enterprises is asking people to donate tickets to veterans. That's a fine thing for individuals to do, but the Sens are basically just making money. Super questionable for the Sens foundation to be trying to sell tickets for the Sens.

 

[L'Aveuglette]

I think she was very open and welcome to questions and transparency. .Brady Tkachuk only got 8 goals last year. A number on a page doesn't paint a complete picture. Its not all Melnykism.

This is a terrible comparison.

 

[Sens of Anarchy]

This is a terrible comparison.

17

 

[Gil Gunderson]

Shocking.

 

[AchtzehnBaby]

okay... so here's the retort

https://www.tsn.ca/radio/ottawa-1200/sens-foundation-president-danielle-robinson-1.1201724

 

[Nac Mac Feegle]

Charities have been big business for awhile. Great way to have a well-paying job for life. Hell, just look at the Red Cross and the shit they get away with.

Always best to deal with people in need as directly as possible. Cut out the charity middleman when you can.

 

[Sensung]

I thought that the president of the foundation presented quite well yesterday and did a fine job of spinning the info to look less damaging.

Of course, Simmer and Ian were complicit and didn't ask the tough question; specifically, why we are so far behind the numbers posted in Tor (or the other NHL markets, excepting Calgary)

 

[Pangu]

Charities have been big business for awhile. Great way to have a well-paying job for life. Hell, just look at the Red Cross and the **** they get away with.

Always best to deal with people in need as directly as possible. Cut out the charity middleman when you can.

I think this sort of charitable organization (where the charity is tied to a for-profit company) has very specific problems that say United Way (another middleman that only spends 20% on overhead) doesn't have. The issue with these tied companies-charities is that it is unclear how much of their work is really for the parent company and how much is for the charitable cause. If United Way advertises for themselves, only their charitable partners benefit. If the Sens foundation advertises for themselves, it is obviously also advertising for the Sens for-profit organization, since the brands are not separated in the minds of most people.

 

[Pangu]

Président of thé foundation was on the radio, apparentoy part of the problem is that 50/50 payout is considered expenses, while the entirety of ticket sales is revenue, and most of their revenue comes from gaming and gala sales. Basically those numbers paint a very incomplete picture, at least according to her.

Having just heard the interview - her answer on the 50/50 was a bit vague. It sounds like they put on their tax, etc forms that the 2 million raised is income and the 1 millon given away to the 50/50 winners is an expense.

HOWEVER, this specific report only included the net 1 million as income. If this report had treated the 50/50 stuff as was suggested by the President of the Sens foundation, then they spent 46% of their revenue on fundraising and only 39% on charity work.

So - that was actually really deceptive.

 

[Beville]

Days since Sens incident... Nil

 

[OgieO]

Charities that receive donations as their primary source of fundraising have little expenses and therefore have a higher ratio. Charities that undertake fundraising activity with expenses will show a far low ratio. It does not make one ethical and the other unethical. Look at the admin costs as a % of revenue. That's your best indicator.

 

[Icelevel]

Booooo. More incompetence

 

[Sensung]

Charities that receive donations as their primary source of fundraising have little expenses and therefore have a higher ratio. Charities that undertake fundraising activity with expenses will show a far low ratio. It does not make one ethical and the other unethical. Look at the admin costs as a % of revenue. That's your best indicator.

So why under the exact same tax rules as Toronto are the Sens so far behind?

Do they not use 50/50 as a major fundraising initiative?

Why didn't Ian or Simmer ask this tough, but fair question?

 

[NorthCoast]

Charities that receive donations as their primary source of fundraising have little expenses and therefore have a higher ratio. Charities that undertake fundraising activity with expenses will show a far low ratio. It does not make one ethical and the other unethical. Look at the admin costs as a % of revenue. That's your best indicator.

Still not great. As you say, donations should not require half of the revenue to collect and I don't see why 50/50 would take a lot of costs, and those two actives make up 75% of the revenues.

So unless the special events almost make no money at all, I don't see how it gets to 50%.

Plus, these are not small charities. I can understand where someone might make the argument that a very large charity can find administrative and costs efficiencies that a very small charity cannot, thereby decreasing expenses. Sens foundation is pretty much half the size of MLSE Foundation in both staff and money given, yet we have a much higher cost profile.

Seems like a lot of the revenue goes to grants. Wish the sens statement broke this out into cash vs. in-kind gifts like MLSE does. Because if it's 2 mil in cash they gave away to local charities that's great. If it's 20,000 signed Mark Borowiecki bobble heads valued at $100 a piece, then did the team really give away 2 mil?

 

[Canadian Game]

Something may also surprise people is that foundations (such as hospitals) usually have high admin costs to pay for huge fancy marketing campaigns and events. In many cases, only a fraction of that money to foundations goes to the actual cause, because they have looser regulations from CRA. Meanwhile charities like United Way (not a foundation) put a lot of effort into local programs getting 80-85% of your donation. That means the remainder covers admin (salaries, marketing, research, etc.).