How the Institute of Electrical and Electronics Engineers (IEEE) Spends Revenue (2021)

The Institute of Electrical and Electronics Engineers (IEEE – pronounced “I Triple E”) is a non-profit tax-exempt 501 (c) (3) – a professional association for electrical and electronic engineers that serves the public good through its scientific work and education (making their work available on a non-discriminatory basis (note:  a 501 (c) (6) serves an industry – not the public – and does not need to make their work available to the public in a non-discriminatory basis).

Headquartered in Piscataway, New Jersey, IEEE has more than 427,000 members from 160 countries. Membership dues vary by country and whether the member is a professional or student. In the USA, a professional membership is about $200 a year whereas a student membership is $32.

In 2021, IEEE reported total revenue of $525 million (compared to $478 million in 2020)  which came primarily from 7 sources:

• $228 million (43% of total revenue):  Periodicals
• $129 million (25% of total revenue):  Conference Revenue
• $ 59  million (11% of total revenue):  Investment Income, Royalties, Gains, Interest
• $ 48  million (9% of total revenue):  Membership Dues
• $ 38  million (7% of total revenue):  Standards Review
• $ 10 million (2% of total revenue):  Insurance Recoveries
• $  8  million (2% of total revenue):  Advertising
• $  5   million (1% of total revenue):  Other (contributions, intracompany services)

As illustrated above, the two highest sources of revenue are from conferences and periodicals. Memberships dues of $48 million from the 427,000 members means that the average annual membership dues are $112.

Expenses totaled $382 million (73% of total revenue) and can be viewed two ways:  by broad general category (i.e. grants, program services, fundraising, management and general expenses) or by specific line item categories (i.e. compensation, office-related expenses, travel and conferences, fees for services, etc). Both ways are beneficial with the latter approach providing more detail on how revenue was spent.

Expenses by Broad General Category

The $382 million in expenses were categorized as follows:

• $365 million (70% of revenue):  Program Services
• $  11 million (2% of revenue):  Management and General Expenses
• $  4 million (1% of revenue):  Grants
• $  2 million (less than 1% of revenue):  Fundraising

As illustrated above the largest expense for IEEE was program services. IEEE spent $365 million of the $525 million raised on program services while $17 million or 3% of revenue was spent on management and general expenses, fundraising, and grants.

The unspent revenue – $143 million – was added to the general fund along with unrealized gains on investments ($36 million) and $7 million in changes to net assets.  Hence the fund balance  increased from $720 million at the beginning of the year to $905 million at year-end.

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

$100:  Revenue

-$ 70: Program Services

-$  2:  Management and General Expenses

-$  1:  Grants and Fundraising

-$ 73: Total Expenses

 $ 27:  Revenue Remaining:  To General Fund

As illustrated above $70 out of every $100 was spent on program services.  $27 out of every $100 remained unspent and was added to the general fund.

Expenses by Specific Line Item Category

The $382 million in expenses were categorized as follows:

• $178 million (34% of revenue):  Compensation
• $ 47 million (9% of revenue):  Fees for Services (primarily other with no detail provided)
• $ 45 million (9% of revenue):  Office-related Expenses
• $ 36 million (7% of revenue):  Travel and Conferences
• $ 27 million (5% of revenue):  Commissions, Membership Expenses
• $ 16 million (3% of revenue):  Printing/Publications/Educ Training
• $ 12 million (2% of revenue):  Other Expenses
• $  9 million (2% of revenue):  Advertising and Promotion
• $  8 million (1% of revenue):  Royalties
• $  4 million (1% of revenue):  Grants

As illustrated above, the two largest expenses for IEEE are compensation and fees for services Ihistorially travel/conferences (primarily conferences) was the second largest expense but the effects of COVID on travel and conferences is still evident in 2021).  1,150 employees received $178 million in compensation, an average compensation of $155,000.  The most highly compensated employee was Stephen Welby, the Assistant Secretary and Executive Director who received $1,282,171 in 2021.

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

$100:  Revenue

-$ 34:  Compensation

-$  7:  Travel and Conferences

-$  9:  Office-related Expenses

-$  3:  Printing/Publications/Educ Training

-$  9:  Fees for Services

-$  5:  Commission/Membership Expenses

-$  1:  Royalties

-$  2:  Other Expenses

-$  2:  Advertising and Promotion

-$  1:  Grants

-$ 73:  Total Expenses

 $ 27:  Unspent Revenue:  To General Fund

As illustrated above, $43 out of every $100 in revenue was spent on compensation and fees for services to non-employees..  An additional $30 out of every $100 was spent on office, printing, publications, fees, commissions, royalties, advertising, and other expenses.  $27 out of every $100 was not spent and added to the fund balance.

In summation, the IEEE is a tax-exempt, non profit 501 (c) 3 that raises about $500 million annually.  Although the IEEE is a professional trade association, membership accounts for less than 10% of revenue.  Instead, conferences have historically been the largest revenue source until COVID outbreaks that began in early 2020, which cancelled travel and conferences for years.  In 2021, the primary source of revenue for IEEE was periodicals although conference revenue is expected to resume its number 1 position by 2023.

IEEE’s largest expenses has always been compensation for its 1,000 plus employees who received an average compensation of $155,000. In addition, fees for services to non-employees was the organization’s second largest expense followed by office-related expenses.  Collectively these 3 expenses accounted for 50% of revenue spent.  However, IEEE has also been focused on building up the general fund which has nearly $1 billion by year-end (that includes a nearly $200 million increase in 2021).

To read the IRS Form 990 (2021), click here.