Where Does $100 to the American Humane Association Go (2021)?

The American Humane Association (AHA) is a Washington, DC-based (with a Palm Beach, Florida office) non-profit 501 (c) 3 whose “No Animals Were Harmed” certification program in film and television is well-known in the entertainment industry. In addition, AHA certifies zoos, aquariums, conservation centers, and humane treatment in food production (farms, slaughterhouses, etc), awards grants, donates goods, and participates in other program services. How the AHA “ensures the safety, welfare, and well-being of animals” in slaughterhouses is not clear.

There are 13 independent voting members (directors or board members) of the governing body:

• William Abbott
• Dawn Assenzio
• Marty Becker
• Amanda Bowman
• Scott Campbell
• Sharon Jablin
• Naomi Judd (deceased in 2022)
• Tom Kearney
• Herbert Krauss
• John Payne
• Jean Shafiroff
• Candy Spelling
• Abigail Trenk

The AHA paid for first class travel for board members.

A relatively small organization by non-profit standards, AHA raised $15 million in 2021 (compared to $21 million in 2020 and $19 million in 2019) which primarily came from five sources:

• Contributions, Gifts, and Grants: $9 million
• Certifications and Fees:  $3 million
• Royalties:  $2 million
• Broadcast Rights and Event Fees: $0.5 million
• Investment Income: $0.5 million

Expenses totaled $16 million and can be viewed two ways:  by broad general category or by specific line item categories. Both provide beneficial information with the latter providing more detail on how revenue was spent.

Expenses by Broad General Category

The $16 million in expenses were categorized a follows:

• $11.8 million (79% of revenue): Program Services
• $ 2.5 million (17% of revenue):  Fundraising
• $ 1.7 million (11% of revenue):  Management

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

$100:  Revenue

-$ 79:  Program Services

-$ 17:  Fundraising

-$ 11:  Management

-$1.07: Total Expenses

 $   7:  Excess Expenses Over Revenue

As illustrated above, AHA spent $107 for every $100 in revenue raised, which equates to $1 million (rounded) which they were able to do because AHA had $21 million in net assets at the beginning of the year. Even though they spent more than they raised, net assets increased to $25 million at year-end because of unrealized gains on investments and a $2 million change in net assets from a $1.1 million PPE loan that was given and forgiven by the government and a $1 million change in the value of a beneficial interest in a perpetual trust.

Expenses By Specific Line Item Category

The $16 million in expenses were categorized as follows:

• $ 7.5 million (50% of revenue):  Compensation
• $ 2.4 million (16% of revenue):  Fees for services (primarily consultants with no detail provided)
• $ 2.3 million (15% of revenue):  Office Expenses
• $ 0.6 million (4% of revenue):  Travel
• $ 1.6 million (11% of revenue):  Subcontractors
• $ 0.8 million (5% of revenue):   Events, Trade Shows, Advertising and Promotion
• $ 0.7 million (5% of revenue):  Other Expenses
• $ 0.1 million (1% of revenue):  Grants

As illustrated above, the largest expense for AHA is compensation for the 90 employees who were paid $7.5 million, which equates to an average compensation of $83,300.  The President and CEO, Robin Ganzert received $712,344 in total compensation in 2021.  

Fees for services (which are primarily consultants and other program fees not detailed) and office expenses use another $4.7 million.  

Travel, at $600,000 appears high for a small organization during a pandemic and is in part due to AHA paying for first class domestic travel for its President and CEO and board members for airline (including domestic) travel.

Finally, it is interesting to note that AHA paid $1.6 million to subcontractors. If the fees for services ($2.4 million) and the fees to subcontractors ($1.6 million) were added together, $4 million was spent on outside services (nearly 27% of total revenue). But exactly what services are contracted out?  Certifications of movie sets? slaughterhouses? The Form 990 does not require specifics beyond the five most highly compensated independent contractors and there were seven that received more than $100,000:

• $441,417:  Pleasant Street Entertainment, of Encino, CA for production of “hero dogs’ (video?)
• $330,040:  Validus Verification Services Division, of Castle Rock, for farm audits
• $300,910:  Film Comm, of Batavia, IL for distribution of PSA’s
• $206,019:  MRB Productions, of Hollywood, CA for production of “Escape from Extinction” (video?)
• $191,779:  Mindset Direct, of Reston, VA for fundraising counsel

The above five independent contractors received $1.5 million.  With only 2 more (unnamed) reported who received more than $100,000 in compensation (but less than the lowest above at $191,779), it is unclear who received the other fees.

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

$100:  Revenue

-$ 50:  Compensation

-$ 16:  Fees for Services

-$ 15:  Office Expenses

-$ 11:  Subcontractors

-$  5:  Events, Trade Shows, Advertising and Promotion

-$  5:  Other Expenses

-$  4:  Travel

-$  1:  Grants

-$1.07:  Total Expenses

-$   7:  Excess Expenses over Revenue 

As illustrated above, $50 out of every $100 was spent on compensation for the 90 employees. $27 out of every $100 was used for fees for services and subcontractors while $15 out of every $100 was used for office expenses.  $14 out of every $100 was used for travel, events, trade shows, advertising and promotion and other expenses.

Conclusion:

AHA is a small non-profit (that typically raised about $20 million annually but raised $15 million in 2021, during the pandemic) that provides high compensation to its employees and first class travel to its president/CEO and board members. Non-profits are tax-exempt organizations trying to make a difference so how can AHA justify paying its President and CEO more than $700,000 annually, allow her to fly first class, allow board members to fly first class, while accepting $1.1 million in PPE loans (that were forgiven) from the government?  And, what about the $4 million in outsourcing fees?  Who receives these fees and what services are they providing?  If certifications, how can they certify a slaughterhouse as humane?

To read the IRS Form 990 (2020) for the year ending June 30, 2021, click here.