Arizona Republic sports investigative reporter Jason Wolf answered questions about the nonprofits founded by Walter Payton NFL Man of the Year award winners — including Russell Wilson, J.J. Watt, Larry Fitzgerald and others — during a recent “ask me anything” session that generated more than 1.1 million page views on the social media website Reddit.
The Payton award, described by the NFL as its most prestigious honor, recognizes a player for excellence on and off the field, with an emphasis on community service and philanthropy.
The annual winner receives a trophy, a special patch to wear on his jersey for the rest of his career and a $250,000 donation to his charity of choice. Twenty-four of the past 27 winners have founded a 501(c)(3) tax-exempt organization since the award was named in honor of Payton in 1999.
The Republic spent six months working on a five-part story about NFL players’ struggles and successes in the nonprofit sector, basing its report on thousands of pages of federal tax records and interviews with nonprofit legal and accounting experts, the NFL, NFL Players Association and numerous players, their family members and representatives.
The investigation found the NFL has built the Payton award into a monument to excellence, but the league does not vet the nonprofits founded by the men it honors, leaving the responsibility to individual teams. And neither the NFL nor the NFLPA, which presents weekly and annual awards for community service, match their promotional efforts when it comes to educating players on the nonprofit sector.
The resulting knowledge gap, mixed with bravado and the encouragement such awards provide to give back to the community, contributes to players founding nonprofit organizations that struggle with inefficiency for years, award winners and nominees said.
“It’s not as simple as saying, ‘I want to help people,’” Watt said. “I wish it was. Trust me. I wish it was. But you have to understand the responsibilities that come along with it.”
NFL players often start nonprofits without having the slightest idea what they’re doing, and without considering partnering with established organizations.
Players enlist family, friends and business associates who may mean well, but are inexperienced and ineffective at running a nonprofit.
Or they hire for-profit management companies that run everything but take a huge chunk of the donations, leaving little for actual charity.
The issue has persisted for years.
“Everything you said, that was me too,” said former Chicago Bears cornerback Charles “Peanut” Tillman, the 2013 Payton award winner. “That’s all players. They might not know everything about the foundation business, but they want to give back. They want to use their platform to do something amazing. I tried to tell people, ‘Learn from my mistake.’”
Nearly a dozen Walter Payton NFL Man of the Year award winners and nominees spoke with The Republic because they wanted to share their knowledge about nonprofit best practices and pitfalls to help young players avoid the same issues that they’ve experienced – like putting on fundraising events that raise little or lose money.
“There are better ways of doing things,” said Baltimore Ravens defensive end Calais Campbell, the 2019 Payton award winner and NFLPA vice president. “With the knowledge that a lot of us have accumulated over the years, the older players, we need to figure out a better way of doing things to change the system so that the younger guys can do it easier — and more efficiently — and help the people they really want to help.”
Many of these active and retired superstars said the NFL, NFLPA, themselves and their peers should place a greater emphasis on nonprofit education, especially since the league and union bestow their most prestigious awards for community service and philanthropy.
“I think if the NFL or the NFLPA have resources, they can do a better job of making it known to the players,” said former Arizona Cardinals wide receiver Anquan Boldin, the 2015 Payton award winner. “And on the other end, players have to do a better job of reaching out to see if there are those resources.”
Boldin co-founded the Players Coalition, a nonprofit with a mission to improve social justice and racial equality, and pledged the organization’s support.
Most athletes’ nonprofits merely serve as fundraising vehicles — they collect money to give to existing nonprofits like hospitals or food banks that perform programmatic activities. But some spend less than half of the donations they receive on charity, with the rest paying for overhead.
Charity watchdog groups expect efficient nonprofits to spend at least 65 cents to 75 cents on charitable activities.
“Every year in camp there’s mandatory meetings that have to be had, right? So why isn’t that one of them?” said former Los Angeles Rams offensive lineman Andrew Whitworth, the 2021 Payton award winner and 2019 winner of the NFLPA’s Alan Page Community Award. “I spent 45 minutes watching a video, ‘Why not to beat my wife.’ You know, ‘Don’t do domestic violence.’ ‘Why not to drunk drive,’ for 45 minutes. ‘Why not to carry a gun on you in an airport,’ for 45 minutes. All of these, I call them, ‘covering your ass-type things.’ And every year I have to watch this video because I’m on a team. And I’ve done it for 16 years.
“Why isn’t there a video or a session on 501(c)(3)?”
The Republic’s investigation published the week of the Super Bowl and remains a big talker, with more stories on the topic of sports philanthropy in the works.
Walter Payton NFL Man of the Year award:What to know about the league’s top honor
Here are five questions and answers about the project:
Q: What appears to be the most egregious example of a nonprofit founded by the listed players?
A: Russell Wilson’s Why Not You Foundation.
The nonprofit has reported $7.5 million in total revenue, $7 million in total expenses and has spent less than 40 cents of every dollar on charitable activities over its first eight years of existence, according to federal tax records. It has spent less than 25 cents of every dollar on charity since Wilson was named the 2020 Walter Payton NFL Man of the Year.
The reason why?
The nonprofit, which reported a near-record $1.2 million in annual expenses in both 2020 and 2021, spent nearly half of its money on employee compensation in those years, the most recent for which tax records are available.
The salaries of two employees were exorbitant — exceeding the 90th percentile for senior leadership positions at similar-sized nonprofits in the Seattle area by tens of thousands of dollars, according to comprehensive data compiled by the charity watchdog group Candid.
These salaries included more than $200,000 per year for a chief strategy officer who also worked for the Wilson family office, a business relationship not disclosed on tax records, as required by law.
