The LeBron James Family Foundation has announced that if the 1,100 kids currently in 3rd to 7th grade fulfill the elements of the "I Promise" program that the Foundation will pay their way through college.
This has led to claims that LeBron is paying to put 1,100 kids through college at a cost of $41 million. I love LeBron, but people, this isn't "Scott's Tots" - he isn't going to be standing with his schlong in this hand 5 years from now hoping he still has enough money to write checks.
First -- the money is available only to kids who finish the Program. Part of the Program is getting acceptable grades and adequate standardized score results and getting through school in Akron. If you assume that 30% of the kids will not complete the program, I think you are giving the kids a lot of credit.
Second -- the money only goes to the kids if they go to the University of Akron. Assume you are a poor kid from inner city Akron and you stay in school, stay out of trouble, and have, say, a 27 on your ACT. You probably can go to most colleges for free or close to free, either on a need based scholarship or a merit based scholarship. If you can go to Ohio State or Michigan, do you want to go to Akron? Harvard or Akron? Stanford or Akron? You get the point. Assume that the kids who can go to a better school will. Let's say that is 10% of the remaining 750 kids. So drop 750 to 675.
Third -- the Foundation is partnering with the University of Akron. Do you believe that a poor inner city kid from Akron would be charged full freight for attending the U of A if he or she had stayed out of trouble, did well in school and had a decent ACT score? I do not believe that to be the case, and the U of A web site states that it awards both merit and need based scholarships up to $10,000 (tuition is currently $9,500). If LeBron approached the U of A, do you think that they screwed him and said, "Yeah, LeBron, a lot of these kids would actually go here for nothing or next to nothing, but if YOU will pay for them, we are going to charge YOUR FOUNDATION $10K/kid." I really, really doubt it. Therefore, LeBron probably said, "What would you charge a kid who was in this situation?" Around $3,500 on the average. "OK, that is what I will pay."
$3,500 X 675 kids = $9,450,000.
Fourth -- LeBron isn't paying the $9,450,000. It is the Foundation that is paying it. I seriously doubt that every dollar in the coffers of the LBJ Foundation is contributed by LeBron James. If it is, great, but generally Foundations do fundraiser and get donations, etc. Maybe not the case here, but, again, someone should at least look at the source of the funds at issue. If Dan Gilbert gives $10,000,000 a year to LeBron's foundation it is one thing. If Gilbert gives $0 it is another.
Fifth -- I doubt that anyone would be so stupid as to Michael Scott it and promise payment in the future without some clear source of payment. It is possible that the Foundation gave U of A, for example, $6,000,000 today and said, "That is it. That is all I will pay. You invest it and you agree that these kids all go for free if they want." Or you get someone like a bank or insurance company involved and buy some investment product today that they will guaranty will amount to the possible tuition payment in 4-5-6 years.
LeBron ain't paying $41M.