Consumer Affairs Victoria to review fundraising rules after EJ Whitten Foundation Legends Game’s paltry fundraising outcome
UPDATE: CONSUMER Affairs Victoria plans to revise fundraising rules so that donors have a clearer picture of how much money is getting through to their chosen cause.
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UPDATE: CONSUMER Affairs Victoria plans to revise fundraising rules so that donors have a clearer picture of how much money is getting through to their chosen cause.
The fundraising regulator will also specifically revise the way commercial fundraising groups operate.
The developments follow revelations in the Herald Sun about the footy’s famous Legends Game, whose beneficiary is prostate cancer charity the EJ Whitten Foundation.
In a statement, CAV said: “Minister for Consumer Affairs, Gaming and Liquor Regulation Jane Garrett recently asked CAV to look at ways to reform fundraising regulation so it’s more in line with community expectations. CAV will do this work to address developments in the sector, including fundraising done in collaboration with commercial partners and fundraising conducted online.”
The Herald Sun revealed that the events management company that runs the Legends Game, Baker Smith Management, has split with the EJ Whitten Foundation after 20 years of celebrity footy.
A complex web of Consumer Affairs permits means that just six cents from every dollar donated to the game has actually gone to cancer research.
The Herald Sun understands the popular footy match could be rebranded The Footy Show All-Stars with Channel 9 set to take an active role in the running of the fundraiser.
Channel 9’s preference is to call the game The Footy Show Legends but it may have to settle for The Footy Show All Stars to avoid a naming rights dispute.
The Shane Warne Foundation is set to be a major beneficiary, alongside the EJ Whitten Foundation, under the new arrangement.
All money raised through ticket sales will be split between the EJ Whitten and The Shane Warne foundations.
“We intend to donate 100 per cent of ticket revenue to each of the EJ and Shane Warne Foundations equally,” said GTV9 managing director Ian Paterson.
“We are bringing some of the greats of the game back to raise money. Wouldn’t it be great to have 40,000 people there, you’re talking about a pretty big cheque we’re handing over to each of those two foundations.”
The network has appointed former Collingwood player and ESP co-founder Craig Kelly to run the event.
“Our contract expired with Baker Smith at the completion of this year’s event, we met following the event but we failed to renew that contract,” he said.
“We have appointed Kelly’s company, TLA, to run the event, we are a broadcaster not an event manager.
“For 20 years Nine had a fantastic relationship with the EJ Foundation and we are currently talking to them about how we can continue EJ’s legacy in the form of an All-Stars fundraising game in 2016.”
Figures released yesterday by the Australian Charities and Not-for-profits Commission show that the Australia’s charity sector has combined income of $103 billion.
The EJ charity crisis
THE EJ Whitten Foundation sacked the firm contracted to run footy’s famous Legends Game after figures show hundreds of thousands of dollars meant for cancer research has been soaked up by costs and fees.
After two decades of celebrity footy, cancer charity the EJ Whitten Foundation has split from events management company Baker Smith Management.
The future of the game is unclear, with a fight brewing over naming rights and allegations of secrecy.
The Herald Sun has investigated the approved fundraising arrangement between BSM and the EJ Whitten Foundation and found:
ONLY six cents from every dollar donated to the Legends Game since 2008 has actually made it to cancer research organisations.
BSM’s directors put $220,000 from game proceeds into their trusts last year, as they are entitled to do.
Just one-fifth of what is donated to the Legends Game is required by law to be given to the EJ Whitten Foundation. The rest goes on expenses or stays with BSM, a commercial management firm, as profit in a setup approved by Consumer Affairs Victoria.
Incoming foundation CEO Barry Besanko confirmed in a statement the BSM partnership was over.
“The EJ Whitten Foundation and Baker Smith Management have ... parted company allowing the EJ Whitten Foundation to more directly work with its stakeholder interests across a range of event activities,” he said.
“This move goes toward ensuring that the maximum possible returns and subsequent benefits flow to those institutions, individuals and families dealing with prostate cancer and men’s health issues.”
BSM directors Wes Smith and Michael Baker started the Legends Game with Ted Whitten Jr in 1996 to raise money for prostate cancer research following footy great Ted Whitten’s death from the disease.
The contract BSM had to run the game has not been renewed following its expiration this week.
A non-compete clause says any similar game cannot be run for three years after BSM and the foundation part company, sources say.
The Herald Sun understands the foundation engaged law firm Arnold Bloch Leibler to compel BSM to produce detailed accounts for inspection, but BSM knocked them back saying they had no obligation to do so.
