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Ironman Foundation analysis
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Interesting analysis of IM foundation. I would have thought that more than 50% of the funds they collect were actually going to the communities where they hold races.

Where does all that Community Fund slots money go?
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Re: Ironman Foundation analysis [KathyG] [ In reply to ]
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Staff? Overhead? Marketing? Promotions? Receptions?

I don't know if that is all that much out of line with other non-profits. The misconception that many make is thinking 100% of their donation goes to a particular cause. I feel like it isn't all that unusual to hear about stories where the non-profit only has 15-20% going toward the actual cause.
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Re: Ironman Foundation analysis [Trispoke] [ In reply to ]
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Trispoke wrote:
Staff? Overhead? Marketing? Promotions? Receptions?

I don't know if that is all that much out of line with other non-profits. The misconception that many make is thinking 100% of their donation goes to a particular cause. I feel like it isn't all that unusual to hear about stories where the non-profit only has 15-20% going toward the actual cause.

Sadly this isn't unusual but it also isn't the case with all charities. Whenever I am looking to possibly donate to a charity for the first time I always check them out first on Charity Navigator to see what their income is actually allocated to.

"Just don’t abandon everything you’ve ever learned because of something someone said on the internet." - Eric McGinnis
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Re: Ironman Foundation analysis [KathyG] [ In reply to ]
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What the person who wrote that understands about the tax code is less than what she doesn't know.

The 2013 tax return (990), assuming it is a calendar year filing, is due on May 15 but can be extended until Aug 15, which is very common. Even then, it would take time for Guidestar to acquire it and publish it. Much of the tax returns they publish are acquired directly from the IRS under the FOIA. It takes time for the IRS to enter the tax return and then respond to the FOIA request. Most tax information on Guidestar for charities have a significant delay of that nature.

Charities are required to use 5% of their assets for their charitable purposes each year. You may think 50% of their revenue is appropriate, but it is not the legal requirement. Most charities balance building their endowment with their current charitable distribution goals. Both are legitimate goals.

As to the legitimacy of a loan to WTC, that would be an issue if they were a "disqualified party", which I do not see that they are.

As to having the foundation help drive business to the for-profit side, this is common. Gambling websites do this extensively. For-Profit universities do this. Sports franchises do this. Fortune 500 companies do this.
Last edited by: CPA_Triathlete: Nov 19, 14 6:19
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Re: Ironman Foundation analysis [Trispoke] [ In reply to ]
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a nonprofit is still a company in the sense it needs full time staff to operate, that takes money. You want a full time Exec. Director to give their full attention to the task at hand, that means a full-time position. There are industry guidelines and websites like Guidestar/CharityWatch/Charity Navigator can give you ratings/glimpse of nonprofits and access to public records.

Understanding how funds are labeled and the need for funding within each charity is important in discerning if a nonprofit is achieving their mission. For example, a disease related nonprofit might get hammered (like ALS) for giving what many perceive as low figure to actual ALS research. Upon closer inspection they may well be giving a substantial (and critical amount) to support services for the disease - stuff like family support, in home care options, treatment equipment, even things like travel expenses for sufferers/families.

Personally I would be hesitant to judge performance off a single percentage number for any nonprofit. not enough information. Doesn't mean it isn't worth looking closer, just that it is hard to make sound assessments off a single data point.
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Re: Ironman Foundation analysis [Trispoke] [ In reply to ]
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Trispoke wrote:
The misconception that many make is thinking 100% of their donation goes to a particular cause. I feel like it isn't all that unusual to hear about stories where the non-profit only has 15-20% going toward the actual cause.

I try and ask charity solicitations what percentage they actually receive. Some are very high (70%), but a lot are in your 20% range.

On a side note, your local girl scout troop only gets 50 cents on a $4 box of cookies (12.5%). Our local cub scout pack got 40% on that popcorn.

Proud Member of Chris McDonald's 2018 Big Sexy Race Team "That which doesn't kill me, will only make me stronger"
Blog-Twitter-Instagram-Race Reports - 2018 Races: IM Florida 70.3, IM Raleigh 70.3, IM 70.3 World Championships - South Africa, IM North Carolina 70.3
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Re: Ironman Foundation analysis [Trispoke] [ In reply to ]
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Trispoke wrote:
Staff? Overhead? Marketing? Promotions? Receptions?

I don't know if that is all that much out of line with other non-profits. The misconception that many make is thinking 100% of their donation goes to a particular cause. I feel like it isn't all that unusual to hear about stories where the non-profit only has 15-20% going toward the actual cause.

