Professional athletes are really good at being athletes. For the most part, they're not really good at running charities.
Former Baltimore Ravens kicker Matt Stover saw an opportunity to help his former teammates and colleagues safely and legally navigate the minefield that often comes with operating a charitable foundation -- Internal Revenue Service rules, payrolls, rent and fees. So he and a couple of partners started the Players' Philanthropy Fund.
The Players' Philanthropy Fund is a nonprofit that essentially takes over the administrative functions of a player's charitable foundation.
"We saw that there was a need to assist pro athletes and their charitable giving," said Stover, who retired in 2011 after a 19-year career with the Cleveland Browns, Ravens and Indianapolis Colts. "This simplifies things for the player. You can operate the same foundation name. You can raise funds underneath that name. You have the opportunity to gift from the fund."
The Players' Philanthropy Fund is a donor-advised fund. It gives athletes all of the advantages of running their own foundation, like tax deductions and gifts to worthy causes, without the potential headaches that come with it.
Stover said the idea for the Players' Philanthropy Fund was "birthed" in 2006, when he was getting ready to sell his interest in creditcards.com. His advisor, Emil Kallina, asked him if the NFL had a donor-advised fund.
Stover didn't know what a donor-advised fund was, but after Kallina explained it, an idea was hatched.
Stover said the Players' Philanthropy Fund handles the funds of future Hall of Fame safety Ed Reed, current Ravens cornerback Lardarius Webb and former Ravens and current Colts defensive lineman Arthur Jones.
"They love it," Stover said. "They are no longer legally responsible for their funds. We file the [forms]. We make sure everyone is IRS compliant, not them.
"We're the ones who tell them that they aren't allowed to give to a certain fund. We protect the player and the dollars that are given in his name. We protect their brand and their name.
"If you have your own foundation and a board, that board is legally responsible for what goes on. With us, I'm legally responsible."
And because the Players' Philanthropy Fund and other donor-advised funds aggregate money from multiple athletes and entertainers, they are often able to get better rates of return than single-source foundations.
Andrew D. Morton is a partner at Handler Thayer in Washington, D.C. He's also the chair of the firm's sports and entertainment law practice. He said the great majority of athletes and celebrities shouldn't be running their own foundations.
"Their job is to leverage their celebrity into philanthropy," Morton said. "Their involvement is generally using their name to inspire their fans into being philanthropic. Generally, they are not out there in the community running events. They are using tweets to inspire people to give."
Morton said he had 56 clients at the end of the second quarter of 2015. They came to him because they either wanted him to advise them of the best way to get into philanthropy, or because they wanted him to "go back to time zero" and look at everything their previous representatives had done -- from bylaws to compliance agreements -- to see how well their foundations were being operated.
"If you were measuring how well the foundations were being run on a scale of one to 10, with one being perfect, I've never had a client come in with better than a four," Morton said. "And most of them are in the four-to-six range."
Morton said there are "only a handful" of nonprofits like Stover's that serve the celebrity/athlete market. He pointed to The Giving Back Fund and the Edward Charles Foundation, which are both based in Los Angeles.
Morton said "the public doesn't care much" about how an athlete's foundation is set up.
"They only care that they get their deduction and that the money goes where they want it to go," Morton said. "Not only is this an acceptable strategy, but it's being viewed as a more sound strategy, because people know that athletes don't know how to run a foundation."