The United States Golf Association steadfastly promotes and builds passion for the game of golf. We will continue to adhere to this principle by assuring high levels of competence in all our activities and clearly establishing goals which will be supported by having the right resources and by maintaining an openness to improvement.

We strive for our championships to be the best in golf, consistent with our commitment that a USGA championship will rigorously examine the player's skill, perseverance, adaptability, tenacity and stamina. Our United States Open championships will be conducted on the most challenging courses, with preparation starting years in advance and set up in accordance with our published philosophy and guidelines. Our United States Women's Open and United States Senior Open are intended to be the highlight experience for women and senior golfers. The USGA deeply appreciates that for many amateurs playing in a USGA championship is the crowning achievement in an amateur golf career. To us, amateur golf is the backbone of the game, its rules and its traditions. To be a USGA champion is the dream - how many young men and women have dreamed to themselves that "this putt is to win the U.S. Open or U.S. Women's Open" in their practice solitude?

We continue to seek clarity in the Rules of Golf. The Rules define the game and make it fair for all players and provide historical consistency to playing the game. The 2008 changes to the Rules of Golf reflect these purposes. A core tenet of golf is that every player enforces the Rules without a referee. To do this effectively, the Rules must be functional, easily understood and available to all golfers. We intend to become more flexible in teaching the Rules with shorter Rules seminars, simplified instructions and greater outreach.

As the Statement of Principles regarding equipment issues provides, we will continue to be vigilant to maintain the balance between skill and technology in the game. The Statement of Principles was adopted by the USGA and the Royal & Ancient Golf Club of St. Andrews in 2002 and by the PGA Tour in 2003. Average driving distances on the U.S. PGA Tour have been largely stable since 2003 (approximately 3 percent change in five years) and, in fact, went down slightly in 2007 compared to 2006. As of writing this letter, the USGA is continuing to study the comments received on the USGA's proposal regarding grooves published in mid-2007. The process followed in formulating this proposal is consistent with our approach to obtain all relevant data, conduct careful scientific analysis, and propose equipment regulation based on facts and science, not anecdotes.

The renovation of our museum and construction of the Arnold Palmer Center for Golf History at Golf House is on track to open in 2008, providing an extraordinary resource for all who treasure the history of the game. We are working to digitize much of our collection so that it will be available online to enthusiasts and scholars. Our museum will continue to expand its outreach and availability.

An important initiative conceived in 2006 with implementation begun in 2007 is to vastly improve our Internet functions and ability to communicate via the Internet. We have hired Alex Withers to coordinate and lead this effort. Early ideas and focus are exciting - we will simplify, improve and consolidate our Web sites to achieve greater ease of use and migration and interactive capabilities within our Internet offerings. These improvements will enable golfers to stay current and to find out more about the game, more about competitions, and more about the USGA's programs (including the USGA Handicap System^T, the museum, the Members program) and the USGA's work with state and regional golf associations. In 2007, we had approximately 227 million unique page views on our Web site relative to the U.S. Open, and we want to more effectively use the Internet to communicate with these avid golfers.

Many of you are USGA Members and we appreciate your participation and support. Beginning in 2006 and continuing into 2008, we are re-examining how our Members program works, how better to serve individual members, how to provide a valuable benefit, and how to involve our member clubs more effectively. The Internet will be an important resource in this endeavor. We are learning from our corporate partner, American Express, how to be more responsive and tailored to our individual Members.

In addition to American Express, Lexus joined us as a corporate partner (providing more than 12,000 car nights of excellent courtesy cars in connection with our championships) and Rolex continued its relationship with the USGA. We approached 2007 as a learning experience with these relationships and have been pleased with our ability to utilize the talents, experience and products of these partners in a way that is consistent with our philosophy. We will likely add a final two more relationships, one focusing on our grants and outreach programs and the other providing expertise on systems, logistics and business processes.

In addition to the very substantial non-monetary benefits our partners provide, the corporate partner program helps us diversify our sources of income, a key principle in economic health, or reduces our expenses so we can continue to support our non-income producing programs such as the grants program and amateur championships. After 10 years in action, the USGA grants program has funded nearly $60 million to make the game more affordable and accessible, principally to youth and disabled golfers. We are the largest cash contributor to The First Tee at more than $20 million. The grants program has just been extended for another three years.

To better align ourselves with many of our functions and to be better able to react to, and coordinate with, many of the organizations with whom we work, we created a new position of chief business officer and appointed Pete Bevacqua. Pete will lead our revenue-producing activities as well as being responsible for new media, the museum, the Members program, corporate partners and the communications department. We already see increased coordination, new initiatives and improved performance. We are confident that Pete and those who work with him will generate many successes for the USGA in this big and vital job.

We need the right resources to achieve success and constant improvement. These necessary resources include gaining specified expertise on the Executive Committee through our revised nominating process, which is achieving its goals. We also completed the process of asking our thousands of wonderful committee members and volunteers to define their job expectations and commitment and reaffirm their desire to continue in this critical role. This process encouraged new ideas and new talent, as well as geographic, gender and ethnic diversity.

Finally, we completed a major study using outside expert consultants to assure that our staff received market-level base compensation, somewhat above market-level benefits, and that they could participate in a bonus program founded on goal setting and achievement. We believe this three-part program will enable us to retain and attract top talent while achieving agreed upon individual and association goals. We expect to provide leadership training to senior staff and develop other ways of allowing our best people to have challenging and rewarding careers within the USGA.

The United States Golf Association will promote passion for the game, constantly build our core competencies, and assure that we have the right resources for the job who will agree upon key strategic goals and initiatives supported by specific tactics to be completed and achieved with set time frames and parameters. Our focused effort to enhance the role, relevance and performance of the USGA will be an important cornerstone for the future of the organization and our impact on the game.

Walter W. Driver Jr.