Pro sports charities hoarding cash, overspending on fundraising, (Flames worst)

[Locke]

Originally Posted by Thunderball

There's always the potential that the foundation is building up an invested base to be able to provide charitable proceeds in perpetuity from the proceeds of its investments and not rely on active donations. I believe CRA only requires charities to spend about 3.5% each year, so not immediately using donated funds doesn't necessarily mean anything negative.

Financial summaries and much of the tax return filings are freely available on CRA's charity website, and if their expenditures were considered out of line, charities get audited quite a bit. This would be doubly so if those funds found their way back to the Flames.

I'd be more concerned that the foundation is doing this because they think the Flames might not be around for a lot longer and are building up a warchest to be able to maintain their charitable pursuits without as many 50/50s and other Flames events to support them. Right now, they'll need to save a lot more than what they have to have anywhere near the same revenue, as charities are a bit restricted in what they can invest in (lower risk).

Either way, its a "get out the pitchforks" argument with half the facts.

I think thats generally understood? That was my first guess when presented with a reserve that large.

But considering the optics of CalgaryNEXT combined with the arena fiasco the factr that the Flames could use some positive press and then this report comes out and unfairly skewers them....they're just setting themselves up.

This report was basically designed to vilify pro sports in Canada and the Flames just happened to be caught in the unenviable position that they are currently in.

The fact of the matter remains that the Flames Foundation's position is not bad, its just unusual and victim to timing differences.

Honestly, with information this flawed and biased I would be hesitant to draw any conclusions from it.

Theres too many question-marks and everyone wants to use them to pile on.

At the moment the Flames Foundation is being vilified by poor accounting standards, some sub-par journalism and arbitrary goalposts as well as just being associated with 'The Flames' their owners and King who have not done wonders for themselves in the arena of Public Opinion.

There is no proven malice here. There are irregularities but the fact of the matter remains that the Flames Foundation doesnt generate this much revenue annually so its clearly been going on for a while. Why is it a travesty today?

And once again, they just donated $1M to the Calgary Children's Hospital which is not included in this study.

[GioforPM]

Originally Posted by The Yen Man

Agree with this statement. You can argue their inefficiency in raising funds, but at the end of the day, I think it's a bit naive to think the majority of the people who donated to the Flames charity would do so without some sort of benefit in return. I think someone would be more willing to donate $1,000 for tee time with the Flames than they would donating $300 anonymously.

And as people pointed out, they have the money in reserve. So eventually it has to get used in charitable donations. Why they have the reserve is for sure a legit question, but lets not get all Helen Lovejoy on the Flames Foundation here when all the facts aren't out.

If I play the poker tourney I probably hoping I make money and at the very least I'm in it for the entertainment.

[Passe La Puck]

I know that’s how charities are run, the point stands the flames are not the ones donating anything their costs are covered.

On the 50/50 subject, isn’t it considers a lotto therefore 50% MUST go to charity? Does their own charity count?

[Oling_Roachinen]

Originally Posted by GioforPM

The percentage per event is a bit distressing, but I guess the bottom line on some of those is the raw dollars that go to charities. I suspect a charity who needs $100K is happy even if it took $900K in costs to make that amount of profit.

That's one way to look at it, and a very fair one.

But of that 1M how much do you think those who 'donated' would have donated elsewhere if they didn't exist? If it's more than 100k (or equivalent) to the charities themselves, it's already a loss.

Then how many hours of unpaid volunteered work put in? A foundation like this could get suckers, for lack of better word, who will put in a ton of hours. At one point, the charity getting that 100k, might have been better off if all the volunteers working the event just took up a minimum wage second job for the same amount of time and pooled their money from their second jobs. Heck at $15 an hour it wouldn't even be hard! I kid, but 100K being donated from a million dollar fundraiser with volunteers is pretty pitiful. Especially if you told to some of the more standup players that if they realized that 13% of every dollar is actually going towards the charities, I imagine someone awesome like Giordano might instead just pay that 100K instead of sitting there with people being conned into believing their donations are doing a lot more than they thought.

[Thunderball]

Originally Posted by Locke

I think thats generally understood? That was my first guess when presented with a reserve that large.

I would have thought so too, but it seems people believe that charities are supposed to send out every dollar they receive and not think long term in their goals. The connotation of "hoarding cash" is not a positive one.

[rohara66]

Maybe the Flames are planning on saving up $10m extra and then donating it all in one shot and then boom! Flames win the Pro Sport Charity Stanley Cup!


Terrible article once you dig into the facts.

[EM11]

Originally Posted by Badgers Nose

In my dealings with the Flames administration (not hockey opps), nothing about them is efficient. If a job can be done by one person at a typical downtown corp, Flames will do it with two or three. So this doesn't surprise me, if the charitable organization is run the same way.

