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Tuesday
Nov132012

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

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Reader Comments (16)

I love Frank Hannigan.
11.13.2012 | Unregistered Commenterjohnhuggan
Answer Frank's question Geoff... what is your major malfunction?

Thank you for making my night a second time!
11.13.2012 | Unregistered CommenterAmen Coroner
Frank Hannigan rocks! I have missed the occasional missive from Saugerties.

And this "charity" trope needs to go, too. "Charity" (Caritas) has lost its meaning as one of the three theological virtues in most of the world and certainly that of PVB, where it exists, virtually, to make too many feel too good about themselves.

And btw, what the hell is the matter with you?! Made my night, too, as I finish up some futile grant writing chores.
11.13.2012 | Unregistered CommenterKLG
Put a piece of the Open on the Golf Channel? uh oh.
11.13.2012 | Unregistered CommenterDevon
"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." Thank you, Mr Hannigan!
11.14.2012 | Unregistered Commenterfreshfrankie
As I said in an earlier thread.....tough room.
Amazing how a post from someone that actually has facts and an understanding of the truths behind something can really explain a situation. i think over time we're all realizing that just because someone calls themselves a charity doesn't always mean that funds are well spent or that they do anything more than get tax breaks. Red Cross ceo makes 1M+ in salary a year. charities know how to waste money too. They just know how to deflect any criticism by the thought of them 'doing good'.
11.14.2012 | Unregistered CommenterCharlie
Call the Tournament Director Humana Challenge. When they inquired about giving directed "charity funds" from the tournament to a non-profit agency outside of The First Tee, they were turned down. The TOUR's contracts are not optional. How do you think the TOUR raised $106 million for The First Tee over the next 5 years?
11.14.2012 | Unregistered CommenterRyan
I'm surprised this issue wasn't raised a long time ago.
11.14.2012 | Unregistered CommenterDTF
I love John Huggan AND Frank Hannigan.
11.14.2012 | Unregistered CommenterSteve Elling
Frank Hannigan notes the emperor has no clothes. So should we all note that.
11.14.2012 | Unregistered CommenterGolden Bell
Clay feet, too.
11.14.2012 | Unregistered CommenterKLG
Thank you Frank. Lone voice in the wilderness. Now how about a comment on the closed shop status of the Champions tour? Or the "grab the cash" closed shop tour that it should be called.
11.15.2012 | Unregistered Commenterthebigdad
DTF I thought it was. Wasn't this what the Tour had to fight a few years back and successfully won due partially to TF's DC connections?
11.15.2012 | Unregistered CommenterPeter South
It'a clear that Frank Hannigan uses whatever avenue available to carry on his bitterrness toward the USGA or any other entity in golf that has not givien to him what he considers his proper due. I would prefer (but it is your site) that you do not give this self promoter who will, and has, used any hyperboly to make a point. Factual or not. It doen't matter to Frank. He may have a legitamate point as to the maatter of taxation of the PGA and the USGA, but he certainlly does not make the case. So what does it matter how charitable contributions reach the recipiiants. Is it realy important to the St. Jude Hospital that the PGA has a contract that benifits St. Jude , the PGA and the sponsors. So what. The money gets where it is best used. And sluring volunteers is one more attempt to slam his former benifactor and makes clear his real motives. In the interest of full disclosure, I was a USGA volunteer for several years and worked several national championships. I never, nor do I know anyone who ever, received chartered jet transportation to an evert. And, for sure, Hannigan could not have conducted any tournament without those "volunteers who get in the way." And what is wrong with a vlunteer deducting hotel expenses, airfare, and any other expenses when doing a volunteer job. Hannigan wants you to believe that there is something unethecal about this. Well I don't write the tax rules. I have also deducted expenses for working for the food bank, the church and other groups and have no qualms. Perhaps he has also. I suggest that you not give Hannigan a platform to spew his resentment over his "treetment" by his former employers. After all, it is they who may have the real complaint. Didn't the square groove problem start duiing his term. Huge legal fees resulted. Poor juldgement, by the Executive Direcctor perhap? And if the USGA championships are worth so much money, why didn't he profit by that value during his tenure? Frank move on. I for one, don't need any more pontifications.
11.17.2012 | Unregistered CommenterBill Provan
Bill,
I certainly don't agree with your take on Frank's views, so I suggest in the future using the scroll wheel (and spell check).

As for the jet comment and "unethecal" behavior, it related to this:

http://www.geoffshackelford.com/homepage/2006/1/22/usga-private-jet-travel.html

I will embed that in the item for those unaware of the USGA's jet chartering days for the Executive Committee.
11.17.2012 | Registered CommenterGeoff

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