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February 18, 2022

Where Does $100 to the American Psychological Association Go?

by Anne Paddock

The American Psychological Association (APA) is a tax-exempt, non-profit professional organization with more than 122,000 members, although the APA is not a trade association.  Consequently, membership dues make up a very small portion of total revenue ($4 million out of $132 million in 2019) while licensing fees, which provided $80 million (or about 60% of total revenue) followed by books and journal subscriptions that provided $24 million (nearly 20% of total revenue) appear to be the bread and butter of the APA.

Unlike most non-profits, contributions, gifts and grants provided a negligible amount of income to the APA (less than $2 million in 2019), making the APA a unique non-profit whose reliance is not on donors, but instead licensees.

Expenses totaled $136 million (not including $3 million in depreciation) in 2019 with expenses categorized as follows:

  • $75 million (57% of revenue):  Compensation
  • $31 million (23% of revenue):  Office-Related Expenses
  • $13 million (10% of revenue):  Fees for Services
  • $11 million (8% of revenue):  Travel and Conferences
  • $ 6 million (5% of revenue):  Royalties, Advertising, Promotion, Grants, Other

As illustrated above, compensation is the largest expense.  716 employees received $75 million in compensation, which equates to an average compensation of $105,000.  However, only 163 employees received more than $100,000 in compensation with the most highly compensated employee reported to be Arthur C Evans, Jr. who received $937,634.

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

$100:  Revenue

-$ 57:  Compensation

-$ 23:  Office-Related Expenses

-$ 10:  Fees for Services (primarily other with no detail provided)

-$  8:  Travel and Conferencees

-$  6:  Royalties, Advertising,Promotion, Grants, Other Expenses

-$103:  Total Expenses

For every $100 received by APA, the organization spent $103 which means they spent $7 million more than they raised (including $3 million in depreciation; so they spent $4 million more than they raised if depreciation is not included). After adding $11 million of unrealized gains on assets, APA closed the year with $50 million in net asses (compared to $45 million the year before).

In closing, APA is a non-profit organization with 122,000 members who paid $4 million for membership (an average of $33) whose main source of income is licensing fees.  Those fees ($80 million) plus other income of $52 million (primarily book and journal subscriptions, membership dues, application fees, convention and conference fees, etc) allowed the company to report total revenue of $132 million in 2019, most of which was spent on compensation, office-related expenses, fees for services, and travel and conferences.

To read the IRS Form 990 (2019), click here.

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