They are run like a fat charity, lots of make work manual stuff that would be automated at a typical company.


That's just my opinion from experience.

Yet they also pay relatively poorly.

[rohara66]

Originally Posted by EM11

Yet they also pay relatively poorly.

What large company or corporation doesn't pay quickly?

[SuperMatt18]

Originally Posted by Oling_Roachinen

That's one way to look at it, and a very fair one.

But of that 1M how much do you think those who 'donated' would have donated elsewhere if they didn't exist? If it's more than 100k (or equivalent) to the charities themselves, it's already a loss.

Then how many hours of unpaid volunteered work put in? A foundation like this could get suckers, for lack of better word, who will put in a ton of hours. At one point, the charity getting that 100k, might have been better off if all the volunteers working the event just took up a minimum wage second job for the same amount of time and pooled their money from their second jobs. Heck at $15 an hour it wouldn't even be hard! I kid, but 100K being donated from a million dollar fundraiser with volunteers is pretty pitiful. Especially if you told to some of the more standup players that if they realized that 13% of every dollar is actually going towards the charities, I imagine someone awesome like Giordano might instead just pay that 100K instead of sitting there with people being conned into believing their donations are doing a lot more than they thought.

Yeah I think the one fair takeaway from this whole thing is that the Flame Foundation needs to rethink the emphasis on the poker tournament and the golf tournament. And at the least try to better manage the costs for these things (like you’d think there would be a golf course willing to subsidize the cost of tee times for the day).

The 50/50 work is good. And they do a lot of other great stuff with their partners in terms of community events and bringing Flames players out there to attend and help raise attention for specific causes for their parents but for the reasons stated above the big events just don’t appear to be working.

[EM11]

Originally Posted by rohara66

What large company or corporation doesn't pay quickly?

No, I meant the Flames do not pay very competitively for non-hockey jobs.

[The Yen Man]

Originally Posted by Passe La Puck

I know that’s how charities are run, the point stands the flames are not the ones donating anything their costs are covered.

On the 50/50 subject, isn’t it considers a lotto therefore 50% MUST go to charity? Does their own charity count?

So is your point that you have a problem with the Flames doing that? Last I checked, most corporate charities are ran this way. And lets be perfectly honest, all these charities are just another form of marketing. But along the way, a portion of the money they've raised goes to charities. So why the outrage?

Again, I'd argue they're getting people who would normally not donate to any charity if not for these events. People who buy 50/50 aren't doing it to donate money, they're doing it in hopes of winning something.

[Passe La Puck]

My original point was for the quote saying we shouldn’t complain about the flames donating bro charity I was simply stating they do not donate they simply run a charity like any other charity. In short not buying the 30c on the dollar is okay because they’re giving money away so stop complaining kind of thinking.

[rohara66]

Originally Posted by SuperMatt18

Yeah I think the one fair takeaway from this whole thing is that the Flame Foundation needs to rethink the emphasis on the poker tournament and the golf tournament. And at the least try to better manage the costs for these things (like you’d think there would be a golf course willing to subsidize the cost of tee times for the day).

The 50/50 work is good. And they do a lot of other great stuff with their partners in terms of community events and bringing Flames players out there to attend and help raise attention for specific causes for their parents but for the reasons stated above the big events just don’t appear to be working.

The people that are paying to go to the Flames poker or golf tournaments most likely have little concern that their entry fee is only 30% (or whatever the number is) going to 'charity'. They're paying the entry fee's to rub elbows with Flames players and alumni and to have a good time. There happens to be a slight 'charity' spin off which is great.

Honestly its mind bottling that people think these events don't work. Its like we've run out of things to complain about.

[kman35ca]

Ah, I'm sure this will get addressed by the Flames soon enough. Probably alot more nuance to this situation. I hope anyways.

[Oling_Roachinen]

With some rounding errors, here's how I believe they are getting the per cent of every dollar going to charity, it has nothing to do with the reserve fund so the Flames having a higher reserve fund does not hurt them in this calculation. With some rounding errors:

Flames:
4.1M total revenue
-2.7M from the 50/50
-1.4M other
--0.3M from direct donations
--1.1M from the special events


1M for operating costs


So 1.4M (total, non 50/50) - 1M (operating cost)/ (1.4M) = 30%

MLSE
10.6 total revenue
-1.8 from the 50/50
-8.8M from other
--6.1M from donations and goods
--2.7 from special events

1.7M for operating costs

8.8M (total non 50/50) - 1.7M (operating costs)/ (8.8M) = 81%

Edmonton
7M total revenue
-3.5M from the 50/50
-3.5M from other
--1.7M from donations
--1.7M from special events

1.2M for operating costs

3.5M-1.2M/3.5M=65%

Winnipeg
6.9M total revenue
-1.5M from the 50/50
5.4M from other
--2.4M from donations and others
--3.0M from special events

1.7M for operating costs

5.4M-1.7M/5.4M= 69%

Senators
4.4M total revenue
1.1M from the 50/50
3.3M from others

1.8M for operating costs

3.3-1.8/3.3=46%

Similar calculations for Montreal and the Jays to get the 0.62 and 0.65 numbers. Canucks one was weird but I think it's because of the cash flow being negative.

