[zck]

> “I do not believe that financial insecurity should stop our nation’s elite athletes from breaking through to new frontiers of excellence,” Stevens said upon the announcement of his gift.

So his goal is to prevent money issues from being a thing getting in the way of athletes achieving. But he has structured it in a way that prevents the money from helping this goal.

> Per the Wall Street Journal, “Half will come 20 years after their first qualifying Olympic appearance or at age 45, whichever comes later. Another $100,000 will be in the form of a guaranteed benefit for their families after they pass away.”

So half of it will never be seen by the athlete. Ever. And the other half will not be seen for at least two decades.

What Olympic athlete is not able to achieve as much because they don't have money decades down the road? Or because their heirs don't have enough money? I might be missing something, but how do these two incredibly-delayed payments help them train now? They can't use money they won't see for 20 or 30 years to hire coaches, buy equipment or pay for track time. They can't buy food or pay rent with money they will never see.

[apparent]

It allows them to "income smooth". They will know they're getting $100k down the road, so they can count on having that money to use for their kids' college or part of their nest egg. In the meantime, they can spend more freely.

As for the gift to their heirs, that also allows them to consume somewhat more freely, instead of purchasing (as much) life insurance. Most young people don't, but people who compete in dangerous sports probably do.

[koolba]

$100K in 20 years is worth about $37K today (20 year STRIPS pay about 5%). Nobody is making long term or short term financial plans based on this. It’s just a nice bonus to honor dedication to a sport.

[conductr]

> In the meantime, they can spend more freely

In the meantime, they need income not advice on frugality.

[zck]

Do you think a 21-year old fencer will be more competitive because of this money? A 17-year old swimmer? A 16-year old gymnast?

[maxerickson]

That's like $75 a year of term life insurance for a young healthy person.

[justin66]

You make it sound like the word of an eccentric billionaire is as good as a US treasury bond.

[winddude]

lol, what?

[embedding-shape]

> Another $100,000 will be in the form of a guaranteed benefit for their families after they pass away.

> So half of it will never be seen by the athlete

This can't be right, right? I never heard of people "receiving a donation" that you get the promise of now, but will be given to your family once you die, sounds a bit macabre. And as you mention, also pointless, how would that make them "break through new frontiers of excellence" when they may not be able to afford rent while being alive?

[mindslight]

My very rough lay understanding is that life insurance policies can be quite lucrative due to tax-free growth, and the main thing that holds back taking life insurance on arbitrary people as a general investment strategy is that you need to have some plausible reason why you're connected to someone's lifespan. I have to wonder if this whole thing isn't some giant tax dodge based on taking life insurance policies that pay a small amount to the athletes and the bulk back to whatever asset protection vehicle.

[falcor84]

> will be given to your family once you die, sounds a bit macabre.

To me it sounds more than a bit macabre - depending on the familial relations, it would seem like a motive for them to commit suicide in order to provide for their children or for their children to murder them. I can already imagine the memoires being adapted into Netflix shows.

[pooloo]

Why even question it? Its a donation that no one ever had to make.

[dylan604]

Have you never heard of a trust before? They have all sorts of stipulations depending on what the person creating the trust wants. It's very common for a kid to only get access to their trust when they turn 18 with more access granted at other milestones. It also sounds like a free life insurance policy. Those also only pay out when someone dies.

This doesn't sound macabre at all to me. Sounds more like loophole finding to avoid directly paying the athletes to allow them to keep their amateur status to me.

[coliveira]

This has all the tell signs of a financial lie. I doubt this money will ever materialize. But of course he's immediately receiving the results of the publicity stunt.

[hartator]

Real answer are probably tax benefits for Ross.

He can now report a $100M donation, let it grow for 20 years, pay the actual donation, and pocket the remainder tax free.

[the_sleaze_]

It's called a grantor retained annuity trust (GRAT) and more than beng able to retain the initial investment at the end of a period of time, he would be able to take loans against the principal itself in the meantime (LALs).

