NBA's Chris Paul, other celebrity athletes, invest for a cause
By Elizabeth Dilts
NEW YORK(Reuters) - Giving back to their communities has always been a challenge for pro athletes who get rich quick because they tend to lose the money even more quickly. But even those who manage to build a substantial amount of wealth have a hard time using it charitably in a way that truly has a long-term effect.
Some celebrity athletes are turning to "impact investing," a growing niche of do-gooder strategies that aim to put money toward charitable causes but that would otherwise lack support. Fund managers, of course, also aim to generate income in the process.
The Turner Multifamily Impact Fund, a private-equity style vehicle focused on preserving affordable housing, has lately drawn financial support from NBA All Star Chris Paul.
He joins former World No. 1 tennis player Andre Agassi and Basketball Hall of Famer Magic Johnson, who have invested in other funds and projects run by the parent company, Turner Impact Capital and its founder, Bobby Turner. Their contributions work with dollars from hedge fund billionaire Bill Ackman, the Rockefeller Brothers Fund and actress Eva Longoria.
In an interview with Reuters, Paul said he was frustrated by the feeling that giving away his own millions only "put a Band-Aid on a situation." As a point guard for the Los Angeles Clippers, he has earned money not just from the 5-year, $107.3 million contract he signed in 2013, but also from lucrative endorsements for companies like Nike and State Farm Insurance.
Paul is worth an estimated $30 million, according to Forbes.
"We were doing basketball courts here or there, we'd always do giveaways during the holidays, and we did 10 computer labs," Paul said, referring to a few of the projects the Chris Paul Family Foundation has organized for disadvantaged kids. "But at times, philanthropy can be frustrating."
Whether impact investing is more successful than pure charitable giving is unclear. Continued...