Basketball Recruiting on the Nonprofit Margins

He said he expects the money will come in checks from wealthy boosters who will then take a tax write-off. He said he will put the money back into his summer league program. "If it came in cash," he said, "I would just keep it for myself."

One prominent AAU coach said Vaccaro encouraged him to create a nonprofit foundation a decade ago as a way to "clean your money." The coach said he declined because he felt it was illicit, but acknowledged that if he were presented with the idea now he would consider it because it is an effective money-maker.

"This is the most clever, best way of doing it," Vaccaro said. "There is no hiding. The guy who gave the check has to issue it. The guy who receives it has to deposit it. How they disperse the money is the discretion of the team, which I don't feel there is anything wrong with. You worked in the shadows prior to this new way of doing it."

Two head coaches said that when they got jobs as assistants at high-level college teams in the 1990s, they learned to drop notes under the doors of high school coaches and donate to foundations. One of the coaches said, you have to decide whether you want to "sell your soul."

"If you're a young assistant, how are you going to get the AAU coaches to talk to you?" the coach added. "How are you going to make your phone call stand out from the rest? It's something you have to do. . . . If you go to the bar and don't drink, you don't get any girls. It's money to show that you are serious, that you are willing to dance."

Business of Basketball

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Summer basketball programs can be big business, with some reporting budgets of more than $100,000 to the IRS. The programs with the players rated the best in the nation are sponsored by Adidas, Nike or Reebok, which compete vigorously to outfit and financially support the best teams.

For the shoe companies, the investment serves a dual marketing purpose: Not only does it ensure that the top up-and-coming players wear their gear (and maybe one day endorse their products if they become NBA stars), but having idolized youngsters wearing their products can make lesser players, classmates and fans want to wear them, too. Add the fact that Vaccaro said the investment is tax-deductible, and the marketing expense becomes quite attractive for the companies.

Summer teams are commonly referred to as AAU programs although some only compete in shoe company-sponsored events that are not run under the auspices of the Amateur Athletic Union, which stages close to 300 national championships per year.

The Richmond-based Squires Boys Basketball Education Foundation received $18,000 in 2003 from Adidas to sponsor its program, while another Virginia area organization, the Boo Williams Summer League, received $115,000 in 2004 from Nike.

The coaches said they need more money because there are more age groups within each program and more events to attend each year. Teams usually play in five to 10 tournaments per year in the spring and summer, and top players attend one of three shoe company-sponsored camps in July, where they are scouted by hundreds of college coaches.

A late-July event annually attracts 600 teams to Las Vegas, where teams can sometimes play as many as four times in one day. Some teams travel by bus around Las Vegas, while others cram into minivans. Summer league coaches pay for everything from food to airfare to hotel rooms. The 2004 expenses for the Squires program included $7,945 for airfare, $3,582 for food, $2,625 for lodging, $9,495 for tournament and AAU fees and $3,016 for telephone costs.

Several summer league coaches said they hold fundraisers to supplement money their programs receive from shoe contracts. And still some said they are forced to pay some travel and expense costs from their own pockets. Dwaine Barnes, the coach of the Ohio D-1 Greyhounds team that featured high school all-American O.J. Mayo, said: "I've been paying out of my own pocket before Reebok came [to sponsor the program]. And I'll still be paying out of my own pocket once Reebok leaves. Every program has to work its butt off and fundraise."