Type in the word “sports” into GuideStar’s search box and you will get more than 85,000 returns. “Athletics” brings in another 2,000 listings. Last week, I met with about twenty reporters and producers at ESPN to help try to make some sense out of all of these sports-related nonprofit organizations.
I’ll admit it wasn’t easy to explain.
Some athletic-related nonprofits make a lot of sense. Youth athletic leagues, for example, seem like an appropriate charitable activity. Little leagues I can understand too – there are nearly 9,000 listed in our database. The word “softball” generates nearly 13,000 results.
But others aren’t as easy to explain. Take the National Football League Management Council for example. It has $54 million in assets and operates as a 501(c)(6) business league. The National Football League has nearly a billion dollars in assets and is also a 501(c)(6). Then there is the National Football Coaches Association and the National Football League Players Association – both 501(c)(5) organizations. The National Football League Non-Players Insurance Trust is a 501(c)(9). The National Football League Museum and National Football League Disaster Fund are 501(c)(3) charities.
Oh and did someone say bowls? When searching the term “bowl” on our home page, there are nearly 600 listed and they include 501(c)(3), 501(c)(5) and 501(c)(6) organizations.
With all of these organizations making up the pool of sports-related charities, it’s not surprising that even the most educated reporters and producers had questions about how these nonprofits function.
The questions I received were about what you would expect:
- Can a nonprofit make a profit? (They better. If their expenses exceed their revenues they’ll go out of business. But those surpluses stay with the organization.)
- Why does a big business operate as a nonprofit? (Good question. Maybe to avoid taxes?)
- How can a nonprofit have a billion dollars in assets? (A common public misperception. Not all nonprofits are poor and run by volunteers. See health facilities and universities)
- Why does this organization warrant a tax deductible contribution? (Because of IRS regulations and how the IRS applies them).
Maybe the question shouldn’t be “are there too many nonprofits?” A better might be “are there too many different nonprofit classifications?” I think there are. It confuses the public and makes it harder for charities to development the trust and support they need from stakeholders.
Check back next week as I continue my discussion of the kinds of organizations that are eligible for a tax exemption.
The preceding is a guest post by Bob Ottenhoff, Chief Executive of the Center for Disaster Philanthropy. With an entrepreneurial spirit, strong technology focus, and a quest to make an impact in the world, Bob has the ability to take an organization and lead it into strong performance, sustainability, and industry leadership.