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March 5, 2020

Where Does $100 to the Institute of Electrical and Electronics Engineers (IEEE) Go?

by Anne Paddock

The Institute of Electrical and Electronics Engineers (IEEE – pronounced “I Triple E”) is a non-profit tax-exempt 501 (c) (3) – a professional association for electrical and electronic engineers that serves the public good through its scientific work and education (making their work available on a non-discriminatory basis (note:  a 501 (c) (6) serves an industry – not the public – and does not need to make their work available to the public in a non-discriminatory basis).

Headquartered in Piscataway, New Jersey, IEEE has more than 420,000 members from 160 countries. Membership dues vary by country and whether the member is a professional or student. In the USA, a professional membership is about $200 a year whereas a student membership is $32.

In 2018, IEEE reported total revenue of $547 million (compared to $494 million in 2017) which came primarily from 7 sources:

  • $201 million (37% of total revenue):  Conference Revenue
  • $189 million (35% of total revenue):  Periodicals
  • $ 55 million (10% of total revenue):  Membership Dues
  • $ 48 million (9% of total revenue):  Investment Income, Gains, Interest
  • $ 34 million (6% of total revenue):  Standards Review
  • $ 11 million (2% of total revenue):  Advertising
  • $  9 million (1% of total revenue):  Other (contributions, intracompany services)

As illustrated above, the two highest sources of revenue are from conferences and periodicals. Memberships dues of $55 million from the 422,000 members means that the average annual membership dues are $130.

Expenses totaled $471 million (86% of total revenue) and can be viewed two ways:  by broad general category (i.e. grants, program services, fundraising, management and general expenses) or by specific line item categories (i.e. compensation, office-related expenses, travel and conferences, fees for services, etc). Both ways are beneficial with the latter approach providing more detail on how revenue was spent.

Expenses by Broad General Category

The $471 million in expenses were categorized as follows:

  • $443 million (80% of revenue):  Program Services
  • $ 21 million (4% of revenue):  Management and General Expenses
  • $  5 million (1% of revenue):  Grants
  • $  2 million (1% of revenue):  Fundraising

As illustrated above the largest expense for IEEE was program services. IEEE spent $471 million of the $547 million raised. The unspent revenue – $76 million – was added to the general fund but was offset by $52 million in net unrealized losses on investments. Hence the fund balance (or endowment) increased from $415 million at the beginning of the year to $439 million at year-end.

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

$100:  Revenue

-$ 80: Program Services

-$  4:  Management and General Expenses

-$  1:  Grants

-$  1:  Fundraising

-$ 86: Total Expenses

 $ 14:  Revenue Remaining:  To General Fund

As illustrated above $80 out of every $100 was spent on program services.  $14 out of every $100 remained unspent and was added to the general fund.

Expenses by Specific Line Item Category

The $471 million in expenses were categorized as follows:

  • $175 million (32% of revenue):  Compensation
  • $121 million (22% of revenue):  Travel and Conferences
  • $ 39 million (7% of revenue):  Office-related Expenses
  • $ 35 million (6% of revenue):  Printing/Publications/Educ Training
  • $ 34 million (6% of revenue):  Fees for Services (primarily other with no detail provided)
  • $ 29 million (5% of revenue):  Commissions, Membership Expenses
  • $ 15 million (3% of revenue):  Royalties
  • $ 12 million (2% of revenue):  Other Expenses
  • $  6 million (1% of revenue):  Advertising and Promotion
  • $  5 million (1% of revenue):  Grants

As illustrated above, the two largest expenses for IEEE are compensation and travel/conferences (primarily conferences).  Together, these two expenses totaled nearly $300 million or 55% of total revenue. $175 million in compensation was for 1,289 employees, who received an average compensation of $135,800.  The two most highly compensated employees were:

  • $1,225,788:  E James Prendergast, Asst Secretary and Executive Director
  • $  844,918:  Stephen Welby, Asst Secretary and Executive Director

IEEE paid for first class travel, companion travel and tax indemnification and gross up payments (see Schedule J, Part III Supplemental Information for more details).

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

$100:  Revenue

-$ 32:  Compensation

-$ 22:  Travel and Conferences

-$  7:  Office-related Expenses

-$  6:  Printing/Publications/Educ Training

-$  6:  Fees for Services

-$  5:  Commission/Membership Expenses

-$  3:  Royalties

-$  2:  Other Expenses

-$  1:  Advertising and Promotion

-$  1:  Grants

-$ 86:  Total Expenses

 $ 14:  Unspent Revenue:  To General Fund

As illustrated above, $55 out of every $100 in revenue was spent on compensation, travel, and conferences.  An additional $31 out of every $100 was spent on office, printing, publications, fees, commissions, royalties, advertising, and other expenses.  $14 out of every $100 was not spent and added to the fund balance.

To read the IRS Form 990 (2018), click here.

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