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February 16, 2023

Where Does $100 to Alliance Defending Freedom Go (2020)?

by Anne Paddock

The Alliance Defending Freedom (ADF) is a tax-exempt, non-profit 501 (c) 3 that is described as a conservative  legal advocacy group that works to curtail rights of LGBTQ people while expanding “christian practices” in public schools and government (who serve all people), and to prevent access to a woman’s right to choose. How do they do this? Primarily through challenges in the legal system and taking on cases that further their mission and goals including the most recent case about a Colorado-based web page designer who “does not want to” (note:  she hasn’t been asked to) create wedding websites for gay couples.  Based in Scottsdale, Arizona, ADF “is committed to transforming law and culture so true freedom can flourish” which indicates that ADF has their own meaning of “true” as it applies to their beliefs and no others.  On their website, ADF states they are a “faith based 501c3 that legally defends the First Amendment rights of free speech and religious liberty” and that they are the “world’s largest legal organization committed to protecting religious freedom, free speech, the sanctity of life, parental rights, and God’s design for marriage and family.” Really?  Sounds more like they are a tax-exempt organization committed to protecting their religious freedom, their free speech, and their design for marriage and family.

ADF has 8 independent voting members (directors) of its governing body although the website lists 9 directors (8 males and 1 female) and the Form 990 lists 10 (two are part-year).

In 2020, ADF reported total revenue of $65 million (compared to $61 million in 2019), most of which came from contributions, gifts, and grants ($63 million).  

Expenses totaled $57 million (not including $2 million in depreciation) – 88% of revenue – and can be categorized as follows:

  • $32 million (49% of revenue):  Compensation
  • $ 6 million (9% of revenue):  Travel and Conferences
  • $ 6 million (9% of revenue):  Grants
  • $ 5 million (8% of revenue):  Office-Related Expenses
  • $ 5 million (8% of revenue):  Advertising and Promotion
  • $ 3 million (5% of revenue):  Fees for Services (primarily fundraising and “other”)

As illustrated above, the largest expense is for compensation.  319 employees received $32 million in compensation which equates to an average compensation of $100,000 annually.  However, only 69 employees received more than $100,000 in companion with the most highly compensated employee reported to be Alan Sears, the founder who received $830,412 in 2020 and who departed ADF as of July 31, 2019.

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

 $100:  Revenue

-$ 49:  Compensation

-$  9:  Travel and Conferences

-$  9:  Grants

-$  8:  Office-Related Expenses

-$  8:  Advertising and Promotion

-$  5:  Fees for Services (primarily fundraising and “other)

-$ 88:  Total Expenses

 $ 12:  Revenue Remaining:  To General Fund

ADF spent $88 out of every $100 in revenue with nearly half of revenue used to compensate employees.  

Administrative expenses (office, travel – which includes first class travel and travel for companions), advertising and fees) used up $30 out of every $100 while grants used up $9 out of every $100.  

Grants included $3 million to foreign entities primarily in Europe, and $3 million to domestic organizations and individuals (31 grants greater than $5,000 with 11 provided to other non-profits and 20 to other organizations (i.e law firms) including the ADF Foundation who received $1.1 million in investment grants. 158 individuals received $1 million in grants for scholarships, or an average of $6,300.

Fees for Services were primarily fundraising fees and “other” fees. Fundraising fees totaled $1.2 million.  The four most highly compensated fundraisers (Masterworks, The HIbbard Group, MDS Communications, and American Target Advertising) raised $1.7 million, retained $1.2 million in fees, netting ADF $500,000.

ADF allocated $6 million to the general fund in 2020, leaving the organization with $43 million in net assets at year-end.

To read the IRS Form 990 (2019 for the year ending June 30, 2020), click here.

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