How Dairy Management Inc (DMI) Spends Revenue (2019)
Dairy Management Inc (DMI) is a non-profit, tax-exempt 501 (c) (6) whose purpose is to promote dairy products in order to increase consumption of dairy products.
Funded by a mandate by Congress, DMI is what is referred to as a “check off program” where all producers have to contribute funds for the good of the industry. Dairy producers are required to contribute 15 cents per 100 pounds (foreign dairy producers are required to contribute 7.5 cents per 100 pounds) which equates to about 1.5 cents per gallon of milk.
DMI has 78 independent voting members (Directors) on its governing body although 84 are listed on the most recent Form 990 (which appears to be due to timing differences). 61 of the 84 (73%) are male while 23 of the 84 (27%) are female (note: The Form 990 does not disclose gender; determinations were based on name and google searches).
In 2019, DMI reported total revenue of $156 million (compared to $160 million in 2018 and $155 million in 2017), most of which came from program and core funding revenue from the dairy producers. Expenses were $156 million and were categorized as follows:
- $79 million (51% of revenue): Domestic Marketing
- $29 million (19% of revenue): Compensation
- $20 million (13% of revenue): Export
- $ 7 million (4% of revenue): Research
- $ 7 million (4% of revenue): Contract Services
- $ 6 million (4% of revenue): Office-related Expenses
- $ 5 million (3% of revenue): Travel and Conferences
- $ 2 million (1% of revenue): Grants
- $ 1 million (1% of revenue): Other
As illustrated above, the largest expenses were for domestic marketing ($79 million), compensation ($29 million) for the 307 employees who received an average compensation of $95,000), and export ($20 million). The most highly compensated employee was Thomas Vilsack, an EVP who received $902,895.
With regard to expenses related to compensation and travel and conferences, it is important to note DMI paid for first class travel, provided tax indemnification and gross up payments, and paid for health or social club dues or initiation fees. See Schedule J of the Form 990 (link below) for more information.
Using the above information, every $100 in revenue was spent as follows:
-$ 51: Domestic Marketing
-$ 19: Compensation
-$ 13: Export
-$ 4: Research
-$ 4: Office-related Expenses
-$ 4: Contract Services
-$ 3: Travel and Conferences
-$ 1: Grants
-$ 1: Other Expenses
As illustrated above, $51 out of every $100 in revenue was spent on domestic marketing while $19 out of every $100 was spent on compensating staff.
In summary, DMI consistently raises about $155-$160 million annually and spends whatever they raise (there are no net assets), primarily on marketing and compensation of employees.
To read the IRS Form 990 (2019), click here.