> “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.
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.
$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.
> In the meantime, they can spend more freely
In the meantime, they need income not advice on frugality.
Cash is fungible. Money not spent on kids is money you can spend now.
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?
If that money is what makes them feel comfortable e.g. dropping out of college to focus on their sport, absolutely.
Then they are likely fools in more than one way. They might be awesome athletes, and dropping out to pursue their sport might be absolutely the right thing for them to do. But a promise of $100k after age 45 is not the reason.
Not in the amount promised unless they have non positive financial acumen
That's like $75 a year of term life insurance for a young healthy person.
Not to be too pedantic, but this is not a term life insurance policy. It's a guaranteed benefit, so you should compare it to a "whole" life insurance policy (US terms). I see $500k benefit for $500+/mo, so I guess $100k benefit is $100/mo. Not amazing but not a joke either.
You make it sound like the word of an eccentric billionaire is as good as a US treasury bond.
> 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?
> 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.
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.
Yes, I've heard of all of those things, but never used in a way to motive the person who is currently alive.
A trust that says you don't get access to the rest unless you graduate college isn't meant as motivation? Allowing extra payout for a house only if married? People have put all sorts of limitations on trusts specifically as motivation.
> A trust that says you don't get access to the rest unless you graduate college isn't meant as motivation?
No, a trust that is setup to give your family money when you die, in order to serve as motivation for you to "break through new frontiers of excellence"
This isn't motivation though. This is a reward for achieving a place on the Olympic team. If this does not continue as a thing past the upcoming Olympics, athletes will still train in hopes of qualifying for the next team. They won't be doing it because this might be available to them. If they qualify, this will just be a bonus.
Why even question it? Its a donation that no one ever had to make.
“You only get this money if you submit yourself to Christ and living a conservative lifestyle”
Still not worth questioning?
That isn’t a donation.
Also, $donator is making, as far as I know, zero demands. These people would be competing if they had to pay. Actually, most of them do have to pay.
Your analogy is comparing apples-to-sqrt(-1)
If there are stipulations for receiving the money then it is a demand.
If you think the above example isn’t a donation then I don’t see the logic behind seeing this as a donation.
And to be clear, I view it as a donation that is still probably net good, but it’s not a selfless donation. The timeline as well also means it can be clawed back at some point in time.
I’d probably rate it a 2/10 for “goodness” where anything greater than 0 is still good.
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.
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?
He'll donate to a trust/non-profit he controls that will direct the investment. That allows him to take the tax benefit today and keep the money
Not if he controls the funds. Tax deductions are only afforded to contributions if they are charitable and am actual gift. If the contributor benefits, it is bit deductible, and control of donated funds is a benefit, as is the ability to direct funds to a particular person or persons.
This has some real "Scott's Tots" energy to it.
> 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).
$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.
> 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.
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...
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.
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.
People absolutely do give up their athletic career to start a normal career for better financial security.
How many of these normal careers pay a single paycheck of $100k that can't be cashed for twenty years? That's what this offer is.
The real answer here is that he is mad about people protesting what Israel is doing in Gaza. This $100M donation is being made with funds he had given to UPenn. He has taken it back, via lawyers, because they allowed the protests to go on. He is now just taking that original donation and moving it somewhere else. Not that I am against the Olympians getting paid, just some context.
Sources: https://philanthropynewsdigest.org/news/donor-pulls-100-mill... https://thehill.com/homenews/education/4348656-upenn-loses-1... https://www.timesnownews.com/world/who-is-ross-stevens-stone... (many more)
This answer is correct.
I’ve been close to some people who tried to make a living as a professional athlete. This is a really special way to help passionate, hard-working people live out their dreams and potential.
> Billionaire financier Ross Stevens is changing that. Starting with the upcoming Milan Cortina Olympics, he will give $200,000 to every U.S. Olympic and Paralympic athlete—even if they don’t win a medal. 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.”
> His entire donation to the U.S. Olympic & Paralympic Committee (USOPC), announced last March, is $100 million—a record breaking gift to the organization.
Just...lol.
Totally outrageous.
"I want to give a ton of money to olympians but... they are too young and dumb to get it now and also they should get half of it after they die."