However -

> The USPOC currently supports ~4500 athletes, or ~$22,222 each.

Machinations of the uber rich and the morality of them aside, they would've gotten nothing and now they're getting something.

[ex-aws-dude]

But if he retains the money while its growing wouldn't that result in capital gains?

You can't claim a donation while still holding onto the money?

[prawn]

If this individual pulled funding because of a political perspective, is it possible that these recipients lose their future funding if they speak about an issue or act in a particular way?

[winddude]

> So his goal is to prevent money issues from being a thing getting in the way of athletes achieving. But he has structured it in a way that prevents the money from helping this goal.

Yup, the biggest challenge faced by most olympic athletes, and those doing an Olympic campaign, is affording to train, travel, gear, etc, especially in more niche sports, bobsleigh, etc.

[bsder]

> But he has structured it in a way that prevents the money from helping this goal.

I suspect it's worse. It's structured in a way that will probably harm the goal.

The money will go to people who somehow already managed to marshal enough resources to get to the Olympics. Good on you for supporting people after the fact, but by that point money problems have long before winnowed far too many qualified athletes out of the pipeline.

That kid from Moab would be an amazing swimmer. That kid from Punxsutawney shoots one hell of a bow. That kid from Tuscaloosa would have a smoking slapshot. None of them have a hope of clearing the initial monetary barriers.

The most effective time to apply resources is when the athletes are young, not done.

[giarc]

>It's structured in a way that will probably harm the goal.

Potentially could also stop others from donating to athletes because they hear this and think "some rich guy already took care of them" not knowing the details.

[nrmitchi]

This has some real "Scott's Tots" energy to it.

[TacticalCoder]

You ask a just question and shouldn't be downvoted.

A friend of mine is an ex-pro tennis player. She's nearing 60 years old now. She's been n 1 in her country and n 2 worldwide in doubles.

And it's not easy for athletes once they age: when they're still young, they make money doing their sport. Then they find other things, often related, to do: for example she trained a world number one for years.

But later on, it gets more difficult: she became a tennis teacher. And the country's sport federation gives her money for quite a few years... But not until 65 years old.

It's precisely later in life that many pro athletes do need money.

Only those at the very, very, very top do make a really good living. For the others, it's hard.

So $100K at 45 is welcome.

P.S: also if you're 100% guaranteed to get $100 K a 45, I'm sure there are way to use that as collateral for borrowing before you're 45. But that may defeat the idea of giving it when they turn 45.

[zck]

Is your argument that, if she knew she was going to get $100,000 in 2010, she would have been number 1 in the world in doubles in 1990? That's how I understand the stated goal of this gift.

[JumpCrisscross]

> half of it will never be seen by the athlete

Guaranteed benefits can be monetized. The gift’s goal is to start building generational wealth. But nothing prevents me from lending one of these athletes $50k today if they give me an LPOA over that death benefit tomorrow (assuming this doesn’t breach any covenants).

[stouset]

$200k is not even remotely close to generational wealth, particularly when structured as $100k 20 years from now and another $100k 50-ish years from now. Those would be worth an estimated $55k and $22k in inflation-adjusted dollars.

It’s a totally different story if those are in a trust which is invested on behalf of the athletes, which pays out the invested value at time of disbursement. But I would be shocked if it were set up that way. Pleasantly shocked but shocked nonetheless.

[linehedonist]

Is there any guarantee he will actually pay out in 20 years? Is this money going into escrow, or is this just a promise that will be completely forgotten in a couple decades?

[giarc]

Ask Michael Scott how this works out.

[reaperducer]

I might be missing something, but how do these two incredibly-delayed payments help them train now?

They call J.G. Wentworth?

/Worst earworm since 1-877-KARS-4-KIDS

[throwaway439080]

Wow. When I saw the headline, I thought this would be a generous donation so that Olympians wouldn't need to work day jobs to make ends meet, allowing them to focus on training. But... nope...