I agree that endurance event oriented fundraising is a poor way to raise money. That's a far cry from how the IMF raises money via the Community Slots, though. The Community Slot model is fantastic; bundle a mandatory charitable donation on top of an entry fee for an in-demand product. Here you are able to get donations from people who have no desire or intent to donate to your cause. This is a phenomenal way to raise money for your charity, but requires you have the in-demand product to bundle the donation with.

I don't think the 50% number is out of line with average charity efficiencies. But, average charities have to put out real money to market and attract those with charitable intent to get their donations. Expensive activities like putting on events. IMF doesn't have to do that. They just have to have slots to sold out WTC races to bundle with. And Kona slots to auction. Their expenses ratio should be much more favorable than the average charity and the fact that it isn't is what raises some eyebrows.

My guess is the 50% number is wrong and they are actually a lot more efficient than this blog has revealed. They can't have big expenses. Their salary load is already determined to be negligible. They don't have infrastructure. They don't "do anything" charitable; they just pass money through, so they have no big expenses like equipment. I'm willing to bet when the truth comes out their actual efficiency number is very good.

The loan is dodgy and does harken to when a WTC employee (Lake Placid) forced a tri club to donate $2000 to IMF for cleanup of graffiti on the road. I remember at the time wondering "How can WTC force a charitable donation to IMF as punitive action?"

Couldn't the loan be looked at as an investment by the charity?

People keep referring to a loan, but I don't see what they're referring to.

I see $2.4MM listed in 'Other Assets' as coming from the World Triathlon Corporation, but couldn't this just be a $2.4MM donation/payment from WTC to the fund? I'm guessing all payments for stuff like charity slots are paid to WTC and then paid onto IMF so it might just be money that IMF knows it's going to get and therefore accounting for it

Beats me. I'm just going from what the blogger posted.

One thing I wonder is how much WTC sells the slots to IMF for. I remember stinley raising a kerfuffle by complaining that WTC was charging his charity $27K per Kona slot. Surely the same is true for IMF. How much does WTC sell Kona slots to IMF for that IMF auctions on ebay? How much does WTC sell other event slots to IMF for that IMF then sells as Community Slots. This has to be known information, because the buyer can only deduct the amount above this "intrinsic value", so the intrinsic value of the item sold by charity must be made known at least to the buyer. Does anyone know?

All this and then some.

The reality is Kelly isn't interested in talking about the benefits of the Foundation. She isn't interested in talking anything positive about IM. In fact, she is out to accomplish the opposite. She dislikes the brand. This isn't her first attempt to throw mud at Ironman. She was on the losing end of the battle with them and she is holding a grudge. So there isn't an objective viewpoint. There isn't constructive criticism of what's going on with the Foundation. It's just another attempt by her to stir the pot.

What I find ironic...better yet hypocritical...is if she dislikes IM so much, why did she and her husband race IM Florida last month? Seems like a long trip and a lot of money ($1500) to support a brand that she dislikes.

That's with a "traditional" Foundation slot. With Team IMF (new in 2015), all of the fundraising goes towards the 501(c)(3).

If you look at the audit sheet, Note 3 states that there is $557,626 Due from WTC that is "...the Foundation program contribution portion of general entry fee paid by participants in Ironman events owed at December 31, 2012. The Foundation entry fees are paid to the WTC and the WTC remits the Foundation program contribution portion monthly to the Foundation.

Note 4, meanwhile, speaks of the Note Receivable from WTC, which is a note that originated on December 31, 2011 with a principal amount of $2,499,929. This is the part of the audit sheet kny posted about above.

My prior post was deleted due to being on mobile and not being able to appropriately look to the PDF for quotation purposes.

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Editor-in-Chief, Slowtwitch.com | Twitter

The new Team IMF is the tried and true Team in Training model. IMF still buys a race entry from WTC (presumably for $725). The racer pays nothing (well nothing for TnT, but $100 for this program) and is obligated to raise $3000. It's a good model, better than the Community Slots approach. WTC gets their same $725 and IMF ends up with a minimum $2325, surely much more in most cases. With TnT you know where the donations are going (Leukemia and Lymphoma). With IMF, I think they'd be well served to open up their transparency a bit now that they're asking people to go out to the world and solicit donations from friends and family.

I appreciate Rappstar's comments and those of many who understand this better than I do.

When we donate to any charity we want to understand where the funds are going. Charities with high overhead, high fundraising costs and low percentage of money going to the intended charity activity/program we tend to avoid.

By discussing this issue we can better understand the foundation and what it does.

Let me expand on the IMF from a different perspective - one that is not associated with buying IMF slots to races, which so many of you seem to be hung up on. I used the IMF platform to raise money for a charity I chose. I raised money to help prevent and treat child abuse - sexual, mental, and physical. In the end, $0.93 of every dollar I raised went to my charity. A charity that I selected. That's impressive! IMF didn't take the money I raised. They gave it to my charity. I have proof of the check they cut to my charity.