Other non-profits have marketing and promotion expenses, which may be a significant percentage of revenue. I don't see how that applies to the Ironman Foundation. Those slots sell themselves based on the regular slots selling out.

This looks like the typical charity scam. Loaning WTC money? Really?
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Re: Ironman Foundation analysis [Arch Stanton] [ In reply to ]
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Arch Stanton wrote:
Trispoke wrote:
Staff? Overhead? Marketing? Promotions? Receptions?

I don't know if that is all that much out of line with other non-profits. The misconception that many make is thinking 100% of their donation goes to a particular cause. I feel like it isn't all that unusual to hear about stories where the non-profit only has 15-20% going toward the actual cause.


Other non-profits have marketing and promotion expenses, which may be a significant percentage of revenue. I don't see how that applies to the Ironman Foundation.


Why is this different for the IM Foundation? A staff of 3-4 can easily cost 200-400k in personnel expenses. Who maintains the websites? Correspondence? Basic operations?

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Those slots sell themselves based on the regular slots selling out.


Do you have information to support this claim? What percent of charity slots sell out in a given year?

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This looks like the typical charity scam. Loaning WTC money? Really?

Please support your claim and explain how the loan was wrong, illegal or totally not justified.
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Re: Ironman Foundation analysis [Trispoke] [ In reply to ]
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Just out of curiosity, do you think that people buy charity slots at 2x the price because of all the great marketing and promotional work that IM Foundation does, and not because the regular entries have sold out and charity slots are the only means of entry?
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Re: Ironman Foundation analysis [kny] [ In reply to ]
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In most instances no. In some instances it may be due to advertising.

I didn't buy a Cervelo because of all the great marketing and promotional work they do. However, I suspect marketing is a reasonable chunk of Cervelo's annual budget.

Just out of curiosity, do you think marketing/advertising should not be a line-item for the IM Foundation? And if not, why?
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Re: Ironman Foundation analysis [Trispoke] [ In reply to ]
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Trispoke wrote:
Just out of curiosity, do you think marketing/advertising should not be a line-item for the IM Foundation? And if not, why?

Of course marketing and advertising should be an expense line item for any non-profit. I don't think that IM Foundation does or needs to do much advertising and promotion in order to generate their charitable donation revenue, however, and IM Foundation certainly needs to do less marketing and advertising to generate their charitable revenue than other non-profits.

I believe that nearly all of charitable revenue for IM Foundation comes from people who are not giving money out of primarily charitable intent, but rather primarily out of desire to race a sold out event. I do not believe that many people who are donating to IM Foundation via charity registrations are doing so because 50% of their 2x registration fee flows to local charities. Indeed, I would hazard a guess that most people who purchase charity slots are completely unaware of the end destination of the charitable money, because their primary interest is simply in the entry to the race and the charitable donation is a necessary byproduct.

One way to know whether people are donating to IM Foundation out of charitable intent vs desire to race a sold out WTC event would be to see the ratio of charitable registrations that are sold while general registration is open vs while general registration is closed. If people are spending 2x for a registration because of the charitable aspect then we should see plenty of charitable slots sold while general registration remains open.
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Re: Ironman Foundation analysis [Trispoke] [ In reply to ]
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Per the 2012 990, which is available here, employee costs were $114,600, of which $95,000 went to the Executive Director.

Schedule D, Part VII, Investments, details the amounts due from World Triathlon Corp.

Marketing/Advertising for the quarter year period of the 2012 report was $10,142, per the audit statement.

The loan could possibly be construed as innurement, in which the 501(c)(3) is operating for the benefit of private interests. In this case, all members of the 501(c)(3) are all either employees or officers of WTC, in which the loan is an improper benefit. This said, we don't know the purpose behind the loan, consideration given, etc.

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Re: Ironman Foundation analysis [KathyG] [ In reply to ]
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This reminds me a lot of some of the articles written about Livestrong. Lance was a fraud as an athlete, so Livestrong MUST have been a fraud as a charity. But, by measured accounts, that seems definitely not to have been the case.

This is one of the major issue with the internet. It's very easy to come up with a "plausible" story that goes something like, "I'm not an expert in this particular area, but I see a bunch of things that - in my non-expert opinion - are either nothing to worry about or potential red flags. Based on the fact that I harbor a personal dislike of this person/organization, I will assume that these things are red flags, and I will write a detailed and heavily biased account of why so-and-so is a terrible fraud."

