The blurred lines of Livestrong - the spin bike sham

[euanli]

Without looking at the sources directly, it's hard to know for certain, but I would suggest that you not confuse the audited annual report with the tax filing. Different sets of rules can lead to expenses and income being booked at different times or in different manners. As for the $1.0M discrepancy between the 990 and the website -- perhaps a typo? It happens.

So you defend against your claims of lack of evidence with the lack of evidence? Good good.

 

[Dominar]

Answer my question Dominar.

Sorry, I must have missed it. Can you repeat it or direct me to your post?

 

[Dominar]

Post #263 page 27 Dominar. Evidence & a question. Please respond.

I did -- #323.

 

[Velocentric]

Thank you Dominar. I've got all the publicly accessible papers & have been very careful about checking my figures. Granted though, the $1,000,000 may be a typo but that's quite a mistake to make and I'm very surprised an organisation like Livestrong didn't pick up on it.

 

[jimbob_in_co]

Everyone should take the time to view this http://www.guardian.co.uk/society/gallery/2008/mar/31/lifebeforedeath This is the reality of cancer for the vast majority - something that robs them of dignity, that is frightening and life destroying - not the commercialised, fist pumping guff of Livestrong

Thank you bianchgirl, both your words and the link you included address the whole experience as I have witnessed it.

On another note, those you outside of the US might never have heard of/seen the TV series 'thirtysomething' which was broadcast in the States for four years (1987 to 1991) on the ABC (American Broadcasting Company). All criticism of the TV series aside, the middle of the third season addressed the process of cancer diagnosis, treatment and recovery with honesty and depth that Livestrong has NEVER come close to matching, even with their recent focus on "Young Adult" Cancer Patients.

 

[euanli]

I just found myself looking forward to listening to Phil and Paul commentate on the TDU after the SI article breaks.

 

[Dominar]

So you defend against your claims of lack of evidence with the lack of evidence? Good good.

First of all, I am not "defending" against anything. Merely pointing out that posters on this thread don't seem to understand the mechanics and taxation of charitable organizations. I should also point out, if it's not already apparent, that I am reluctant to draw hard and fast conclusions from any "evidence" posted in an online forum. Speculation is fine (and certainly fun at times), but it disturbs me when people blur the lines between conjecture and supposed "fact," particularly when they combine their faulty understanding of the law with a lack of all relevant information.

 

[AnythingButKestrel]

I have read the comments here and elsewhere many, many times (all of these sorts of threads are very much alike). My point is that the "evidence" of what you see to be "clear abuse" and a "tax shelter" is based on a faulty understanding of how these sorts of things are commonly structured in fact and why. ...

As for what is/is not a "good cause," that's a subjective decision to be made by each donor.

So, could you name another LBS that has their own G-IV? Gotta sell a ton of inner tubes and Bontrager arm warmers to make the payments on that one.

The leaseback arrangement is solely for tax sheltering purposes, as are all leaseback arrangements. Don't believe me? Call someone in the leasing industry. They will tell you flat out. Maybe LS.org doesn't get any tax benefit, but LS.com and "LA Inc." surely do, or they would have simply purchased the plane outright and depreciated it like a normal piece of capital equipment. Please note, that nowhere did I state that any law had been broken. It *is* a very, shall we say, *interesting* bit of accounting though. [Formation of these types of LLCs as tax/lawsuit/bankruptcy shelters is very common, but what is also becoming more common is financial accountability being brought back on the prime beneficiary of these businesses.]

Normally, as has already been stated, airplanes are owned by independent *third parties* and leased to individuals and corporations either on a full or fractional ownership basis. Buying a jet, then leasing it back to one's self is a fairly unusual arrangement.

As for the *need* for a jet, do some people and corporations need jets? Absolutely. Does LA.org/.com/inc need a G-IV? No. There are lots of people generating more cash flow than LA who don't even have a Piper Cub to their name.

 

[Race Radio]

First of all, I am not "defending" against anything. Merely pointing out that posters on this thread don't seem to understand the mechanics and taxation of charitable organizations. I should also point out, if it's not already apparent, that I am reluctant to draw hard and fast conclusions from any "evidence" posted in an online forum. Speculation is fine (and certainly fun at times), but it disturbs me when people blur the lines between conjecture and supposed "fact," particularly when they combine their faulty understanding of the law with a lack of all relevant information.

Perhaps we should ask the experts what they think?

"This blurs the lines between the foundation and its charitable mission, and the personal gain of its founder,'' said Ken Berger, president and executive director of Charity Navigator. "It's mixing two purposes in a way that smells of a conflict of interest. The most precious thing a charitable organization has is the public's trust, and things like this put a ***** in that.''