Now, if you think the IMF is not giving back to local IM race communities, then you are misinformed. As previously stated in another post, this past weekend at IMAZ they gave $30,000 to KEEN, a Phoenix non profit. They also gave several thousand dollars to a local fire/rescue department. And these are just two examples.

Why are we trying to prosecute a non profit that is probably doing more good than many other organizations to which you donate on an annual basis? Do you pull public records for your local library, boys and girls club, or other charitable origination you give money to each year? Not likely.

I do tend to look up records before choosing charitable donations. I want to make sure that the funds or goods that I donate are being put forth to the causes that the charity says it is trying to benefit.

I don't think anybody is necessarily disputing the good work that the Foundation does, and if it appears that way from my posts, then I apologize for not appropriately stating my position. To wit: there is indisputable evidence that the IMF does do great things and provides funds in examples that you cite.

However, there are also questions when there sits a 2.5 million dollar note at a 5 percent interest rate. Considering that Foundation slots are accounted for elsewhere in the balance sheet, there is zero out there in regards to the purpose of this note.

Do we know that this was done in bad faith? No. That's the problem at this point: we simply don't know. That lack of transparency in process is problematic when you're talking about such close ties between a corporate parent and the non-profit entity.

I am hopeful that there is a simple explanation behind that note, that all is on the up and up, and we can go from there. But it's surprising to me that there was no explanation of that note anywhere in the first place.

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Editor-in-Chief, Slowtwitch.com | Twitter

I don't think anyone's trying to prosecute IMF. A blogger published an article that raises some questions and now there is discussion about it. Personally, I think that more info will come out to show that the blogger got it wrong, or at least, got it horribly incomplete.

IMF is itself a 501(c)(3), but really it is just an entity that passes funds through to other charities. There should be precious little overhead. They don't "do anything" other than cut checks to other 501(c)(3)s. They don't build homes, have a research facility, deliver meals, fund scholarships, etc.... An entity that collects donations and distributes it to other charities should be terribly efficient. As you encountered with using IMF's platform to raise funds for your charity of choice, passing donations through was 93% efficient for you. This is great and how it should be. But, the blogger introduces data that makes it appear that IMF is far less efficient at distributing funds that come through via Community Slots. More like 50% efficient. I'm betting this is actually not true, but if it is, why would it be so poor? All IMF does is take in money from selling Community Slots and spit it out the other end to charities. Where's the rest of the money going if they're only 50% efficient? It's been shown they have nearly no salary. They have no equipment. They leverage WTC's offices and infrastructure. There is no reason the passthrough efficiency of donations from Community Slots should not be as excellent as you experienced with using their fundraising platform to raise for your charity of choice.

Rappstar says 50% efficiency is very good for a small charity, which may be true, but not for a charity like this which is just a funnel to other charities. And, you say $30K went to KEEN. That's great, but not if there are $60K of tax deductions out there that resulted in only $30K of actual donation. $30K is also only 40 Community Slots worth of donations. How many community slots were sold?

I will never give any money to a charity connected to a for-profit organization.

You are right that a "most random blogger" can interpret the information to fit their narrative, particularly if they dislike an organization.

Likewise, someone who likes (or works for) a particular organization can also do the same.

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Internet User

Excellent points.

I for one railed against Livestrong... and while it may have done "some good" when you look at the corporate filings... you see a HUGE spike in Legal Fees when Mr PED started to crumble.

I have only done a cursory look at IMF and while most know my dislike for the WTC, looking just at the numbers and my understanding of their form and function, I could not understand what I saw as high overhead. A lot of this is obfuscated since the WTC numbers are masked to see a more comprehensive flow of financial interests.

Most charity organizations are hacks and if you want to have a nice cushy life, being the head of a charitable foundation.

Does the CEO of the Boy Scouts need to make almost $2M a year?

Or how about the Jimmy Fund... Kids with Cancer... but $1.4M for Ed Benz?

One of the best Scams... The Kardashian Family... The mother forms a "Church" and then the daughters periodically "purge" their closets with a percentage going to "charity" and you guessed it, the charities is their mother's which basically then pays Mom a nice income.

David, Jordan: What was the $2.5M loan for? That would answer a lot of questions.

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Internet User

Agreed. I never give to most of the large charities in the U.S. because I look at their salaries. Red Cross, United Way, etc. High 6 figure and even 7 figure salaries plus a plethora of perks. I will not support them.

I haven't done the amount of digging as many of you have, however...

I am a CPA who works entirely with non-profits, and I read 990s all day.

