Thanks to reader Mark for catching the Washington Post's front page piece by Joe Stephens conducting an in-depth investigation of the Tiger Woods Foundation's charitable giving and expenses. Stephens finds that, yes purses are a tad excessive in golf.
Tell me what you think, but I felt like the piece was stretching to make the point that there are too many conflicts of interest surrounding Foundation operations.
The charities that host such PGA Tour events collectively raise millions of dollars for good works in the community. Last year, the PGA and related tours reported having raised a total of $105 million. "We're very proud of that," said Ron Price, the Tour's chief financial officer.For me, this seemed to put a damper on most of the conflict-of-interest issues:
Less well known is that much more money goes toward expenses and operations -- especially the purses taken home by golfers. Tour officials said their average tournament provides golfers with a purse of $5.7 million and, after paying costs associated with the event, generates $1.75 million for charity.
"You can certainly question the validity of calling something a charitable event when so much money goes to individuals," said Sandra Miniutti of Charity Navigator, a watchdog organization that rates nonprofits on efficiency.
Charity specialists say such disparities are not uncommon when it comes to special fundraising events. "It is not unusual for them to be on the expensive side, and relatively slim on the charity," said William Josephson, a New York lawyer who specializes in the ethics of philanthropy.
Charity Navigator gives the Tiger Woods Foundation four stars -- its highest rating. One reason is that the foundation in 2005 reported spending $1 million, a relatively low percentage of revenue, on management and fundraising expenses. A factor keeping those numbers low, but not considered in the rating, is the foundation's receipt of millions of dollars raised by its sister nonprofit, the Charity Event Corp., which reports its expenses separately.
The Charity Event Corp. is the least known of Woods's charities but brings in the most money. The organization's fundraisers include the Target World Challenge golf tournament at Sherwood Country Club north of Los Angeles and Tiger Jam concerts in Las Vegas.
From 2004 through 2005, Charity Event Corp. raised $29 million and gave $6.7 million in grants and contributions to Woods's foundation and other charities, IRS records show. Much of the remainder went toward expenses, including golf prizes totaling more than $10.25 million. As in the case of many tournaments, officials at the charity said, the PGA Tour subsidizes part of the purse in exchange for television rights.
This part was intriguing...
From 1999 to 2002, records show, the Tiger Woods Charity Event Corp. paid $375,000 to IMG for what the nonprofit's tax returns describe as consulting services. IMG has helped develop Woods's public image and helped win him millions of dollars in corporate endorsements.
In 2000, the head of IMG's golf division, Mark Steinberg, joined the board of the Tiger Woods Foundation. Steinberg is Woods's agent at IMG.
Charity watchdogs are always on the lookout for conflicts of interest and self-dealing at nonprofit organizations. One charity has established a Web site that offers stark advice about how sports agents can use athletes' foundations to collect a bigger paycheck.
"By setting up a foundation . . . for your client you can obtain COMPENSATION FOREVER from gifts made from this foundation," says the Web site of the National Heritage Foundation. "You, the agent, may receive compensation directly."
McLaughlin said there was no conflict of interest between Steinberg's board position and the payments to IMG. The payments were commissions for the company's work attracting sponsors for its tournaments, he said. In recent weeks, IMG has been working to line up financial backers for the AT&T National, and IMG will be paid commissions for any sponsorship money it brings in, he said. Such commissions are paid competitively and IMG receives no special consideration from the charity.