Letter From Saugerties: Taxation And Golf's Non-Profits

Former USGA Executive Director Frank Hannigan saw my post on Tom Coburn's "Waste Book" and the non-profit status for pro sports leagues. He took issue with my defense of the PGA Tour and their charitable contributions...

Did I hear you say the Tour should enjoy tax exempt status because of the money it gives to charity?

What the hell is the matter with you?

The Tour gives nothing to charity. The money is donated by the host organizations, e.g.,  the Salesmen's Club of Dallas.

Charity is voluntary, optional.

There is nothing optional about the Tour's contractual relationships with the tournament hosts. Suppose the Tour was to say to its Dallas host that the contract in the future would not allow all admissions income to go to the host as it does now,  that it would be part of the Tour's income in the future.

The negative publicity would be enormously harmful to the Tour. The Salesmen's Club, which does a superb job, would walk away.  Thus, the Tour has no choice. The operation, which does indeed result in large gifts to charity, has become an essential part of the Tour's way of doing business.

Senator Coburn is right.  Moreover, his attitude should extend to large non-professional sports organizations.  My alma mater, the USGA, enjoys 501C3 tax status.  Thus, its volunteers can deduct their expenses for getting in the way of the staff at US Opens after being flown to the site in a chartered jet.

Meanwhile, the USGA piles up surpluses with more to come. Its next TV contract,  with NBC, which lusts to put a piece of the Open on The Golf Channel, or Disney, which would like to put all four days on its ESPN, will be colossal.

That money should be subject to federal taxation.

Frank Hannigan
Saugerties, New York