As Patriots foundation charitable giving soared, the team’s vendors carried the ball.
No defensive line in history could stop the Patriots’ charitable giving and publicity machine.
Public records show that even as the team’s owner, Robert Kraft, stood accused of paying for sex acts in Florida in 2019 (charges that have since been dropped), the New England Patriots Charitable Foundation Inc., a grant-making organization, raised $7.3 million compared with $4.5 million in 2018. That 60% increase came while Kraft still faced solicitation charges. Meanwhile, a US senator redirected a Kraft campaign donation elsewhere and at least one of the foundation’s grant recipients returned money, citing the principle that would be violated in accepting it.
For companies partnering with the Patriots, it was business as usual, regardless of any ethical issues in play. The charity reported receiving contributions from 155 donors in 2019 versus 151 in 2018. As appears to be a pattern, when it comes to charitable donations, Patriots vendors are carrying the ball while the Kraft family scores points with the public.
“It certainly appears that [vendors] recognize contributions as a condition of being a business partner,” said Aaron Dorfman, CEO of the Washington, D.C.-based National Committee for Responsive Philanthropy, adding that although such business-vendor arrangements are not unprecedented, the foundation’s reliance on companies doing business with the Patriots is reason for concern..
“It’s less pure as I’d like,” Dorfman said. Kraft’s family “gets cachet in the mind of the public, and they’re using other people’s money to do it.”
In 2019, the Patriots foundation’s largest donor not directly affiliated with the team was Vinyl Development LLC, which does business as Zudy. The Florida-based software maker, which markets a development tool designed to enable the creation of software apps “in days instead of months” without conventional coding, contributed $135,000. The company also touts the Patriots as one of its customers and uses testimonials by executives with the Kraft Group LLC (Kraft’s umbrella company) in advertisements.
The reportedly 150-employee Zudy was founded by Thomas R. Kennedy, a multimillionaire tech entrepreneur. While the company has been trying to attract the attention of Patriots fans, Kennedy’s business dealings caught the eye of the Massachusetts Department of Revenue. In late 2019, the DOR’s Appellate Tax Board released a ruling detailing how Kennedy attempted to avoid $6.7 million in tax payments by claiming that he lived in Florida separately from his wife and four sons in Brewster, Mass. The case is notable because Kennedy’s approach to tax payments appears to conflict with his charitable giving.
After presenting his case to the ATB in October 2017, the board found that Kennedy had made several “ministerial moves” to create the appearance of Florida residency after he incrementally sold his previous company, BackOffice Associates Inc., to Goldman Sachs Group Inc. (for $240 million) in 2011. The ATB ordered Kennedy to pay $8.7 million, including penalties of more than $1.3 million, according to its ruling.
In 2018, Zudy and its executives were the second-largest donors to the Patriots’ foundation. Combined, they donated $216,500. That amounted to more than the total donations by major corporations Bank of America Corp. ($30,000), Bose Corp. ($30,000), ESPN/Disney ($50,000), Pepsi-Cola Co. ($70,000), Hilton Hotels Corp. ($10,000), and Anheuser Busch Inc. ($25,000), the IRS filing shows.
Zudy co-founder Patricia Kennedy didn’t respond to requests for comment. Kraft Group controller Michael Joyce provided the IRS filings for $14 apiece but also declined to comment on the foundation.
Why would a relatively small company like Zudy donate such an outsized amount when its founder would apparently go out of his way to save on his taxes?
It’s good for business, observers said.
Former NFL lineman Michael Oriard, the author of books examining the power of the NFL, acknowledged that he didn’t have any special insight about the Patriots’ business dealings. But donations to the charity are indicative of the type of back-channel deals that can occur in the NFL.
“My guess would be that the companies doing business with the Patriots want to keep in Kraft’s good graces, to keep their business,” he said. “And the companies not doing business with the Patriots are trying to curry favor for future business.”
The big give
Kraft, a Brookline native and resident, bought the Patriots in 1994 for $175 million. After winning six Super Bowls, the franchise is now worth more than $4 billion, the second-most valuable NFL franchise after the Dallas Cowboys’ $5.7 billion. The Patriots generate $630 million in annual revenue, and Kraft has amassed an estimated personal wealth of $6.6 billion, according to Forbes.
The Patriots Charitable Foundation, based in Foxborough, Mass., was established in 1996. NFL spokesman Brian McCarthy said the league doesn’t regulate team charities or monitor their operations. However, NFL Foundation contributed more than $126,000 to the Patriots charity in 2019, its fifth-largest donor, the IRS filing shows.
The donor list includes other familiar names: United Healthcare Services Inc., Raytheon Technologies Corp., Harvard Pilgrim Health Care Inc., and CBS Corp. Considering the nature of the charges filed against Kraft, it’s noteworthy that CBS would donate $50,000. The network made a public effort to change its culture after several sexual harassment accusations involving its executives and on-camera stars were highlighted as part of the #MeToo movement. As for how that went in reality, according to one 60 Minutes producer in a 2019 report, no meaningful changes have taken place at the network, and harassment of women is still tolerated.
“It appears that CBS continues to protect senior male talent at the expense of junior women—business as usual.”
In 2019, the Patriots Charitable Foundation distributed $6.1 million in grants to 206 recipients compared with $4.1 million to 217 recipients the previous year. The largest 2019 grants ($500,000 apiece) went to the Anti-Defamation League in New York and the Tree of Life Congregation in Pennsylvania, the latter the scene of a mass shooting the year prior. In 2018, the largest grants ($250,00 apiece) went to the Boys & Girls Clubs of Boston, where son Joshua Kraft was the CEO until recently, and the Elton John AIDS Foundation.
The Patriots Charitable Foundation also receives money from motorists. The Massachusetts Registry of Motor Vehicles issues special $40 license plates bearing the Patriots logo. During fiscal 2020, the plates generated $418,687 for the foundation and $22,005 for the state, an RMV spokeswoman said. (New Hampshire and Rhode Island offer similar products generating additional revenue for the Patriots’ charity.)
Even closer to home, Robert Kraft is also president of the Kraft Family Foundation Inc., which in 2018 reported assets of $64.1 million. It’s largely funded by dozens of investment funds and made its largest 2018 donation ($1 million) to Rice University in Houston, IRS filings indicate.
In the aftermath of the 2019 charges against Kraft, Patrick Moynihan, president of North Kingston, Rhode Island-based the Haitian Project Inc., declined a $100,000 donation from the Patriots Charitable Foundation. Moynihan cited the negative effects of prostitution and Kraft’s response to the charges.
“We can’t accept philanthropy from an individual that has not only participated and supported the [prostitution] industry, but refuses to recognize that it is wrong and fundamentally harmful to society,” Moynihan said at the time.
What went unreported was that Moynihan’s stance came at an inopportune time for the Haitian Project. The group posted revenue of $1.6 million in 2019 compared with $3.2 million during 2018, the charity’s IRS filings show.
Meanwhile, Bank of America Corp. whose chairman and CEO is Patrick’s older brother Brian Moynihan, donated $50,180 to the Patriots Charitable Foundation in 2019.