Tom Brady Allegedly Used His Charity’s Funds To Pay For His For-Profit Company
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Tampa Bay Buccaneers quarterback Tom Brady is being accused of using money from his charity, TB12 Foundation, to fund his for-profit business, TB12 Inc.
First reported by The Daily Beast, Brady is alleged to have used donations from the TB12 Foundation for sports therapy sessions. Workers from TB12 Inc. did the therapy sessions. Since TB12 Foundation began in 2015, the nonprofit organization has paid TB12 Inc. $1.6 million. Brady founded TB12 Inc in 2013 along with business partner Alex Guerrero.
TB12 Inc. is listed as the only independent contractor for sports therapy sessions for the TB12 Foundation.
Guerrero, who is also Brady’s health coach, is listed as a director of the TB12 Foundation, according to 2021 tax records. Former TB12 Inc.’s CEO John Burns was also a director for the TB12 Foundation. Tax records also showed TB12 Inc. Brady and Guerrero are listed as the “majority owners” of TB12 Inc.
Executive director of independent nonprofit monitor, Laurie Styron, spoke to The Daily Beast about the questionable findings over Brady’s corporation and foundation.
“I can say that I haven’t come across this type of arrangement too often in my 19 years of nonprofit financial analysis in a watchdog role,” Styron said. “A charity’s board members have a fiduciary duty to act in the best interest of the charity at all times. Doing so becomes more complicated when there are competing interests between nonprofit and for-profit legal entities, particularly when the two organizations share key staff who have to balance their fiduciary duties between the two. It has the potential to get tricky if there aren’t any adequate safeguards in place.”
In 2015, TB12 Inc.’s net assets were listed at $862,460 in the TB12 Foundation’s charity records 2015 and jumped to $2.17 million in 2016. In 2017, TB12 Inc’s net assets went up to $5.72 million and dropped to $3.62 million in 2018.
In 2019 TB12 Inc saw a drastic drop in net assets to $176,435 with a $7.41 million negative balance.
“When a charity has related for-profit legal entity, it can turn into an accountability black hole,” Styron added. “If the charity is granting or reimbursing funds to the for-profit entity, and the for-profit is then paying money to other companies or individuals, there is a danger that charitable dollars are indirectly subsidizing the expenses of the for-profit. Money is fungible.”
TB12 Foundation told The Daily Beast that charity donations do not cover expenses or salaries for TB12 Inc.