If, at some point, the details actually do become clear, an apology or correction is rarely issued. And even when it is, it's just sort of like, "oops." And, given the way that we all consume media - we are so inundated and overwhelmed, it's not at all probable that just because we read the original story that we read the follow-up that says, "everything I wrote in that first article is wrong."

This extends most definitely from the most random blogger all the way to "legitimate" (in theory anyway) "news" channels, with CNN being the most egregious lately (Faux News is so clearly propaganda that I don't count them).

Now, certainly, bending of the rules (and plenty of outright fraud) exists in the non-profit world. Ironically, charity is big business. But I think this is a clear case of, "WTC is bad, so IMF must be bad too..."

What's interesting is that Kelly doesn't anywhere go into all of the various benefits of being associated with a larger for-profit entity. This topic is of particular interest to me because "my" charity - World Bicycle Relief - is "part" of SRAM. The Ironman Foundation gets to take advantage of loads of existing infrastructure within that exists within WTC. The need space within the WTC offices, but they don't need their own office building. They can leverage existing IT infrastructure - all the IMF employees have @ironman.com emails and phone numbers within the WTC switchboard. Need to transport supplies to a race? Just put them in the trucks leaving with the rest of the supplies going to the race.

I also think it's questionable to point out that the job listing mandated - in a very pro forma line item - that the employee needed to worry about the profitability of WTC. That's logical for two reasons - first, if WTC doesn't exist, then the IMF also wouldn't exist. Secondly, there's a lot of crossover - and it's intelligent - between supporters of IMF and sponsors/licensees of WTC. As an example, Newton is the official running shoe licensee of Ironman. But they are also the "title sponsor" of the IMF team. This makes good sense. But what that means - because of the way that Ironman necessarily does business - that someone who is part of the foundation necessarily needs to be in tune with the larger sales vision of the corporate entity.

50% payout is actually pretty darn good, especially considering how (relatively) small IMF is as a non-profit.

I am close friends - by virtue of my work for WBR and my annual fundraiser, which has been supported by IMF in a variety of ways since WTC created the IMF - with David Deschenes, who runs the IMF program. If anyone has any specific questions, I am happy to field them with David.

"Non est ad astra mollis e terris via." - Seneca | rappstar.com | FB - Rappstar Racing | IG - @jordanrapp
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Re: Ironman Foundation analysis [kny] [ In reply to ]
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kny wrote:
Just out of curiosity, do you think that people buy charity slots at 2x the price because of all the great marketing and promotional work that IM Foundation does, and not because the regular entries have sold out and charity slots are the only means of entry?


I agree with this. I think most people see it as tiered pricing, rather than a charitable endeavour. There is lots of information below that I've Google-Fu'd. It gets more interesting towards the bottom.

The standard for large sporting events will give spots to charities and then as a charity participant you sign up to raise X amount of money that you know goes straight to the charity. Most charities you can find out a decent level of information about what the money went on (expenses vs. charitable projects, etc), but I'm struggling to find info on IM Foundation.

Their website states they had given $100k to Kailua-Kona projects in 2012, and lists 26 charities, so that would be about $4k per charity which is pretty miserly and not going to make a difference to most of these organisations (except maybe the canoe clubs). I was there for 6 months and asked loads of people about WTC/Ironman and everyone was unanimous that they do little/nothing. I suspect it is an arrangement (explicit or implicit) that the local economy makes lots of money during the World Champs and this is enough for them to want to host it each year, keep the roads in pristine condition, etc.

Anyway, back to the $100k. In 2011 there were 4 ebay auction spots for the champs, with winning bids ranging from $45-60k. Let's pick the bottom number to underestimate and that is already $180k. If you paid someone $80k to list the spots on eBay and then put them in the starting list, then there's the $100k right there. WTC is still a small enough organisation that it's costs for a Ironman Foundation shouldn't be huge (it's not like they're the Red Cross, GreenPeace, etc).

Their news page is pretty terrible. Only one of the links works and it is to an external site. All the other links do not. I can't find any good information at all so it seems they are working in a vacuum, and at best don't feel the need to publicise their spending.

The other interesting figure is $18million in donations between 2003-2012.

