Charities May Gain $125-Million From Sale of Kansas City Royals

Charities in Kansas City, Mo., stand to gain about $125-million from the proposed sale of the Kansas City Royals baseball team by the Greater Kansas City Community Foundation, which was bequeathed the team by its former owner.

The deal is subject to approval by Major League Baseball team owners. If approved, it would fulfill a goal of former owner Ewing M. Kauffman, who formed a trust that donated the team to the community foundation upon his death in 1993. His intent was for the foundation to seek a buyer who would keep the team in Kansas City, with the proceeds of the sale going to charity.

The Internal Revenue Service ruled in 1995 that Mr. Kauffman’s trust could take a charitable-contribution deduction for the bequest.

A local-investor group headed by Miles Prentice, a New York real-estate lawyer, has agreed to buy the Royals for $75-million.

If the sale is approved, charities would receive nearly all proceeds, plus $50-million in an operating fund that Kansas City donors previously raised to help cover the team’s losses pending its sale.

Two groups — the Ewing Marion Kauffman Charitable Foundation and the Julia Irene Kauffman fund, which is overseen by Mr. Kauffman’s daughter — would recommend how the sales proceeds would be disbursed. Money that was given for the operating fund would be funneled through the community foundation and distributed through funds set up by the original contributors.

A few donors to the operating fund have announced plans to give money to local non-profit groups, but it is not yet known which charities would receive the bulk of the money from the team’s sale.