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March 26, 2019

Where Does $100 to the American Humane Association Go?

by Anne Paddock

The American Humane Association (AHA) is a Washington, DC-based non-profit 501 (c) 3 whose “No Animals Were Harmed” certification program in film and television is well-known in the entertainment industry. In addition, AHA certifies zoos, aquariums, conservation centers, and humane treatment in food production (farms, slaughterhouses, etc), awards grants, donates goods, and participates in other program services.

A relatively small organization by non-profit standards, AHA raised $19 million in 2017 which primarily came from three sources:  contributions, gifts, and grants ($13 million), certifications ($4 million), and royalties ($2 million).

Expenses totaled $16.5 million and can be viewed two ways:  by broad general category or by specific line item categories. Both provide beneficial information with the latter providing more detail on how revenue was spent.

Expenses by Broad General Category

The $16.5 million in expenses were categorized a follows:

  • $13.5 million (71% of revenue): Program Services
  • $ 1.8 million (9% of revenue):  Fundraising
  • $ 1.0 million (5% of revenue):  Management
  • $  .2 million (1% of revenue):  Grants

Using the above information, $100 in revenue was spent as follows:

$100:  Revenue

-$ 71:  Program Services

-$  9:  Fundraising

-$  5:  Management

-$  1:  Grants

-$ 86: Total Expenses

$  14:  Revenue Remaining:  To Fund Balance (think savings account)

Expenses By Specific Line Item Category

The $16.5 million in expenses were categorized as follows:

  • $ 7.0 million (37% of revenue):  Compensation
  • $ 3.2 million (17% of revenue):  Fees for services (accounting, legal, investment, consultants and other)
  • $ 2.2 million (11% of revenue):  Office Expenses
  • $ 1.2 million (6% of revenue):  Travel
  • $ 1.2 million (6% of revenue):   Events, Trade Shows, Advertising and Promotion
  • $ 1.0 million (5% of revenue):  Subcontractors
  • $ 0.5 million (3% of revenue):  Donated Goods and Other Expenses
  • $ 0.2 million (1% of revenue):  Grants

As illustrated above, the largest expense for AHA is compensation for the 92 employees who were paid $7 million, which equates to an average compensation of $76,000.  The President and CEO, Robin Ganzert received $537,912 in total compensation in 2017.  

Fees for services (which are primarily consultants and other fees) and office expenses use another $5.5 million.  Travel, at $1.2 million appears high for a small organization and is in part due to AHA paying for first class domestic travel for its President and CEO and board members. Finally, it is interesting to note that AHA paid $1 million for subcontractors. If the fees for services ($3.2 million) and the fees to subcontractors ($1 million) were added together, $4.2 million was spent on outside services (nearly 25% of total expenses).

Using the above information, $100 in revenue was spent as follows:

$100:  Revenue

-$ 37:  Compensation

-$ 17:  Fees for Services

-$ 11:  Office Expenses

-$  6:  Travel

-$  6:  Events, Trade Shows, Advertising and Promotion

-$  5:  Subcontractors

-$  3:  Donated Goods and Other Expenses

-$  1:  Grants

-$ 86:  Total Expenses

 $ 14:  Revenue Remaining:  To Fund Balance (think savings account) 

As illustrated above, $37 out of every $100 was spent on compensation for the 92 employees. $22 out of every $100 was used for fees for services and subcontractors while $11 out of every $100 was used for office expenses.  $12 out of every $100 was used for travel, events, trade shows, advertising and promotion.  Less than $4 out of every $100 was used for donated goods and grants.

It is important to note AHA did not spend approximately $2.5 million the revenue collected which allowed the organization to increase its net fund balance to $17.4 million at year-end, of which $6.7 million is permanently restricted.

To read the IRS Form 990 (2017), click here.

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