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April 13, 2020

Where Does $100 to the American Humane Association (AHA) Go (2018)?

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. How the AHA “ensures the safety, welfare, and well-being of animals” in slaughterhouses is not clear.

A relatively small organization by non-profit standards, AHA raised $19 million in 2018-2019 (the organization’s calendar year is July 1, 2018 – June 30, 2019) which primarily came from four sources:

  • Contributions, Gifts, and Grants: $12 million
  • Certifications:  $4 million
  • Royalties:  $2 million
  • Broadcast Rights and Event Fees: $1 million

However, it is important to point out that the largest contributor to AHA has been the Screen Actor’s Guild, an organization in the very industry that seeks to obtain certifications on the treatment of animals on television and movie sets from AHA. How does this not represent a conflict of interest?

Expenses totaled $18 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 $18 million in expenses were categorized a follows:

  • $15 million (79% of revenue): Program Services
  • $ 2 million (11% of revenue):  Fundraising
  • $ 1 million (5% of revenue):  Management

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

$100:  Revenue

-$ 79:  Program Services

-$ 11:  Fundraising

-$  5:  Management

-$ 95: Total Expenses

$   5:  Revenue Remaining:  To Fund Balance (think savings account)

Expenses By Specific Line Item Category

The $18 million in expenses were categorized as follows:

  • $ 7.6 million (40% of revenue):  Compensation
  • $ 3.8 million (20% of revenue):  Fees for services (primarily “other program expenses” with no detail provided)
  • $ 2.1 million (11% of revenue):  Office Expenses
  • $ 1.4 million (8% of revenue):  Travel
  • $ 1.3 million (7% of revenue):  Subcontractors
  • $ 1.0 million (5% of revenue):   Events, Trade Shows, Advertising and Promotion
  • $ 0.6 million (3% of revenue):  Other Expenses
  • $ 0.1 million (1% of revenue):  Grants

As illustrated above, the largest expense for AHA is compensation for the 97 employees who were paid $7.6 million, which equates to an average compensation of $78,350.  The President and CEO, Robin Ganzert received $596,225 in total compensation in 2017.  As a comparison, the President and CEO of the ALS Association – a non-profit tax-exempt organization that has consistently raised $20-$25 million annually (except in 2014 when the ICE Challenge brought in $115 million) was compensated $312,721 in 2018.

Fees for services (which are primarily consultants and other program fees not detailed) and office expenses use another $5.9 million.  Travel, at $1.4 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 for airline (including domestic) travel. Finally, it is interesting to note that AHA paid $1.3 million to subcontractors. If the fees for services ($3.8 million) and the fees to subcontractors ($1.3 million) were added together, $5.1 million was spent on outside services (nearly 27% of total revenue). Finally, it is also important to point out AHA paid nearly $700,000 to Crown Media and Holidays, an organization in which a board member, William Abbott, is President and CEO, for a “hero dog awards broadcast rights fees.” This expense appears to be related to a nearly $700,000 revenue source described as “broadcast rights” revenue.

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

$100:  Revenue

-$ 40:  Compensation

-$ 20:  Fees for Services

-$ 11:  Office Expenses

-$  8:  Travel

-$  5:  Events, Trade Shows, Advertising and Promotion

-$  7:  Subcontractors

-$  3:  Other Expenses

-$  1:  Grants

-$ 95:  Total Expenses

 $  5:  Revenue Remaining:  To Fund Balance (think savings account) 

As illustrated above, $40 out of every $100 was spent on compensation for the 97 employees. $27 out of every $100 was used for fees for services and subcontractors while $11 out of every $100 was used for office expenses.  $13 out of every $100 was used for travel, events, trade shows, advertising and promotion.

It is important to note AHA did not spend approximately $1 million the revenue collected which allowed the organization to increase its net fund balance to $18.8 million at year-end, of which $6.9 million is permanently restricted.

Conclusion:

AHA is a small non-profit (raises less than $20 million annually) that provides high compensation to its employees and first class travel to its president/CEO and board members. In addition, AHA paid nearly $700,000 to an organization whose President and CEO is a board member of AHA (that also brought in nearly $700,000 in broadcast rights revenue). Non-profits are tax-exempt organizations trying to make a difference so how can AHA justify paying its President and CEO nearly $600,000 annually, allow her to fly first class, allow its board members to fly first class, and pay nearly $700,000 to a board member’s organization and claim they are making donor dollars go as far as possible to meet their mission?

To read the IRS Form 990 (2018) for the year ending June 30, 2019, click here.

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