The nonprofit also paid a third employee, a director who also leads Wilson’s brand management company, at least $60,000 per year for part-time work.
Nonprofit legal and accounting experts who reviewed The Why Not You Foundation’s tax returns described its governance structure as a “virtual free-for-all” and said the situation raises serious questions about the potential for excess benefit transactions and private inurement — a criminal abuse of power resulting in personal gain from a nonprofit’s resources.
The Why Not You Foundation defended its high salaries by claiming a financial impact far greater than its tax records reveal. It cited money raised by “partner” organizations, including nearly $10 million donated for pediatric cancer research by customers in Safeway/Albertsons grocery store checkout lines.
But nonprofit experts say this type of third-party fundraising does not justify the Why Not You Foundation’s salaries.
Part 2 of The Republic’s charity investigation delves into the Why Not You Foundation as an independent 501(c)(3) that deserves further public scrutiny. It went viral the week of the Super Bowl.
Q: Which player you looked at had the “best” charity?
A: I’m glad you asked this question.
There are many Walter Payton NFL Man of the Year award winners who efficiently raise money for charity, and sometimes that means not starting a nonprofit at all!
Eli Manning partnered directly with Hackensack (N.J.) Meridian Health Foundation to help raise $22 million for its Tackle Kids Cancer initiative. No donations were used to pay for the nonprofit’s overhead, meaning “100 percent of a donor’s gift was used for its intended purpose,” according to a hospital system spokesperson. The organization has been recognized as a top performer by the Association for Healthcare Philanthropy.
Larry Fitzgerald has a fiscal sponsorship with the Minneapolis Foundation, which means he does not have an independent 501(c)(3) but uses that established nonprofit’s tax-exempt status and legal framework as the backbone for his charitable efforts.
Dak Prescott, the 2022 Payton winner, has a fiscal sponsorship from the Edward Charles Foundation.
Both collectives spend better than 90 cents of every dollar on charitable activities, according to tax records.
J.J. Watt has an independent nonprofit run by his mom, who had decades of business experience before switching to philanthropy. The J.J. Watt Foundation reported $51 million in revenue and $49.7 million in expenses through 2020, including $48.3 million — or 97 cents of every dollar spent — on charitable activities. The totals are swollen by Watt’s viral Hurricane Harvey relief campaign in 2017, when he hoped to crowdsource $200,000 and ended up with nearly $42 million.
Part 5 of the project focuses on successes and solutions to the ongoing issues players face in the nonprofit sector.
Q: Did you go into the investigation suspecting that these “foundations” were much more than tax shields, payola for friends and family and PR hedges?
A: In 2021, I wrote an investigative story for The Buffalo News about the Andy and JJ Dalton Foundation, which set me on the path to tackle this larger project.
Long story short, in the 2017 NFL regular season finale, Andy Dalton threw a late touchdown pass to help the Cincinnati Bengals defeat the Baltimore Ravens, which put the Buffalo Bills in the playoffs for the first time in 17 years.
Bills fans celebrated by donating $442,000 to his nonprofit through an unsolicited, viral social media campaign. But the Daltons’ nonprofit, established to help sick kids and their families, was run by a for-profit management company called Prolanthropy, which charged 22.5% of gross revenue regardless of whether it had a hand in raising the money.
In this instance, the company received nearly $100,000 off the top.
The Daltons left the company during the course of my reporting and pledged all further donations would go directly to children’s hospitals.
Andy Dalton founded his nonprofit before his first snap as a pro, when his agent directed him to a marketing rep who directed him to Prolanthropy, which has had two clients win the Walter Payton NFL Man of the Year award.
This piqued my interest about the big picture.
Part 3 of the charity project is about Prolanthropy.
Q: Do you have any insight into Damar Hamlin’s GoFundMe and how that money will be used?
A: Hamlin won the NFLPA’s Alan Page Community Award after nearly $9 million poured into a two-year-old GoFundMe he set up in college to benefit his “Chasing M’s Foundation Community Toy Drive.”
None of those donations are tax deductible because Hamlin did not have 501(c)(3) status, contrary to public claims.
Hamlin’s Chasing M’s Foundation now has a fiscal sponsorship through the nonprofit Giving Back Fund, which means he can use its established 501(c)(3) status to raise future tax-exempt donations. But the arrangement wasn’t in place until after the $9 million was already in his GoFundMe, and it isn’t retroactive.
When you donate to a GoFundMe, you are assuming the person who set it up is honest and will use the money for the stated purpose, according to experts.
CharityWatch took a closer look at crowdsourcing and the Hamlin situation.
Q: What do you think about the whole Brett Favre scandal? It seems at least tangentially related to the topic.
A: The Brett Favre situation is different because his nonprofit allegedly took public money meant to support social service programs and used it to fund construction of a volleyball arena at his alma mater.
The Republic’s investigation into NFL players’ charities reveals a systemic issue – not widespread corruption, but ignorance leading to inefficiency obscured by marketing hype.
I found no instances of Payton award winners’ nonprofits spending money outside the scope of their mission, with the possible exception of Wilson’s nonprofit paying an executive who also worked for the family office. But that’s up to the IRS or other government agencies to investigate and determine.
Wilson’s attorney said the executive in question spent the “vast majority” of his time working for the nonprofit and was paid separately for his work for the family office.
Wilson also attempted to defend the financial practices of his nonprofit by posting a selfie video on social media days after The Republic’s investigation published, but he did not address specific financial concerns raised in the report.
The IRS does not disclose whether it is auditing a nonprofit or the results of any scrutiny, a spokesperson said, but media reports can lead to investigations, according to experts.
The NFL and NFLPA have not commented on The Republic’s findings.