NRA wrestling with how to manage its tide of red ink
Posted: Sun Dec 21, 2003 9:29 pmNRA wrestling with how to manage its tide of red ink
Stephanie Strom, New York Times
Sunday, December 21, 2003
©2003 San Francisco Chronicle
Costly legal, legislative and political battles in the last decade have left the National Rifle Association with a $100 million deficit, reopening a bitter debate within the group about how it manages its money.
In the past decade the group's efforts have helped Republicans win the White House and Congress and led to laws in more than 30 states banning lawsuits against gun manufacturers. The NRA helped pay for a losing legal battle against campaign finance legislation, which the Supreme Court upheld this month.
But through many of those years, according to Internal Revenue Service and NRA records, the organization spent more than it took in.
Even in 2000, when gun owners helped elect George W. Bush as president, pushing NRA membership to a 10-year high, expenses outstripped revenues by $20. 4 million, according to IRS filings.
"The victories we have delivered have been costly, cutting deeply into the NRA's budgets," Wayne LaPierre Jr., the group's executive vice president and chief executive, wrote in an NRA magazine, America's 1st Freedom, in October. "Winning takes millions of dollars beyond what individual members' dues cover. Today, if we were faced with a full-blown legislative assault, we simply would not have the war chest."
The NRA, one of the largest and most powerful grass-roots groups in the country, relies heavily on membership dues, but since 2000 -- when the organization had a surge of new members -- membership has slid about 20 percent, from a peak of 4.3 million to about 3.4 million.
That is partly because membership usually rises in election years and ebbs thereafter. NRA officials note that membership was higher than average during the 1990s.
"A lot of people think that because we have a Republican in the White House, our guns are safe and our rights won't come under attack," said Angel Shamaya, founder and executive director of Keep and Bear Arms, a rival organization.
Experts who study nonprofit groups like the NRA disagree about how great an impact the deficit can have on the group's lobbying or political activities. But the growing shortfall, coupled with the recent departure of Charlton Heston, the actor who was the president and the public face of the NRA over the past seven years, has reignited internal fights over financial management.
"We shouldn't be going into the hole, which is what we're doing," said Neal Knox, a member who once tried to unseat LaPierre partly over concerns about finances. "The deficit isn't there because we're taking in more or less money. It's there because we're spending more money than we have."
NRA officials said that Knox, once a powerful executive at the group, had other motives. "It's the old battle plan where you create a crisis and then come swooping in with a plan to resolve it," said Wayne Ross, a board member who last year ran for governor in Alaska.
Ross said he was not concerned about the NRA's finances. "I would rather have the NRA get into deficit spending and fight the good fight than just sit on the sidelines because it was financially prudent," he said.
The NRA contends that its deficit is a fiction manufactured by accounting standards. "Trying to do an analysis of the organization based on its accounting-created balance sheet is a futile attempt because it is driven by assets that aren't there, namely the quality of its members, and liabilities that aren't really there either," said Wilson Phillips Jr., the NRA treasurer.
He said the deficit was a sign of strength, because the bulk of the liabilities reflect future obligations to long-term members. "What appears to be a growth in the deficit is actually a demonstration of membership growth and growth in longer-term commitments from members," Phillips said.
But Elizabeth Keating, an assistant professor at the John F. Kennedy School of Government at Harvard University who is an expert in nonprofit accounting, said the deficit would have consequences. "They are not going to be able to sustain the activities they are engaged in today and provide the same level of service to their members in the future based on what the financial figures suggest," she said.
©2003 San Francisco Chronicle
Stephanie Strom, New York Times
Sunday, December 21, 2003
©2003 San Francisco Chronicle
Costly legal, legislative and political battles in the last decade have left the National Rifle Association with a $100 million deficit, reopening a bitter debate within the group about how it manages its money.
In the past decade the group's efforts have helped Republicans win the White House and Congress and led to laws in more than 30 states banning lawsuits against gun manufacturers. The NRA helped pay for a losing legal battle against campaign finance legislation, which the Supreme Court upheld this month.
But through many of those years, according to Internal Revenue Service and NRA records, the organization spent more than it took in.
Even in 2000, when gun owners helped elect George W. Bush as president, pushing NRA membership to a 10-year high, expenses outstripped revenues by $20. 4 million, according to IRS filings.
"The victories we have delivered have been costly, cutting deeply into the NRA's budgets," Wayne LaPierre Jr., the group's executive vice president and chief executive, wrote in an NRA magazine, America's 1st Freedom, in October. "Winning takes millions of dollars beyond what individual members' dues cover. Today, if we were faced with a full-blown legislative assault, we simply would not have the war chest."
The NRA, one of the largest and most powerful grass-roots groups in the country, relies heavily on membership dues, but since 2000 -- when the organization had a surge of new members -- membership has slid about 20 percent, from a peak of 4.3 million to about 3.4 million.
That is partly because membership usually rises in election years and ebbs thereafter. NRA officials note that membership was higher than average during the 1990s.
"A lot of people think that because we have a Republican in the White House, our guns are safe and our rights won't come under attack," said Angel Shamaya, founder and executive director of Keep and Bear Arms, a rival organization.
Experts who study nonprofit groups like the NRA disagree about how great an impact the deficit can have on the group's lobbying or political activities. But the growing shortfall, coupled with the recent departure of Charlton Heston, the actor who was the president and the public face of the NRA over the past seven years, has reignited internal fights over financial management.
"We shouldn't be going into the hole, which is what we're doing," said Neal Knox, a member who once tried to unseat LaPierre partly over concerns about finances. "The deficit isn't there because we're taking in more or less money. It's there because we're spending more money than we have."
NRA officials said that Knox, once a powerful executive at the group, had other motives. "It's the old battle plan where you create a crisis and then come swooping in with a plan to resolve it," said Wayne Ross, a board member who last year ran for governor in Alaska.
Ross said he was not concerned about the NRA's finances. "I would rather have the NRA get into deficit spending and fight the good fight than just sit on the sidelines because it was financially prudent," he said.
The NRA contends that its deficit is a fiction manufactured by accounting standards. "Trying to do an analysis of the organization based on its accounting-created balance sheet is a futile attempt because it is driven by assets that aren't there, namely the quality of its members, and liabilities that aren't really there either," said Wilson Phillips Jr., the NRA treasurer.
He said the deficit was a sign of strength, because the bulk of the liabilities reflect future obligations to long-term members. "What appears to be a growth in the deficit is actually a demonstration of membership growth and growth in longer-term commitments from members," Phillips said.
But Elizabeth Keating, an assistant professor at the John F. Kennedy School of Government at Harvard University who is an expert in nonprofit accounting, said the deficit would have consequences. "They are not going to be able to sustain the activities they are engaged in today and provide the same level of service to their members in the future based on what the financial figures suggest," she said.
©2003 San Francisco Chronicle