Unreal paternalism.
Kinda of a side note but a way I try to talk to people about how much a billion dollars is is "how many people can you hire each day at X dollars before you start losing money".
Here's the setup: you have a billion dollars invested in some account earning some interest, let's say 5% because that's like bond rates (lower than S&P500). Day 1 you generate interest and don't hire. All following weekdays you hire a new employee and day then daily at a yearly rate of Y, say $250k/yr. Most people are going to be surprised that you can basically go an entire year before your account has less than a billion dollars.
I do this because it's so much money the daily interest is not negligible. I mean 1000000000*0.05/365~=$137k. Is back of the envelope and estimating, but it gets the point across. (So you can hire people daily at $100k indefinitely...)
Anyways, googling suggests there's ~600 American Olympians that participated in 2024 and another ~250 paraolympians. So what, we need on the order of $10bn to solve this? I can think of a lot worse ways we currently spend that kind of money and about 15 Americans where this would be less than 10% their total wealth and 11 of those people made more than twice that just last year... I'm not saying anyone should but hey, Elon could solve issues like these without blinking an eye. Probably better PR than anything else he could do
Your illustration is really long winded.
If you invested a billion dollars at a conservative 5% interest rate, you could employ 200 people at 250k a year on the interest alone.
You'd need to account for inflation right?
From what I can piece together from Wikipedia/news that is ~1000-1200 athletes in the most recent 4 year cycle (~600 for Summer Olympics, ~250 for Winter, and ~200-400 for Paralympics). That therefore requires ~$200-250M per 4 year cycle.
Granted, that's 20 to 60 years down the line...
Oh this explains it:
> Starting with the Olympic and Paralympic Games Milan-Cortina 2026, and going at least through the 2032 Games, every U.S. Olympian and Paralympian will receive $200,000 in financial benefits for each Games in which they compete:
> Starting with the upcoming Milan Cortina Olympics, [Billionaire financier Ross Stevens] will give $200,000 to every U.S. Olympic and Paralympic athlete—even if they don’t win a medal. 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.”
I wonder if this will adjust for inflation / earn interest at all. If a 20 year old olympian dies 70 years later, then when their family gets $100,000 USD nominal, it will be the equivalent of getting $8,400 in today's money. Assuming the same average inflation from the last 70 years (1956->2026).
> If a 20 year old olympian dies 70 years later, then when their family gets $100,000 USD nominal, it will be the equivalent of getting $8,400 in today's money
Did you inflate over 70 or 50 years?
My read of the original article [1] is it’s a defined benefit. That said, “athletes will receive $200,000 for each Olympics they compete in,” so an athlete who competes for four seasons could stand to get $400,000 when they turn 45 and potentially borrow against their death benefit.
[1] https://www.wsj.com/sports/olympics/team-usa-milan-cortina-e...
I wonder what the "breakage" will be in 2096. How would your surviving family members know to cash in this benefit? You keep a certificate in your safe deposit box, next to the expired term life insurance papers, that says, be sure to contact so and so to collect some money after I die?
> How would your surviving family members know to cash in this benefit?
Same way all benefits and assets are passed down. One part trustee’s work. Four parts the beneficiaries’.
My guess is the figure is after interest, that way because of compounding interest, 100k ~20 years after debut and another 100k which occurs let’s assume 50 years later on average would be substantially less than it sounds on paper. And for me at least, a smaller amount in my 20’s that I could use for a house deposit or similar would be worth farm more than 100k in my 40s and another 100k on my death
This seems like some billionaire trying to inflate their donation amount by talking in terms of decades not now. I’m sure there’s conditions attached too (some reasonable but I’m sure some are just intentional land mines)
> seems like some billionaire trying to inflate their donation amount
My reading is Ross made a $100mm donation to the USOPC.
> I’m sure some are just intentional land mines
You’re sure based on zero evidence.
Weird aggresssion. You trust billionaires?
$100K after they pass away? I am curious what those will be worth by then. This whole thing sounds like some tricky scheme. He can probably take these 100M from his profit, stuff it into some fund to avoid taxes and let the fund grow, meanwhile the real value of what he has to give will be shrinking as the years pass.
Check the fine print
Npv the fine print