More interesting points:
They've raised >$1million from crowdrise.
Guidestar shows their income/expenses based on IMF's 990 filing. Page 4 is the most informative:
- Their total assets grew at a healthy rate between 2011-2012 (from 2.7MM to 4.5MM)
- This goal is not uncommon amongst charities as growing assets allows you to earn interest and provides a buffer between spendings and earnings.
- They state they spent $18MM between 2003-2012 = $2MM year. So their assets would cover their donations for another 2 years (assuming they still get income to cover their expenses).
Give.com says their income is $2.3MM and assets are $5.2MM. Guidestar doesn't appear to have any information on 2013, and Give doesn't provide it's source unfortunately.
FoundationCenter appears to corroborate GuideStar, and also is missing 2013 990 filings information.
Ironman Foundations fiscal year runs from Jan 1st to Dec 31st. Their 2013 990 Filing would have been May 15th (rules for filing date here).
It lists their 2012 expenses as $572k and income as $1MM putting it well within the legal bounds of calling itself a charity.

So in my conclusion I don't think they are breaking any laws or anything, but it would be great to get more transparency on what they're doing with the money. I'm happy to approach them for information on this if people are interested. As a fairly young organisation it seems sensible to build an assets pot because then you can start to do good things with the interest and income of the fund, rather than push it straight out and leave the future of the charity as uncertain. Note that the name, email and telephone number of the executive director is public information but i won't post it here.

There are two ironman 501 registered charities but I was only looking at the latter:

26-1716311Ironman for KidsSan AntonioTXUnited StatesPC





65-1172979The Ironman Foundation Inc.TampaFLUnited StatesPC

For more information on charities and their 990 Filings click here.
Last edited by: dado0583: Nov 19, 14 8:18
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Re: Ironman Foundation analysis [Rappstar] [ In reply to ]
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Rappstar wrote:
But I think this is a clear case of, "WTC is bad, so IMF must be bad too..."
Rappstar wrote:
50% payout is actually pretty darn good, especially considering how (relatively) small IMF is as a non-profit.

I agree with both these points. It would be ridiculous for WTC to start a charity in order to try and raise their own profits. They could sell slots on a price tier with no charity implication and they would still sell out because people want the product. I'm sure it's a well-meaning organisation, but it would be good to hear how the money is benefiting people. Their mission statement is quite vague.

I like WaterAid because I understand where the money is going and can use their website to see the exact projects and how they believe it will benefit communities. I'd encourage IM Foundation to have some kind of explanation to allay the fears.
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Re: Ironman Foundation analysis [Rappstar] [ In reply to ]
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I'm a cynic of the "Lance is bad, Livestrong must be too" ilk. But, Livestrong was actually a very efficient charity, with something on the order of $0.70 on the donated dollar going to the cause. Now, of course, the livestrong cause was "raising awareness of cancer" so marketing expenses were accounted as distributed funds, but that's another story.

Point is, charities run from the fraudulently inefficient (Sammy Sosa's pennies on the dollar fraud non-profit) to very efficient $0.90+ on the dollar getting to the cause.

One would expect IMF to skew towards the very efficient end because they operate at an advantage to most/all charities out there.
  1. For a large percentage of their revenue they need to do no advertising/marketing. Community slots and Kona auctioned slots generate huge money at virtually no expense.
  2. IMF is able to generate charitable revenue from people with no charitable intent to the IMF mission as a byproduct to selling a product (race entries) bundled with a mandated charitable donation.

For these reasons I would expect IMF to operate on the efficient side of the scale, but if it is true that they are less than 50% efficient, then that money is going somewhere. IMF reports that it has distributed >$30mm to "various nonprofit groups around the world". If that is true and they are really less than 50% efficient, then they have raised >$60mm and another $30+mm in expenses have been generated. I find this difficult to believe, but anything is plausible.
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Re: Ironman Foundation analysis [kny] [ In reply to ]
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You can't band around 'efficiency' percentages without defining them as they aren't standard metrics, they are opinion.

A charity might get $1MM in income per year, spend $100k on charities and have expensives of $100k. You might say that their efficiency is 10% because they are currently doing good with 10% of it. Or you may say it is 90% because the money they're saving is earmarked for a project in another 2 years time that costs $2.4MM. Or you might say they're 90% efficient because only 10% is going on expenses.

They're all very different scenarios. Even websites with the goal of making expenses more transparent have to make compromises with how they define their own metrics and how they generate them.
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Re: Ironman Foundation analysis [dado0583] [ In reply to ]
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Well, yes and no. The Program Expense Ratio: "the percent of a charity's budget spent on the programs and services it delivers", is a standard metric looked at in evaluating the efficiency of charities.

Yes, if IMF is hoarding today's donations to use in one big lump-sum at some future point, then that could make their Program Expense Ratio look poor today. Or, if IMF is off loaning cash to other businesses instead of spending it on the programs and services it delivers, that could make their Program Expense Ratio look poor. In either case, one would expect a donor to have the ability to understand that that is where their charitable donation is being used for rather than it going to "the programs and services it delivers".

