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May 27, 2020

How the National Association of Realtors (NAR) Spends Membership Dues

by Anne Paddock

The National Association of Realtors (NAR) is the largest professional trade association in the US. A non-profit tax-exempt 501 (c) (6) based in Chicago, Illinois, NAR represents 1.4 million members who belong to one or more of the 1,200 associations/boards and 54 state or territory associations.  Members can be residential or commercial brokers, sales people, property managers, real estate appraisers, counselors and others who work in the real estate industry.

NAR functions as a self regulatory agency, a lobbying organization, and as a provider of accreditation and certification of designations.

NAR reported total revenue of $242 million in 2017, of which $202 million (83% of revenue) came from membership dues from the 1.3 million members (note:  in 2020, membership has grown to 1.4 million). The remaining revenue – $40 million – came primarily from program services (i.e. conventions, advertising and subscriptions, government affairs, and publications) and investment income (i.e. investment income, royalties, gains from the sale of inventory, etc).

Expenses totaled $237 million (98% of revenue) and were categorized as follows:

  • $60 million (25% of revenue):  Compensation
  • $49 million (20% of revenue):  Fees for Services (primarily consulting)
  • $37 million (15% of revenue):  Advertising and Promotion
  • $26 million (11% of revenue):  Office-Related Expenses
  • $22 million (9% of revenue):  Travel and Conventions
  • $20 million (8% of revenue):  Public Policy Expenses
  • $13 million (5% of revenue):  Subscriptions
  • $ 6 million (3% of revenue):  Other Expenses
  • $ 4 million (2% of revenue):  Taxes

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

$100:  Revenue

-$ 25:  Compensation

-$ 20:  Fees for Services (primarily consulting)

-$ 15:  Advertising and Promotion

-$ 11:  Office-Related Expenses

-$ 9:  Travel and Conventions

-$ 8:  Public Policy Expenses

-$ 5:  Subscriptions

-$ 3:  Other Expenses

-$ 2:  Taxes

-$98: Total Expenses

 $ 2:  Revenue Remaining: To General Fund

If you paid $150 in dues and special assessments in 2017, the revenue was spent this way:

$150:  Revenue

-$ 38:  Compensation

-$ 30:  Fees for Services (primarily consulting)

-$ 22:  Advertising and Promotion

-$ 16:  Office-Related Expenses

-$ 13:  Travel and Conventions

-$ 12: Public Policy Expenses

-$  8: Subscriptions

-$  5:  Other Expenses

-$  3:  Taxes

-$147:  Total Expenses

 $  3:  Revenue Remaining:  To General Fund

As illustrated above under both scenarios, about 80% of revenue was spent on compensating the 355 employees (including some very well compensated employees who received 7 figure compensation packages), paying consultants, advertising and promotion, office-related expenses, and travel and conferences (including first class travel and companion travel).

It is also important to point out the NAR had $163 million in net assets, or what some people refer to as the general fund.

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

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