How the National Association of Manufacturers Spends Revenue
The National Association of Manufacturers (NAM) is a tax-exempt, non-profit advocacy group (trade association) representing more than 14,000 manufacturing companies. Based in Washington, DC, NAM is primarily engaged in lobbying for policies in all areas that affect labor and employment in manufacturing.
The governing body has 204 voting members (board members), 203 of whom are independent. 171 of the 204 (84%) board members are male while 32 of the 204 (16%) are female.
In the most general terms, NAM is a trade association that collects about $50 million annually. They have not historically been an organization with a strong balance sheet, meaning NAM has not had a large endowment to rely on. In 2013, NAM had $6 million in net assets which was reduced to $2 million in 2014 and then into a negative position since then. At the end of 2018, NAM had a negative $8 million in net assets, which appears to be because NAM has been spending more than they have been raising.
In 2018, NAM reported total revenue of $51 million, most of which came from 3 sources: member dues ($38 million), advocacy and litigation ($9 million), and sponsorship, programs and affiliation fees ($3 million).
Expenses totaled $52 million in 2018 and can be categorized as follows:
- $28 million (55% of revenue): Compensation
- $11 million (21% of revenue): Fees for Services
- $ 5 million (10% of revenue): Office-Related Expenses
- $ 4 million (8% of revenue): Travel and Conferences
- $ 3 million (6% of revenue): Other Expenses (to affiliates, dues, taxes, etc)
- $ 1 million (2% of revenue): Advertising and Promotion
Using the above information, every $100 in revenue was spent as follows:
-$ 55: Compensation
-$ 21: Fees for Services
-$ 10: Office-Related Expenses
-$ 8: Travel and Conferences
-$ 6: Other Expenses
-$ 2: Advertising and Promotion
-$102: Total Expenses
-$ 2: Amount Overspent
As illustrated above, NAM spent $102 for every $100 in revenue raised. The largest expenses were Compensation and Fees for Services. 179 employees received $28 million in compensation ($3.6 million went to the CEO, Jay Timmons) which equates to an average compensation of nearly $157,000. Fees for Services totaled $11 million, most of which was used to compensated “retained specialists.”
NAM paid for first class or charter travel. Specifically, the CEO is permitted to fly first class.
NAM paid for social or health club dues and/or initiation fees. Specifically, the CEO is reimbursed for club dues, which are grossed up to cover the tax liability.
In conclusion, NAM spends about $50 million annually on organization costs – primarily on staff (179 employees), fees for outside services, office-related expenses, travel and conferences. Collectively, these four expenses account for 94% of revenue collected. That NAM has been in a negative net asset position that had grown to -$8 million by the end of 2018, should signal that expenses need to be cut.
To read the IRS Form 990 (2018), click here.