What’s Your Call?
Over the last 75 years, the PGA Tour (Professional Golfers Assn) says it has made nearly $2 billion in donations to charities — from St Jude Children’s Research Hospital to Boys & Girls Club to myriad local charities.
But it might surprise you to learn that the PGA Tour is a nonprofit business league (501(c)6, like the National Football League and the National Hockey League) and many of the tour’s tournaments are set up as individual 501(c)3 charities.
So, in effect, a major golf tournament, which might award millions in prize money, is no different than a major gala for a local hospital, symphony or children’s cause. It’s event fundraising at bottom, but perhaps with higher visibility (your hospital gala is unlikely to be televised!) and higher financial stakes.
Of course, the benefit of charitable status for these sports charities is tax avoidance … hundreds of millions of dollars.
But here’s the issue … a PGA Tour event might earn, say $12 million and after expenses (including, hypothetically, a $1 million prize to Tiger Woods) pay out $1.5 million to its designated charity. Your hospital gala might cost $50,000 and pay out $250,000 to the hospital capital improvement fund.
Which of these is a better ‘deal’ for society?
This and other issues are raised by this fascinating article from ESPN’s Outside The Lines, Tax breaks power PGA Tour giving.
Says Charity Navigator’s Ken Berger: “The lion’s share of the money is going to big prizes, cash prizes for athletes and all the promotion around it, so it’s really pathetic, actually … Every single taxpayer in this country ultimately is bearing the burden of having to pay the taxes for this wildly inefficient organization that’s giving so little to charity.”
Counters the PGA Tour’s Ty Votaw, noting that the PGA’s contributions — “unprecedented in professional sports” — far exceed its tax breaks: “It’s as if no good deed goes left unpunished.”
You be the judge. Roger and I would like to know …
Does the PGA Tour rate a triple-bogey or a hole-in-one for its approach to charitable giving?
Tom
P.S. If you’re not sure of your golf jargon, consult Wikipedia here.
3 responses to “What’s Your Call?”
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A triple-bogey!
Ken Berger is correct…it’s pathetic…using the good name of charities to feather the nests of overpaid sports figures and the associations, leagues, etc.
Sorry, but getting all bi-polar-y about this, I can’t make the call whether to laugh or cry. NFL, NHL, PGA as non-profits–check that, non-taxable non profits–is hilarious, and tragic. Who gave them that status? You guessed it. Who would need to change it? Same. Likelihood of change? Back to laughing and crying again.
Frankly I am stunned by the statement by Ken Berger “The lion’s share of the money is going to big prizes, cash prizes for athletes and all the promotion around it, so it’s really pathetic, actually … Every single taxpayer in this country ultimately is bearing the burden of having to pay the taxes for this wildly inefficient organization that’s giving so little to charity.”
The athletes/golfers are the draw. The person that buys the ticket to the event gets no tax deduction for his purchase because the purchase is not considered a charitable gift. The money used for the personal ticket purchase has already been taxed. The professional golfers who win the prize money have to pay income tax on the money they win, at the highest income tax rate in most cases. The money that corporate America is a cost of doing business but that money would not have been spent without the existence of the event. Can someone tell me what burden to the taxpayer exists in this scenario?
I think the PGA tour is making a huge contribution to the charitable safety net in this country.