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January 31, 2021

4

How Membership Dues Are Spent at the California Nurses Association

by Anne Paddock

With the pandemic out of control in this country and the demand for healthcare workers and particularly nurses soaring, the National Nurses United (NNU) has been all over the news explaining, defending, cajoling, opining, and talking about nursing in general.

Often referred to as the largest nursing union in the country, the NNU was formed in 2009 when the California Nurses Association (CNA)/National Nurses Organizing Committee/AFL-CIO (NNOC), the United American Nurses, and the Massachusetts Nurses Association came together as 4 founding organizations to create NNU, the largest union and professional association of nurses in the US.

It is important to note that CNA and NNU have a joint employee arrangement under which all NNU employee-related expenses including payroll and benefits are paid through the CNA payroll system. NNU reimburses CNA for these expenses. The Executive Director of CNA has been retained by NNU to also serve as Executive Director of NNU.

CNA is overseen by a board of 37 voting members, 28 of whom are independent. The Form 990 lists 30 board members, 27 of whom are female and 3 whom are male.

CNA is a non-profit 501 (c) 5 labor organization with more than 100,000 members in hospitals, clinics, and home healthcare agencies in the US. For the year ending June 30, 2018, CNA reported total revenue of $123 million (compared to $108 million the prior year) with nearly all revenue coming from membership dues and assessments. Membership dues to unions are often based on gross income so a specific dues amount is not disclosed. However, if there are 100,000 members, then the average membership dues were about $1,200 annually.  If there were about 125,000 members, then the annual membership dues were about $1,000.

CNA reported total expenses totaled $86 million (not including $2 million in depreciation)  – 70% of revenue – and can be categorized as follows:

  • $41 million (33% of revenue):  Compensation
  • $20 million (16% of revenue):  Per Capita Payment
  • $12 million (10% of revenue):  Travel and Conferences
  • $ 6 million (5% of revenue):  Office-Related Expenses
  • $ 3 million (2% of revenue):  Fees for Services
  • $  2 million (2% of revenue):  Other Expenses
  • $  1 million (1% of revenue):  Advertising and Promotion
  • $  1 million (1% of revenue):  Grants

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

$100: Revenue

-$ 33:  Compensation

-$ 16:  Per Capita Payment

-$ 10:  Travel and Conferences

-$   5:  Office-Related Expenses

-$  2:  Fees for Services

-$  2:  Other Expenses

-$  1:  Advertising and Promotion

-$  1:  Grants

-$ 70:  Total Expenses

 $ 30:  Excess Revenue:  To General Fund

Another way to look at this is to assume the membership dues were $1,000 for each member. Only $700 of the $1,000 was spent (with the remaining $300 retained in the general fund) as follows:

 $1,000:  Membership Dues

-$  330:  Compensation

-$  160:  Per Capita Payment

-$  100:  Travel and Conferences

-$   50:  Office-Related Expenses

-$   20:  Fees for Services

-$   20:  Other Expenses

-$   10:  Advertising and Promotion

-$   10:  Grants

-$  700:  Total Expenses

 $  300:  Excess Revenue:  To General Fund

As illustrated above, the CNA only spent 70% of the revenue reported with the two largest expenses being compensation and a “per capita payment” (the meaning of which is unclear). 741 employees were compensated $41 million, which equates to an average compensation of $56,000.  143 employees received more than $100,000 in compensation with the most highly compensated employee reported to be Michael Griffing, who received $580,707.

It is also important to note CNA paid for first class or charter travel. No detail was provided.

In summary, CNA is part of the largest nurses union in the country. More than 100,000 members provided $123 million (or an estimated $1,000-$1,200 annually each) in revenue in 2018.  CNA spent 70% of revenue with the three largest expenses being compensation for the 741 employees, per capita payments, and travel and conferences (including first class or charter travel).  The unspent revenue ($35 million) was retained allowing the net fund assets to increase to $237 million at year-end.

