OT: Chris Zorich "Misplaces" $864,000 of Charitable Contributions
ND never promised its graduates could count.
http://www.chicagotribune.com/news/ct-met-zorich-charity-20100708,0,454…
This could just mean that he (or an employee of the foundation) disbursed all of the funds without keeping track of where the money went. However, if the majority of that $864,000 went to "administrative" costs, or worse, if the charity were raided by Zorich or an employee of the charity, then there could be some criminal charges pending. I have always wondered why athletes and other wealthy individuals are so quick to set up these foundations. I realize that this gives them more control over where the $ is going, but in all likelihood there is already any number of organizations already operating (and most likely being run by people who are more capable of running such organizations) who are doing precisely the type of work that the foundation will be doing. My guess is that it is an egotistical thing. Couldn't he give the Door of Hope Rescue Mission a donation to hand out Thanksgiving turkeys? Couldn't he give ND or any number of High Schools endowments to provide for scholarships? When an athlete or another individual sets up a foundation, particularly one endowed with a lot of cash, they create another administrative entity that sucks away more and more of the money. I remember reading about a Jonny Unitas' charitable foundation and that it was taking in like $120,000 a year, versus $80,000 or so in administrative expenses. Not so efficient.
" I have always wondered why athletes and other wealthy individuals are so quick to set up these foundations. . . . When an athlete or another individual sets up a foundation, particularly one endowed with a lot of cash, they create another administrative entity that sucks away more and more of the money. I remember reading about a Jonny Unitas' charitable foundation and that it was taking in like $120,000 a year, versus $80,000 or so in administrative expenses."
I don't know about Unitas specifically, but a lot of these guys (not just athletes but rich people generally), hire family members to run the foundations. That way they get a tax deduction for giving $$ to family.
Taxes man...taxes.
These foundations / charitable organizations are setup as 501(c)(3) non-profits that aren't subject to tax. It's a huge tax shelter for them. They donate a bunch of their money to the foundation, take the deduction for that contribution to a legit charity, and pay people to run it. Everybody wins.....most of the time.
True. I know a woman who runs her family's foundation. She is quite flighty and would not really be able to do much else in an ordinary capacity. I think it is laughable (and sad) that an individual can be paid a not insignificant amount of money to run a small foundation, particularly since I have seen some charitable foundations attached to larger entities that are essentially run as an afterthought by their accounting departments. The annual transactional volume is usually quite miniscule, and could be taken care of in one afternoon by your average accountant. Of course, this would not be true of larger foundations, such as the Ford foundation, or the Gates foundation.
EDIT: This should have been posted as a response to rdlwolverine