So why are the Flames so ####ty? How come it costs them 1M to bring in 1.4M when everyone else spends between 1M-1.8M and brings in much more?

[CaptainYooh]

To suggest that Flames' charity is somehow crooked, driven by ulterior motives or evil-spirited is patently asinine. Each member of the ownership group has donated millions of dollars (of their own money and corporately) to various charities. In fact, verified by people like Harley Hotchkiss and Doc Seaman, one of the conditions of belonging to the Flames ownership group was member's personal charitable generosity.

Those suggesting that the Foundation should transfer all of the money donated to charitable causes don't really understand how it works. Example: say, Flames Foundation invites to its golf tournament and people buy the tickets for $500. Net "profit" after all expenses paid, could be $100 x 288 participants. Plus all the prize donations and mulligan sales etc. The efficiency is 20%. But it doesn't mean that 288 people would have donated $500, if this was a straight-up donation request from the Flames Foundation. Companies and individuals pay $500 and more to rub shoulders with the Flames players, coaches and other staff, to have a nice dinner, to meet other business people, to hear fun stories from Peter Maher and Ken King and, generally, to be entertained, while doing something nice. $100 net donation is a product of this entertainment and it's a great way of doing it.

[Oling_Roachinen]

Originally Posted by CaptainYooh

Those suggesting that the Foundation should transfer all of the money donated to charitable causes don't really understand how it works. Example: say, Flames Foundation invites to its golf tournament and people buy the tickets for $500. Net "profit" after all expenses paid, could be $100 x 288 participants. Plus all the prize donations and mulligan sales etc. The efficiency is 20%. But it doesn't mean that 288 people would have donated $500, if this was a straight-up donation request from the Flames Foundation. Companies and individuals pay $500 and more to rub shoulders with the Flames players, coaches and other staff, to have a nice dinner, to meet other business people, to hear fun stories from Peter Maher and Ken King and, generally, to be entertained, while doing something nice. $100 net donation is a product of this entertainment and it's a great way of doing it.

You're using 500 for a ticket and 100 "net donation."

But the closer reality is 500 for a ticket and 65 net donation. And yet, all other teams are doing similar and bringing in at least double the amount of their operating costs (except the Senators). Why is that?

[CaptainYooh]

Originally Posted by Oling_Roachinen

You're using 500 for a ticket and 100 "net donation."

But the closer reality is 500 for a ticket and 65 net donation.

And yet, all other teams are doing similar and bringing in at least double the amount (except the Senators). Why is that?

I don't know. I assume they will provide some response to the above. I am sure, they can improve the efficiencies and, if the report is based on the accurate data, the owners themselves will be very disappointed and some heads at the Foundation will roll, no doubt. I was primarily disgusted by the posts that immediately imply fraud and render everyone guilty of treason...

P.S. I can speak from personal experience being a committee member for two fundraising golf tournaments. They ARE very expensive. The "net net" after all costs paid was in that 20% range in both cases. And reducing expenses, did not necessarily translate to more outcome. The lesser the quality of an event, the lesser the interest in participating from sponsors.

[Oling_Roachinen]

Originally Posted by CaptainYooh

They ARE very expensive. The "net net" after all costs paid was in that 20% range in both cases. And reducing expenses, did not necessarily translate to more outcome. The lesser the quality of an event, the lesser the interest in participating from sponsors.

I don't disagree with this, but if your cost is a million dollars, with unpaid volunteers, and you're bringing in 1.1 million. I think at the very least there should be an asterisk next to your name when you call it a charity event. If it's really only paying for itself, people should know. I know 100,000 isn't insignificant, but I can almost guarantee that people think these charity events are bringing in more than that when they are donating 25,000 for a banner with their company names on it.

But then they lump it altogether with the 50/50 and say that the foundation donated millions because of these events. Cool, but that's not exactly transparent.

[CaptainYooh]

CRA rules governing charitable events are very prescriptive. And participation fees are not recorded as charitable donations. They are usually recorded as business development or marketing expenses. We have a couple of accountants here, they can provide more insight. There is no misleading or mis-labeling. At the end of the day, the charities receive the money that's left after expenses are paid.