BSM director Wes Smith defended the management company, saying it had nothing to hide.
“They came to us and indicated they no longer wanted a commercial association with us,” BSM director Wes Smith told the Herald Sun.
“We’ve heard the scuttlebutt questioning where the money raised has gone, but we’ve been given a clean bill of health by the regulator and our fundraising permit remains valid up 2018. We also retain our rights to the event and the intellectual property associated with this event.”
BSM owns the name “EJ Whitten Legends Game” and “Legends Game” and sources say there is also a non-compete clause in the contract saying that should BSM and the foundation part company, a similar event cannot be run for three years.
BSM is believed to have told the foundation they had no obligation to hand over the figures and directed them to regulator Consumer Affairs Victoria, which holds a copy of them.
The Legends Game has grown to become the third most-watched footy event on TV behind the Anzac Day clash and the Grand Final.
Auditing firm Ernst and Young went over EJ Whitten’s books earlier this year and gave them the all-clear.
CAV told the Herald Sun it had had no problems with BSM.
BSM and the foundation produced figures in response to requests from the Herald Sun over the past two months.
BSM, a private commercial events operator, has a permit from CAV to run the Legends Game as a fundraiser.
BSM must give 20 per cent of the game’s proceeds to its beneficiary — the EJ Whitten Foundation — which in turn must give 30 per cent of what it gets to its beneficiaries.
This means that by law, only six cents from each dollar given to the Legends Game is given to groups which actually carry out cancer research.
Inquiries by the Herald Sun confirm this has been the actual distribution since 2008, when CAV imposed the permit conditions.
Ted Whitten Jr today said that he had never been given an indication how much overall revenue the Legends game generates.
Whitten Jr — the former CEO of the foundation — says the foundation simply received its cut from a pool that is passed onto medical research and developing awareness programs.
He said Baker Smith Management “has abided by its contract over the years”, but said the foundation had never been given an indication of the total amount of money associated with the event.
“We receive a dividend — we don’t know how much the game makes in total,” he told SEN radio today.
“That dividend goes into the foundation’s pool and then we distribute 30 per cent of what the foundation brings in as donations, bequests, etc.
“They’ve (BSM) done a great job with the game, they’ve abided by their contract and Consumer Affairs. But the board of the foundation does not know how much money the game has made over the years. In some regards, the game has been fantastic for the foundation because it’s got us off the ground from year one … and we’ve been really excited by the opportunities for us to promote our cause.
“It’s just really disappointing that we’re having our name tainted. We’re one of a number of charities who do a lot of great work and I don’t want people to lose that sight.”
Whitten Jr is hopeful that the Legends game will carry on.
“I really think we’ve got a fantastic concept,” he said.
“I hope we can get together with the appropriate people … and make it bigger and better.”
Collingwood president Eddie McGuire believes the Legends game will continue.
“I guarantee you there’ll be a game next year,” he said on Triple M today.
“I don’t know the intricacies, but I guarantee there’ll be a game. Mark that one down.
“I don’t know (if it will be under the banner of EJ Whitten). But there’ll be a Legends game.”
The Legends Game is one of many fundraising events the EJ Whitten Foundation runs throughout the year.
These include golf days, charity walks and the foundation’s biggest earner, the AFL Grand Final Lunch.
From all its activities the foundation has generated between $850,000 and $924,000 each year since 2010.
In that period, it has distributed an average of 30 per cent to its beneficiaries which include Cancer Council Victoria, Monash University, the Alfred hospital, the Epworth hospital and the Western Private hospital.
The BSM figures show that in the 2015 financial year, they generated $1.15 million from fundraising, of which $237,114 went to its beneficiaries.
These figures account for two Legends games due to the game being played around the end of the financial year.
They say that from the 2015 game alone, $125,000 went to the foundation.
More than $220,000 went into the family trusts of Michael Baker and Wes Smith in financial 2015, according to figures supplied to the Herald Sun.
Specifically, $111,000 went into the Smith family trust and $110,000 went to the Baker family trust.
It is not uncommon for commercial event companies to draw a salary or make a profit from fundraising activities.
Their figures put the cost of hiring the venue, Etihad Stadium, at $75,000.
CAV told the Herald Sun it was satisfied that BSM had complied with the conditions of its fundraising permit, which include disclosing the fact they’re allowed to keep 80 per cent of the game’s proceeds to cover costs and for profit.
The foundation said under its new structure, Ted Whitten Jnr would serve as ambassador and there would be new partnerships with Cricket Victoria and the Melbourne Stars Big Bash cricket team.
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