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January 16, 2016

1

Where does $1 to the American Humane Association Go?

by Anne Paddock

The American Humane Association (AHA) claims to be the “nation’s voice for the protection of children and animals” by reaching “millions of people every day through groundbreaking research, education, training and services that span a wide network of organizations, agencies and businesses.” They do this, according to the 2014 IRS Form 990 primarily four ways:

  1. Certifying the safety of animals on film sites through their No Animals Were Harmed certification program;
  2. Certifying the humane treatment of animals in North America food production through the American Humane Certified Farm Animal Welfare Program (Note: how slaughter and humane can be used together is disturbing);
  3. Participate in humane research and therapy through “innovative research studies;” and
  4. Humane intervention providing emergency field response and community outreach.

To accomplish the above, the AHA – a non-profit 501 (c) (3) – raises funds primarily from the public. For the year ending June 30, 2015, the following information was reported on AHA’s 2014 IRS Form 990:

$13.5 million was raised which came primarily from four sources:

  • $9 million (67%) came from contributions and grants;
  • $2.5 million (19%) from service fees, broadcast rights, and seminars;
  • $1.6 million (12%) from royalties; and
  • $0.4 million (2%) from investment income, rents, and the sale of assets offset by a loss ($103,248) on fundraising events.

Functional expenses totaled $13.1 million:

  • $6.3 million (47% of revenue) on salaries, pensions, benefits and payroll taxes. AHA employs 95 employees (which means the average compensation is about $66,000), ten of whom receive in excess of $100,000 annually including eight executives who received $1.7 million (or 13% of total revenue):
  1. Robin R Ganzert, President and CEO:                                                         $373,253
  2. Paul Raybould, Chief Innovation Officer:                                                      $253,234
  3. Shannon (Kwane) Steward, Chief Veterinary Officer:                                   $208,915
  4. Clifford J Rose, CFO:                                                                                    $193,397
  5. Stephen T Kaminski, EVP and General Counsel:                                         $188,573
  6. Mark Stubis, Chief Communications Officer:                                                $184,919
  7. Audrey Lang, Chief of Staff:                                                                          $165,309
  8. Mary Katherine Phelps, Chief Philanthropy and Marketing Officer:              $144,198
  • $1.9 million (14% on revenue) on office, occupancy, IT, accounting, legal, and insurance;
  • $1.4 million (10% of revenue) on travel, trade shows, and conferences
  • $1.1 million (8% of revenue) on lobbying, fundraisers, advertising, promotion, and subcontractors
  • $0.6 million (5% of revenue) on taxes, licenses, fees, donated goods, and other expenses
  • $1.8 million (13% of revenue) on program service expenses

Although the organization spent about $400,000 less than they collected, total assets declined from $13.5 million to $13 million (most of which is beneficial interests in charitable trusts, publicly traded securities, and liquid assets) primarily because of a decline in pledges and grants receivable, prepaid expenses and beneficial interests in charitable trusts. Liabilities were $2.6 million at year-end and consist primarily of obligations under split-interest agreements and deferred lease incentives, along with accounts payable. Net assets were $13 million at year-end compared to $13.5 million the prior year (again, primarily due to the change in value in the trusts).

Other reported information includes:

  • AHA held a fundraiser at the Mar a Lago Club in Palm Beach in March, 2015 which resulted in $27,000 in gross income. After $130,000 in expenses (food and beverage, facility costs, prizes and other expenses), the loss was $103,000. However, $147,596 in contributions (which are not included in gross income) were reported (note: The IRS does not allow the contribution amount to the charity to be included in income so as to better match income and expenses).
  • AHA gave four grants totaling $21,500 for therapy dogs and the Hero Dog Charity Partner.
  • William Abbot, a board member of AHA and President and CEO of Crown Media Holdings paid AHA $583,500 for the Hero Dog Awards Broadcast Rights Fee.
  • AHA paid Fineman PR (based out of San Francisco, CA) $175,554 for PR and Communication.
  • AHA spent $223,957 for eight employees/contractors on animal safety outside the US and $5,733 to assist animals displaced by a tsunami.
  • Telemarketing fundraising resulted in a loss of $597.
  • Donor Point Marketing of Rockville, Maryland raised $429,132 through solicitations, grants, and events which netted AHA $385,132 after paying $44,000 in fees.

Based on the 2014 IRS Form 990, $1 in revenue was spent as follows:

 $1.00:  Revenue

-$0.34: Compensation costs for 87 employees

-$0.13:  Compensation for 8 key executives

-$0.14:  Office, occupancy, IT, accounting, legal, and insurance

-$0.10:  Travel, trades shows, and conferences

-$0.08:  Lobbying, fundraisers, advertising, promotion, and fundraisers

-$0.05:  Taxes, licenses, fees and other expenses

-$0.84:  Subtotal Functional Expenses

-$0.13:  Program Service Expenses

-$0.97:  Total Functional Expenses

 $0.03:  Revenue Remaining (unspent)

As illustrated above, the biggest expense for AHA is staff, which uses 47 cents of every dollar. 37 cents of every dollar is spent on office support, travel, fundraising, and other expenses while 13 cents is used for program service expenses. It is important to point out that staff provide a key oversight, educational, and intervention component of this organization but even if every single of the 95 staff are essential, do they need 47 cents of every dollar for compensation and 37 cents of every dollar to support their function?

Our goal is to measurably, demonstrably and significantly increase the number of children and animals who are protected from harm – and the number of humans and animals whose lives are enriched – through direct action, thought, leadership, policy innovation, and expansion of proven, effective programs.

To review the 2014 IRS Form 990 submitted by AHA, click here.

1 Comment Post a comment
  1. Jan 20 2016

    Now I don’t feel guilty for never donating any money to them. Thanks

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