Prolanthropy LLC took in nearly $100,000 in 2018 when Buffalo Bills fans contributed $442,000 in unsolicited donations to the Andy and Jordan Dalton Foundation, a nonprofit created to help sick and disabled children and their families, The Buffalo News reported on Sunday after a monthslong investigation into how the donations were spent.
Readers asked questions after learning about Prolanthropy’s business model.
The management company charged the Dalton Foundation 22.5% of all revenue received by the nonprofit for its various services, regardless of how the funds were raised, according to its contract. The fees, while legal, were “wildly out of line” with industry norms, according to nonprofit oversight attorney Andrew Morton and other industry experts. And those fees were not the extent of the Dalton Foundation’s operating expenses.
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In 2018, the Dalton Foundation spent 63 cents of every dollar on charitable giving and events, an amount determined by dividing its program expenses by its total expenses, which are reported on its annual tax return. In 2019, it was 56 cents.
Charity Navigator, a nonprofit watchdog group, expects efficient nonprofits to direct at least 70 cents of every dollar toward charity. CharityWatch, another watchdog group, considers a nonprofit highly efficient when it spends at least 75 cents of every dollar on charity. Its rating system gives nonprofits that spent less than 50 cents per dollar on charity a grade of D or F.
What other athletes’ nonprofits are managed by Prolanthropy?
Prolanthropy, which bills itself as the “largest and most successful provider of full-service philanthropy management in professional sports,” has helped create and operate dozens of nonprofit organizations for professional athletes since 2008. But it doesn’t reveal how many nonprofits it manages or how much money it raises.
The clients listed on the company’s website include a dozen active players in the NFL, NBA and Major League Baseball, as well as a college basketball coach.
The News determined how much of each dollar spent went to charitable giving and events based on what was reported on the federal tax forms. The calculations are based on the last three years of publicly available federal tax returns (2017-19) unless noted.
NFL
• Von Miller, Los Angeles Rams, Von’s Vision Inc. (59 cents)
Mission: Provide low-income students with eye care and glasses.
• Kareem Jackson, Denver Broncos, Kareem Jackson Foundation (26 cents)
Mission: Provide seriously ill children and their families with daily encouragement and life-changing experiences; honor and support breast cancer patients and survivors.
• David Johnson, Houston Texans, David Johnson’s Mission 31 Foundation Inc. (30 cents)
Mission: Provide seriously ill children and their families with daily support and life-changing experiences.
Note: The program expense ratio is based on the last two years. The nonprofit’s 2018 tax return cites $175,000 in revenue and $141,000 in expenses in 2017, but it did not receive 501(c)(3) status until Dec. 20, 2017, and there is no 2017 tax return available on the IRS website.
• Kyle Van Noy, New England Patriots, Van Noy Valor Foundation Inc. (63 cents)
Mission: Provide resources and encouragement for adopted, foster and disadvantaged children.
Note: Program expense ratio based on tax return from 2019, the year it was founded.
• Darren Waller, Las Vegas Raiders, The Darren Waller Foundation Inc. (Unknown)
Mission: Help youngsters avoid and overcome addiction to drugs and alcohol and support them and their families during recovery and treatment.
Note: Received 501(c)(3) nonprofit status on Feb. 11, 2020.
• Melvin Ingram, Kansas City Chiefs, Melvin Ingram’s Mission Possible Foundation Inc. (46 cents)
Mission: Provide inner-city and low-income children with educational opportunities and resources.
Note: Program expense ratio is based on 2015 and 2016 returns. The nonprofit filed an abridged Form 990-N each year since 2017, which certifies that its gross receipts did not exceed $50,000. In such instances, no further information is required by the IRS.
• Jameis Winston, New Orleans Saints, Jameis Winston’s Dream Forever Foundation Inc. (39 cents)
Mission: Improve the quality of life for financially disadvantaged children.
• Allen Robinson, Chicago Bears, Allen Robinson’s Within Reach Foundation Inc. (30 cents)
Mission: Provide educational opportunities and resources to low-income and inner-city students.
NBA
• Anthony Davis, Los Angeles Lakers, Anthony Davis Foundation Inc. (97 cents)
Mission: Provide opportunities for children, rewarding kids to stay active and excel in school.
