TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, December 13, 2013

ESPN: PGA Tour's Tax-Exempt Business Model Yields Only 16% to Charity

ESPN Outside the Lines, Tax Breaks Power PGA Tour Giving:

ESPNThe PGA Tour's nonprofit business model has allowed it to avoid paying up to $200 million in federal taxes over the past 20 years, and its tournaments -- designed to benefit local charities -- operate in ways that fall short of acceptable charitable practices, an "Outside the Lines" analysis of IRS data finds.

The tour's charitable giving is a centerpiece of its golf events, tournament telecasts and website. The professional golf organization touts nearly $2 billion in donations over 75 years.

Yet that philanthropy has been bolstered by millions of dollars of annual tax breaks for the PGA Tour and its tournaments, which often are run by charities that spend far more on prizes, catering and country clubs than they do on sick kids, wounded vets or economic development. In one case, running a PGA tournament actually caused a charity to lose money -- more than $4.5 million over two years, the analysis found.

"Outside the Lines" analyzed the tour's U.S.-based tournaments that received charitable tax exemptions in 2011 (the most recent year available) and found they spent, on average, about 16 percent on actual charity. That figure is far below the minimum 65 percent that charity watchdog groups say makes for a responsible charity.

One of the groups, Charity Navigator, gave a "zero rating" to each of the tournament charities it reviewed for "Outside the Lines." ...

A breakdown of the 25 tour stops run as 501(c)(3) charities or private foundations can be found here.

Video here.

Prior TaxProf Blog coverage:

Celebrity Tax Lore, Tax | Permalink