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(Scott Olson / Getty Images)
The National Rifle Association is traditionally one of the most powerful and intimidating interest groups in Washington. But a new third-party audit of the group's finances, obtained by OpenSecrets, raises questions about its long-term fiscal health.
The paper presents the first snapshot of the NRA's finances following the 2016 elections. This shows that over the past two years, the NRA has seen the income of contributing members collapse, fueling growing deficits.
The 2016 Bonanza
The NRA became big in 2016, break his own expense records help catapult Donald Trump to the White House and protect Republican majorities in the House and Senate. The reports of the organization's Federal Electoral Commission show that the group defending the rights of weapons spent at least $ 54.4 million boosting Republicans – with Donald Trump being by far the biggest beneficiary of this firepower, with support of $ 31.2 million.
The bulk of NRA expenditures in 2016, $ 35.2 million, were channeled not through its Political Action Committee, but through its 501 (c) non-profit arm ( 4). It is this section of the NRA – which does not have to disclose its donors – whose finances are reported in the audit obtained by OpenSecrets.
These nonprofit organizations are not supposed to have the main purpose of politics, but they can collect and spend unlimited funds from anonymous donors and easily spend millions in elections without too much supervision from the IRS or the FEC. The fact that they can do so without disclosing their donors is why they are often called "black money" groups.
The huge push of the NRA in 2016 was part of what eventually became a $ 100 million increase in group expenses between 2015 and 2016. But these expenditures did not coincide with similar revenue growth, leaving the NRA with a deficit of more than $ 14.8 million.
This deficit is in so-called "unrestricted" net assets, which are funds available at the discretion of the board.
A year later, with the bid selected, the NRA's expenses dropped by $ 76 million, according to the audit.
Life in the red
It is normal for the expenses of an organization as politically active as the NRA to increase during the election years and fall out of the years when these groups tend to raise funds and try to bring order in their finances. But even with such a drop in spending, the NRA – one of the richest and most powerful political forces in the country – remained in the red, with revenues falling by $ 56 million.
"Their current business model can not be maintained as it does," said Brian Mittendorf, an accounting professor at Ohio State University. "It can be sustained in the short term, but not in the long run. The financial statements would indicate that. "
By the end of 2017, the group had spent $ 26.1 million more than expected, bringing its current deficit over the previous year to $ 31.8 million.
"The main point to take into account is that there were warning signs about their long-term financial health in 2016," Mittendorf told OpenSecrets, "and nothing solves these problems in their accounts of 2017. In any case, it shows that they come to fruition. "
This two-year deficit is down sharply from the NRA's $ 27.8 million positive assets from 2015.
Even more striking, one of the main drivers of the group's declining revenues is the decline in NRA membership dues from over $ 163 million in 2016 to $ 128 million in 2017.
"It is not uncommon for an organization of this size and scope to be in this situation," said Mittendorf. "That would tell me, though, that you have to give something at some point. Either they must reduce or find new sources of income.
Contributions also fell slightly in 2016 and an analysis of ANR audits dating back to 2009 – the first year for which such audits are available – shows that 2016 to 2017 was the only period during which contributions were made. decreased for more than a year. . In 2014, for example, NRA revenues declined by more than $ 47 million, but rebounded by $ 37 million in 2015.
The audit does not include any non-profit entities affiliated with the NRA such as the NRA Foundation, the 501 (c) (3) charity branch. The ANR's CAP is not included either.
It will take time to know if the NRA will respond in 2018 as tax returns and audits covering the current year will not be filed with state and federal regulators until the end of 2019. The NRA has not answered OpenSecrets questions.
But one possible indication that the group's finances are not as robust as they have been in the past is that its election expenses have slowed considerably in 2018. The NRA has returned $ 2.7 million to this 19.2 million at this stage in 2016 and $ 10.7 million at this stage in 2014, the last mid-term election cycle.
At the same time, the organization would have been involved in investigations surrounding Russia's interference in the 2016 elections and it has openly begun to sound the alarm about the possible financial impacts of the " blacklist "nationally in New York and elsewhere.
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