Tiger Woods’ charities raised $50 million. What now?

Tiger Woods’ charities raised $50 million. What now?
December 23rd, 2009, 5:00 am · Post a Comment · posted by Teri Sforza, Register staff writer
Say what you will about Tiger Woods and his latest antics.

The golf star’s OC-based nonprofit foundations raised more than $50 million and spent more than $40 million last year, and got high marks from charity watchdogs (despite criticism that glitzy golf tournaments with millions in prize booty aren’t traditional nonprofit endeavors).

Executive Greg McLaughlin’s compensation totaled $503,138, which eclipses than the average charity CEO compensation of $150,000 - but is not necessarily out of line for this sort of operation. (The No. 2 guy at the National Boy Scout Council, for example, made more than $722,000 last year.)

There are actually three nonprofits bearing Woods’ name, as far as the Internal Revenue Service is concerned, though they are perceived as one by the masses. Two have piled up assets worth more than $70 million - far exceeding what they spend in a year - but officials say there are good reasons for piling up cash, including the requirements of repaying tax-exempt bonds.

See detailed charts of finances (and copies of tax returns) below. And, without further ado, let us introduce you to:

Nonprofit No. 1: The Tiger Woods Charity Event Corp. It’s not the one you’ve heard of, but it’s the Iron Giant that raises (and spends) the most money on those glitzy events that cost tens of millions to mount. In 2008, revenues were $36.2 million, and it spent $32.7 million mounting the star-studded AT&T National Golf Tournament, Chevron World Challenge Golf Tournament, Tiger Jam Benefit Concert and Tiger Woods Learning Center Block Party. At first glance, things look good: 95 percent of spending was on programs - considered the charity’s core mission - far more than the 75 percent charity watchdogs look for here. But that’s because the cost of throwing these expensive events were counted as core program spending - part of the charity’s main mission - and there are critics of that approach.

In 2008, Tiger’s events cost $31.2 million to mount (including millions in purses for the winning golfers), and brought in $34.9 million - leaving about $3.5 million for good works. “You can certainly question the validity of calling something a charitable event when so much money goes to individuals,” Sandra Miniutti of nonprofit watchdog Charity Navigator told The Washington Post when Tiger’s tour went to Bethesda in 2007.

Foundation executive McLaughlin responded thusly: “It’s a very expensive business. If you don’t put on a nice event, you don’t get the people to come back. The goal is to run a great experience . . . and raise as much money for charity as possible.” (Peruse a tax return: tiger-woods-events-08)



Nonprofit No. 2: The Tiger Woods Foundation. This is the one you hear about, which gives out grants and scholarships seeking “to empower young people to reach their highest potential by initiating and supporting community-based programs that promote the health, education and welfare of all of America’s children,” say its tax returns.

It reported revenues of $10.6 million in 2008; expenses of $6 million; and has a nice cushy nest egg of - get this! - $45.5 million. Eighty-two percent of spending was programs, and it gets four of four possible stars from Charity Navigator. (Peruse a tax return: tw-foundation-08)



Nonprofit No. 3: The Tiger Woods Learning Center. “The proudest moment in Foundation history took place on February 10, 2006, as Tiger Woods was joined by former President Bill Clinton, First Lady of California Maria Shriver, and Southern California students, teachers and community leaders for the dedication of the Tiger Woods Learning Center (TWLC), an innovative youth-education facility located in Anaheim, California,” says the organization’s tax returns. “The much anticipated event served as the culmination of a four-year, $25 million campaign to transform Woods’ dream of creating an educational center to inspire and support the career exploration of young people.” Revenues in 2008 were $4.4 million, expenses were $3.9 million, and net assets were $25 million. It funneled 86 percent of spending into programs. (Peruse a tax return: tw-learning-center-08pdf)

Tiger Woods Foundation spokesperson Rachel Rees told us in an email that, although there are three nonprofit organizations, they are all considered support organizations of the Tiger Woods Foundation and viewed as one entity.

By the foundation’s own computations, 88 percent, 92 percent and 92 percent of spending went directly to charity over the past three fiscal years. ”To put that in perspective .92 of every $1.00 we spent went to programs,” the email says. “We are proud of the Foundation’s accomplishments and our ability to provide support to our programs through fundraising efforts. Our programs have allowed us to positively impact the lives of more than 10 million young people.”

One of the reasons net assets are so high - more than $70 million - is due to the value of hard assets (such as buildings) and cash that must be set aside as a condition of borrowing. When the Tiger Woods Learning Center was built, the Foundation sold $11 million in tax exempt bonds. As a result of covenants associated with these bonds, they are required to maintain net assets of at least $12.5 million. The rest represents event profits, short & longer term investments and future pledges. All of these funds are directed for the long-term growth of the foundation and its programs, according to McLaughlin.

And those who would quarrel with McLaughlin’s compensation, the Foundation says this: It relies on competitive market data when determining compensation for all of its employees. “We are extremely proud of all of our staff members and their commitment to furthering our mission to provide educational opportunities to youth worldwide,” the email said.

Woods announced last week that he would temporarily step away from his duties with the foundations. A message on his web site said, “Since my Dad and I created the Foundation, this work has been extremely important to me. I started the organization because I sincerely believe in giving back. There are millions of young people who have truly changed their lives through the Foundation’s programs, and millions more still counting on us for help. I am committed to them and to the Foundation’s excellent work, and I know my staff will continue these efforts during my absence.”