Need Proof the USGA Isn't a Nonprofit?

The USGA may have the 501(c)3 classification, but it certainly is not behaving like a nonprofit. Agreements with American Express and Lexus for sponsorship deals signaled that the USGA is trying to generate revenue that goes well beyond what is generated by their national championships.

As an old rule of thumb, the US Open is the moneymaker for the entire organization. A large chunk of their operating funds for the year come from the revenue produced by the Open - merchandising, ticket sales, etc. (The other major portion is your - and my - contributions as members of the organization.) But, as signaled by the recent corporate sponsorship agreements, the USGA is trying to gain more money "for the good of the game."

The best excuses the USGA has for these efforts are operating losses of $5.8 million in 2000 and nearly the same amount in 2006. According to the Chris Millard piece on the USGA in GolfWorld, there is an expectation of future operating losses because Walter Driver considers money "fungible." Thus, in his mind, there needs to be more fungible money than there has been generated in the past.

Hence today's announcement of the promotion of Peter Bevacqua to Chief Business Officer of the USGA. In his own words, Bevacqua is charged with "working with [the USGA] staff and Executive Committee in connection with ... potential new revenue-producing activities of the USGA, including broadcasting relationships, USGA Members program and [USGA] corporate partnerships."

This is a clear signal that the USGA is continuing in the direction of being run like a business instead of like a nonprofit. A new position has been created to develop more ways for the organization to make money even though it's fairly clear charge is to simply break even each year.

The question, then, is if all of these efforts are necessary? The simple answer is no. Why? Because the USGA is sitting on approximately $300 million in cash reserves that they could tap into at any time when their operating revenue does not suffice to cover operating costs. Whatever special revenue is generated as a result of corporate sponsorships or whatever else Bevacqua can cook up is simply not needed.

Then why do it? That's the big mystery. Generating revenue really has nothing to do with the good of the game - the USGA's mission statement. Larger television contracts, corporate sponsorships, and all things money are not the goal of the USGA. The goal of the USGA is three-fold: grantmaking programs that help further advances in agronomy and equipment testing, regulating the equipment of the game and managing rules, and presenting their national championships each year. That's it.

As a member of the USGA, I am concerned about what I am getting with my membership contribution. Am I belonging to an organization that truly has my interests as an amateur golfer in mind? Or, is the almighty dollar guiding decision making among executives at Golf House? Perhaps we should ask USGA employees, who have had their benefits cut in multiple areas.

Whatever the rationale, the members of the USGA deserve an explanation for these business practices. Although the USGA is a 501(c)3, members are essentially the shareholders of the organization. The USGA works to serve our interests. Turning a profit is not in our interest. Therefore, we must demand that the USGA engage in activities that DO meet our interests.