Again, I am a cynic. But, I also believe WTC would be absolutely insane to do anything below-the-board with the IMF. Too much to lose and too little to gain. So, my guess is that a deeper dive into the numbers will reveal a better efficiency than the blog reports. Though that low interest loan to WTC needs some explaining.
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Re: Ironman Foundation analysis [Trispoke] [ In reply to ]
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I don't know if that is all that much out of line with other non-profits. The misconception that many make is thinking 100% of their donation goes to a particular cause.

I know more than a few people in the cause marketing and charity event game. This is correct. In fact, I've been told that ironically, one of the worst ways to try and raise funds for a charity is through these big charity or other endurance sports events - the overhead is always way higher than you think.

In fact, I was just called into consult with a high profile charity, in Canada, who had historically NOT been involved in endurance sports event oriented fund raising, and they wanted to know what it was all about and would it be worth their while. They wanted to start up an event. I suggested to them this may not be in their best interest, if raising more $$ was a goal - it might be good for their marketing, but in absolute terms of raising more $$, the gains if any would be marginal.


Steve Fleck @stevefleck | Blog
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Re: Ironman Foundation analysis [kny] [ In reply to ]
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I think we're in broad agreement kny. Basically we need more info.

Just to add another aspect to the efficiency point, the "services it delivers" is an interesting one. IMF doesn't really go out and actually buy canoes for the Kona canoe clubs, nor does it go out and buy medication, ship it to a crisis-struck area and give it to Red Cross. Therefore you have to kind of judge how efficient IMF is based on who it gives the money to. If it gives it to 'efficient' organisations then you could say it is more efficient because it is ensuring the money is getting to the grassroots. If it donates all its money to 'inefficient' organisations then it's all opinion as it might be giving 90% of it's money to other causes, but perhaps only a small percentage of that is actually getting to the people who need it.
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Re: Ironman Foundation analysis [kny] [ In reply to ]
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The loan was the biggest red-flag I saw reviewing their 990s from 2008 onward. The audit statement provided the clarity behind that year's Due From World Triathlon Corporation under the assets portion of Schedule D.

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Re: Ironman Foundation analysis [KathyG] [ In reply to ]
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I know a lot of people responded more substantively as to what was written in the article from a tax/charitable donation perspective. But I would like to quickly respond as a member of the IRONMAN Foundation Newton Running Ambassador Triathlon Team http://www.triteamforgood.com). For IMAZ, for example, our team targeted a specific charity (http://www.keenphoenix.org) as our community partner and raised $30,000+ through CrowdRise for KEEN (Kids Enjoy Exercise Now), an organization which works with kids with disabilities by providing exercise opportunities. For this team, 100% of what was raised went to the charity. All this was made possible through IM Foundation and Newton Running. All of the kids received new Newton shoes as well. Our team worked with the kids on Thursday might before the race and we were able to present the check to KEEN. None of the funds were used for team member entries. In fact, I paid for IMAZ through an IRONMAN Foundation spot. In addition, the Foundation supported a number of different charities in Phoenix. There are certainly ways to become more efficient as a charity to help bottom line giving, but I applaud WTC and IRONMAN for its creation of the Foundation and for its commitment to make a difference in the communities where races take place. I personally saw first hand the impact that is made.

John Snyder @URNotAsCoolAsMe
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Re: Ironman Foundation analysis [Snyderman] [ In reply to ]
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I don't think people are questioning the good things that IMF does. The questions are more about transparency, and in particular, why IMF would've loaned WTC just short of $2.5 million.

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Editor-in-Chief, Slowtwitch.com | Twitter
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Re: Ironman Foundation analysis [rrheisler] [ In reply to ]
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Are they including the whole slot entry fee, or just the portion minus the race entry fee? IF a Foundation lost is $2000, but entry fee is $700, isn't the foundation only getting $1300?


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Re: Ironman Foundation analysis [motoguy128] [ In reply to ]
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It's explained on the signup page here. $725 pays for the WTC entry fee. The other $725 goes to the Ironman Foundation.

This means IM makes the same profit out of this slot versus any other. It also means that the other $725 is tax deductible and will go to the charity, Ironman Foundation. Of that $725 the charity receives, a portion will go to the expenses of running the foundation and the remaining will be put towards good causes.

So let's say [hypothetically] Ironman Foundation expenses run at 50%, $367.50 of the $1450 will go to good causes. I've just made up that 50% as an example
Last edited by: dado0583: Nov 19, 14 10:47
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