Looking at the most recent full year 990 on Guidestar (the one for the year ended 8/31/12), I don't know where people are getting this 50% number from. If you look at the statement of functional expenses, over 78% of IMF's operating expenses are grants to others. 78% is pretty good. However, I do have some questions after looking at that page of the 990. All the expenses make sense, and are pretty reasonable for an organization IMF's size, but legal expenses of almost $67k seem very high. IMF's relationship with WTC is complex, and perhaps they had some legal issues or IRS notices that needed to be paid. It looks like this was a one time thing because there aren't any legal fees for any of the other years, and IMF did change its accounting period during 2012, and that likely generated professional service fees. If you look at the 990 for the year ended 8/31/11, grants represent 84% of total expenses.

As for the related party connection, that isn't clear from the 990. It states that not all of the board members are independent, and I have to assume it's because of the board member's relationship with WTC. However, Schedule L isn't completed for loans to any officers or organizations that owned by officers. It seems, and I haven't dug a ton, that if the board members' connection with WTC was so strong that they weren't considered independent board members, that the loan would need to be disclosed on Schedule L.

Not to get on my soapbox, but I agree with what others have said about needing to look at lots of information re: a charity before deciding to donate. Any metric, taken in a vacuum, can distort things. Should a foundation give much of its revenue to the causes it raises funds for? Sure....maybe...but not necessarily. Should an organization, especially one structured like IMF, have a high percentage of its expenses go towards program? Sure....but something must be said for the cost of getting talented fundraisers and Executive Directors who could easily pull higher wages in commercial industries. Why must working for a NFP mean that you are paid less than fair market wages?

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Chris Harris

>Agreed. I never give to most of the large charities in the U.S. because I look at their salaries. Red Cross, United Way, etc. High 6 figure and even 7 figure salaries plus a plethora of perks. I will not support them.

That's roughly market value for executive leadership of a large organization.

So you expect a charity to find quality executive leadership for less than market value? That's effectively expecting your charity to find leaders who are extraordinarily personally charitable, not just giving up 10-20% of annual income like most "charitable people" do, but 50-90% or more. That would certainly be a leader who leads by example, but I wonder how many of those people are out there.

Granted it is also debatable if the extreme rise in executive compensation over the past 20 years across all categories of charity and business reflects an actual in the value of the leadership or is some sort of market distortion.

Besides the ED, the 3 other people on the board are from Providence Equity.

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Internet User

I get that. My issue is more with the way it is reported on the 990. They claim on Part IV to not be related to any taxable or tax-exempt organization, however, it could be argued that WTC effectively controls IMF since its owners are the majority of the IMF board.

Why isn't WTC or Providence listed on Schedule R?

Also, if they aren't independent, then why isn't the loan to WTC disclosed on Schedule L?

If no reporting on Schedule R or Schedule L, then why are they bothering to disclose that the board members aren't independent? Unless it's for some other reason, like paying them....which would have to be disclosed, too. It's pretty clear why the ED isn't (and not all EDs are considered voting board members, so not all EDs are non-independent board members....it depends on the organization's by-laws) as he gets paid....but why the others without any disclosure?

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Chris Harris

From the 2011-2012 IMF 990, there were grants of $40,000 and $10,000, respectively, to the following two organizations: Madison Area Sports Commission and Louisville Sports Commission.

MASC's stated purpose is "promote sports travel within Dane County and promote youth sports activities." It took in $378,428 in revenue. Total expenses were $311,498. However, of that total, $32,587 went to grants. $80,472 went to salary (treasurer). $198,439 under "Other Expenses." Of that, $109,674 went to "bid fees/sponsorships." Included in these events are things like Ironman Wisconsin.

Louisville Sports Commission's stated purpose is "to attract quality sporting events to Louisville..." LSC did not pay out anything in Grants in the 2011-2012 990. Total revenue of $1.2 million. Salaries of $484,520. Total expenses of $1.176 million. More specifically, LSC spent $177,541 alone on the IM event.

Working on breaking down where those donations in fact went and what the respective purpose of each organization is.

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Editor-in-Chief, Slowtwitch.com | Twitter

Funny how some of that happens.

You can have a field day looking at Livestrong during the LA days. For get all the details, but one particular event I think Livestrong had pledged a bunch of money to Haiti for a Cancer wing in a hospital or something like that... then there was the big Hurricane and they did some fundraising for the "Hurricane Victims" and had gotten a big chunk from Nike and then a large portion of that money they really went to cover the previous pledge.

I think what one will find as you pull all the threads on orgs like IMF, in the end, much less goes where people think because everyone is taking a cut. In the case shown IMF takes their cut, does grants to other orgs who take their cuts, so in essence that initial amount paid part of the salaries in two orgs etc.

So it's friday morning and I'm tired and having a hard time connecting the dots. Are you saying that:

1. The foundation donated $40k to the Madison Area Sports Commission; and then,
2. The Madision Sports Commission paid $40k+ to bid on hosting ironman Wisconsin?