Daniel Borochoff, founder and president of the American Institute of Philanthropy in Chicago, said he was uncomfortable with the arrangement, especially because Armstrong remains chairman of the board of the foundation. "Nonprofits have to be concerned not only with actual conflicts of interest, but the appearance of conflicts of interest,'' Borochoff said.

The cat is out of the bag, it is only going to get worse from here. People will not be OK with the excessive legal, advertising, traveling and lapdance expenses charged to Livestrong.

 

[thehog]

He didn't need to stand on the top step of the TdF Podium seven times to garner the required attention to have a real, lasting, and major positive impact int he lives of cancer patients, .

Yeah that clinched it for me. That speech was a wonderful opportunity to be humble and thank everyone. But he took it as another opportunity to take a swipe at everyone. Funny thing was he was a doper. It wasn't hard work that won it. It was some hard work and a lot of dope. To be honest I think the only person he's trying to convince is himself.

I read his first book. Some of the passages are extremely moving. The way his treatment is described was very touching for me. It brought back a lot of memories and I found it very real. Sad to know that the other 80% of the book was a pack of lies and that he lost his humility shortly after returning to Europe.

He could have been so much more as a person.

 

[Dr. Maserati]

Well, if there are, I haven't seen much evidence of it on this thread (or any of the dozens of others like it over the past couple of years I've been lurking here). As just one small example, there's the comment a couple of pages back decrying the double deduction from the "misuse" of the private jet, despite the fact that a lease expense deduction has absolutely no value for the LAF, which is a tax-exempt entity.

But by all means, please continue with the conspiracy theories...

Legally you are correct about the LAF - but you are ignoring the fact that the LAF is marketed and branded as 'Livestrong'.

All the advertisements, the jerseys etc feature the Livestrong name - it is from that association that the title of the thread is correct, "the blurred lines of Livestrong.....".

Armstrong (& his buddies) profit directly from that association.

 

[Race Radio]

Legally you are correct about the LAF - but you are ignoring the fact that the LAF is marketed and branded as 'Livestrong'.

All the advertisements, the jerseys etc feature the Livestrong name - it is from that association that the title of the thread is correct, "the blurred lines of Livestrong.....".

Armstrong (& his buddies) profit directly from that association.

Yes....and LAF pays for it.

Last year LAF spent over $4,000,000 on advertising. Most of it very simple, with Armstrong's likeness and LIVESTRONG on it. There is never a differentiator in this advertising ORG/.COM. Of course the public does not know there is a difference, that is why the traffic to the for profit .COM has jumped so much. Largely thanks to the advertising dollars of the .ORG

 

[euanli]

Oh that is a sweet sweet graph.

 

[Polish]

As for the *need* for a jet, do some people and corporations need jets? Absolutely. Does LA.org/.com/inc need a G-IV? No. There are lots of people generating more cash flow than LA who don't even have a Piper Cub to their name.

Thousands of business execs fly on company owned private jets, yes.
But how many have won seven TdF's in a row? None, nada, zip.

The cat is out of the bag, it is only going to get worse from here. People will not be OK with the excessive legal, advertising, traveling and lapdance expenses charged to Livestrong.

Excessive lapdance charges?
You are going to have to explain THAT one to me.
Most people would agree there is ALWAYS room for another lapdance.

Legally you are correct about the LAF - but you are ignoring the fact that the LAF is marketed and branded as 'Livestrong'.

All the advertisements, the jerseys etc feature the Livestrong name - it is from that association that the title of the thread is correct, "the blurred lines of Livestrong.....".

Armstrong (& his buddies) profit directly from that association.

And Livestrong.org benefits directly from the association too.
Why the confusion?

The "blurring" is in the eye of the beholder, who can not distinquish between Lance the world class business man and Lance the world class fundraiser. And Lance wears so many other hats too - a private jet is a must lol.

"Blurred"? I cant wait to see the look on your faces when you learn that Lance has personally donated more $$$ to Livestrong than was ever spent on jet fuel and lapdances. You guys will go cross eyed

 

[Velocentric]

Most people would agree there is ALWAYS room for another lapdance when your charity is picking up the tab for you.

Fixed that for you.

 

[Race Radio]

"Blurred"? I cant wait to see the look on your faces when you learn that Lance has personally donated more $$$ to Livestrong than was ever spent on jet fuel and lapdances. You guys will go cross eyed

HAHAHA, you are a comedian Polish.

Let us know when you find that.

