Your Legal Rights: Charitable athletic events; how to stay on course
Charitable athletic events, like walkathons, races and mud runs, may allow donors to both help a good cause and have the gratification of competing at an athletic event, but not all events are the same. Some events have high overhead, leaving little for charity, and at least one mud run in Minnesota gave no money to the charity it promised to help.
Doing your homework before participating in a charitable athletic event helps to ensure that your participation actually benefits a worthy cause.
Nationwide, and in Minnesota, issues have occurred with some charitable races and athletic events. Things to pay attention to include:
Low percentage of donations to charity. Athletic events can involve high costs and overhead. These costs reduce the amount of race fees and donations that go to a charitable purpose.
For-profit events that appear to be nonprofit events. Charities sometimes use for-profit organizers to run an event. The for-profit vendor may prominently use a charity’s name to promote the event, but only give a small amount of money to the charity.
Scammers that provide no support to charities. The Minnesota Attorney General’s Office recently filed a lawsuit against a Minnesota man who organized mud runs throughout the country. He told participants that their race fees would benefit a cancer charity for young adults. The promoter took their race fees but gave nothing to the cancer charity.
How the event benefits charity. There are several scenarios by which a charitable athletic event could potentially benefit charity, each with different issues:
• Some charities hold events to raise money to further their own charitable programs. While these charities have an incentive to hold down costs, you should still verify what percentage of your contribution is being used to hold the race, versus going toward the charity’s mission.
• Some charities hold events to raise money to donate to other charities. In this situation, you should find out the name of the other charity and how much money the event organizer has committed to donate.
• Some charities hire for-profit “professional fundraisers” to run their events. If a professional fundraiser is organizing the event, it takes a “cut” of your donation for itself.
DO YOUR RESEARCH
An organization called GuideStar makes charities’ federal tax returns, called IRS “Form 990,” available for free on its website, www.guidestar.org. Form 990 discloses how much a charity receives in donations, how much it spends on overhead and other expenses, and whether or not it uses for-profit professional fundraisers to solicit donations.
You may also wish to check if Minnesota Charities Review Council has rated the charity holding the athletic event at www.smartgivers.org.