Where Does $100 to Americans for Prosperity Go (2019)

Americans for Prosperity is actually two organizations:  Americans For Prosperity (AFP) and Americans For Prosperity Foundation (AFPF). Both organizations are tax-exempt non-profit organizations but AFP is a 501 (c) (4) while AFPF is a 501 (c) (3). The primary difference between the two organizations is that donations to AFPF are tax deductible while donations made to AFP are not. In addition, AFP is considered a social welfare organization so they can engage in more lobbying while AFPF is considered an educational organization and is therefore limited in how much they spend on lobbying.

Although both organizations operate out of the same office in Arlington, Virginia and share employees, how a donation was spent depends on which organization received the donation.

AFPF

AFPF reported $19 million in revenue (compared to $17 million in 2018 and $27 million in 2017), most of which were contributions and gifts. Expenses totaled $16 million (84% of revenue) categorized as follows:

• $9 million (47% of revenue):  Compensation
• $1  million (5% of revenue):  Fees for Services (primarily legal)
• $3  million (16% of revenue):  Travel and Conferences
• $2  million (11% of revenue):  Office-Related
• $1   million (5% of revenue):  Advertising and Promotion

As illustrated above, the largest expense for the organization was compensation ($9 million) for the 76 employees., which equates to an average compensation of $118,000.

Using the above information $100 was spent as follows:

 $100:  Revenue

-$ 47:  Compensation

-$  5:  Fees for Services (primarily legal)

-$ 16:  Travel and Conferences

-$ 11:  Office-Related

-$  5  Advertising and Promotion

-$ 84: Total Expenses

 $ 16: Revenue Remaining:  To Fund Balance

As illustrated above, AFPF spent $47 out of every $100 on compensation, $5 out of every $100 on fees for services (primarily legal fees) and $27 out of every $100 on travel, conferences, and office-related expenses.  In total, $84 out of every $100 in revenue was spent, leaving $16 out of every $100 unspent, thereby increasing the fund balance from $3 million at the beginning of the year to $6 million at year-end.

AFPF paid for first class or charter travel.

2 independent contractors were compensated more than $100,000:

• $1.8 million to Stand Together Communications, of Arlington, VA for media services
• $500,000 to Quinn Emmanuel Urquhart & Sullivan, of LA, CA for legal services

AFP

AFP reported $54 million in revenue (compared to $97 million in 2018) most of which came from contributions and gifts) and $57 million (106% of revenue) in expenses categorized as follows:

• $27 million (50% of revenue):  Compensation
• $10 million (19% of revenue):  Office-Related
• $11  million (20% of revenue):  Advertising
• $ 6  million (11% of revenue):  Travel and Conferences
• $ 3  million (6% of revenue):  Fees for Services (primarily legal)

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

$100:  Revenue

-$ 50:  Compensation

-$ 19:  Office-Related

-$ 20:  Advertising

-$ 11:  Travel and Conferences

-$  6:  Fees for Services (primarily legal)

-$106: Subtotal Expenses

As illustrated above, AFP spent $69 out of every $100 on compensation and office-related expenses. 408 employees received $27 million in compensation (an average of $66,000).  $20 of every $100 was spent on advertising while $11 out of every $100 was spent on travel and conferences. $6 out of every $100 was spent on fees for services (primarily legal fees).  In summary, AFP spent $106 for every $100 received, resulting in a nearly $3 million deterioration in net assets, from $20 million at the beginning of the year to $17 million at year-end.

It is important to note AFP paid for first class or charter travel. In addition, 20 independent contractors were compensated more than $100,000 with the 5 most highly compensated independent contractors reported as:

• $12.5 million to Stand Together Communications, of Arlington, VA for media services
• $ 1.4 million to Quinn Emmanuel Urquhart and Sullivan, of LA, CA for legal fees
• $700,000 to People Who Think, of Mandeville, LA for printing
• $535,000 to Morgan Meredith and Associates, of Sterling, VA for direct mail service
• $435,000 to The Lukens Company, of Arlington, VA for mailer printing

AFPF and AFP

As stated above, AFPF and AFP are separate organizations regulated by rules to maintain their non-profit tax exempt status. Since both organizations operate out of the same office and share staff and expenses, a theoretical combining of their revenue and expenses would look like this:

The combined revenue of both organizations was $73 million while expenses were also $73 million:

The $73 million in expenses were collectively classified as follows:

• $36 million (50% of revenue):  Compensation
• $12 million (17% of revenue):  Office
• $ 9 million (12% of revenue):  Travel and Conferences
• $12 million (16% of revenue):  Advertising
• $ 4 million (5% of revenue):  Fees for Services

As illustrated above, compensation ($36 million) for the 484 employees was the highest expense, an average of $74,000, although 82 employees received more than $100,000 in compensation with the most highly compensated employee the President and CEO, Emily Seidel who received $640,078.

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

 $100:  Revenue

-$ 50:  Compensation

-$ 17:  Office

-$ 12:  Travel and Conferences

-$16:  Advertising

-$  5:  Fees for Services

-$100:  Total Expenses of both organizations

 $   0:  Revenue Remaining

As illustrated above, the primary expenses for both organizations were compensation, office, travel and conferences, and advertising. Collectively, $95 out of every $100 in revenue were spent on these expenses.

So, to answer the question, $100 in revenue was primarily spent on compensating staff and office expenses followed by travel and conferences and advertising.  The bottom line is the organizations collectively spent what they raised in 2019.

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

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