 

[euanli]

There is an easy formula for working out if business execs require a private jet

$cost of total hire of jet < $total cost of the time saved in the travel time

If your execs are earning tens of millions and you put four of them on a plane then yeah its cost effective to put them on a private jet and let them work together saving check in and travel time.

If you are Lance Armstrong, your time isn't worth that much.

 

[frenchfry]

First of all, I am not "defending" against anything. Merely pointing out that posters on this thread don't seem to understand the mechanics and taxation of charitable organizations. I should also point out, if it's not already apparent, that I am reluctant to draw hard and fast conclusions from any "evidence" posted in an online forum. Speculation is fine (and certainly fun at times), but it disturbs me when people blur the lines between conjecture and supposed "fact," particularly when they combine their faulty understanding of the law with a lack of all relevant information.

It's all about values, not tax laws.

Milking a "charity" for personal gain just doesn't comply with certain people's values. Personally I find it repulsive. Even if it's allowed by the tax auditor.

I have done a lot of volunteer work, never have I received a personal advantage from this. Quite the opposite. This is what being charitable is all about.

To say that Livestrong has benefited from Armstrong so there is no reason he shouldn't benefit back is BS, at least in my humble opinion.

 

[jimbob_in_co]

"Blurred"? I cant wait to see the look on your faces when you learn that Lance has personally donated more $$$ to Livestrong than was ever spent on jet fuel and lapdances. You guys will go cross eyed

Ah yes, that other great "myth" sold by the Foundation, second only to the 'most tested athlete of all time' line of BS.

 

[thehog]

It's all about values, not tax laws.

Milking a "charity" for personal gain just doesn't comply with certain people's values. Personally I find it repulsive. Even if it's allowed by the tax auditor.

I have done a lot of volunteer work, never have I received a personal advantage from this. Quite the opposite. This is what being charitable is all about.

To say that Livestrong has benefited from Armstrong so there is no reason he shouldn't benefit back is BS, at least in my humble opinion.

Right you are. It certainly is an issue of ethics. To announce the comeback as "awareness" and clearly state that "this one's on the house" to then draw funds on the charity for the comeback 2.0 is very blurry and encroaching on fraud. It becomes even more worrying when you are the chairman of said organisation to which you are drawing the funds.

Lance Armstrong is a professional bike racer. Nothing wrong with brining the charity into the mix but the problem comes when the charity also has a "for profit" arm and no one can really tell the difference between the two entities. The lines become blurred. You never really know what is "for profit" work and what is not. To draw down funds on the charity which leads the "for profit" and the personal entities to benefit is breaking the law.

You see by being paid for the TDU appearance you can't then expense the entire trip on Livestrong. You can only take the portion whereby the work that was undertaken was for the charity only. An upcoming IPO also has its problems with ethics and the law. Is the stock being artificially increased by the charity? There needs to be a separation.

 

[thehog]

Ah yes, that other great "myth" sold by the Foundation, second only to the 'most tested athlete of all time' line of BS.

Polish is actually correct. Armstrong has donated 10 million of his own money to Livestrong.org.

Which in itself it admirable.

but... there always a but...

However if you are the chairman of the charity and the same charity is paying you a hefty salary and funding your travel to fuel your professional work then it becomes a problem. Because the 10 million investment is tax deductible. Then that money is funnelled straight back into your expenses without hitting the tax man. Thats fraud again.

10 million. That pays the lease on the jet right there.

 

[Velocentric]

Wouldn't that $10 million donation be tax deductible?

Aside from the fact it's a great PR shield, the $10 million is a drop in the ocean compared to some other donors.

 

[thehog]

Wouldn't that $10 million donation be tax deductible?

Aside from the fact it's a great PR shield, the $10 million is a drop in the ocean compared to some other donors.

Thats what I just wrote! Think you need to read my post again.

So the 10 million of personal income is funnelled through the charity untaxed. It then is used for salary and expenses as an "operating cost" for LiveStrong but funds further professional work. Basically means Armstrong pays zero tax on his personal earnings and uses it to pay for his lifestyle.

Go get him IRS!

 

[Velocentric]

*ahem* sorry. I was reading the email summary on my phone. So yes, what The Hog said

 

[Race Radio]

Polish is actually correct. Armstrong has donated 10 million of his own money to Livestrong.org.

Which in itself it admirable.

but... there always a but...

However if you are the chairman of the charity and the same charity is paying you a hefty salary and funding your travel to fuel your professional work then it becomes a problem. Because the 10 million investment is tax deductible. Then that money is funnelled straight back into your expenses without hitting the tax man. Thats fraud again.

10 million. That pays the lease on the jet right there.

Where does this $10 million number come from? Livestrong says it is just over $1,000,000 and much of that was given in his name by another donor.