MEMPHIS, Tenn. — Rain suspended play at the FedEx St. Jude Classic for the second day in a row Friday.
Rain or shine, it’s a massive undertaking that puts thousands of eyes on the city of Memphis each year.
Meanwhile, WREG has learned more about the charity behind the tournament and its gifts to St. Jude. It seems big prizes don’t always equal the same in donations.
It’s one of Memphis’ biggest sporting events. Some of world’s greatest golfers, celebrities, and thousands of spectators gather at TPC Southwind for the FedEx St. Jude Classic.
The PGA event is organized by the non-profit Youth Programs, Inc.
Tournament Director Phil Cannon said, “Youth Programs was formed in 1960 to produce a PGA tour event in Memphis to raise funds for youth-oriented charities. In 1970, St. Jude Hospital came on as Youth Programs’ sole beneficiary and since then, we’ve raised some $28 million for the hospital.”
The On Your Side Investigators learned not all of those donations go to St. Jude in the form of direct cash aid.
In fact, over a three-year period from 2009 to 2011, Youth Programs collected more than $43 million in total revenue. (Click to see the records for each year: 2009, 2010, 2011)
Over the same period, a little more than $3 million went to St. Jude, but less than a million of that was in the form of cash grants.
Cannon says the benefits can’t simply be measured in dollars and cents.
“St. Jude also gets other pass-through benefits like television exposure this week on TV, countless mentions in newspapers across America. The title sponsorship on the PGA tour routinely goes for $8 to $10 million a year, and St. Jude has the benefit of being in our title for free.”
In 2011, the most recent tax year publicly available, St. Jude received more than $1.5 million from the tournament.
That donation amounted to about ten percent of the non-profit’s total revenue of roughly $15 million for the same year.
The bulk of that $1.5 million paid for TV ads promoting St. Jude during the week of the tournament, and a little more than $250,000 was provided in cash to the hospital.
Other perks included 20 pro-am entry fees worth more than$60,000, plus the charity sprung for celebrity travel.
So how is Youth Programs spending its money?
Most of it goes toward putting on the event itself, with the purse being the biggest expense, followed by television promotions.
Of the 990s the On Your Side Investigators reviewed, the most the charity profited was during tax year 2010, in which it made $465,780 after expenses. The previous year, the non-profit was in the red.
Cannon said, “It takes a lot of money to operate a PGA tour event and we’re not embarrassed about that. We’ve given a big percentage of our money to St. Jude over the course of 30 years, and each year is unique because of the challenges with weather delays and marketing expenses and things like that.”
He reiterated that even during bad weather when play is suspended, the tournament still has bills to pay.
Cannon says their goal post-recession has been to build reserves to ensure the tournament’s stability, and as that grows, so could direct cash aid to St. Jude.
“Having a PGA tour event in your city is an experience that only about 30 cities in America have. Memphis is lucky to have the PGA tour come to town and we’re also lucky that St. Jude is in town.”
WREG also contacted St. Jude. A spokesperson said by email, “We are grateful for the support St. Jude Children’s Research Hospital receives from the FedEx St. Jude Classic as well as the positive national attention it brings to Memphis annually, and we’re looking forward to another successful tournament this weekend.”
Charity watchdog groups have set standards for how much they believe charities should give away.
According to Charity Navigator, a minimum of 65 percent of money raised should be spent on providing actual charity.
