How Revenue is Spent at the American Legion

The American Legion is a non-profit, tax-exempt 501 (c) (19) – a veteran’s organization permitted to conduct social and welfare activities for its members.  Established more than 100 years ago, at the end of WWI, the American Legion has about 1.8 million members. The organization is headquartered in Indianapolis, Indiana and is organized into 55 departments, one for each of the 50 states along with DC, Puerto Rico, Dance, Mexico, and the PHillipines.

There are two types of membership:  regular active and paid up for life.  Regular Active membership dues vary (but are about $40 annually) because each post determines their own dues rate. However, if a veteran joins through the Legion headquarters, a special introductory rate is provided and the new member is assigned to the post in which state he/she resides.  Paid up for Life membership is about $1,400.

This post addresses how revenue is spent at national headquarters (Legion).

Total revenue in 2017 was $80 million, most of which came from membership dues ($38 million), contributions, gifts, and grants ($15 million), advertising ($9 million), and inventory sales ($6 million).

Total expenses were $77 million (96% of revenue) and were categorized as follows:

• $23 million (29% of revenue):  Compensation
• $19 million (24% of revenue):  Office-Related Expenses
• $10 million (12% of revenue):  Magazine
• $ 8 million (10% of revenue):  Travel and Conferences
• $ 7 million (9% of revenue):  Direct Membership Services and Direct Programs
• $ 5 million (6% of revenue):  Fees for Services (primarily other with no detail provided)
• $ 2 million (3% of revenue):  Advertising and Promotion
• $ 2 million (3% of revenue):  Grants

As illustrated above, the single largest expense is compensation ($23 million) for the 325 employees at the national headquarters, followed by office related expenses of $19 million), magazine costs ($10 million), travel and conferences ($8 million) and direct membership services (the organization relies heavily on direct mail) and direct program costs ($7 million). The bottom line is that most of revenue (75%) is spent to cover paying the employees, running the office, publishing the magazine, and travel (including first class and travel for companions) and conference costs.

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

 $100:  Revenue

-$ 29:  Compensation

-$ 24:  Office-related Expenses

-$ 12:  Magazine

-$ 10:  Travel and Conferences

-$ 75:  Subtotal:  Compensation, Office, Magazine, Travel and Conferences

 $ 25:  Revenue Remaining

-$  9:  Direct Membership Services and Direct Programs

-$  6:  Fees for Services

-$  3:  Advertising and Promotion

-$  3:  Grants

$  4: Revenue Remaining:  To Fund Balance

As illustrated above, $75 out of every $100 went to pay compensation, office expenses, the magazine, and travel and conferences.

If you paid $40 in annual membership dues and want to understand how your dues were spent, see below:

$40:  Revenue

-$12:  Compensation

-$10:  Office-Related Expenses

-$ 5:  Magazine

-$ 4:  Travel and Conferences

-$31: Subtotal:  Compensation, Office, Magazine, Travel and Conferences

 $09:  Revenue Remaining

-$ 3:  Direct Membership Services and Direct Programs

-$ 2:  Fees for Services

-$ 1:  Advertising and Promotion

-$ 1:  Grants

$ 2:  Revenue Remaining:  To Fund Balance

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