How Revenue is Spent at the American Humane Association (2022)

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 14 independent voting members (directors or board members) of the governing body.

The AHA paid for first class travel for the CEO and board members.

A relatively small organization by non-profit standards, AHA raised $25 million in 2022 (compared to $15 million in 2021, $21 million in 2020 and $19 million in 2019) which primarily came from four sources:

• Contributions, Gifts, and Grants: $14 million
• Certifications and Fees:  $5 million
• Royalties:  $3 million
• Investment Income and Gains: $2 million

Expenses totaled $20 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 $20 million in expenses were categorized a follows:

• $15 million (60% of revenue): Program Services
• $ 3 million (12% of revenue):  Fundraising
• $ 2 million (8% of revenue):  Management

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

$100:  Revenue

-$ 60:  Program Services

-$ 12:  Fundraising

-$  8:  Management

-$ 80: Total Expenses

 $  20:  Unspent Revenue

As illustrated above, AHA spent $80 for every $100 in revenue raised, or $20 million of the $25 million raised, with the $5 million in unspent revenue allocated to the general fund. $4 million in net unrealizable losses on investments offset this allocation leaving net assets at $26 million at year-end (compared to $25 million at the beginning of the year).

Expenses By Specific Line Item Category

The $20 million (80% of revenue) in expenses were categorized as follows:

• $9  million (36% of revenue):  Compensation
• $4  million (16% of revenue):  Fees for services (primarily subcontractors and consultants)
• $2  million (8% of revenue):  Office Expenses
• $2  million (8% of revenue):  Travel, Events, Trade Shows
• $1  million (4% of revenue):  Advertising and Promotion
• $2  million (8% of revenue):  Other Expenses (including grants of $300,000)

As illustrated above, the largest expense for AHA is compensation for the 93 employees who were paid $9 million, which equates to an average compensation of $97,000.  The President and CEO, Robin Ganzert received $764,421 in total compensation in 2022.  

Fees for services (which are primarily consultants and subcontractors) and office expenses use another $4 million.  

Travel, at $2 million appears high for a small organization 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,  and for events, and trade shows.

Finally, it is interesting to note that AHA paid $1.5 million to subcontractors which is included under “fees for services” that totaled $4 million.   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 6 who received more than $100,000:

• $330,760:  Pleasant Street Entertainment, of Encino, CA for production of “hero dogs’ (video?)
• $282,005:  Javier S Mosquera Guitarrez, of West Palm Beach, FL for construction – sanctuary
• $252,312:  Mindset Direct, of Reston, VA for fundraising counsel and direct mail
• $234,926:  Fuse Fundraising, of Reston, VA for fundraising counsel and direct mail
• $233,056:  M2 Construction, of Reston, VA for construction DC office

The above five independent contractors received $1.3 million.  With only 1 more (unnamed) independent contractor who received more than $100,000 in compensation (but less than the lowest above at $233,056), it is unclear who received the other fees.

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

$100:  Revenue

-$ 36:  Compensation

-$ 16:  Fees for Services

-$  8:  Office Expenses

-$  8:  Travel, Events, Trade Shows

-$  4:  Advertising and Promotion

-$  8:  Other Expenses ($1 was for grants)

-$ 80:  Total Expenses

  $ 20:  Remaining Revenue:  To General Fund

As illustrated above, $36 out of every $100 was spent on compensation for the 93 employees. $16 out of every $100 was used for fees for services (including subcontractors) while $8 out of every $100 was used for office expenses.  $20 out of every $100 was used for travel, events, trade shows, advertising and promotion and other expenses.  In total, $80 out of every $100 was used for expenses.

It is also important to note there is an inconsistency with regards to the annual Pups 4 Patriot Dinner, an annual fundraising event.  On Schedule G, the event reported gross receipts of $260,000 less $229,575 of contributions leaving $38,425 in gross income.  After deducting $64,189 in expenses (i.e. rental facility costs, food, entertainment, etc), the event posted a loss of about $26,000. However, Schedule O reports total expenses of $1.6 million in expenses for this event.  Again, there appears to be an inconsistency.

Conclusion:

AHA is a small non-profit (that typically raises about $20-$25 million annually) 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 nearly $800,000 annually, allow her and board members to fly first class? And, what about the $4 million in fees paid to independent contractors?  $1.5 million was for subcontractors while $1.3 million was used to pay the 5 most highly compensated independent contractors. More than $1 million in other fees is not detailed beyond “consultants.” Who receives these fees and what services are they providing?

To read the IRS Form 990 (2021) for the year ending June 30, 2022, click here.