Note: Based on the nonprofit’s 2019 tax return, which cites $200,000 in grants and $150,000 in travel expenses, all of which is attributed to charitable giving and events. It reported only $17,000 in management fees. The nonprofit filed an abridged Form 990-N in 2017 and 2018, which certifies that its gross receipts did not exceed $50,000. Davis, an eight-time NBA All-Star and 2020 NBA champion, does not have a website for his nonprofit. But he is prominently featured on Prolanthropy’s homepage.
• Clint Capela, Atlanta Hawks, Clint Capela’s CC15 Foundation Inc. (26 cents)
Mission: Provide children in foster care and children of low-income single parents with the same opportunities and resources that are available to dual-parent, middle- and upper-class families.
Note: Based on the nonprofit’s 2019 tax return. It has otherwise filed abridged Form 990s.
• Reggie Jackson, Los Angeles Clippers, Reggie Jackson’s Determined To Assist Foundation Inc. (43 cents)
Mission: Provide educational opportunities and resources to low-income children.
Major League Baseball
• Kenley Jansen, Los Angeles Dodgers, The Kenley Jansen Foundation Inc. (32 cents)
Mission: Provide seriously ill children and their families with daily support through resources and experiences.
Note: Based on the nonprofit’s 2019 tax return. It has otherwise filed abridged Form 990s.
College basketball
• Chris Mack, University of Louisville men’s basketball coach, Mack Family Foundation (53 cents)
Mission: Serve, inspire and help less fortunate children in metro Louisville.
The News reviewed state and federal public records, consulted charity watchdog groups and other industry professionals and interviewed the Dalton Foundation’s board members, tax attorney and beneficiaries. The scrutiny revealed that Prolanthropy not only profited from Bills fans’ unsolicited donations, but the nonprofits it manages submit tax records that obscure how the money was used.
How have the Daltons responded?
Jordan Dalton said the Dalton Foundation has ended its relationship with Prolanthropy and the nonprofit will donate all money directly to hospitals “so 100% of proceeds go to families in need.” This pertains to future donations.
Some on social media have the misconception the Daltons are using their own money to reimburse the funds that went to Prolanthropy to make the donations from Bills fans “whole.” This is not the case.
Jordan Dalton estimated she and her husband donated $300,000 to the nonprofit since it was founded in 2011. Like all donations, Prolanthropy was entitled to 22.5%.
There was $83,000 remaining in the Dalton Foundation’s account at the end of 2019, according to public records.
Do the management companies of foundations list administrative and marketing expenses on their websites? Are they required by law to do so?
This information is not required to be posted on management companies’ websites, however, all but the smallest nonprofits must disclose this information on annual tax returns known as Form 990s.
Nonprofits tend to make these available through a link on their websites, but it’s relatively easy to obtain a copy elsewhere, including on the IRS website and from charity watchdog groups, many of which offer their own analysis and ratings.
Useful websites for vetting nonprofits:
• IRS.gov
• Give.org
Is it better to donate to a local nonprofit organization?
A nonprofit’s location has nothing to do with its efficiency.
Prolanthropy has managed nonprofits for current and former Bills players.
The Emmanuel Sanders Foundation directed an average of 41 cents of every dollar spent toward charitable programs, according to its three most recent federal tax filings. Sanders, who signed with the Bills in March, said he no longer worked with Prolanthropy, but his nonprofit is run by a former Prolanthropy employee. They declined to discuss their business relationship.
The Eric Wood Foundation, created by retired Bills center Eric Wood, directed 33 cents of every dollar spent toward charitable programs in 2016, the last year under Prolanthropy's management, according to public records. In 2017, Wood dissolved his nonprofit and created a fund to directly benefit John R. Oishei Children’s Hospital in Buffalo. The Children's Hospital of Buffalo Foundation, the medical facility’s philanthropic arm, spends 97 cents of every dollar on charitable programs.
“As an athlete, you don’t have time to look into all of the ins and outs and you put trust in people that nationally have a strong reputation,” Wood said.
Does the size of a nonprofit organization matter?
While larger nonprofits sometimes pay executives relative to the size of the organization, they also tend to benefit from economies of scale that make the organization far more efficient than smaller nonprofits.
The tiniest charities – those that report less than $50,000 in annual revenue – file the most basic tax form, which requires no additional financial disclosures. They essentially just have to certify that they exist, which makes them nearly impossible to scrutinize through public records.
