September 19, 2018; OpenSecrets
Although the National Rifle Association, a 501c4, increased its fees last year, it also experienced a 22 percent downturn in revenue from membership dues, according to its 2017 audited financial statements. This translates into a loss of membership, though the organization has recently boasted a membership of six million—up from “more than five million.” The audit was obtained by Open Secrets at the Center for Responsive Politics. That math eludes us, but much of what the NRA says and does doesn’t make a lot of sense.
Dues represented 40 percent of the organization’s revenue in 2017 and their decline accounted for a loss of $35 million. This comes after a year of profligate spending; according to the nonprofit’s Federal Election Commission reports, the NRA spent at least $54.4 million on Republican campaigns in 2016, and $31.2 million of that went into electing Trump.
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Brian Mittendorf, chair of the accounting department at Ohio State University’s Fisher College of Business, says this trend at the NRA is relatively longstanding and serious. He points out that in 2016 the organization’s assets were negative by $14 million, and by 2017 the number was $32 million. Last year, it not only nearly maxed out its $25 million line of credit, but it took out a $5 million loan from the NRA Foundation, indicating it was in urgent need of unrestricted money for operations.
“I think they needed the cash,” said Marcus Owens of Loeb and Loeb, pointing out that though 501c3 organizations like the NRA Foundation can’t grant money to 501c4 groups like the NRA unless the money is restricted to a charitable purpose, loans are held to a less strict standard. Thus, the NRA may be treating the foundation as an emergency piggy bank.
“Their current business model cannot be sustained the way it is going,” said Mittendorf. “It can be sustained in the short term, but not the long term. The financial statements would indicate that.”—Ruth McCambridge