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

4 Comments Post a comment
  1. Jan 31 2021

    Some readers look at the 4 major categories of expenses: Program Services, Fundraising, Management and General Expenses, and Grants to try and ascertain how much goes to the delivery of services but even that view can be misleading. The key as you wrote is what the organization is engaged in: is it a service, the provision of grants to other non-profits, the provision of grants for research, the disbursement of a product, etc.

  2. Jan 31 2021

    I’d love to know how much of revenue goes to delivery of services to constituents. It’s difficult to parse, though, because salaries are part and parcel of service delivery in an organization that does not produce a “product,” but rather engages in advocacy and education.

    Thanks for slogging through all these 990s for the rest of us.

  3. Charles Phillips, MD - retired to write and teach
    Jan 31 2021

    I will redo the math on Permanente partners though I was close. $450,000+ a year, 20% benefits including home down payments perhaps forgiven at 10 years, then the public idea of a 4-5% tip, with the reality of $2% a year X 25 years = $225,000 plus value and the profit split expected for 2020 with patients staying home – of $10 billion/200,000 partners which is %$500,000 tucked away for investment growth until you finish 30 years (average) – so in one year the MD gets $450,000, $90,000 benefits, $17,000 public tip, and two retirement funds one for just being there $225,000 and then the massive $500,000 split profits the public never knowing about the last two – the lie always that KP is non-profit. Well, I get $557,000 + $200,000 + 500,000 = $1,257,000 for treating but not much the school janitors (the medium income, the near poor, the very poor, and the old. Mayo Clinic at the top does salary/benefits/simple retirement and that is it – since 1932 – now being 88 years later. And the whole state of Minneapolis has asked all profit splitting plans to leave. I think Kaiser will have to be honest and thus sell to Mayo – where in nurse will be paid better and patients get better care by better motivated doctors without the burdens of profit sharing. I went 50 years of practice with occasional 8% profit sharing for three months. Then I was out for my usual crime of not overbilling – called upcoding. Obamacare 2.0 will stop this profit sharing – my prediction. And Congress is already into sharing care in the hospitals and patients owning there records. There is hope. I almost could not send before – you mean YOUR website not that I needed one.

  4. Jan 31 2021

    I have followed 990 Tax forms of public benefit organizations and think the physicians are often the ones who talk against nursing raises – since nursing costs are subtractions from net profits for most (most docs are now in for profit organizations as if that is more “accountable.”)
    I have proven to the IRS with some 10,000 pages of evidence that the Permanente for profit physicians who practice in hospitals as I did in Kaiser Fresno ER (hourly but offered partnership) would by 2020 at 4% increase a year get on the average in Northern California (all other docs watching) – a $400,000 base, benefits 20%, a 4% tip to salary, and a retirement tip of: A) $2% each of 25 years ($400,000 value repeated) and B) another 2% X 25 years goal $400,000 in split profits (allocated to the MD but invested within the Plan (Cayman Islands). So, in one year – a value of $1,280, 000 and a token tip of $16,000 for the 501K. Of course, CEOs getting $10 million is a slap against all taxpayers so I do watch non-doc incomes.

    I did once lead a strike the spokesman for 250 physicians with our single goal to get the nurses paid well; and we won because even the Public Health docs would not step in. Our strategy was to be confused by the nurses’ depressions so we could treat but not come up with a billing diagnosis – costing the country $1 million a day a week. When it was over, we suddenly remembered how do bill so the county actually lost nothing but power to keep county nurses underpaid for harder work. Later the ICU nurses went on to be FNPs asking me to supervise them. In general nurses – if like teachers lose health benefits each year and that becomes the focus of strikes. Of course, I never got any big fee for running emergency rooms as I thought that was a privilege; the King of Saudi Arabia through the Royal Family that I organize his out of time coverage – and I “worked” in the Jeddah Palace one week. Again, I was not paid more but honored more.

    Charles Phillips, MD – Lifetime ER Certified – affiliated with HARP – Health Administration Responsibility Project or HARP – top leader Harvey Frey, MD, PhD, JD – a radiotherapist and attorney.

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