How Revenue is Spent at the AFL-CIO

The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) is a federation of 56 labor unions that represent 12 million workers. A non-profit, tax-exempt 501 (c) (5) – a labor organization, the AFL-CIO is headquartered in Washington, DC.

Key facts about the AFL-CIO include the following information taken from the IRS Form 990’s:

The AFL-CIO has 19 related tax-exempt, non-profit organizations, 14 of whom operate out of the same office address. The other 5 organizations also operate out of a two DC-based offices but at a different street address, and an office in Silver Spring, MD.

There are 97 voting members (board members) of the governing body, 88 of whom are independent.  77 of the 97 (79%) are male while 20  (21%) are female.

Revenue has been declining since 2013 when total revenue was $158 million. By 2017, revenue was down to $140 million and by 2018, total revenue was $119 million which appears to indicate membership has been declining but could also be due to a decline in royalties, or a combination of both. However, more recently in 2019, revenue increased to $126 million and although revenue is not back up to 2013 levels, revenue has improved over last year.

Revenue primarily comes from two sources:  memberships dues and royalties. In 2019, $72 million of the $126 million (57%) came from memberships dues while $45 million (36% of total revenue) came from royalties.

Expenses totaled $116 million in 2019 – $10 million less than the revenue raised. The $10 million was added to the general fund (along with unrealized gains on assets) which increased from $34 million at the beginning of the year to $46 million at year-end – a significant increase.

The $116 million in expenses can be categorized as follows:

• $49 million (39% of revenue):  Compensation
• $24 million (19% of revenue):  Grants
• $15 million (12% of revenue):  Royalties
• $10 million (8% of revenue):  Office-Related Expenses
• $ 8 million (6% of revenue):  Printing and Publications
• $ 4 million (3% of revenue):  Travel and Conferences
• $ 4 million (3% of revenue):  Interest and State Unity Fund
• $ 2 million (2% of revenue):  Fees for Services (primarily other with no detail)

As illustrated above, compensation used up nearly 40% of revenue in 2019. 427 employees received $49 million in compensation, which equates to an average compensation of $115,000. However, only 136 employees received more than $100,000 in compensation. The most highly compensated employee was Sean McGarvey who received $560,296 (from a related/affiliated organization).

119 grants greater than $5,000 were made with the 13 largest reported to be:

• $7,026,000:  Working America
• $  975,000:  National Labor College
• $  600,000:  Alliance for Retired Americans
• $  412,000:  Fl AFL-CIO
• $  380,000:  Minnesota AFL-CIO
• $  325,000:  PA AFL-CIO
• $  325,000:  American Center for Internal Labor Solidarity
• $  284,000:  Texas Gulf Coast Area Labor Federation AFL-CIO
• $  241,000:  Texas AFL-CIO
• $  216,108:  Dallas AFL0CIO Council
• $  200,000:  Solidago Foundation
• $  200,000:  Colorado AFL-CIO
• $  180,000:  Michigan State AFL-CIO

The purpose of most of the grants was program support, operating subsidy, a culture of health grant, a solidarity funding grant, or general support.

Using the above information, every $100 in revenue was spent as follows in 2019:

 $100:  Revenue

-$ 39:  Compensation

-$ 12:  Royalties

-$  8:  Office-Related Expenses

-$  6:  Printing and Publications

-$  3:  Travel and Conferences

-$  3:  Interest and State Unity Fund

-$  2:  Fees for Services (primary other with no detail provided)

-$ 73: Subtotal:  Organization Expenses

 $ 27:  Revenue Remaining

-$ 19:  Grants

$  8:  Revenue Remaining:  To General Fund

As illustrated above, $73 out of every $100 was spent on organization expenses while $19 out of every $100 was used for grants – primarily to other labor organizations.

It is important to note the AFL-CIO ended the year with $46 million in net assets, compared to $34 million the prior year. The improvement is primarily due to the organization spending $10 million less than they raised in 2019.

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